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UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 


SCHOOL  OF  LAW 
LIBRARY 


A  TREATISE 


Law  and  Proceedings 


BANKRUPTCY 


BY 

FRANK  O.  LOVELAND 

Clerk  of  the   United  States  Circuit  Court  of  Appeals  for  the  Sixth  Circuit, 
Author  of  "  Forms  of  Federal  Practice." 


SECOND  EDITION 


CINCINNATI 

THE  W.H.ANDERSON  CO. 

J  904 


COPYRIGHT 

1899 

W.  H.  ANDERSON  &  CO. 


COPYRIGHT 

1904 

THE  "W.  H.  ANDERSON  CO. 


r 

\fo4 


This  Volume  is  with  great  respect 
dedicated  to  the 

HONORABLE  HORACE  H.  LURTON. 

Presiding  Judge  of  the 
United  States  Circuit  Court  of  Appeals, 
for  the  Sixth  Circuit. 


756G4- 


PREFACE. 


At  the  time  the  first  edition  oi"  tliis  work  was  published  the 
present  Aet  had  not  been  consti'ued  by  ihv  eourts.  I  relied  upon 
the  constructions  placed  on  similar  provisions  of  prior  acts,  so 
far  as  it  was  applicable,  to  determine  the  meaning  of  the  Act  of 
1898.  Since  then  nearly  every  provision  of  that  Act  has  been 
construed  by  the  courts  and  many  important  (juestions  have  been 
authoritatively  answered  by  the  Supreme  Court,  so  that  now  it 
is  possible  to  present  the  law  as  declared  by  the  courts  passing 
directly  on  questions  arising  under  the  present  Act  and  the 
amendement  of  February-  5,  1903. 

In  making  the  present  revision  I  have  preserved  the  plan, 
including  chapter  and  sections,  adopted  in  the  former  edition 
which  is  as  follows :  To  consider  the  power  of  congress  upon  the 
"subject  of  bankruptcies"  under  the  constitution,  the  organiza- 
tion and  jurisdiction  of  the  courts  of  bankruptcy,  and  then  to 
follow  step  by  step,  in  its  natural  course,  a  proceeding  in  bank' 
ruptcy,  from  its  inception,  through  the  court  of  bankruptcy  and 
the  appellate  court.  Under  the  present  Act  proceedings  by  a 
debtor,  by  creditors  against  a  common  debtor,  and  to  have  a  part- 
nership declared  bankrupt  differ  in  the  mode  of  instituting  them. 
After  an  adjudication  and  order  of  reference  the  proceedings  are 
substantially  the  same,  irrespective  of  how  or  by  whom  com- 
menced. 

By  this  arrangement  the  several  provisions  relating  to  the 
same  proceeding,  which  are  separated  in  the  Act  itself,  are  col- 
lected; so  that  the  attorney  may  have  before  him  all  parts  of 
the  statute  and  the  authorities  relating  to  the  particular  ques- 
tion, which  is  being  investigated. 

A  large  share  of  whatever  approval  this  revision  is  awarded 
by  the  profession,  is  due  to  I\Ir.  Oliver  S..  Bryant,  of  the  Cin- 
cinnati Bar,  Avho  greatly  aided  in  its  preparation. 

CiN-ciNNATi,  :MHy  1,  ]904. 

Frank  O.  Lovet-and. 


ANALYTICAL      TABLE     SHOWING     WHERE     EACH 

CLAUSE    OF    THE    BANKRUPT    ACT    IS 

CONSIDERED    IN    THIS    TREATISE. 


Bec- 
tioii 

Clause 

Page  of  Treatise. 

tfon    ^'^^^ 

Page  of  Treatise. 

1 

(1) 

Meaning  of  "  Per.son 

2 

(8) 

735. 

against  wliom  a  peti- 

(9) 

682,  697,  6'j8. 

tion  is  filed." 

(10) 

118. 

(2) 

233. 

(11) 

428,  442. 

(3) 

790. 

(12) 

785. 

(4) 

631,  636. 

(13) 

116,    632,  638,  666,  667, 

(5) 

129. 

675,  747. 

(6) 

147. 

(14) 

646. 

(7) 

Ill,  276,  279,  349,  632. 

(15) 

88,  211,  214,  633. 

(8) 

33. 

(16) 

116,  343,  617,  619,    638, 

(9) 

189,  219,  269,  322. 

667,  747. 

(10) 

76. 

1 

(17) 

349,  356,  660. 

(U) 

283,  309. 

(18) 

357,  715. 

(12) 

754. 

(19) 

See  Sec.  32. 

(13) 

377. 

(14) 

171,   203,   817,  584,  738, 

820. 

3 

169,  185. 

(15) 

161,  165,  196,  387,  574. 

(I 

15;^,   156,  159,  168,    195, 

(16) 

Meaning  of  ' '  Judge . ' ' 

248,  392. 

(17) 

177. 

b 

152,   170,  195,  196,    198, 

(18) 

132,  134. 

202,  224,  247. 

(19) 

141,  172,  190,  246. 

c 

15,  155,  161,  194,  225. 

(20) 

Meaning  of  "Petition. " 

d 

155. 

(21) 

Meaning  of  "Referee.  " 

e 

216,  217. 

(22) 

656. 

(23) 

604. 

4 

172,  194,  777. 

(24) 

422. 

a 

28,  141,  246. 

(25) 

161,  381,  561,  572. 

b 

141,  142,  147,  199,    224, 

(20) 

Meaning  of  "Trustee. " 

246. 

(27) 

142. 

(28) 

Words     in     masculine 

5 

142,  243. 

gender. 

a 

247. 

(29) 

Words   importing   plu- 

b 

255,  270. 

ral. 

i 

c 

152,  244,  249,  251,  253. 

(30) 

Words    importing   sin- 
gular. 

d 
f 

255,  852. 
192,  255. 
243,  256,  720. 

2 

25,  33,  70,  174,  603. 

(/ 

256 . 

(1) 

114,   173,   199,  206,    224, 
247,  251,  424,  6:52. 

1 

h 

244,  245. 

(2) 

341. 

6 

376,  424,439,440,  442. 

(3) 

117,  132,  211,  212. 

(4) 

12.5,  353,  63H,  (565. 

7 

274,  631 . 

(5) 

117,    132,    211,  213,  214, 

(1) 

273,  631,632. 

702. 

(2) 

617,  631. 

(6) 

90. 

(3) 

178,  633. 

(7) 

701,  711. 

(4) 

632,  (183. 

VI 


ANALYTICAL    TABLK. 


8eo- 

tlOll 

Clause 

I'nKe  of  TrcntiBC. 

Sec- 
tion 

OlnuBe 

Pago  of  Treatise. 

7 

(5) 

367,  395. 

18 

./■ 

110,  114,  130,  236. 

(6) 

633. 

<J 

110.    113,    114,  180,   184, 

(7) 

(533. 

186, 

(8) 

131,   177,  178,  180,    1S2, 

221,371,429,  433,  439. 

19 

102,  196,  223,  226,  819. 

634,  653. 

a 

157,  210,  280. 

(9) 

612,  617,  618,  623. 

b 

157. 

a 

625,  653. 

c 

664,  753   787. 

8 

146,  896. 

20 

115,  177,  201,  830,  360, 
642. 

9 

a 

632.  633,  638. 
638,  639. 

a 

627. 

b 

HI,  614,  640,  642. 

21 

a 

343,  616. 

232,  615,  626,  629,  667. 

10 

646. 

b 
c 

232,  344,  629. 
344,  630. 

11 

77. 

d 

113,  735. 

a 

88,  94,  211. 

e 

867,  371. 

b 

95,  359. 

f 

693,  697,  783. 

c 

95,  359. 

(J 

696. 

d 

361. 

22 

a 

110,  111,  185,  235. 

12 

a 

677. 
679. 

b 

110. 

b 

682,  684. 

23 

75,  76 

c 

691. 

a 

103. 

d 

Ill,  686,  688,  692. 

b 

81. 

e 

693,  695. 

c 

83,  125,  858,  638. 

13 

697. 

24 

75,  795. 

a 

111. 

a 
b 

790,  807,  808. 

807,  808,  812,  813,  814. 

14 

Ill,  736,  739,  788. 

a 

738. 

25 

102,  809,  818. 

b 

688,  689,  738,  744,  746, 

a 

346,  807,  813,  820,  823. 

748,  750,  753,  754. 

b 

796. 

c 

694,  754. 

c 
d 

828. 

797,  799,  808. 

16 

Ill,  785,  786,  787,  788. 

26 

716. 

16 

70,    244,    295,    315,  401, 

a 

354,  698. 

694,  756. 

b 

c 

700. 
700. 

17 

639,  094,  754,  756,  760. 

(1) 

762. 

27 

698,  703,  716. 

(2) 

764,  766,  767,  768. 

a 

354. 

(3) 

758,  768. 

(4) 

769,  771,  774. 

28 

269,  736. 

18 

204. 

a 

132,  210. 

29 

655. 

b 

112,  210,  222,  228. 

a 

.353,  055,  656,  661. 

c 

177,  227,  233,  786. 

b 

656,  66(1,  662,  747. 

d 

Ill,  230. 

c 

125,  663,  6(U. 

e 

112,  2.36. 

d 

665. 

ANALYTICAL    TABLE. 


vn 


Sec- 
tion 

Clause 

Pajre  of  Treatise. 

Sec- 
tion 

Clause 

Papre  of  Treatise. 

30 

112,  845. 

45 

210,  348,  349. 

31 

171,   203,  317,  387,  390, 
584,  738,  820. 

46 

47 

a 

348,  351,  358,  654. 
348. 

32 

228,  252. 

(1) 
(2) 

717. 

355,  360,  701,  716. 

33 

107,  348. 

(3) 
(4) 

353. 
353,  732. 

34 

107,  109. 

(5) 
(6) 

353. 
352. 

35 

108. 

(7) 
(8) 

718. 
734. 

36 

109, 

(9) 
(10) 

356,  732. 
352,  717,  731. 

37 

107. 

(11) 
b 

429,  439. 
356. 

38 

(1) 

109,  110,  114. 
112,  114,  186. 

c 

353,  362,  367. 

(2) 

115,  614. 

48 

348,  362. 

(3) 

112,  117,  130,  212,  217. 

(4) 

Ill,   117,  621,  684,  691, 
699. 

49 

348. 

(5) 

115,  124,  344,  620. 

50 

a 
h 

348. 
109. 
109,  350,  351. 

39 

n 

122. 

<• 

109,  278,  350. 

(1) 

721,  732,  122. 

(I 

109,  350,  351. 

(2) 

179,  187,  239,  122. 

e 

350. 

(3) 

122. 

f 

350. 

(4). 

280,  122, 

() 

109,  351. 

(5) 

125,  622,  122. 

h 

109,  351. 

(6) 

122. 

i 

350,  351. 

(7) 

122. 

j 

350. 

(8) 

125,  123. 

k 

350. 

(9) 

124,  344,  620,  123. 

I 

]{)9. 

(10) 

123. 

m 

351. 

h 

114,  713. 

51 

130,  18.3. 

40 

126,  338,  721. 

52 

(1 
h 

131. 

132. 

41 

(I 
h 

115,   116,  .343,  619,    666, 

667,  747. 
343,  617,  619,  622,   628, 

638. 
Ill,  622,  671. 

53 
54 
55 

134. 
134. 
210. 

42 

'I 

124. 

<i 

268,  269. 

h 

124. 

h 

1 1 3,  273,  274,  275. 

c 

124,  735. 

c 
d 

274. 
279. 

43 

107,  109. 

{' 

279. 

44 

113,  210,  275,  276,    279, 
348,  349,  350,  358,  698, 

f 

280,  734. 

789. 

50 

273,  277. 

Vlll 


ANALYTICAL    TABLE. 


Sec- 
tion 

OlHllBC 

PnKe  of  TrentiBO. 

Sec- 
tion 

Clause 

PilRO  of  TreatiHO. 

56 

<I 

269.  -JSO.  C.Sl. 

(53 

(4) 

293,  301. 

b 

IIH),   15)4.  '2i\\l   270,    271. 

(5) 

290,  292,  766. 

869,  601,  604. 

b 

282. 

57 

321. 

64 

242. 

a 

322.  326,  330. 

a 

354,  723. 

b 

330,  839. 

b 

135,  561,  725,  726,  727. 

c 

337. 

c 

698,  780,  789. 

d 

272,  387,  388,  340. 

e 

271,  283,331, 

(55 

f 

283,  340. 

a 

718,  720. 

'J 

28;?,  324,   383,  334,  345, 

b 

718,  723. 

598. 

c 

719,  720,  722. 

h 

3.31,  604,  705,  710. 

d 

722. 

i 

296,  298,  323,  332,  780. 

e 

720. 

j 

284,  730,  7(>3. 

k 

273,  341,  342,  345. 

66 

733. 

I 

346,  356. 

a 

356. 

m 

299,  324,  355. 

n 

302,  320,  325. 

67 

a 

563,  716. 

369,  562,  599,  602. 

58 

b 

356,  561,  600. 

a 

i22,   239,  269,  280,  358, 

c 

561,  562,  563,  569,  570, 

(518,  681,  685,691,700, 

607. 

703,  705,  706,  70 .-,711, 

d 

369,  562,  591,  599,  727. 

716,718,  721,  734,737. 

e 

159,   355,   381,  389,  393, 

b 

769. 

562,  595,  605. 

c 

123,  132,  269. 

f 

1.^)4,  355,  369,   888,  562, 
563,  566,  569,  600, 607. 

59 

a 

172,  176. 

68 

317. 

b 

190,  193,  199. 

a 

329. 

c 

Ill,  131,  182,  198,  201. 

h 

315,  316. 

d 

190,  199. 

e 

192. 

69 

112,   117,   132,   216,  217, 

f 

219. 

219. 

g 

187,  190,  239. 

70 

118,  182,  385,  563,  716. 

60 

159,   162,  386,  560,  563, 
571,  581,  589,591,694, 

a 

365,  366,  367,   376,  427, 
429,  438. 

716. 

(1) 

377. 

a 

582. 

(3) 

378. 

b 

355,   360,  369,  561,  562, 

(3) 

379. 

577,  580,  606,  611. 

(4) 

381,  382,  384. 

c 

817. 

(5) 

394,  408. 

d 

355,  586. 

b 

417,  420. 

441,  712,  713,  715. 

61 

a 

354. 

c 
d 

369,  60.i,  713. 
369,  698,  789. 

62 

131,  725. 

e 

360,   384,  389,  605,  611, 
716. 

63 

a 

193,  281,  318,  761. 
289,  293,  764. 

f 

3G9,  693,  696. 

(2; 

301. 

71 

129. 

(3) 

301. 

72 

363. 

TABLE    OF    UOA'TENTS.  IX 


TABLE  OF  CONTENTS. 


CHAPTER  1. 

A   BRIEF    HISTORY   OF    BANRRPPT   LAW. 

PAGE. 

§  1.     Bankrupt  laws  of  the  Romans    1 

2.  Bankrupt  laws  of  other  countries   2 

3.  English  bankrupt  laws    4 

4.  Bankrupt  laws  of  the  United  States   6 

5.  The  act  of  1800   7 

6.  The  act  of  1841    10 

7.  The  law  of  18G7    12 

8.  A  brief  comparison  of  the  acts  of  1867  and  1898 13 

CHAPTER  II. 

THE   POWKE  OF   CONGRESS   AND   THE   STATES    TO    EXACT  E.\.NKRUPT   LAWS. 

§  9.     The  power  of  congress  to  enact  bankrupt  laws   17 

10.  Power  of  the  state  to  enact  bankrupt  and  insolvent  laws...  20 

11.  Power  of  the  states  to  enact  bankrupt  and  insolvent  laws...'  20 

tion  of  a  contract    21 

12.  The  effect  of  a  national  bankrupt  law  upon  state  insolvent 

laws  23 

13.  The  effect  of  a  national  bankrupt  law  upon  general  assign- 

ment laws  of  the  states 29 

CHAPTER  III. 

THE    COURTS    OF    BANKRUPTCY     AND    TIIKIU    TERRITORIAL     JURISDICTION. 

514.     Bankruptcy  courts  created   33 

15.     Territorial  jurisdiction    33 

CHAPTER  IV. 

THE   .ICRISDICTION   OF   COURTS   OF   RANKRITTCY. 

§lfi.     The  statutory  jurisdiftion    67 

17.  Tho  general  extent  of  bankruptcy  powers    tiO 

18.  Bankruptcy  jurisdiction  exclusive   75 

19.  Limitations  to  the  exercise  of  jurisdiction   78 


X  TAKT.K    OK    CONTENTS. 

PAGE 

S20.     Jurisdiction  of  plenary  suits  at  law  and  in  equity 39 

21.  Ancillary  proceedings  in  other  districts   86 

22.  Power  to  stay  proceedings  in  other  courts  87 

23.  Power  to  obtain  possession  of  property    95 

24.  When  a  circuit  court  may  have  jurisdiction  of  bankruptcy 

proceedings    101 

25.  Jurisdiction  of  circuit  courts  at  law  and  in  equity  103 

CHAPTER  V. 

REFERKES. 

§26.     The  appointment,  removal  and  districts  of  referees 107 

27.     Qualifications  of  referees    107 

2S.     The  oath  and  bond  of  a  referee  109 

29.  General  powers  of  referees   109 

30.  Power  to  make  an  adjudication   114 

31.  Power  to  administer  oaths  and  examine  witnesses 115 

32.  Power  to  take  possession  and  release  the  bankrupt's  prop- 

erty      117 

32a.  Review  of  referee's  rulings  by  judge 118 

33.  The  administrative  duties  of  referees   12."^ 

34.  Records  of  referees 124 

35.  Offenses  of  referees  125 

36.  Compensation  of  referees   126 

CHAPTER  VI. 

CLERKS,    MARSHALS,    ETC. 

§37.     Duties   of  the  clerks    129 

38.  Compensation  and  expenses  of  clerks    131 

39.  Marshals    132 

40.  Compensation  and  expenses  of  marshals  132 

41.  Duty  of  the  attorney-general  to  report  annually 133 

41a.  Attorneys   134 

CHAPTER  VII. 

WHO  MAY  BE  BAXKRIPTS. 

§42.     Voluntary  Bankrupts   141 

43.  Involuntary  Bankrupts    141 

44.  Aliens    143 

45.  Infants    144 

46.  Lunatics    145 

47.  ?klarried  women    1*6 

48.  Corporations    147 

CHAPTER  VIII. 

ACTS    OF    BANKRUPTCY. 

549.     Who  may  commit  an  act  of  bankruptcy ,  152 

50.  What  are  acts  of  bankruptcy?  153 

50a.  Insolvency  as  an  act  of  bankruptcy  155 

51.  First:  Fraudulent  transfers  159 


TABLE    OF    CONTiaiU*.  XI 

PAGE 

§52.     Second:  Preferences  created  by  the  debtor  161 

53.  Third:   Preferences  created  hy  legal  proceedings  164 

54.  Fourth:   Assignment  for  the  benefit  of  creditors  167 

55.  Fifth :    Voluntary    petition    169 

56.  Computing    time    170 

CHAPTER  IX. 

PROCEEDINGS     IN     VOLUNTABY     BAXICEUPTCY. 

§57.     Who  may  file  a  voluntary  petition  172 

58.  In  what  court  the  petition  is  to  be  filed  174 

59.  The   petition    176 

60.  Schedules     178 

61.  Of  filing  the  petition  and  schedules   182 

62.  The  order  of  adjudication  and  reference  184 

63.  Amendments  to  petition  and  schedules  186 

64.  Voluntarily  dismissing  a  petition    187 

65.  Proceedings  subsequent  to  the  adjudication   18S 

CHAPTER  X. 

INVOLUXTAEY    PKOCEEDINGS. 

§66.     Who  may  institute  involuntary  proceedings   189 

67.  Against  whom  a  petition  may  be  filed  194 

68.  In  what  court  an  involuntary  petition  is  filed 197 

69.  The   petition    19*5 

70.  The  time  and  manner  of  filing  the  petition  201 

71.  The  writ  of  subcena  203 

72.  In  what  cases  a  subpoena  is  necessary  204 

73.  The  service  of  a  subpoena  205 

74.  The  return  of  the  subpoena  207 

75.  Service   by  publication    20S 

76.  How  to  object  to  an  irregularity  of  service  or  subpoena 209 

77.  Interlocutory  orders  to  protect  the  estate   210 

77a.  Receivers   in   bankruptcy    212 

78.  Temporary  injunction  or  restraining  order   214 

79.  The  seizure  of  the  debtor's  property  216 

80.  Appearing  for  the  purpose  of  becoming  a  party  to  the  pro- 

ceedings      219 

81.  Schedules    221 

82.  Pleading  to  the  petition    222 

83.  The  answer   224 

84.  The  order  of  proceeding  where  petitions  are  filed  in  differ- 

ent districts    228 

85.  The  order  of  proceeding  where  two  or  more  petitions  are 

filed  in  the  same  court  229 

86.  The   reply    229 

87.  The  hearing  or  trial   230 


Xil  TAHLK    OK    CONTENTS. 

PAGE 

§SS.     Order  of  adjudication    ' 233 

S9.     Proceedings  to  set  aside  an  adjudication  234 

90.  Order  of   reference    235 

91.  Proceedings  on  default    23t5 

92.  Amendments  in  involuntary  proceedings  237 

93.  Dismissing  a  petition    238 

94.  Involuntarly  proceedings  as  to  grounds   for  suit  for   dam- 

ages      241 

94a.  Costs    241 

95.  Proceedings  subsequent  to  the  adjudication  242 

CHAPTER  XI. 

PROCEEDINGS    PECULIAE   TO   PARTNERSHIPS. 

§  96.     Partnership  bankruptcy  generally   243 

96a.  Individual  petition  by  or  against  a  partner  244 

97.  "When  a  partnership  may  be  adjudged  bankrupt 246 

98.  How  to  institute  proceedings  to  have  a  partnership  declared 

bankrupt    248 

98o.  The  adjudication  and  reference  in  partnership  cases 253 

99.  The  administration  of  partnership  estates 255 

100.  What  is  firm  and  individual  property  respectively 258 

101.  What  are  firm  and  individual  debts  respectively  260 

102.  The  effect  of  a  discharge  265 

CHAPTER  XII. 

MEETINGS    OF    CREDITORS. 

§103.     Proceedings  after  a  reference  generally 268 

104.  The  time  and  manner  of  calling  the  first  meeting  of  cred- 

itors      268 

105.  Who  are  entitled  to  vote  at  the  first  creditor's  meeting.  . . .  209 

106.  How  to  conduct  the  first  meeting  of  creditors  273 

107.  Notice  to  trustee   278 

108.  Other  meetings  of  creditors    279 

CHAPTER  XIII. 

WHAT  DEBTS   ARE  PROVABLE. 

§1 09.     Provable  debts  defined  281 

110.  What  is  "a  debt"   283 

111.  Equitable   debts    285 

112.  Contingent  demxands  and  liabilities  not  debts   286 

113.  Debts  which  are  a  fixed  liability  provable  287 

114.  What  constitutes  a  fixed  liability  absolutely  owing 288 

115.  Judgment  debts  provable    289 

116.  Debts  evidenced  by  an  instrument  in  writing 293 

117.  Interest 299 

118.  Costs    301 

119.  Debts  founded  upon  contract 301 

120.  Rent 30-4 


TABLE    OF    CONTENTS.  XIU 

PAGE 
§121.     Mutual  debts  and  credits   307 

122.  What  are  "mutual  debts"  and  "mutual  credits"   309 

123.  What  mutuality  is  necessary 311 

124.  The  debts  and  credits  must  be  in  the  same  right 313 

125.  Set-offs  must  be  provable  debts 315 

126.  Debts  acquired  by  purchase  as  set-offs   316 

127.  Rights  of  preferred  creditor  to  set-offs   317 

128.  Torts    318 

129.  Debts  barred  by  the  statutes  of  limitations   319 


CHAPTER  XIV. 

HOW   TO  PROVE  DEBTS. 


5130.  Necessity  of  proof  321 

131.  Who  may  make  the  proof  322 

132.  The  time  within  which  debts  may  be  proved  325 

133.  The  manner  of  making  the  proof 326 

134.  Proof  by  a  secured  creditor   331 

135.  Proof  by  creditors  who  have  received  preferences  332 

136.  What  is  a  surrender  of  a  security  or  preference? 334 

137.  Filing  proofs  of  debts   337 

138.  Amendments  and  withdrawal  of  proof  338 

139.  Allowance  of  claims   349 

140.  Re-examination  of  claims 342 

141.  How  to  review  the  final  allowance  or  rejection  of  a  claim. .  346 


CHAPTER  XV. 

TRUSTEES. 

§142.     Appointment  and  qualifications  348 

143.  Bonds  of  trustees   350 

144.  Duties  of  a   trustee    351 

]  45.     Removal  of  trustee  356 

146.  Suits  which  may  be  prosecuted  or  defended  by  trustees 358 

147.  Limitations  of  actions  by  or  against  trustees   361 

148.  Compensation  and  expenses  of  trustees 362 

CHAPTER    XVI. 

WII.\T    PASSES    TO    THE    TRViSTEE. 

8149.     Title  to  bankrupt's  property   365 

150.  The  possession  of  the  bankrupt's  property   370 

151.  Trustees  not  bound  to  take  incumbered  interest  371 

152.  Property  of  other  persons  in  the  possession  of  the  bank- 

rupt      372 

15.3.     What  property  passes  to  the  trustee  generally  376 

154.     Documents    37T 


XIV  TABLK    OF    CONTEI^TS. 

TAGi; 

§155.  Patents,  copyrights  and  t  raiU'-marks    378 

15G.  Powers  of  appoiutmeut,   etc ; 379 

157.  Property  frauduleutly  transferred  by  the  bankrupt   381 

158.  Transfers  in  fraud  of  creditors 382 

159.  Transfers  to  prefer  creditors  385 

IGO.  Property  transferred  to  hinder,  delay  or  defraud  creditors.  .  389 

161.  Transfers  void  as  to  creditors  under  state  laws 393 

1G2.  Real  and  personal   property    394 

163.  Interest  in  real  estate   395 

164.  Dower   and    curtesy    396 

165.  Leaseholds    396 

166.  Growing  crops,  fixtures  and  good-will   402 

167.  Goods  and  chattels  generally  403 

168.  Shares  of  stock   405 

169.  Membership  in  exchanges,  franchises  and  privileges 406 

170.  Negotiable   instruments    407 

171.  Pensions    403 

172.  Insurance    policies    408 

173.  Property  held  by  the  bankrupt  as  trustee  411 

174.  Trust  property  in  which  the  bankrupt  has  a  beneficial  in- 

terest      414 

175.  After-acquired  property   415 

176.  Rights  of  action  upon  contracts   for  injury,  etc.,  to  prop- 

erty   417 


CHAPTER  XVII. 

EXEMPTIONS. 

$177.     By  what  laws  exemptions  are  governed 422 

178.  Constitutionality  of  clause  providing  for  exemptions 426 

179.  Title  to  exempt  property  427 

180.  Jurisdiction  of  a  court  of  bankruptcy  over  exempt  prop- 

erty      428 

181.  Liens  on  exempt  property    430 

182.  Who  may  claim  exemptions    432 

183.  Waiver  of  exemption    433 

184.  Waiver  to  exemption  in  property  fraudulently  conveyed...  435 

185.  Dower    437 

186.  How  to  set  apart  exemptions  433 

187.  What  property  is  exempt  generally 442 

188.  Exemption  laws  of  the  several  states  and  territories 444 


CHAPTER  XVIII. 

PREFERENCES    AND    LIENS. 

1189.     The  general  nature  of  preferences  and  liens  560 

190.  Valid  preferences  and  liens   561 

191.  Invalid  preferences  and  liens 562 


TABLE    OF    CONTENTS.  XV 

PAGE 

192.  Preferences  by  judgments,   attachments,   levies,  etc 563 

193.  Dissolution  of  liens    570 

194.  Preferences   by   transfers    571 

195.  Payments     584 

196.  Sales    589 

197.  Mortgages    591 

198.  Pledges    597 

199.  As  to  liens   generally    599 

200.  Mechanics'  liens  601 

201.  Admiralty  liens    603 

202.  Rights  of  a  secured  creditor  604 

203.  Suits  to  set  aside  fraudulent  conveyances  and  preferences.  605 

CHAPTER  XIX. 

EXAMIXATIOXS. 

§204.     When  a  bankrupt  may  be  examined 612 

205.  When  persons  other  than  bankrupts  may  be  examined....  614 

206.  How  to  obtain  an  order  for  an  examination  615 

207.  Notice    of   examination    to    bankrupts,    creditors    and    wit- 

nesses       617 

208.  How  an  examination   is  made    619 

209.  Upon  what  topics  the  bankrupt  may  be  examined 623 

210.  Upon  what  topics  witnesses,  other  than  bankrupts,  may  be 

examined 626 

210a.  Examination  of  witnesses  residing  without  the  district....  628 

210b.  When  testimony  upon  an  examination  may  be  used 630 

CHAPTER  XX. 

THE    BAMvEUPT — DUTIES    AND    EXTRADITION. 

§211.    Who  is  a  bankrupt  631 

212.  Duty  to  attend  meetings  631 

213.  Duty  to  comply  with  the  orders  of  the  court 631 

214.  Duty  with  respect  to  claims  against  his  estate 633 

21 5.  Duty  to  execute  papers    633 

210.     Duty  to  prepare  a  schedule  of  his  debts  and  asfets 634 

21 7.  Duty  to  submit  to  an  examination   634 

21 8.  Protection  from  arrest    635 

219.  When  a  bankrupt  may  be  arrested   638 

220.  Proceeding  to  release  a  bankrupt  from  imprisonment.    Ha- 

beas   corpus    642 

221.  Extradition  of  bankrupts 646 

222.  Proceedings  to  remove  a  liankrupt  from  one  district  to  an- 

other       648 

223.  Proceedings  l)efore  a  United  States  commissioner 648 

224.  Proceedings  before  the  judge  for  an  order  of  removal 650 

225.  The  order  of  court  granting  or  refusing  a  warrant 662 

226.  Habeas   corpus    653 

227.  Abatement    653 


XVI  TAHLK    OF    CONTKM'S. 

CHAPTER  XXI. 

OFFENSES. 

PAGE 

S22S.     Generally G55 

229.  Misappropriation   ol"  proiierty   by  the  trustee    655 

230.  Concealment   of  property  by  a  bankrupt    656 

231.  False  oath  or  account   6G0 

232.  Presenting   false   claims    CGI 

233.  Receiving  property  from  a  bankrupt  6G2 

234.  Extorting  money  for  forbearing  to  act  662 

235.  Offenses  by   referees 636 

236.  What  court  has  jurisdiction  of  criminal  proceedings 663 

237.  Practice   and    procedure 664 

CHAPTER  XXII. 

PROCEEDINGS  IN  CONTEMPT. 

§238.     The  power  to  commit 666 

239.  Nature  of  the  proceedings   670 

240.  Practice,   pleadings   and   procedure    671 


CHAPTER  XXIII. 

COMPOSITIONS    A-ND   ARBITRATIONS. 

§241.     The  general  nature  of  a  composition   677 

242.  The  power  of  congress  to  provide  for  compositions 67S 

243.  Composition  provisions  should  not  be  construed  broadly..  678 

244.  When  a  bankrupt  may  offer  terms  of  composition 679 

245.  Creditors'  meeting  to  consider  terms  of  composition 680 

246.  Application  for  confirmation   632 

247.  Objections  to  a  confirmation   685 

248.  The  hearing  of  objections    691 

249.  The  order  of  confirmation    692 

250.  The  effect  of  a  confirmation  of  a  composition  693 

251.  Proceedings  after  a  confirmation  of  a  composition  695 

252.  Setting  aside  a  confirmation   697 

253.  Arbitration  and  compromise    698 

CHAPTER  XXIV. 

now    TO     REDUCE    THE    ESTATE    TO    MONEY. 

§254.     The  general  power  of  trustee  to  sell   701 

255.  Unencumbered    property    703 

256.  Encumbered    property    704 

:i57.     When  a  secured  creditor  may  apply  to  have  property,  on 

which  he  has  a  lien,  sold 70S 

258.  Disputed    property    711 

259.  Sale    of    perishable    property    711 


TABLE    OP    CONTENTS.  XVll 

PAOE 

§260.  The  sale   712 

261.  Setting  aside  a  sale   714 

262.  Costs  of  sale  715 

263.  Of  preferences   and   debts    715 


CHAPTER  XXV. 

THE   niSTEIBUTION    OF   THE   ESTATE. 

§264.     The  general  plan  of  distribution   717 

265.     Who  are  entitled  to  share  in  the  estate    719 

26C.     How  and  when  dividends  are  declared   720 

267.  Debts  which  have  priority    723 

268.  Dividends  are  not  subject  to  attachment   731 

269.  The  manner  of  paying  dividends  732 

270.  Unclaimed   dividends    733 

271.  The  settlement  of  the  estate   733 

272.  The  record  of  the  referee  to  be  transmitted  to  the  court. . . ,  735 

CHAPTER  XXVI. 

DISCHARGE. 

S273.     Application   for  a  discharge    736 

274.  When  and  where  the  petition  is  filed  737 

275.  Who  may  oppose  a  discharge   738 

276.  How  to  oppose  a  discharge  739 

277.  The  specification  of  grounds  in  opposition  to  a  discharge..  742 

278.  Grounds  for  opposing  a  bankrupt's  discharge  744 

279.  First  ground   for  opposing  a  discharge,   that   bankrupt   is 

guilty   of  an   offense 747 

280.  Second  ground  of  opposing  a  discharge,  that  books  of  ac- 

count are  fraudukntly  withheld  or  are  not  kept 748 

281.  Pleading  to   a   specification 752 

282.  The  hearing  of  objections  to  a  discharge 752 

283.  The   order   granting   a   discharge 754 

284.  The  general  nature  and  effect  of  a  discharge 755 

285.  The  effect  of  a  discharge  upon   liens 753 

28G.     The  effect  of  a  discharge  on  foreign  creditors 756 

287.  The  effect  of  a  foreign  discharge  on  American  debts 758 

288.  In   what  court  the   effect  of  a  discharge   is   determined..  759 

289.  What  debts  are   released   by   a  discharge 760 

290.  The  effect  of  a  discharge  on  debts  due  the  United  States.  .  762 

291.  The  effect  of  a  discharge  upon  judgments  against  the  bank- 

rupt     ; 7G4 

292.  The  effect  of  a  discharge  upon  debts  not  scheduled 76S 

293.  Debts   created   by   fraud   or  embezzlement 7)i9 

294.  Fiduciary  debts    771 

295.  Debts   created    by    misappropriation 775 

290.     Co-debtors   not  discharged    77G 


X\  111  TA151.K    OF    CONTKNTrt. 

PAGE 

§297.     The  effect  of  a  new  promise  upon  a  discharged   debt....  779 

298.  Pleading   a    discharge    '. 782 

299.  Revoking    discharges     784 

300.  The  effect  of  revoking  a  discharge 788 

CHAPTER    XXVII. 

.\PPELLATE     PUOCEEDINGS. 

§301.     The    appellate    courts    790 

302.  Appellate  jurisdiction  at  law  and   in  equity  to  revise  the 

action    of    federal    courts 790 

303.  Appellate  jurisdiction  at  law  and  in  equity  to  revise  the 

action  of  a  state  court 793 

304.  Jurisdiction  of  the  supreme  court  of  appeals  in  bankruptcy  795 

305.  Writs  of  certiorari  from  the  supreme  court 797 

306.  Certiorari   to   complete   records 797 

307.  Certiorari  to  remove  a  case  for  review 799 

308.  The  application  for  writ  of  certiorari  to  remove  a  case  to 

the    supreme    court    801 

309.  Certifying  questions   to   the   supreme   court 803 

310.  Appeals  to  the  supreme  courts  of  the  territories 807 

311.  The  twofold  jurisdiction  of  the  circuit  court  of  appeals..  807 

312.  The  supervisory  powers  of  the  circuit  courts  of  appeals.  . . .  808 

313.  Application  to  superintend  and  revise  matters  of  law 812 

314.  Appellate  jurisdiction  in  bankruptcy  of  the  circuit  courts 

of   appeals    81G 

315.  Time  within  which  an  appeal  must  be  taken 820 

316.  How  to  take  an  appeal  in  bankruptcy 821 

317.  Parties  to  an  appeal 823 

318.  Petition    for   appeal    827 

319.  Assic^ments   of  error    827 

320.  Bond    on    appeal    82S 

321.  Supersedeas    829 

322.  Citation     830 

323.  The    record     833 

324.  Amendments  to  the  record 835 

325.  Perfecting  an  appeal  and  filing  the  record 836 

326.  Proceedings  in  a  circuit  court  of  appeals 83S 

327.  Death  of  a  party 840 

328.  The    mandate    842 

General  Orders  843 

Official   forms    865 

Bankrupt  Act  of  1898 1119 

Bankrupt  Law  of  1867 1207 

Table  of  Cases 1243 

Index    1311 


THE  LAW  AND  PROCEEDINGS  IN 
BANKRUPTCY. 


CHAPTER  I. 

A  BRIEF  HISTORY  OF  BANKRUPT  LAW. 

§  I.     Bankrupt  laws  of  the  Romans. 

In  very  early  tiines  the  debtor  was  at  the  mercy  of  his 
creditors.'  He  might  be  imprisoned  or  suffer  bodily  torture, 
as  his  creditors  willed. 

The  first  steps  toward  a  system  of  bankruptcy  were  taken 
with  the  object  of  relieving  the  debtor.  These  laws  in  some 
cases  were  carried  to  such  an  extent  as  to  work  great  injustice 
to  the  creditors.  The  rights  of  the  creditors  were  then  again 
considered,  but  in  connection  with  the  rights  of  the  debtor. 
Then  for  the  first  time  appeared  the  chief  principles  of  the 
law  of  bankruptcy,  namely,  that  when  a  man  is  unable  to  pay 
his  just  debts  the  property  remaining  to  him  rightly  belongs 
to  his  creditors,  and  ought  to  be  distributed  ratably  among 
them  towards  the  satisfaction  of  their  debts.  It  was  later 
that  the  debtor  was  released   from   future  liability  in   respect 

'  Mr.  Justice   Hlackstone,  in  his  and  hard  labor  at  their  mercy,  and 

Commentaries    (\'ol.    2,    pp.    472,  sometimes  sell  him,  his  wife  and 

473),  refers   to   the  early  Roman  children    into    perpetual    slaverj\ 

laws  on  this   subject.      The  laws  Later,  it  is  true,  an  equally  vicious 

of  the  twelve  tables  provided  that  law  was  enacted  for  the  benefit  of 

the  creditors  mi^^ht  cut  the  debt-  the  debtor,  which  provided  that  if 

or's   bo(h-  in    pieces,  and   each   of  an   insolvent  debtor  would  szvcar 

them  take  his  proportionate  share.  that   he   had    not  enough  left  to 

'  )ther  laws  provided  that  the  cred-  jjaj-  his  de])ts,  he  should  not  be  re- 

itors  mip;ht  im])rison  the  debtor  in  cjuired  to  give  up  even  that  which 

chains,  or    subject   hiir.   tf)  strijjes  he  Iiad  in  his  jjossession. 

I 


2  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

to  those  debts,  although  from  the  first  he  was  relieved  from 
corporal  punishment. 

The  first  law  resembling  in  any  marked  degree  a  bankrupt 
law,  as  it  is  understood  at  the  present  time,  is  found  in  the 
Roman  law  of  cession — cessio  honorum.  It  was  introduced 
by  Julius  CcEsar,  and  provided  that  if  a  debtor  yielded  up  all 
his  fortune  to  his  creditors  he  was  secured  from  being  dragged 
to  a  goal  "" omni  qiwquc  corporali  cnuiatu  semoio.^'' ' 

The  law  of  cessions  extended  to  all  classes  of  persons,  much 
like  the  present  bankrupt  law  of  the  United  States,  but  it  did 
not  release  or  discharge  the  debt  or  exempt  the  future  acqui- 
sitions of  the  debtor  from  execution  for  the  debt.*  It  merely 
exempted  the  debtor  from  imprisonment  and  corporal  pun- 
ishment. 

§  2.     Bankrupt  laws  in  other  countries. 

Similar  laws  were  introduced  in  other  continental  countries 
in  Europe.  Chancellor  Kent,  writing  in  the  first  quarter  of 
the  present  century,  said:^  "And  it  may  be  laid  down  as  the 
law  of  Germany,  France,  Holland,  Scotland,  England,  etc., 
that  insolvent  laws  are  not  more  extensive  in  their  operation 
than  the  cessio  botwnmi  of  the  civil  law  In  many  parts  of 
Germany,  as  we  are  informed  by  Hnberus  and  Heineccius,  a 
cessio  bonoriim  does  not  even  work  a  discharge  of  the  debtor's 
person,  and  much  less  of  his  future  property.  But  in  Germany 
the  cessio  bonorum  has  the  severe  operation  of  depriving  the 
insolvent  of  his  remedy  for  a  personal  trespass  committed 
prior  to  the  cession,  so  far  as  pecuniary  compensation  is  in 
question."  According  to  the  Spanish  law,  property  which 
the  debtor  acquired  after  his  cession  was  not  all  liable  for  his 
debts,  but  only  so  much  of  it  as  exceeded  the  amount  neces- 
sary for  his  support.* 

'  2  Black.  Com.  473.  debtor's  support  was  liable  for  his 
2  I  Kent  Com.  422-3.  In  Fitz-  debts  prior  to  the  cession, 
gerald  v.  Phillips,  4  Martin  (La.),  ^  i  Kent  Com.  423. 
O.  S.  292,  Judge  Derbigny  cites  <  But  the  early  law  of  Louisiana, 
the  cessio  bonorum  (\.  4,  5  and  6)  which  was  also  founded  on  the 
of  the  Roman  law  to  the  effect  that  civil  law,  contained  no  such  ex- 
only  so  much  of  the  property  ac-  emption.  Fitzgerald  v.  Phillips, 
quired  after  a  cession  as  exceed-  3  Martin,  O.  S.  588;  s.  c.  4  Mat- 
ed the  amount   necessary  to  the  tin,  O.  S.  292. 


BRIEF    HISTORY    OF    BANKRUPT    LAW.  3 

It  is  not  within  the  scope  of  this  sketch  to  consider  the 
bankrupt  laws  of  all  countries.  While  the  present  act  was 
pending,  the  judiciary  committee  of  the  House  of  Represent- 
atives took  no  little  pains  to  ascertain  from  different  sources 
what  other  countries  had  done  in  respect  to  bankruptcy  legis- 
lation. This  committee  reported  to  congress  December  i6, 
1897,  that  the  following  countries  have  bankruptcy  laws: 
Argentina,  Austria-Hungary,  Belgium,  Bolivia,  Brazil,  Costa 
Rica,  Denmark,  England,  France,  Germany,  Guatemala, 
Haiti,  Honduras,  Ireland,  Italy,  Liberia,  Mexico,  Nether- 
lands, Norway,  Paraguay,  Portugal,  Roumania,  Russia,  Scot- 
land, Spain,  Sweden,  Turkey,  Uruguay  and  Wales.  The  com- 
mittee did  not  ascertain  whether  or  not  there  was  a  bank- 
ruptcy law  in  Chile,  Columbia,  Dominican  Republic,  Hawaii, 
Japan,  Korea,  Peru,  Syria,  Switzerland  or  Venezuela.  It 
will  be  observed  that,  aside  from  China  and  possibly  Japan, 
there  are  no  countries  of  any  considerable  importance  but 
what  have  bankruptcy  laws  in  the  modern  sense  of  the  word. 

"In  China  the  various  foreign  nationalities,  except  the 
United  States,  have  bankruptcy  laws  which  are  enforced 
against  their  nationals,  those  of  Germany  being  very  strict, 
and  others  perhaps  less  so.  .  .  .  There  never  was  such 
a  law  in  existence  among  the  Chinese  as  a  bankruptcy  law. 
All  delinquents  in  China  pass  into  the  dishonored  class,  and 
are  soon  put  under  process  of  coercive  termination  of  a  busi- 
ness career,  and  are  subject  to  punishment  by  bamboo  blows. 
The  laws  against  bankrupts  in  China  are,  theoretically,  very 
severe,  a  failure  of  $1,500  to  $5,000  entailing  banishment, 
and  from  $5,000  upward,  summary  decapitation.  No  distinc- 
tion is  made  between  fraudulent  bankruptcy  and  unavoidable 
ones. ' ' 

In  Guadeloupe  there  is  no  relief  whatever  for  a  bankrupt. 

In  Siam  "there  are  no  bankruptcy  laws,  as  we  understand 
them.  When  a  man's  assets  fall  short  of  his  liabilities  he 
either  compounds  with  his  creditors  or  leaves  the  country 
hurriedly.  If  taken,  liis  own  person  and  those  of  his  family 
may  be  held  until  the  debt  be  paid." 


4  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

§  3.     English  bankrupt  laws. 

The  bankrupt  law  was  an  innovation  on  the  common  law. 
The  English  system  of  bankruptcy  was  borrowed  directly 
from  continental  jurisprudence.'  "We  have  fetched,"  said 
Lord  Coke,  "as  well  the  name  as  the  wickedness  of  bankrupts 
from  foreign  nations."'^  The  English  word  bankrupt  is 
derived  from  the  Italian,  banca  rotta^  meaning  a  broken  bank 
or  bench.* 

The  English  system  of  bankruptcy  originated  in  1542  with 
the  statute  of  34  and  35  Henry  VIII.,  chap.  4.  It  has  been 
frequently  modified  by  subsequent  legislation,  but  it  has 
never  been  abolished  during  any  period  since  that  time. 
Originally  a  bankrupt  was  considered  a  criminal  offender.* 

The  law  of  Henry  VIII.  was  directed  against  debtors, 
whether  traders  or  not,  who  sought  fraudulently  to  evade  the 
payment  of  their  debts,  or,  as  it  was  expressed  in  the  act, 
"who,  craftily  obtaining  into  their  hands  great  substance  of 
other  men's  goods,  do  suddenly  flee  to  parts  unknown  or  keep 
their  houses,  not  minding  to  pay,  or  return  to  pay,  any  of 
their  creditors  their  debts  and  duties,  but  at  their  own  wills 
and  pleasures  consume  the  substance  obtained  by  credit  from 
other  men  for  their  own  pleasure  and  delicate  living,  against 
all  reason,  equity  and  good  conscience."  The  next  statute 
was  that  of  13  Elizabeth,  chap.  7.  By  this  statute  the  law 
of  bankruptcy  was  restricted  to  traders,  and  certain  acts  were 


1  2  Blackstone's  Com.  472.  "  Some  choose  to  adopt  the  word 

2  4  Inst.  277.  route,  which  in  French  signifies  a 
'  See   Skeat's    Etym.  Die,   sub-  trace,  or  track,  and  tells  us  that  a 

ject,  Bankrupt;  Century  Die,  sub-  bankrupt  is  one  who  hath  re- 
ject. Bankrupt;  2  Blackstone's  moved  his  banque,  leaving  but  a 
Com.  472.  trace  behind.     (4  Inst.  2']'].)    And 

"  It  is  said  to  have  been  the  cus-  it  is  observable  that  the   title  of 

torn  in  Italy  to  break  the  bench,  the  first  English  statute  concern- 

or  counter,  of   a   money-changer  ing    this    offence    (34    Hen.  VII., 

upon  his  failure;  but  the  allusion  c.  4),  '  against  such  persons  as  do 

is  probably  figurative,    like  break,  make  bankrupt '  is  a  literal  trans- 

crash,   smash,    similarly    used    in  lation  of  the  French    idiom,  qui 

English." — Cetiiury  Die,  Bank-  font    banque    route."  —  2     Black- 

RUPT.  stone's  Com.  472  N. 

Mr.  Justice  Blackstone  suggests  *  2  Blackstone's  Com.  471. 
another  derivation,  when  he  says: 


BRIEF    HISTORY    OF    BANKRUPT    LAW.  5 

prescribed,  called  acts  of  bankruptcy,  upon  the  committing 
of  which  a  trader  became  liable  to  be  adjudged  a  bankrupt. 

It  was  not  until  the  statutes  of  4  Anne,  chap.  17,  and  10 
Anne,  chap,  15,  that  the  bankrupt  law  lost  its  criminal 
nature.  The  bankrupt  law  then  became  an  equitable  system. 
The  bankrupt,  upon  surrendering  his  property  and  conform- 
ing to  the  requisitions  of  the  bankrupt  law,  was  entitled  to  a 
certificate  of  discharge.  This  was  obtained  only  with  the 
consent  of  a  specified  majority  of  his  creditors.  When  it  was 
issued  it  released  him  from  liability  for  his  prior  debts. 

In  1825,  by  the  general  bankrupt  act  of  6  George  IV., 
chap.  16,  the  former  statutes  were  consolidated  and  many 
important  alterations  introduced. 

In  the  year  1831  an  important  change  was  made  in  the 
mode  of  administering  the  bankrupt  law.  Courts  of  bank- 
ruptcy were  established  by  the  statute  of  i  and  2  William  IV., 
chap.  56.  Before  this  time  the  law  had  been  administered 
by  the  lord  chancellor  or  by  commissioners  appointed  by  the 
chancellor.  This  statute  removed  the  jurisdiction  of  bank- 
rupt cases  in  the  first  instance  from  the  court  of  chancery  to 
that  of  bankruptcy,  reserving  only  an  appeal  from  that  court 
to  the  lord  chancellor  as  to  matters  of  law  and  equity  and 
questions  of  evidence.  Other  important  alterations  were  in- 
troduced. Thus  under  this  statute  there  was  no  deed  of  as- 
signment of  the  bankrupt's  property,  but  the  property  vested 
in  the  assignees  by  operation  of  law  under  their  appointment. 

This  statute  was  followed  by  5  and  6  William  IV.,  chap. 
2Q,  and  by  5  and  6  Victoria,  chap.  122,  which  further  mod- 
ified the  law  and  the  organization  of  the  courts.  The  numer- 
ous statutes  relating  to  bankruptcy  were  again  consolidated 
by  the  bankrupt  law  consolidation  act  of  1849.  This  was 
amended  in  a  few  particulars  by  the  act  15  and  16  Victoria, 
chap.  -]-],  and  by  the  bankruptcy  act,  1854.  A  further  amend- 
ment of  the  law  of  bankruptcy,  known  as  the  "Bankrupt 
Act,  1861,"  24  and  25  Victoria,  chap.  134,  abolished  the 
court  for  the  relief  of  insolvent  debtors  and  transferred  its 
jurisdiction  to  the  court  of  bankuptcy.  By  this  act  non- 
traders  were  made  subject  to  the  law  of  bankruptcy.  By  the 
"Bankruptcy  Amendment  Act,  1868,"  31  and  32  Victoria, 
chap.  104,  further  changes  were  made. 


6  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

After  unsuccessful  attempts  in  several  successive  sessions 
of  parliament  to  reform  the  bankrupt  laws,  the  general  bank- 
rupt act  of  32  and  t,;^  Victoria,  chap.  71,  was  passed  in  1869. 
This  act  in  turn  was  followed  by  an  act  entitled  "An  act  to 
amend  and  consolidate  the  laws  of  bankruptcy,"  46  and  47 
Victoria,  chap.  52,  passed  in  1883,  to  take  effect  from  the 
first  of  January,  1884.  This  act,  with  its  amendments,  com- 
prises all  the  statute  law  relating  to  bankrupts,  except  the 
provisions  for  the  punishment  of  fraudulent  debtors,  which 
are  contained  in  the  Debtors'  Act  of  1869,  32  and  33  Victoria, 
chap.  62,  which  were  not  repealed  by  the  act  of  1883.'  This 
act  of  1883  has  been  several  times  amended.  The  principal 
amendments  are:  the  act  of  50  and  51  Victoria,  chaps.  57 
and  66,  passed  September  16,  1887;  the  act  of  51  and  52 
\'ictoria.  chap.  62,  passed  December  24,  1888;  the  act  of 
53  and  54  Victoria,  chap.  71,  passed  August  18,  1890,  and 
the  act  of  60  and  61  Victoria,  chap.  19,  passed  July  15,  1897. 

It  is  not,  however,  within  the  scope  of  this  work  to  discuss 
the  English  acts  at  length,  or  to  follow  step  by  step  the 
development  of  the  present  system  of  bankruptcy  in  England. 
For  this  purpose  the  reader  is  referred  to  modern  works  on 
English  bankrupt  laws.^ 

§  4.     Bankrupt  laws  of  the  United  States. 

Congress  has  established  four  systems  of  national  bank- 
ruptcy in  this  country.  The  first  system  originated  with  the 
act  of  April  4,  1800,^  which  was  repealed  December  19, 
1803.*  There  was  no  national  bankruptcy  act  thereafter 
until  the  act  of  August  19,  1841.'^  This  statute  was  repealed 
within  two  years  after  its  passage,®  and  again  the  nation  was 
without  a  uniform  system  of  bankruptcy.     The  third  general 

1  "  By  the  Bankruptcy  Act,  1883,  '-^  Robson's    Law    and    Practice 

the    Bankruptcy  Act,  1869,  is    re-  in  Bankruptcy  (1894);    Williams' 

pealed,  subject   to   provisions   for  Bankruptcy  Practice  (1898). 

carr>'ing  out  proceedings  pending  »  2  Stat,  at  L.  19. 

under  it.     But  the  Debtor's  Act,  ••  2  vStat.  at  L.  248. 

1869,  remains    in     force,    subject  ^'  5  Stat,  at  h.  440. 

only  to  such  alterations  as  were  « Act  of  March  3,  1843,  5  Stat, 

necessary^  for   adapting  it  to  the  at  L.  614. 
new  Bankruptcy  Act."     (Robson. 
Bank.,  page  21. 


BRIEF    HISTORY    OF    BANKRUPT    LAW.  7 

act  was  passed  March  2,  1867/  by  the  39th  Congress.  The 
system  established  by  this  statute  existed  eleven  years,  and 
was  terminated  September  i,  1878,  by  the  act  of  June  7, 
1878.^  The  present  statute,  establishing  a  uniform  system 
of  bankruptcy  throughout  the  United  States,  was  passed  July 
I,  1898.^  and  amended  by  the  Act  of  Feb.  5,  1903.^* 

It  may  be  observed  that  each  of  these  systems  differed 
materially  from  all  the  others,  although  necessarily  similar 
in  many  respects.  It  may  be,  therefore,  of  interest  m  con- 
sidering the  present  statute  to  review  briefly  the  principal 
provisions  of  the  former  legislation  in  the  United  States  on 
the  subject  of  bankruptcies. 

§  5.     The  Act  of  1800. 

The  first  national  bankrupt  act*  was  confined  to  "any  mer- 
chant, or  other  person,  residing  in  the  United  States,  actually 
using  the  trade  of  merchandise,  by  buying  and  selling  in 
gross  or  by  retail,  or  dealing  in  exchange,  or  as  a  banker, 
broker,  factor,  underwriter  or  marine  insurer."  ^  Under  this 
act  proceedings  in  bankruptcy  could  be  instituted  only  by  a 
creditor — involuntary  bankruptcy — and  not  by  the  insolvent 
himself.  There  was  no  provision  in  this  act  for  voluntary 
bankruptcy. 

Under  this  statute  bankruptcy  proceedings  could  be  com- 
menced only  after  the  person  to  be  adjudged  a  bankrupt  had 
committed  an  act  of  bankruptcy  specified  in  the  act. 

The  act  provided  that  it  should  constitute  an  act  of  bank- 
ruptcy if  a  person  liable  to   be  adjudged  a  bankrupt,  "with 

'  14  Stat,  at  L.  517.  „   ,   ^  „       ,  ^ 

,        e*  *     *  T  c  r^r.  1541    Fed.  Cas.,  s.  c.  Pet.  C.  C.  15; 

220  Stat,  at  L.  99.  I  Supp.  170.  J'^  \       ^.  ^^ 

•^30  Stat,  at  L.  544.     Thi.s  statute  Barties  v.  Billington,  >.o.  1015  Fed. 

is  printed  in  full  at  the  end  of  this  ^as.,  s.  c  i  Wash.  C.  C.  29;   Marks 

volume  ^-  I^arker,  No.  9096  Fed.  Cas.,  s.  c. 

•''♦  ,32  Stat,  at  L.  797.  I  Wash.  C.  C.  178;    Humphreys  v. 

« Act  of  April  4,  1800.     2  StAt.  Blight,  No.  6870  Fed.  Cas..  s.  c.  i 

at  L.  19.  Wash.  C.  C.  44,  4   Dall.  370;    Lu- 

Cases  arising  under  or  constru-  cas  v.  Morris,  No.  8587,  Fed.  Cas., 

ing  this  act  are  :  Tucker  v.  Oxley,  s.  c.  i  Paine,  396. 
SCranch,  34;  Harrison  v.  Sterry,  15  As  to  the  powers  of  Congress, 

Cranch,  289;  Comegysv.Vas.se,  i  see  also  Sturges  v.  Crowninshield, 

Pet.   193;  Richards  v.   Ins.  Co.,  8  4  Wheat.  122;  Sec.    <),post. 
Cranch,  84;  Woods  v.  Owings,   i  ^^  Act  of  April  4,  1800,  2  Stat,  at 

Cranch,  239;  Blight  v.  Ashley,  No.  L.  19  Sec.  i. 


8  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

intent  unlawfully  to  delay  or  defraud  his  or  her  creditors,  de- 
part from  the  state  in  which  siich  person  usually  resides,  or 
remain  absent  therefrom,  or  conceal  him  or  herself  therein,  or 
keep  his  or  her  house,  so  that  he  or  she  can  not  be  taken,  or 
served  with  process,  or  willingly  or  fraudulently  procure  him 
or  herself  to  be  arrested,  or  his  or  her  lands,  goods,  money  or 
chattels  to  be  attached,  sequestered  or  taken  in  execution,  or 
shall  secretly  convey  his  or  her  goods  out  of  his  or  her  house, 
or  conceal  them  to  prevent  their  being  taken  in  execution,  or 
make  or  cause  to  be  made  any  fraudulent  conveyance  of  his  or 
her  lands  or  chattels,  or  make  or  admit  any  false  or  fraudulent 
security  or  evidence  of  debt,  or  being  arrested  for  debt,  or 
having  surrendered  him  or  herself  in  discharge  of  bail,  shall 
remain  in  prison  two  months  or  more,  or  escape  therefrom, 
or  whose  land  or  effects  being  attached  by  process  issuing  out 
of  or  returnable  to  any  court  of  common  law,  shall  not,  within 
two  months  after  written  notice  thereof,  enter  special  bail 
and  dissolve  the  same,  or  in  districts  in  which  attachments 
are  not  dissolved  by  the  entry  of  special  bail,  being  arrested 
for  debt  after  his  or  her  lands  and  effects,  or  any  part  thereof, 
have  been  attached  for  a  debt  or  debts  amounting  to  one 
thousand  dollars  or  upwards,  shall  not,  upon  notice  of  such 
attachment,  give  sufficient  security  for  the  payment  of  what 
may  be  recovered  in  the  suit  in  which  he  or  she  may  be 
arrested  at  or  before  the  return  day  of  the  same,  to  be  ap- 
proved by  the  judge  of  the  district,  or  some  judge  of  the 
court  out  of  which  the  process  issued  upon  which  he  is 
arrested,  or  to  which  the  same  shall  be  returnable,  every  such 
person  shall  be  deemed  and  adjudged  a  bankrupt."  ' 

Within  six  months  after  such  act  had  been  committed  a 
petition  for  a  commission  of  bankruptcy  might  be  preferred 
by  a  creditor  or  partnership  whose  single  debt  amounted  to 
one  thousand  dollars,  or  by  two  creditors  whose  debts 
amounted  to  fifteen  hundred  dollars,  or  by  more  than  two 
creditors  whose  debts  amounted  to  two  thousand  dollars. 

Under  the  act  of  1800,  proceedings  in  bankruptcy  were 
instituted  by  filing  a  petition  for  a  commission  of  bankruptcy 
in   the  district    court    for  the  district    in  which    the  debtor 

'  2  Stat,  at  L.  21,  vSec.  i. 


BRIEF    HISTORY    OF    BANKRUPT    LAW.  9 

resided.  The  judge  of  the  district  court  thereupon  issued 
such  commission,  appointing  commissioners  of  such  bankrupt 
not  exceeding  three  in  number.'  Immediately  upon  taking 
ihe  oath  prescribed  by  the  act,  they  proceeded  to  execute  the 
commission  and  to  administer  the  estate  of  the  bankrupt. 

The  administration  of  the  estate  in  brief  was  as  follows: 
Upon  due  examination  and  sufficient  cause  shown  against 
the  person  charged,  the  commissioners  declared  him  to  be  a 
bankrupt,  and  took  into  their  possession  all  of  his  real  and 
personal  property,  together  with  his  deeds,  books  of  account, 
papers,  etc.  They  held  the  same  until  an  assignee  was 
chosen  by  the  creditors  at  a  meeting  called  for  that  purpose. 
It  was  the  duty  of  the  assignee  to  hold  the  title  to  the  estate 
and  to  collect  the  assets  of  the  bankrupt.  Within  one  year 
after  the  commission  issued  the  assignee  was  required  to  re- 
port the  amount  of  moneys  in  his  possession  at  a  meeting  of 
the  commissioners  and  creditors  duly  called  by  notice.  The 
commissioners  in  their  judgment  declared  the  first  dividend 
at  this  meeting.  This  was  paid  to  all  creditors  who  had 
proved  their  claims  before  the  commissioners.  Provisions 
were  made  for  similar  dividends  subsequently,  until  the  whole 
estate  of  the  bankrupt  had  been  distributed  pro  rata  among 
the  creditors. 

The  commissioners  reported  to  the  court  what  had  been 
done  in  making  their  return  of  the  commission.  The  debtor 
was  thereupon  entitled  to  be  discharged  from  all  debts  by 
him  due  and  owing  at  the  time  he  was  declared  a  bankrupt. 
A  certificate  of  discharge  was  issued  by  the  court  to  such 
bankrupt,  which  might  be  pleaded  in  bar  of  any  claims  which 
had  been  or  might  have  been  proven  before  the  commissioners. 

The  life  of  this  act  was  limited  to  five  years,  but  owing 
to  the  inconvenience  of  reaching  federal  courts  this  system 
became  unpopular,  and  the  act  was  repealed  by  the  act  of 
December  19,  1803.^ 

'  By  Sec.  14  of  the  Act  of  April  appointed  by  the  President  of  the 

29,    1802,    2   Stat,  at   L.    164,  pro-  United  vStates. 

vision  was  made  for  general  com-  *  2  Stat,  at  L.  248. 
nii.ssioners    of  bankruptcy   to   be 


lO  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

§  6.     The  Act  of  1841. 

The  second  act^  provided  for  voluntary  as  well  as  involun- 
tary bankruptcy. 

Any  person  whatsoever  residing  in  the  United  States  owing 
debts  which  were  not  created  in  consequence  of  a  defalcation 
as  a  public  officer,  or  an  executor,  administrator,  guardian  or 
trustee,  or  while  acting  in  any  other  fiduciary  capacity,  was 
entitled  under  this  act  to  be  declared  a  bankrupt  upon  his 
own  request  and  to  have  his  estate  administered  accordingly. 

Any  person  being  a  merchant,  or  using  the  trade  of  mer- 
chandise, or  a  retailer  of  merchandise,  or  any  banker,  factor, 
broker,  underwriter  or  marine  insurer  owing  debts  to  the 
amount  of  not  less  than  two  thousand  dollars,  was  liable  to 
be  declared  a  bankrupt  at  the  request  of  one  or  more  of  his 
creditors  to  whom  he  owed  debts  amounting  in  the  whole  to 
not  less  than  five  hundred  dollars,  provided  he  had  committed 
an  act  of  bankruptcy. 

An  act  of  bankruptcy  was  defined  in  these  words,  "whenever 
such  person,  being  a  merchant,  or  actually  using  the  trade  of 
merchandise,  or  being  a  retailer  of  merchandise,  or  being  a 
banker,  factor,  broker,  underwriter  or  marine  insurer,  shnl- 
depart  from  the  state,  district  or  territory  of  which  he  is  an 

1  Act  of  August  19,  1841,  5  Stat,  i  N.  Y.  Leg.  Obs.  310,    s.  c.  No. 

at  L.  440-  1632,  Fed.  Cas.;    Fisher,  et  al.,  v. 

The  following  are  cases  under  Currier,  5  Law  Rep.  217,  No.  4818, 

the  act :  Nelson  v.  Garland,  i  How.  Fed.  Cas. ;  Jones  v.  Sleeper,  2  N.  Y. 

265;  Chapman  v.  Forsyth,  2  How.  Leg.  Obs.  131,8.  c.  No.  7496,  Fed. 

202;    Lessee    of   Waller    v.  Best,  Cas.;     Stewart    v.    Loomis,     No. 

3     How.     in;      Ex    parte    The  i3433.    Fed.    Cas.;      Baldwin     v. 

City     Bank    of   New    Orleans,  3  Rosseau,  i  N.  Y.  Leg.  Obs.  391,  s. 

How.  292;    Nugent,   Assignee,  v.  c.  No.  803,  Fed.  Cas.;  /«  r<? House, 

Boyd,  3  How.  426;  Black  v.  Zach-  i   N.  Y.  Leg.    Obs.  348,    s.    c.  No. 

arie,    3    How.    483;    Shawhan    v.  6735,  Fed.  Cas. ;  Ex  parte    Potts, 

Wherrett,    7     How.    627;     In    re  Crabbe,  469,  s.  c.  No.   11344,  Fed. 

Shouse,   Crabbe,    482,    s.    c.    No.  Cas. ;  Barton  v.  Tower,  5  Law  Rep. 

(12815,    Fed.    Cas.;    Wakeman    v.  214,  s.  c.  No.  1085,  Fed.  Cas. ;  Ex 

Hoyt,  5  Law  Rep.  309,  s.   c.    No.  parte  Galbraith,  i  N.  Y.  Leg.  Obs. 

17051,   Fed.    Cas.;   Albany   Exch.  (note)  5,  s.  c.  No.  5187,  Fed.  Cas.; 

Bank  v.  Johnson,  5  I^aw  Rep.  313,  Gassett,  et    al.,  v.  Morse,  3  N.  Y. 

s.  c.  No.  131,  Fed.  Cas.;   Atkinson  Leg.  Obs.  350,  s.  c.  No.  5264,  Fed. 

V.  Farmers' Bank,  Crabbe,  529,  s.  Cas.;  Hutchins  v.  Taylor,  5    Law 

c.  No.  609,  Fed.  Cas. ;  In  re  Bonnet,  Rep.  289,  s.  c.  No.  6953,  Fed.  Cas. 


BRIEF    HISTORY    OF    BANKRUPT    LAW.  II 

inhabitant,  with  intent  to  defraud  his  creditors;  or  shall  con- 
ceal himself  to  avoid  being  arrested ;  or  shall  willingly  or 
fraudulently  procure  himself  to  be  arrested,  or  his  goods  and 
chattels,  lands  or  tenements,  to  be  attached,  distrained,  se- 
questered, or  taken  in  execution;  or  shall  remove  his  goods, 
chattels  and  effects,  or  conceal  them  to  prevent  their  being 
levied  upon  or  taken  in  execution,  or  by  other  process;  or 
make  any  fraudulent  conveyance,  assignment,  sale,  gift,  or 
other  transfer  of  his  lands,  tenements,  goods,  or  chattels,  or 
evidence  of  debt."  * 

Proceedings  under  this  act  were  instituted  by  a  petition 
filed  by  the  bankrupt,  setting  forth  a  list  of  his  creditors, 
with  the  amounts  due  each,  together  with  an  inventory  of 
his  property  and  assets  of  every  description;  or  by  a  petition 
filed  by  a  creditor,  stating  the  nature  of  the  act  of  bankruptcy, 
the  amount  of  his  debts,  and  alleging  the  total  indebtedness 
of  the  bankrupt  to  be  more  than  two  thousand  dollars. 

This  petition  was  filed  and  all  proceedings  in  the  case  were 
had  in  the  district  court  for  the  district  in  which  the  person 
supposed  to  be  a  bankrupt  resided  or  had  his  place  of  busi- 
ness. The  court  appointed  an  assignee,  in  whom  the  title  to 
all  the  bankrupt's  property,  real,  personal  and  mixed,  vested 
by  operation  of  law.  The  assignee  proceeded  to  collect  the 
assets  of  the  bankrupt,  prosecute  and  defend  suits,  and  had 
general  authority  to  sell,  manage  and  dispose  of  the  estate. 
Proof  of  debts  and  claims  were  made  before  the  court,  either 
by  oral  testimony  or  depositions.  In  order  to  secure  a  speedy 
settlement  and  close  the  proceedings,  it  was  made  the  duty 
of  the  court  to  order  and  direct  a  collection  of  the  assets  and 
a  reduction  of  the  same  into  money  and  a  distribution  thereof 
at  as  early  a  period  as  practicable,  consistently  with  a  due 
regard  to  the  interests  of  the  creditors. 

A  bankrupt  who  made  a  bona  fide  surrender  of  his  property 
and  complied  with  the  orders  and  directions  of  the  court  was 
entitled  to  a  certificate  of  discharge  from  all  his  debts.  This 
was  to  be  decreed  and  allowed  by  the  court  which  had  de- 
clared him  a  bankrupt.  There  were  several  exceptions  to 
this  rule,  but  ihey  are  not  important  in  this  connection. 

1  5  vStat.  at  L.  442. 


12  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

The  same  objection  was  raised  to  this  act  that  had  been 
made  to  the  act  of  1800,  for  the  nation  was  still  in  its  infancy, 
and  the  means  of  transportation  were  exceedingly  limited. 
But  in  addition  to  this,  the  following  is  found  in  the  report  of 
the  judiciary  committee  in  the  52d  Congress,  first  session,  in 
its  discussion  of  the  act  of  1841 :  "That  law  became  the  sub- 
ject of  political  contention,  and  was  repealed,  to  take  efEect 
March  3,  1843.'" 

§  7.     Law  of  1867. 

The  act  of  1867,*  with  its  subsequent  amendments,'  estab- 
lished a  system  of  national  bankruptcy,  which  was  in  full 
operation  for  eleven  years.  Although  the  act  of  1867  differs 
in  many  respects  from  that  of  1898,  there  are  many  points  of 
similarity  between  the  two  statutes.  The  courts  were  fre- 
quently called  upon  to  construe  the  provisions  of  the  act  of 
1867  and  its  amendments.  Many  questions,  which  will  arise 
under  the  present  act,  may  be  considered  settled  by  these  deci- 
sions. Although  many  decisions  under  the  former  act  are 
not  controlling  with  reference  to  very  many  provisions  of  the 
present  act,  yet  very  many  of  them  are  important  in  throwing 
light  upon  the  meaning  of  terms  and  provisions  employed. 
It  is  obvious  that  certain  provisions  were  introduced  in  the 
present  act  for  the  purpose  of  settling  disputed  questions  and 
to  avoid  judicial  construction  of  provisions  of  the  prior  act. 

The  cases  decided  under  the  act  of  1867  therefore  become 

1  Act  of  March  3,  1843,  5  Stat,  at  Statutes,    edition    of    1878.      The 

L.  614.  Act  of  1867  was  also  amended  by 

See  Report  of  the  House  Com-  the  Act  of  July  2-],  1868,  15  Stat, 

raittee   on    Judiciary,  55th    Con-  at  L.  227;  by  the  Act  of  June  30. 

gress,  2d  session,  discussing  the  1870,  16  Stat,  at   L.  173;    by   the 

Act  of  1898.  Act  of  July  14,  1870,  16  Stat,  at  L. 

*  Act  of  March  2,  1867,  14  Stat.  276;  by  the  Act  of  June  8,  1872, 

at  L.  517.  17  Stat,  at  L.  334:  by  the  Act  of 

3  The    principal  amendment  to  Feb.  13,  1873,   17  vStat.  at  L.  436; 

this  act  was  passed  June  22,  1874,  by  the    Act  of  March  3,  1873,  17 

18  Stat,  at  L.  178,  and  at  the  same  Stat,  at  L.  577;  by  the  Act  of  Feb. 

time  a  complete  substitute  for  the  18,  1875,  18  Stat,  at  L.  320;  by  the 

act  was  enacted  in  title  sixty-one  Act  of  July  26,  1876,  19  Stat,  at  L. 

of  the  Revised  Statutes.    The  pro-  102,  and  by   the   Act   of  Feb.  27, 

vi.sions  of  the  amendment  of  1874  1877,  19  Stat,  at  L.  252. 
are   incorporated   in  the    Revised 


BRIEF    HISTORY    OF    BANKRUPT    LAW.  I3 

important  in  construing  the  present  statute.  To  intelligently 
use  the  earlier  decisions  in  construing  and  applying  the  pres- 
ent act,  it  will  be  necessary  to  constantly  consult  the  text  of 
the  act  itself,  and  to  compare  it  with  similar  provisions  of 
the  act  of  1898.  For  this  purpose  the  act  of  1867,  as  revised 
and  amended,  is  printed  in  full  in  another  place.'  It  is  there- 
fore unnecessary  to  state  the  general  scheme  of  this  system  here. 
The  reader  is  referred  to  the  act  itself  for  such  information. 

The  principal  objection  to  the  act  of  1867  was  the  great 
expense  of  administering  it,  and  in  some  parts  of  the  country 
the  inefficiency  of  the  officers  appointed  to  assist  the  courts  in 
executing  the  law.  It  was  repealed,  to  take  effect  September 
I,  1878.^ 

The  next  national  system  of  bankruptcy  in  this  country 
was  established  by  the  act  of  July  i,  1898.^ 

§  8.     A  brief  comparison  of  the  Acts  of  1867  and  1898. 

Similarity  of  the  Acts. — The  general  scope  and  objects 
sought  to  be  accomplished  by  these  two  statutes  are  substan- 
tially the  same.  In  both  instances  congress  evidently  in- 
tended to  legislate  fully  on  "the  subject  of  bankruptcies." 
Each  statute  provides  that  proceedings  may  be  instituted  by 
the  insolvent  or  by  his  creditors.  In  other  words,  each  statute 
establishes  voluntary  as  well  as  involuntary  bankruptcy. 

The  principal  ends  of  each  statute  are  to  provide  a  system 
of  bankruptcy,  the  object  of  which  is,  first,  to  ascertain 
whether  the  person  whose  affairs  are  drawn  in  question  has 
become  a  bankrupt ;  second^  if  so,  to  take  into  legal  custody 
all  his  property  and  assets  of  every  description  for  the  purpose 
of  making  a  fair  and  just  distribution  among  his  creditors; 
third,  to  protect  the  creditors  from  frauds  and  unjust  prefer- 
ences; fourth,  to  ascertain  the  amount  due  to  the  several 
creditors  and  their  priority;  fifth,  to  relieve  the  bankrupt 
from  his  load  of  debts  and  to  discharge  him  free  to  acquire 
property,  which  shall  not  be  liable  to  the  payment  of  ante- 
bankrupt  debts.  In  short,  the  acts  seek  to  enable  every 
honest  debtor,  irrespective  of  whether  he  becomes  bankrupt 

'See  page  865,  post.  •■•  ,^0  Stat,  at   L.  544      This  act,  as 

» Act  of  June  7.  1878,  20  Stat,  at      amended    Feli.   5,    lyo.^.   \2   Stat,   at 

1.   99,  I  Supp.  170.  '■•    -W".    i"^    also    printed    in    full    at 

page  — .  post. 


14  LAW   AND    PROCEEDINGS    IN    BANKRUPTCY. 

upon  his  own  or  the  petition  of  his  creditors,  to  have  fair 
treatment  and  a  speedy  consideration  of  his  rights;  and  that 
the  creditors  shall  have  their  claims  considered,  allowed,  and 
the  assets  of  the  debtor  ratably  divided. 

The  administration  of  each  law  is  confided  to  particular 
United  States  courts,  designated  as  courts  of  bankruptcy. 
These  courts  act  to  a  large  extent  through  special  officers, 
subject  to  have  their  action  reviewed  by  the  judge.  In  1867 
these  officers  were  called  registers  and  assignees ;  in  1898  they 
are  called  referees  and  trustees.  The  action  of  the  courts  of 
bankruptcy  under  each  act  is  subject  within  limits  to  review 
by  the  appellate  courts  of  the  United  States. 

Points  of  Difference  between  the  Acts. — The  act 
of  1898  differs  in  many  respects  from  the  act  of  1867.  The 
chief  points  of  difference  between  the  acts  may  be  briefly 
stated  as  follows: 

First,  Under  the  act  of  1867  a  person  could  take  advantage 
of  voluntary  bankruptcy  only  when  his  debts  exceeded  the 
amount  of  three  hundred  dollars.  Under  the  present  act  all 
limitation  is  removed  as  to  the  amount  of  indebtedness.  He 
may  even  proceed  without  expense  upon  filing  an  affidavit  of 
his  poverty. 

Second,  Under  the  act  of  1867  corporations  could  take  the 
benfit  of  their  voluntary  provisions.  A  corporation  can  not 
institute  proceedings  to  declare  itself  a  bankrupt  under  the 
present  act. 

Third,  lender  the  act  of  1867,  as  amended,  any  person 
owing  debts  provable  in  bankruptcy  exceeding  the  amount 
of  three  hundred  dollars  could  be  proceeded  against  by  one 
of  his  creditors,  but  under  the  act  of  1898  a  person  must  be 
indebted  to  the  amount  of  one  thousand  dollars  or  more  in 
order  to  be  adjudged  a  bankrupt. 

Fourth,  Under  the  act  of  1867  a  person  might  become  a 
bankrupt  although  solvent, >   but  solvency  may    be  pleaded 

iBy  reference  to  vSection  5021  stopped  or  suspended  and  not  re- 
ef the  Revised  Statutes  it  will  be  sumed  payment  of  his  commercial 
seen  that  the  act  of  1867,  as  paper  within  a  period  of  fourteen 
amended,  provides  that  any  bank-  days  shall  be  deemed  to  have 
er.  broker,  merchant,  trader,  man-  committed  an  act  of  bankruptcy, 
ufacturer,    or     miner,   who     has  and  to  have  become  liable  to  be 


BRIEF    HISTORY   OF   BANKRUPT   LAW.  15 

in  bar  of   any  proceeding  in  bankruptcy  under   the   act   of 
1898.1 

Fifths  Another  important  difference  between  the  two  acts 
is  in  the  time  when  the  property  passes  out  of  the  bankrupt. 
Under  the  act  of  1867  the  title  to  the  bankrupt's  property 
vested  upon  a  deed  of  conveyance  in  the  assignee  as  of  the 
date  of  filing  the  petition  in  bankruptcy;  but  it  vests  in  the 
trustee  by  operation  of  law  under  the  act  of  1898  as  of  the 
date  of  the  adjudication  in  bankruptcy. 

Sixth,  Another  difference  in  the  manner  of  administering 
the  bankrupt's  estate  is  the  more  convenient  number  of 
officers.  Under  the  act  of  1867  one  or  more  registers  were 
appointed  for  the  district,  but  the  act  of  1898  provides  for 
at  least  one  referee  in  each  county  in  the  state. 

Seventh.  The  act  of  1867  provided  no  means  of  arbitration 
in  addition  to  the  regular  course  in  bankruptcy.^  Under  the 
present  act  the  majority  of  all  creditors,  whose  claims  have 
been  allowed,  may  secure  the  possession  of  the  property,  and 
obtain  for  the  debtor  a  dismissal  of  the  case.  In  addition  to 
this,  provision  is  also  made  for  the  arbitration  and  for  the 
compromise  of  controversies. 

Eighth^  Under  the  act  of  1867  the  "operative,  clerk  and 
house  servant"  were  allowed  priority  over  other  claims  to  an 
amount  not  exceeding  fifty  dollars  for  labor  performed. 
Under  the  present  act  the  amount  is  fixed  at  three  hundred 
dollars  to  each  claimant. 

Ninth,  Under  the  act  of  1867,  as  amended,  no  discharge 
was  granted  to  a  debtor  whose  assets  did  not  equal  fifty  per- 
centum  of  the  claims  proved  against  his  estate,  for  which  he 
was  held  liable  as  principal  debtor,  unless  the  assent  in  writ- 
ing of  a  majority  in  number  and  value  of  his  creditors  was 
filed  in  the  case  at  or  before  the  time  of  the  hearing  of  the 

adjudged  a  bankrupt.     He  may  be  .stituted  an    act  of  bankruptcy  at 

worth  a  million  dollars  over  and  once. 

above  hi.s  liabilities,  and  yet  such  '  R.  A.  1898,  vSec.  3^. 

a  failure  for  fourteen  days  would  -'  II,    however,    was    introduced 

make  him  liable  to  the  involun-  by  the    amendment    of  June    22, 

tary  provisions  of  the  act;  or   if  1874,   18   Stat,  at  L-  178,  Sec.   17. 

he  fraudulently  stopped  paj'ment  R.  S.,  Sec.   5103. 

of  his  commercial  i)a])er,  that  con- 


l6  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

application  for  a  discharge.  Under  the  act  of  1898  no  assent 
is  required  from  the  creditors.  If  the  debtor  has  acted  dis- 
honestly by  committing  certain  acts  forbidden  in  the  act  he 
will  not  be  discharged;  if  he  has  acted  honestly  he  will  be. 
The  granting  or  withholding  of  it  is  dependent  upon  the 
honesty  of  the  man,  not  upon  the  value  of  his  estate. 

Tenths  Another  point  of  difference  between  the  two  acts 
will  be  noticed  in  a  comparison  between  the  fees  allowed. 
The  expense  of  the  proceedings  is  very  much  reduced  in  the 
act  of  1898. 

There  are  other  differences  which  will  be  referred  to  here- 
after as  the  various  questions  arising  under  the  present  statute 
are  discussed. 


POWER   TO    ENACT    BANKRUPT    LAWS.  1 7 


CHAPTER  II. 

THE  POWER  OF  CONGRESS  AND  THE  STATES  TO  ENACT 
BANKRUPT  LAWS. 

§  9.     The  power  of  Congress  to  enact  bankrupt  laws. 

The  power  of  congress  to  establish  a  system  of  bankruptcy 
depends,  like  the  other  powers  of  congress,  solely  upon  the 
constitution  of  the  United  States.  The  only  provision  in 
the  constitution  relating  to  such  legislation  is  that  "congress 
shall  have  power  ...  to  establish  .  .  .  uniform 
laws  on  the  subject  of  bankruptcies  throughout  the  United 
States. "» 

This  has  been  construed  by  the  courts  to  be  a  grant  of 
plenary  power.-  Under  the  authority  of  this  provision  con- 
gress has  full  power  to  legislate  on  "the  subject  of  bank- 
ruptcies," with  the  one  qualification  that  its  laws  thereon 
shall  be  uniform  throughout  the  United  States. 

It  is  therefore  necessary  to  consider  what  is  meant  by  "the 
subject  of  bankruptcies."  It  was  contended  at  one  time  that 
the  framers  of  the  constitution  intended  to  restrict  the  laws 
of  congress  with  such  scope  only  as  the  English  bankrupt 
laws  had  when  the  constitution  was  adopted.  But  the  courts 
ruled  that  the  subject  was  not  so  limited.' 

>U.    S.    Const.   Art.   i,     Sec.  8,  ton,   51   N.  E.  529,  the    Supreme 

clause  4.     See  Story  on  the  Con-  Court  of  Massachusetts,  constru- 

stitution,  Sees.  1105-1115.  ing  the  present  act,  and  speaking 

* ///  re  Klein,  i    How.  277.  note;  of  the  power  of  congress  to  pass  a 

Silverman's  case.  No.  12855,  Fed.  bankrupt  law    superseding    state 

Cas.,  s.  c.  I   Saw.  410;   /;/  re  Cali-  insolvent     laws,    said  :    "  Of    the 

fornia  Pac.  R.  Co.,  No.  2315,  Fed.  power  of  congress  to  pass  an   act 

Cas.,  s.  c.  3    vSaw.  240;  /«  re  Jor-  having  this  effect  there  can  be  1:0 

dan,  No.  7514,    Fed.  Cas.,  s.  c.  8  doubt."       vSee    also.   In  re  Brus.s 

N.   B.   R.      180;     In    re    Irwine,  x  Ritter  Co.,  90  Fed.  Rep.  651. 
Penn.   L.  J.   291;     Kunzler   v.  Ko-  '^  In  re    Reiman,  No.  1 1673,  Fed. 

haus,  5    Hill,    317;  In  re  Reiman  Cas.,  s.  c.  7  Ben.  455;  In  re   Klein, 

No.  11673,  Fed.  Cas.,  s.  c.   7  Ben.  i  How.  277,  note;  /wr^ Silverman, 

455.  No.  12855,  ^^^-  Cas.,  s.  c.    I    Saw. 

In  Parmenter  Mfg.  Co.  v.  Hamil-  410. 


1 8  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

Again,  it  was  contended  that  it  was  restricted  to  bankrupt 
laws  as  distinguished  from  insolvent  laws.  But  it  may  be 
regarded  as  settled  that  the  subject  of  bankruptcies,  as  used 
in  the  constitution,  includes  both  bankrupt  and  insolvent 
laws.'  Speaking  of  this  distinction,  Mr.  Justice  Marshall 
observed:-  "This  difficulty  of  discriminating  with  any  accu- 
racy between  insolvent  and  bankrupt  laws  would  lead  to  the 
opinion  that  a  bankrupt  law  may  contain  those  regulations 
which  are  generally  found  in  insolvent  laws;  and  that  an 
insolvent  law  may  contain  those  which  are  common  to  a 
bankrupt  law."  And  Judge  Cowen,  after  reviewing  the 
definition  of  bankruptcy,  said  :^  "Looking  thus  at  the  uniform 
popular  acceptation  of  the  word  from  earliest  times,  and  in 
all  English  countries,  and  supposing  that  to  be  the  true  one, 
I  read  the  constitution  thus:  'Congress  shall  have  power  to 
establish  uniform  laws  on  the  subject  of  any  person's  general 
inability  to  pay  his  debts  throughout  the  United  States,'  " 

It  has  also  been  held  that  the  power  of  the  national  legis- 
lature is  not  limited  to  bankrupt  laws  relating  to  any  particu- 
lar class  of  persons,  as  traders,  merchants,  etc.,  but  that 
congress  may  pass  laws  applying  to  all  or  any  persons  within 
the  United  States.* 

Congress  has  power  also  to  modify  the  obligation  of  con- 
tracts in  the  legitimate  exercise  of  the  power  to  establish 
bankrupt  laws.^      This  is  incidental  to  the  power  directly 

1  /;(  re  Klein,  i  How.  277,  note ;  95  Fed.  Rep.  637,  s.  c.  t,7  C.  C.  A. 
Thompson  v.  Alger,  53  Mass.  442;  210;  Hanover  Nat.  Bank  v.  Moyses, 
Kunzler  v.  Kohaus,  5  Hill,  317;  186  IJ.  S.  181;  In  re  Klein,  i  How. 
Keene  v.  Mould,  16  Ohio  12;  Mc-  277,  note;  In  re  California  Pac.  R. 
Cormick  v.  Pickering,  4  N.  Y.  276;  Co.,  No.  2315,  Fed.  Cas.,  s.  c.  3 
Rowan  v.  Holcomb,  16  Ohio,  463 ;  Saw.  240 ;  Sweatt  v.  Boston,  etc., 
Loud  V.  Pierce,  25  Me.  233;  Lalor  R.  Co.,  No.  13684,  s.  c.  3  Cliff.  339; 
V.  Wattles,  8  111.  225;  State  Bank  Winter  v.  Iowa,  etc.,  R.  Co.,  No. 
V.  Wilborn,  6  Ark.  35;  Reed  v.  17890.  Fed.  Cas.,  s.  c.  2  Dill,  487; 
Vaughn.  15  Mo.  137;  Cutter  v.  Fol-  Kunzler  v.  Kohaus,  5  Hill  317. 
som.  17  N.  H.  139;  In  re  Irwine,  ^ /w  re  Klein,  i  How.  277,  note; 
I  Penn.  L.  J.  291;  Morse  v.  Hovey,  Kunzler  v.  Kohaus,  5  Hill  317; 
I    Sandf.    Ch.    187.  Sackctt    v.    Andrews,    5    Hill    327; 

2  In  Sturgis  v.  Crowninshield,  4  Keene  v.  Mould,  16  Ohio  12;  Mc- 
Wheat.   195.  Cormick  v.  Pickering,  4  N.  Y.  276; 

3  In  Kunzler  v.  Kohaus,  5  Hill,  Loud  v.  Pierce,  25  Me.  233 ;  In  re 
321.  Reiman,  No.  11675,  Fed.  Cas.,  s.  c. 

*  Leidigh  Carriage  Co.  v.  Stengel,      12  Blatch.  562. 


POWER   TO    ENACT    BANKRUPT    LAWS.  19 

given  by  the  constitution.  Hence  congress  may  provide  for 
the  discharge  of  a  debtor,  releasing  him  from  contracts  exist- 
ing at  the  time  the  law  is  passed.  An  act  of  congress  may 
be  constitutional,  when,  if  the  same  act  was  passed  by  a  state 
legislature,  it  would  be  unconstitutional.^ 

Another  incident  growing  out  of  this  delegated  power  is 
the  authority  to  commit  the  execution  of  the  system  to  the 
courts  of  the  United  States,  and  to  prescribe  such  modes  of 
procedure  and  means  of  administering  the  system  as  it  may 
deem  best  suited  to  carry  the   law  into  successful  operation.^ 

It  may  be  observed  that  the  extent  to  which  this  power 
shall  be  exercised  rests  in  the  discretion  of  congress,  subject 
only  to  the  qualification  that  such  laws  shall  be  uniform 
through  the  United  States.  The  uniformity  required  relates 
to  national  legislation  only,  and  therefore  the  laws  of  the 
several  states,  as  those  regulating  exemptions,  may  be  left  in 
force  so  long  and  to  such  extent  as  congress  may  see  fit.^ 

The  power  of  congress  to  establish  laws  on  the  subject  of 
bankruptcies  is  exclusive,  while  exercised,  but  when  or  so  far 
as  it  is  not  exercised  its  existence  does  not  defeat  state  legis- 
lation.''    The  effect  of  a  national  bankrupt   law  is  to  suspend 

1  The  Constitution  expressly  Fed.  Cas.,  s.  c.  2  Story,  648;  Good- 
prohibits  states  from  passing  laws  all  v.  Tuttle,  No.  5533,  Fed.  Cas., 
"  impairing  the  obligation  ofacon-  s.  c.  3  Biss.  219;  Sherman  v.  Bing- 
tract."     Const.,  Art.  i,  Sec.  10.  ham.  No.  12762,  Fed.  Cas.,  s.  c.  3 

In   re  Jordan,  No.    7514,  Fed.  Cliff.  552. 

Cas.,    s.  c.  8  N.  B.  R.  180,  Judge  » Darling  v.  Berry,  13  Fed.  Rep. 

Dick,  speaking  of  the  Bankruptcy  668;  hi   re  Beckerford,    No.  1209, 

Act  of   1867,  said:  "  If  this  state  Fed.    Cas.,   s.  c.  i   Dill,   45;  In  re 

had  adopted  the  present  bankrupt  Jordan,  No.  7514,  Fed.  Cas.,  s.  c.  8 

law  it  would  have  been  unconsti-  N.    B.    R.   180;  hi  re  Jordan,  No. 

tutional,  as  it  impairs  the  obliga-  7515,   Fed.  Cas.,   s.  c.    10  N.  B.  R. 

tion  of  contracts  and   affects  the  427;  In  re  Kean,  No.    7630,  Fed. 

rights  of  citizens  of  other  states.  Cas.,  s.   c.  2    Hughes,   322;   In    re 

Congress,  however,   could    adopt  Rouse,  Hazard  &  Co.,  41  Law  Bui. 

the  very  language  and  principles  (Cinti.)  34,  s.  c.  i  Nat.  Bank  News, 

of  such  state  law  and  enact  it  as  a  75. 

lational    law,    and     such     action  <  Sturges     v.    Crowninshield,  4 

vould    be    constitutional;    as    it  Wheat.    122;    Baldwin  v.  Hale,   i 

vould  constitute  a. system  of  bank-  Wall,  228;  Cook  v.  Moffat,  5  How. 

uptcy  uniform  among  the  states."  295.  See  also  Power  of  States,  Sec. 

*  Mitchell    v.   Mf.  Co.,  No.  9662,  10,  post. 


20  LAW    AND    PROCKKDINGS    IN    BANKRUPTCY. 

only,  not  to  extin»;uish  state  laws.'  The  disability  is  re- 
moved when  the  act  of  congress  is  repealed,  and  the  state 
laws  become  immediately  operative  without  reenactment.* 

The   Bankruptcy   Act   of   1898   is  constitutional   and   valid 
legislation."* 

4^  10.     Power  of  the  states  to  enact  bankrupt  and  insolvent  laws. 

Prior  to  the  adoption  of  the  constitution  of  the  United 
States  the  several  "states  could  exercise  almost  every  legis- 
lative power,  and  among  others,  that  of  passing  bankrupt 
laws,"'  They  retained  all  such  powers  after  its  adoption, 
except  those  expressly  granted  to  the  national  government. 
A  part  of  the  powers  so  granted  are  to  be  exercised  exclusively 
by  congress,  and  the  subject  is  completely  taken  away  from 
the  state  legislatures.  Other  powers  were  yielded  by  the 
states  to  be  exclusively  exercised  by  congress,  provided  that 
body  saw  fit  to  legislate  upon  the  subject.  But  until  the 
national  legislature  exercised  this  power,  the  state  legislatures 
retained  the  power  to  enact  laws  on  the  same  subject.  The 
power  to  pass  laws  on  "the  subject  of  bankruptcies"  is  of  the 
latter  class  of  grants.^ 

It  is  well  settled  that  the  several  states  may  pass  bankrupt 
and  insolvent  laws,  subject  to  two  restrictions  only:'^ 

Firsts  A  state  has  no  power  to  enact  a  bankrupt  law  im- 

1  £.r  parte  Eamcs,  No.  4237,  Fed.  Crowninshield,   4  Wheat.    122;   Tua 

Cas.,   .s.   c.   2   Story,  322:   Thornliill  v.   Carriere,   117   U.   S.  201;   Ogden 

V.   Bank,  No.   13992,  Fed.  Cas.,  s.  c.  v     Saunders,    12    Wheat.    273,    275, 

I    Woods,    i:    Sullivan   v.   Hieskill,  280,    306,    310,    314,    335,    369;    see 

No.  13594,  s.  c.  Crabbe,  525 ;  Rowe  Hale  v.  Baldwin,  i  Wall.  223 ;  But- 

V.   Page,   54  N.   H.    190:   Van   Nos-  ler  v.   Goreley,   146  U.   S.  303;  and 

trand  v.   Carr,  30  Md.   128;   Shears  the     many     cases     recognizing     the 

V.    Solhinger,    10    Abb.    Pr.,    N.    S.  right  of  the  states  to  pass  bankrupt 

287;   Martin   v.   Berry,  2>1  Cal.  208;  and  insolvency  lavi^s,  when  there  is 

Griswold  v.  Pratt,  9  Met.  16;  Blan-  nc   bankrupt  law   in  existence, 

chard   v.   Russell,    13   Mass.    i.  An  opposite  opinion  has  been  en- 

-  Baldwin   v.   Hale,    i    Wall.   223;  tertained   by   jurists,    see   Ogden   v. 

Butler   v.    Goreley,    146   U.   S.   303;  Saunders,    12    Wheat.    267    to    270; 

Tua  V.   Carriere.   117  U.  S.  209.  Golden    v.    Prince,    No.    5509,    Fed. 

2*  Hanover  Nat.  Bank  v.  Moyses,  Cas.,  s.  c.  3  Wash.  C.  C.  313. 

186  U.  S.  181  :  Leidigh  Carriage  Co.  ^  Sturges     v.      Crowninshield,     4 

V     Stengel,    95    Fed.    Rep.    637,    yj  Wheat.   120;  Farmers  and  Mechan- 

C    C.  A.  210.  ics    Bank  v.   Smith,  6   Wheat.    130; 

•''Chief  Justice  Marshall,  in  Stur-  Ogden  v.  Saunders,  12  Wheat.  213; 
ges  V.  Crowninshield,  4  Wheat.  122.  Baldwin  v.  Hale,  i  Wall.  223:  Tua 
See  also  Blanchard  v.  Russell,  13  v  Carriere,  117  U.  S.  201;  Wood- 
Mass.  I.  hull    v.    Wagner,    No.    17975,    Fed. 

*  This    rule    is    now    well    settled  Cas.,   s.   c.    Bald.   296. 
by    judicial    decisions.      Sturges    v. 


POWER    TO    ENACT    BANKRUPT    LAWS.  21 

pairing  the  obligation  of  contracts,  whether  there  is  a  national 
bankrupt  act  or  not. 

Second^  The  other  restriction  depends  solely  upon  the  action 
of  congress.  The  moment  it  establishes  a  system  of  national 
bankruptcy,  the  state  law,  in  so  far  as  it  is  in  conflict  with  the 
act  of  congress,  is  superseded  and  limited  by  the  national  act, 
so  long  as  it  is  in  force. 

^11.  State  bankrupt  laws  with  reference  to  impairing  the  obli- 
gation of  a  contract. 

The  constitution  expressly  forbids  a  state  passing  any  law 
impairing  the  obligation  of  a  contract.'  This  prohibition 
applies  to  bankrupt  laws  and  acts  as  a  general  limitation  upon 
the  power  of  the  state  legislature,  whether  there  is  a  national 
bankrupt  law  in  force  or  not.  Yet  each  state,  so  long  as  it 
does  not  impair  the  obligation  of  any  contract,  has  the  power 
by  its  laws  to  regulate  the  conveyance  and  disposition  of  all 
property,  personal  or  real,  within  its  limits  and  jurisdiction.'' 

A  state  has  no  power  to  enact  a  bankrupt  law  which  op- 
erates to  discharge  a  debtor  from  a  contract  entered  into 
previous  to  its  passage.'*  This  is  true,  whether  the  parties  to 
the  contract  are  citizens  of  the  same  or  different  states.^  The 
reason  for  this  rule  is  that  the  effect  of  such  a  law  is  to 
terminate  the  obligation  imder  a  contract,  which  was  not  and 
could  not  have  been  made  in  view  of  the  statute,  because  it 
was  not  in  existence  at  the  time  the  contract  was  made. 

Whether  a  state  may  pass  a  bankrupt  law  which  shall  dis- 
charge a  debtor  from  contracts  entered  into  after  the  passage 
of  the  act  has  been  the  subject  of  much  discussion.  From 
the  decisions  it  may  be  stated  that  a  fair  and  ordinary  exer- 
cise of  the  power  to  pass  bankrupt  laws  by  the  state  does  not 
necessarily  involve  a  violation  of  the  obligation  of  contracts, 
multo  fortiori  oi  posterior  contracts.      Whether  such   a  state 

'  U.  S.  Const.,  Art.  i,  Sec.    lo.  man's  Car    Co.  v.    Pennsylvania. 

*  Smith   V.  Union   Bank,  5   Pet.  141    U.  S.   18,  22. 

518,526;  Crapo  V.  Kelly,  16  Wall.  '*  vSturges    v.    Crovvninshield,    4 

610.  630;    Denny  v.   Hennett,  12S  Wheat.      122;     Farmers   and   Me- 

U.  S.  489,  498;  Walworth  v.  Har-  chanics  Hank  v.  vSmith,  6  Wlieat. 

ris.  129  U.    S.    355;    (ieilinger  v.  130. 

Philipj)i,    133   U.  S.  246,  257;  Pull  <  I<"ariners  and   Mechanics  Hank 

V.  vSniith,  6  Wheat.  130. 


22  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

statute  is  repugnant  to  the  constitution  or  not  depends  upon 
the  citizenship  of  the  parties  to  the  contract.  It  was  held  by 
a  divided  court  in  the  case  of  Ogdcn  v.  Saunders '  that  a  state 
bankrupt  law  discharging  the  person  and  property  of  the 
debtor  does  not  violate  the  obligation  of  a  contract  entered 
into  subsequent  to  its  passage  by  citizens  of  that  state.  The 
reason  is,  that  the  citizens  of  a  state  are  subject  to  its  laws, 
and  contracts  made  by  them  within  its  territory  are  made 
with  reference  to  such  laws.  The  principle  established  by 
this  case  has  never  been  overruled  nor  extended  in  subsequent 
cases.  It  has  been  uniformly  held  that  a  state  bankrupt  or 
insolvent  law  could  have  no  effect  upon  a  contract  made, 
either  within  or  without  such  state,  between  citizens  of  differ- 
ent states.^  The  reason  for  this  is,  that  the  state  has  no  juris- 
diction beyond  its  own  territory,  and  can  not  affect  a  contract 
entered  into  by  a  person  of  another  state  who  can  not  be 
presumed  to  act  with  reference  to  the  laws  of  a  state  of  which 
he  is  not  a  citizen.  Such  state  laws  are  held  not  to  apply  to 
contracts  by  citizens  of  the  same  state  unless  made  within 
such  state. ^     It  makes  no  difference  that  the  contract  entered 

1  12   Wheat.  213.     In  this  case,  law  can  discharge  the  obligation 

Saunders,  a  citizen  of  New  York,  of  any  contract  made  in  the  state, 

drew  bills  on  Ogden  in  New  York,  except  such  contracts  as  are  made 

which  were  accepted  and  protested  between  citizens  of  that  state.  He 

there.     Ogden  was  afterwards  dis-  refers    to    the    case   of  Ogden  v. 

charged  under  the  insolvent  laws  Saunders,  supra,   to    support  this 

of  New  York,  passed  previous  to  proposition. 

the   contract    of  acceptance.     He  2  jjoyle    v.  Zacharie,  6  Pet.  348; 

pleaded  this  discharge  to  an  action  Suydam    v.  Broadnax,  14  Pet.  67; 

brought  again.st  him    in  the  dis-  Cook    v.    Moffatt,    5     How.    295; 

trict  court  of  Louisiana.     A  ma-  Baldwin     v.    Hale,    i    Wall.    223; 

jority   of  the    court   decided  that  Springer  v.  Foster,  No.  13266,  Fed. 

the  bankrupt    or    insolvent    law  Cas.,  s.  c.  2  Story,  383;    Woodhill 

was  not  a  law  impairing  the  obli-  v.  Wagner,  No.    17975,   Fed.  Cas., 

gation  of  that  contract,  but  over-  s.  c.  Baldwin,  296. 

ruled  his  plea  of  discharge  under  »  McMillan  v.  McNeill,  4  Wheat, 

that  act.  209.     But  see  Marsh  v.  Putnam,  3 

vSee  also  Springer  v.  Foster,  No.  Gray,  551,  where  the  contracting 

13266,  Fed.  Cas.,  s.  c.  2  Story,  383,  parties  were  citizens  of  the  state 

in  which  Judge  Story  stated  the  passing    the    insolvent  law;  also 

settled  doctrine  of  the  supreme  Blanchard  v.  Russell,  13  Mass.  i. 
court  to  be  that  no  state  insolvent 


POWER   TO    ENACT    BANKRUPT    LAWS.  23 

into  between  a  citizen  of  one  state  and  a  citizen  of  another  is 
made  payable  where  the  insolvent  law  exists.^ 

If,  however,  the  creditor  makes  himself  a  party  to  proceed- 
ings under  the  insolvent  law  he  will  be  bound  by  them,  like 
any  other  party  to  judicial  proceedings,  and  is  not  to  be  heard 
afterwards  to  object  that  his  debt  was  excluded  by  the  consti- 
tution from  being  affected  by  the  law.^ 

§  12.     The  effect  of  a  national  bankrupt  law  upon  state  insol- 
vent laws. 

Another  restriction  upon  the  operation  of  state  insolvent 
laws  arises  when  congress  establishes  a  system  of  bankruptcy. 
As  soon  as  a  national  bankrupt  act  goes  into  effect  the  state 
law  must  yield  so  far  as  it  conflicts  with  the  act  of  congress. 

It  is  well  settled  by  the  decisions,  both  federal  and  state, 
that  the  effect  of  a  national  bankrupt  law  is  to  suspend  the 
operation  of  any  state  bankrupt  or  insolvent  law  regulating  the 
assignment  and  distribution  of  the  property  of  insolvents,  and 
affecting  the  same  persons,  property  and  rights  that  would 
be  affected  by  proceedings  under  the  bankrupt  act.''  But  the 
act  of  congress  does  not  repeal  such  state  laws.  They  imme- 
diately become  operative,  without  reenactment,  upon  the  re- 
peal of  the  act  of  congress.* 

The  first  inquiry  naturally  is,  when  did  the  bankrupt  act  of 
1898  take  effect  to  suspend  the  insolvent  and  bankrupt  laws 
of  the  several  states?  Of  this  there  can  be  little  doubt.  The 
act  expressly  provides  that  it  "shall  go  into  full  force  and 
effect  upon  its  passage,"  which  was  July  i,  1898.      But  "no 

'Baldwin    v.  Hale,  i  Wall.  223;  s.  c.  Crabbe,  525;    Rowe  v.  Page, 

Baldwin  v.  Bank    of  Newberry,  i  54   N.  H.   190;    Van   Nostrand  v. 

Wall.  234;  Gillnian  v.  Lockwood,  Carr,  30   Md.  128;  Shears  v.  Sol- 

4  Wall.  409.  hinder.   10     Abb.  Pr.,  N.  S.    287; 

2Clay  V.  vSmith,3  Pet.  411;  Gil-  Martin     v.    Berry.     37    Cal.     208; 

man  v.  Lockwood,    4    Wall.    409;  Griswold    v.    Pratt,    9    INIet.     16; 

Baldwin    v.    Hale,    i     Wall.    223;  Blanchard  v.  Russell,  13  Mass,   i; 

Perley  v.  Mason,  64  N.  H.  6.  Parmenter  Mf.    Co.   v.  Carpenter, 

^  Ex   parte    Eanies,   No.   4237,  51  N.  E.  529;   Bruss-Ritter  Co.,  90 

Fed.  Cas.,s.  c.  2  vStory,  322;    hi  re  Fed.  Rep.  651 ;     ///  re    Criitwillig, 

Reynolds,  No.  11723,  Fed.  Cas.,  s.  90  Fed.  Rep.  475. 
c.  9N.  B.  R.  50;  Thornhill  v.  Bank,  <  Baldwin   v.  Hale,  i    Wall.  223; 

No.  13992,  Fed.  Cas.,  s.  c.  i  Woods,  Butler   v.  fioreley,  146    U.  S.  303; 

i;  Sullivan  v.  Heiskill,  No.  13594,  Tua  v.  Carriere,  117  U.  S.  209. 


34 


LAW   AND    PROCEEDINGS    IN    BANKRUPTCY. 


petition  for  voluntary  bankruptcy  shall  be  filed  within  one 
month  of  the  passage  thereof,  and  no  petition  for  involuntary 
bankruptcy  shall  be  filed  %vithin  four  months  of  the  passage 
thereof."'  In  this  respect  the  present  act  differs  from  that 
of  1867,  which  fixed  the  date  at  which  the  act  took  effect 
for  some  purposes  as  June  i,  1867.'^  It  also  differs  in  like 
respect  from  the  act  of  August  19,  1841,  which  provided  that 
the  act  should  take  effect  from  and  after  the  first  day  of  Feb- 
ruary, 1842."     It  is  expressly  provided  by  the  act,  however, 


'  Last  clause  of  the  Act  of  July 
I,  189S.  In  re  Biuss-Ritter  Co., 
90  Fed.  Rep.  651 ;  Blake,  Moffitt 
&  Tovvne  v.  Francis-Valentine 
Co.,  89  Fed.  Rep.  691 ;  In  re  Rou.se. 
Hazard  &  Co.,  91  Fed.  Rep.  96; 
In  re  Curtis,  91  Fed.  Rep.  TS"] ; 
Leidigh  Carriage  Co.  v.  Stengel,  95 
Fed.  Rep.  637,  s.  c.  y]  C.  C.  A.  210. 

In  Parmenter  Mf.  Co.  v.  Hamil- 
ton, 51  N.  E.  Rep.  529,  the  Su- 
preme Judicial  Court  of  Massa- 
chusetts, construing  the  present 
statute,  said ; 

"  The  language  is  materially 
different  from  that  of  the  bank- 
ruptcy act  of  1867  and  from  that 
of  the  earlier  bankruptcy  law  of 
1 84 1.  The  argument  that  the 
change  in  question  was  intention- 
al is  almost  irresistible.  The  act 
is  'to  go  into  full  force  and  effect 
upon  its  passage  ' ;  that  is  to  say, 
the  rights  of  all  persons,  in  the 
particulars  to  which  the  act  refers, 
are  to  be  determined  by  the  act 
from  the  time  of  its  passage. 
Among  these  rights  is  the  right 
to  have  insolvent  estates  settled 
in  bankruptcy  under  the  provis- 
ions of  the  act,  including  the  rights 
to  have  acts  of  bankruptcj*  affect- 
ing the  settlement  of  estates  de- 
termined by  it  (vSec.  3),  to  have  the 
rights  of  debtors  to  file  voluntary 
petitions,  and  of  creditors  to  file 
involuntary  petitions,  determined 


by  it  (Sec.  4),  and  to  have  prefer- 
ences and  liens  governed  by  the 
provisions  of  it  (Sees.  60  and  67). 
These  various  provisions  affecting 
the  rights  and  conduct  of  debtors 
and  creditors  are  different  from 
those  previously  existing  in  most 
of  the  states,  and  perhaps  differ- 
ent from  those  found  in  the  laws 
of  any  state,  and  they  supersede 
all  conflicting  provisions.  The 
only  limitation  upon  the  full  and 
complete  operation  of  the  act  up- 
on its  passage  is  that  the  right  to 
begin  proceedings  is  postponed 
one  month  in  the  case  of  volun- 
tary petitions,  and  four  months  in 
the  case  of  involuntary  petitions. 
Whenever  the  proceedings  are 
commenced  the  conduct  of  the 
parties  after  the  passage  of  the  act 
is  to  be  tested  by  its  requirements. 
The  only  saving  clause  affecting 
the  jurisdiction  of  state  courts 
provides  for  cases  commenced  in 
those  courts  before  the  passage  of 
the  act." 

'-  Act  of  March  2,  1867,  14  Stat, 
at  L.  541,  Sec.  50;  Traders  Bank 
V.  Campbell,  14  Wall.  94;  Martin 
V.  Berry,  37  Cal.  208;  Day  v.  Bar- 
dell,  97  Mass.  246;  Chamberlain 
v.  Perkins,  51  N.  H.  340. 

3  Act  of  Augu.st  19,  1 84 1,  5  Stat, 
at  I/.  449,  Sec.  17;  Griswold  v. 
Pratt,  9  Met.  16. 


POWER   TO    ENACT    BANKRUPT    LAWS.  25 

that  proceedings  commenced  under  the  state  insolvency  laws 
before  July  i,  1898,  shall  not  be  affected  by  the  national  act. ^ 

The  reason  that  state  bankruptcy  and  insolvency  laws  are 
inoperative  is  not  because  the  proceedings  under  them  are 
less  plenary,  but  for  the  sole  reason  that  a  different  tribunal 
is  selected  than  that  provided  by  congress."^  General  juris- 
diction of  bankruptcy  proceedings  is  conferred  upon  courts 
specified  as  courts  of  bankruptcy.^  This  jurisdiction  must 
necessarily  be  exclusive  of  the  state  courts.* 

It  may  be  contended  that  the  bankrupt  law  does  not  sus- 
pend proceedings  under  the  state  law  until  proceedings  are 
instituted  in  a  court  of  bankruptcy.^  But  if  this  were  so 
"the  law  would  be  imperfect,  and  all  the  evils  would  be 
experienced  of  two  different  systems  of  distributing  the  assets 
of  insolvent  debtors,  with  the  strongly  objectionable  feature 
that  one  of  those  systems,  the  state  insolvent  law,  was  of  such 
a  character  as  to  be  liable  to  have  the  proceedings  under  it 
superseded  by  proceedings  being  instituted  under  the  other  at 
the  election  of  the  insolvent  or  of  his  creditors,  if  a  case 
existed  for  compulsory  bankruptcy."*  Another  objection 
to  such  a  construction  is,  that  it  would  defeat  the  very  object 
of  the  national  bankrupt  system,  namely,  uniformity  through- 

1  Last  clause  of  the  Act  of  July  ors  without  preferences  is  neces- 
i^  1898.  sarily  a  fraud  under  the  bankrupt 

«  Globe  Ins.  Co.  v.  Cleveland  law,  defeating  the  operation  of  the 
Ins.  Co.,  No.  5486,  Fed.  Cas.,  s.  c.  law,  because  it  provides  for  the 
14  N.  B.  R.  311,  where  Judge  Km-  administration  of  the  estate  in  a 
mens  used  substantially  the  Ian-  different  way  from  that  provided 
guage  of  the  text.  by  the   bankrupt  law,  and  by  an 

In    Piatt  V.  Preston,  No.  11219,      assignee  selected  by  the  bankrupt 
s.  c.  19  N.  B.  R.  241,  Judge  Choate      himself" 
said:  •' B.   A.   1898,  vSec.   2.     See   al.so 

"  As  to  the  general  assignment,      Juri.sdiction     of  Courts  of   Bank- 
it  is  insisted  that  it  is  not  perse  a      ruptcy.  Sec.  16,  e/  seq.^post. 
fraud  upon  the  bankrupt  law,  but  <  R.  S.  Sec.  711,  clause  6. 

void  if  actual  intent  to  defraud  or  •'■  Bostwick    v.  Burnett,  74  N.  Y. 

to  defeat  the  law  shall  be  shown.      317;  Sadler    v.    Immel,    15     Nev. 
This  may  still  be  regarded  as  be-      265;    Ostrander      v.    Meunch,    12 
ing  an  open   question    in   the  su-      Fed.  Rep.   562 ;  Reed  Brothers  & 
preme  court  of  the  United  States.      Co.  v.  Taylor,  32  Iowa,  209. 
Mayer  v.  Ilellman,  91    U.  S.  496.  "Juf^ge    Dewey,  in    Gri.swold  v. 

But  the  great  weight  of  authority      Pratt.  9    Met.  16;    .see    also    cases 
at    pre.sent    is,  that    a  general  a.s-      cited  in  note  next  below, 
signmenl  for  the  benefit  of  credit- 


26 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


out  the  United  States;  some  cases  would  be  instituted  under 
the  national  bankrupt  act  and  others  proceed  under  the  laws 
of  the  various  states,  provided  no  objection  was  raised  to  such 
proceedings  in  the  state  court.  Clearly  it  was  not  the  inten- 
tion of  the  framers  of  the  constitution  or  of  congress  when  it 
enacted  this  act  to  have  in  existence  two  distinct  and  diverse 
systems  affecting  the  same  property  and  rights,  leaving  it  to 
the  option  of  the  debtor  to  look  to  one  or  the  other  at  his 
pleasure.' 

Under  the  act  of   1841,  as  well  as  under  the  act  of  1867, 

this  question  does  not  appear  to  have  been  directly  decided 

by   the  supreme  court  of   the  United  States,^  for  the  reason 

1  Sturges     V.    Crowninshield,  4      ment    and    prior    to   bankruptcy 

proceedings. 

In  Boese  v.  King,  108  U.  S.  379, 
the  court  held  that  creditors,  who 
permitted  a  debtor  to  surrender 
his  property  for  distribution  and 
to  proceed  under  a  state  insolvent 
act  until  they  acquired  prefer- 
ences over  the  other  creditors  un- 
der the  bankrupt  act,  ■were  es- 
topped, in  a  proceeding  by  the  re- 
ceiver of  such  creditors  to  set 
aside  such  distribution  to  ques- 
tion the  legality  of  the  proceeding. 
But  Mr.  Justice  Matthews,  with 
whom  concurred  Justices  Miller, 
Gray  and  Blatchford,  dissented 
upon  the  ground  that  the  state 
law  being  inoperative  no  title  un- 
der it  could  pass,  and  that  the 
judgment  creditors  who  had  ac- 
quired a  lien  upon  the  fund  in  the 
hands  of  the  assignee  were  en- 
titled to  appropriate  it  as  the 
property  of  their  debtor  to  the 
payment  of  their  claims.  These 
decisions,  together  with  decisions 
of  the  ju.stices  holding  the  circuit 
courts,  indicate  that  the  supreme 
court  was  divided  at  that  time  up- 
on the  question  whether  the  bank- 
rupt law  ipso  facto  made  proceed- 
ings under  the  state  law  invalid. 


Wheat.  122;  Ogden  v.  Saunders, 
12  Wheat.  213;  III  re  Klein,  i  How. 
277,  note;  Ex  parte  Eames,  No. 
4237,  Fed.  Cas.,  s.  c.  2  Story,  322; 
Globe  Ins.  Co.v.Cleveland  Ins.  Co., 
5486,  Fed.  Cas.,  s.  c.  14  N.  B.  R. 
311;  Thornhill  v.  Bank,  No. 
13992,  Fed.  Cas.,  s.  c.  i  Woods,  i  ; 
Sullivan  v.  Hieskill,  No.  13594,  s. 
c.  Crabbe,  525;  hi  re  Reynolds, 
No.  1 1723,  Fed.  Cas.,  s.  c.  9  N.  B. 
R.  50  ;  Rowe  v.  Page,  54  N.  H. 
190;  Van  Nostrand  v.  Carr,  30 
Md.  128;  Shears  v.  Solhinger,  10 
Abb.  Prac.  N.  S.  287;  Martin  v. 
Berry,  37  Cal.  208 ;  Griswold  v. 
Pratt,  9  Met.  16;  Blanchard  v. 
Russell,  13  Mass.  i  ;  Parmenter 
Mf.  Co.  V.  Hamilton  (Mass.),  51  N. 
E.  Rep.  529;  Bruss-Ritter  Co.,  90 
Fed.  Rep.  651. 

See  also  discussion  with  refer- 
ence to  general  assignment  laws 
next  section  below. 

*  In  Mayer  v.  Hellman,  91  U.  S. 
502,  the  question  is  referred  to,  but 
the  court  expressl}'  declined  to  ex- 
press an  opinion. 

In  Reed  v.  Mclntyre.  98  U.  S. 
507,  the  court  held  that  property 
in  the  hands  of  an  assignee  was 
not  liable  to  an  attachment  sued 
out    and    levied    after  the  assign- 


POWER   TO   ENACT    BANKRUPT    LAWS. 


27 


probably  that  the  supreme  court  had  no  appellate  jurisdiction 
in  bankruptcy.'  The  weight  of  authority  in  the  circuit 
courts  (having  final  jurisdiction  of  bankruptcy  cases)  as  well 
as  in  the  state  courts,  is  to  the  effect  that  the  national  bank- 
rupt law  of  iS6-j  ipso  facio  suspended  all  state  legislation 
upon  the  subject  of  bankruptcies.  ^  The  same  rule  has  been 
applied  under  the  present  act.^ 

Rogers,  31  Mich.  391  ;  Langley  v 
Pern',  No.  8067,  s.  c.  2  X.  B.  R 
596  ;  Sedgwick  v.  Place,  No 
12622,  Fed.  Cas.,  i  N.  B.  R.  673 
Bostwick  V.  Burnett,  74  N.  Y.  317; 
Sadler  v.  Immel,  15  Nev.  265. 

3  The     Parmenter  Manufactur- 
ing Co.  V.  Hamilton,  51  N.  E.  Rep. 
529  ;  /}i  re  Bruss-Ritter  Co.,  90  Fed. 
Rep.  651 ;  In  re  Smith,  92  Fed.  Rep. 
135;  In  re  Curtis,  91  Fed.  Rep.  'J2>1\ 
Ketcham    v.    McNamara,    72    Conn. 
709 ;  6  Am.  B.  R.  160 ;  In  re  Macon; 
Sash   Door  &  Lumber  Co.,  7  Ant. 
B.    R.    66. 

In  Parmenter  Manufacturing  Ca 
V.  Hamilton,  supra,  the  Supreme 
Judicial  Court  of  Massachusetts 
used  this  language: 

"  The  question  in  this  case  is', 
whether  this  act  so  far  superseded 
the  insolvency  laws  of  this  com- 
monwealth from  the  time  of  its 
passage  as  to  deprive  our  courts 
of  jurisdiction  to  entertain  peti- 
tions for  the  commencement  of  in- 
solvency    proceedings      filed      after 

July   I,   1898 

The  plain  implication  is,  tjliat 
proceedings  commenced  in  the 
state  courts  after  the  passage  of 
the  act  are  unauthorized.  This  is 
in  accordance  with  the  earlier  lan- 
guage giving  the  statute  full  force 
and  effect  from  the  time  of  its 
passage,  except  that  the  filing  of 
petitions  is  to  be  postponed  for  a 
short  time.  We  are  of  opinion 
that  the  language  was  chosen  to 
make  clear  the  purpose  of  Con- 
gress that  the  new  system  of  bank- 
ruptcy should  supersede  all  state 
laws  in  regard  to  insolvency  from 
the  date  of  the  passage  of  the 
statute." 


1  Cleveland  Insurance  Co.  v. 
Globe  Ins.  Co.,  98  U.  S.  366;  N. 
O.,  etc.,  R.  Co.  V.  Delamore,  114  U. 
S.  506. 

-  Judge  Emmons,  in  the  well- 
considered  case  of  the  Globe  In- 
surance Co.  V.  Cleveland  Insur- 
ance Co.,  No.  5486,  Fed.  Cas.,  s.  c. 
14  N.  B.  R.  31 1,  lays  down  the  rule 
that  "  if  the  state  statute  author- 
izes a  transfer  of  all  a  debtor's 
property  for  equal  distribution 
among  his  creditors,  in  the  lan- 
guage of  many  of  the  cases  'acting 
upon  the  same  persons  and  prop- 
erty,' a  transfer  under  it  is  void; 
not  because  the  proceedings  are 
less  plenary,  but  for  the  sole  rea- 
son that  a  different  tribunal  is  se- 
lected than  that  provided  by  con- 
gress." 

See  also  In  re  Beisenthal,  No. 
1236,  Fed.  Cas.,  s.  c.  14  Blatch. 
146;  In  re  Independent  Insurance 
Co.,  No.  7017,  Fed.  Cas.,  s.  c. 
Holmes,  103 ;  Macdonald  v. 
Moore,  No.  8763,  Fed.  Cas.,  s.  c. 
8  Ben.  579;  In  re  Reynolds,  No. 
1 1723,  Fed.  Cas.,  s.  c.  9  N.  B.  R. 
50;  /«  r^  Stubbs,  No.  13557,  Fed. 
Cas.,  s.  c.  4  N.  B.  R.  376;  Piatt  v. 
I're.ston,  No.  11219,  s.  c.  19  N.  B. 
K.  241  ;  Van  Nostrand  v.  Carr,  30 
Md.  128:  Rowe  V.  Page.  54  N.  H. 
194;  Chamberlain  v.  Perkins,  51 
N.  H.  340  ;  Martin  v.  Berry,  37 
Cal.  208;  Shears  v.  vSolhinger.  10 
Abb.  Prac,  N.  S.  287. 

But  see  contra  Reed  Bros.  & 
Co.  v.  Taylor,  32  Iowa,  209;  Cook  \- 


28  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

It  is  clear  that  any  person  or  corporation  not  subject  to  the 
act  of  1898  may  take  the  benefit  of  an  insolvent  state  law.' 
Any  person  who  owes  debts,  except  a  corporation,  may  be- 
come a  voluntary  bankrupt.'  This  provision  of  the  act 
limits  the  jurisdiction  of  the  state  courts  to  corporations 
which  are  not  liable  to  be  adjudged  bankrupts  upon  the  peti- 
tion of  creditors.  Such  are,  first,  corporations  «^/f  "engaged 
principally  in  nianufacturin^-.  trading-,  printing-,  publishing, 
mining,  or  mercantile  pursuits,  owing  debts  to  the  amount  of 
$1,000  or  over."  In  this  class  may  be  included  corporations 
not  for  profit,  such  as  religious  and  benevolent  societies,  social 
clubs  and  munici]:)al  corporations;  second,  banks  incorporated 
under  state  or  territorial  laws.  National  banks  are  also  ex- 
cluded from  the  operation  of  the  bankrupt  act,  but  congress 
has  i^rovided  another  method  of  winding  up  the  afifairs  of  an 
insolvent  national  bank.' 

If  proceedings  in  insolvency  are  instituted  in  a  state  court 
after  the  law  of  1898  went  into  effect,  by  what  steps  is  it  pos- 
sible to  transfer  the  property  and  proceedings  to  a  court  of 
bankruptcy?  Two  plain  remedies  exist.  First,  If  it  be  a 
case  in  which  the  debtor  may  be  adjudged  a  bankrupt  on 
petition  of  a  creditor — involuntary  bankruptcy — proceedings 
may  at  once  be  instituted  in  a  court  of  bankruptcy  by  the 
creditors.  Such  proceedings  supersede  the  proceedings  in  the 
state  court."''*  If  the  state  court  refuses  to  yield,  the  question 
of  how  far  a  court  of  bankruptcy  may  interfere  with  a  state 
court  arises.  This  is  discussed  in  another  place.*  Second, 
If  the  case  in  the  state  court  is  not  properly  within  involun- 
tar^'  bankruptcy,  under  the  act  of  1898,  but  is  a  case  within 
the  voluntary  provisions  of  that  act,  the  procedure  is  differ- 
ent. Clearly  a  person  can  not  be  directly  compelled  to  volun- 
tarily go  into  a  court  of  bankruptcy.  If  the  state  court  holds 
jurisdiction  after  a  proper  objection  has  been  made  by  any 
of  the  creditors,  the  case  may  be  taken  to  the  highest  court 
of  the  state  in  which  it  is  reviewable.      If  such  court  decides 

1  As  to  who  may  be  adjudged  ■'*/;;  re  Macon  Sash,  Door  & 
bankrupts  under  the  Act  of  1898,  Lumber  Co.,  7  Am.  B.  R.  66 ; 
see  Sees.  42,  et  seq.,  post.  Kctcham  v.    McNamara,  6   Am.    B. 

2  B.      A.      1898,      Sees,      ^a,      as  R.    160,    72   Conn.    709. 
amended   Feb.    5,    1903,   32    Stat,    at  •*  How  far  a  court  of  bankruptcy 
L.    797.  may    interfere    with    a    state    court, 

3  R.  S.  Sees.  5220  to  5243.  Sees.  22  and  23,  post. 


POWER    TO    ENACT    BANKRUPT    LAWS,  29 

in  favor  of  the  jurisdiction  of  tlie  state  court,  this  decision 
may  be  reviewed  by  the  supreme  court  of  the  United  States.^ 

^  13,  The  effect  of  a  national  bankrupt  law  upon  general  as- 
signment lavi^s  of  the  states. 

Under  the  act  of  1841  is  was  generally  conceded  that  a 
general  assignment  for  the  benefit  of  creditors  was  unlawful 
from  and  after  the  date  that  the  act  went  into  effect.-  Under 
the  act  of  1867  a  difference  of  opinion  existed  with  reference 
to  the  effect  of  the  act  upon  state  laws  regulating  assignments 
for  the  benefit  of  creditors.'' 

It  will  be  observed  that  it  is  insolvent  and  bankrupt  laws 
only  which  are  suspended  by  the  act  of  1898.  A  state  statute 
which  is  merely  declarative  of  principles  of  enforcing  a  trust 
substantially  such  as  a  court  of  chancery  would  apply  in  the 
absence  of  any  statutory  provision  is  not  such  a  law.* 

There  is  a  substantial  difference  between  a  proceeding  under 
a  general  insolvency  statute  and  one  under  a  statute  permitting 
general  assignments.  The  one  administers  upon  the  estate  of 
an  insolvent  as  a  proceeding  in  the  courts,  derives  its  jx)tency 
from  the  law,  winds  up  the  estate  judicially,  and  discharges 
the  debtor.     Such  is  essentially  a  proceeding  in  bankruptcy, 

'  R.    S.    Sec.    709.  acquiesced  in  at  that  time  than  that 

^  See    McLean    v.    Johnson,    No.  general   assignments   for  the  henetit 

8883,    Fed.    Cas.,    s.    c.    3    McLean,  ot   creditors   had   become  unlawful. 

202;   McLean  v.   Meline,   No.  8890.  Every  lawyer  of  large  practice  will 

Fed.  Cas.,  s.  c.  3  McLean,  199;  Ex  be  enal)led  to  say  that  the  practice 

parte   Karnes,    No.   4237,   Fed.   Cas.,  was      abandoned      throughout      the 

s.  c.  2  Story,  322;  Griswold  v.  Pratt,  country.     The  local  judgments  were 

0    Met.    16;    In    re    Breneman,    No.  then    less    frequently   reported    than 

1830,  Fed.  Cas.,  s.  c.  Crabbe,  456.  now,    or   they   would   have   been   as 

Speaking  of  this  act.  Judge  Em-  numerous   in  the  books  as  they  are 

mons,    in    Globe    Insurance    Co.    v.  under   the    law    of    1867."     But    see 

Cleveland  Insurance  Co.,  No.  5486,  ex  parte  Ziegenfuss,  2  Iredell    (N. 

Fed.    Cas.,   s.   c.    14    N.    B.   R.   311,  Car.)   463. 
observes :  •'  See  note  2,  page  27. 

"  Under  the  law  of   1841    several  ^  Randolph  v.  Scruggs,  190  U.  S. 

decisions    of    this    precise    question  533,   10  Am.   B.   R.   i  ;   In  re  Watts 

were  made.     During  the  administra-  and   Sachs,   190  U.   S.   i  :   Mayer  v. 

tion   of  that  law,   when   at   the  bar,  Heliman,  91    U.  S.   502.     The  Ohio 

we    had    occasion    to    examine    it.  law  was  under  consideration  in  this 

Few  doctrines  were  more  generally  last  case. 


30  LAW    AND    I'KOCEEDINGS    IN    BANKRUPTCY. 

and  sucli  is  undoubtedly  superseded  by  the  act  of  congress  in 
question.^  Tlie  other  derives  its  potency,  not  from  the  law, 
but  from  the  contract  or  deed  of  the  debtor,  is  administered 
under  and  according  to  the  provisions  of  the  deed,  supple- 
mented only  by  salutary  legislative  safeguards,  and  does  not. 
result  in  a  discharge  of  the  debtor  from  his  obligations. 

Proceedings  therefore  under  a  general  assignment  law  of  a 
state  (not  a  bankruptcy  or  insolvency  law  strictly  so-called) 
or  under  a  common  law  deed  are  not  void,  whether  bankruptcy 
proceedings  are  instituted  or  not.'"'  If  no  bankruptcy  pro- 
ceeedings  are  instituted  within  four  months  the  state  court 
may  proceed  to  administer  the  estate  and  the  proceedings  can- 
not be  assailed  by  a  trustee  in  bankruptcy  subsequently  ap- 
pointed or  by  the  creditors.'^ 

The  bankruptcy  act  makes  a  general  assignment  for  the 
benefit  of  creditors  ^  or  the  appointment  of  a  receiver  by  a 
state  court  ^  an  act  of  bankruptcy.  It  has  been  held  that  an 
assignee,  under  a  deed  of  general  assignment  and  the  execution 
of  which  deed  is  the  act  of  bankruptcy  upon  which  an  adjudica- 
tion is  made  although  the  assignee  has  qualified  and  is  acting 
under  the  orders  of  the  state  court,  does  not  hold  the  estate 
of  the  bankrupt  adversely  to  the  trustee  in  bankruptcy.^''  If 
proceedings  in  bankruptcy  are  instituted  within  four  months 
after  the  general  assignment  or  the  appointment  of  the  receiver 

^  Parmenter   Manf.    Co.   v.   Ham-  King,   io8  U.   S.   379 ;   Patty-Joiner 

ilton,    51    N.    E.    Rep.    528;    In    re  &  Enbank  Co.  v.  Cummins,  (Texas 

Smith,    92    Fed.    Rep.    135;    In    re  Sup.  Ct.)   4  Am.  B.  R.  269,  57  S. 

Etheridge    Furniture    Co.,    92    Fed.  W.   Rep.   566. 

Rep.   329;   In   re   Richard,  94   Fed.  8  B.       A.       1898,      Sec.       3,      as 

Rep.   633;   Ketcham  v.   McNamara,  amended   Feb.   5,    1903,  32  Stat,   at 

y2   Conn.    709,   6  Am.    B.    R.    160;  L.     797;     West     Co.     v.    Lea,     174 

In  re  Macon  Sash,  Door  &  Lumber  U.    S.    590. 

Co.,  7  Am.  B.  R.  66.     But  see  Boese  »  B.  A.   1898,  Sec.  3,  clause  4,  as 

V    King,  108  U.  S.  379.  amended  by  the  act  of  February  5, 

8  Randolph  v.  Scruggs,  190  U.  S.  1903,  2,2  Stat,  at  L.  797. 

533 ,  10  Am.  B.  R.  I ;  In  re  Sievers,  ^"  Bryan    v.    Bernheimer,    181    U. 

91  Fed.  Rep.  366;  In  re  Romanow,  S.   188,  5  Am.  B.  R.  623;  Leidigh 

92  Fed.  Rep.  510;  i  Am.  B.  R.  461.  Carriage  Co.  v.   Stengel    (C.  C.  A. 
7  Randolph  v.  Scruggs,  190  U.  S.  6th  Cir.),  95  Fed.  Rep.  645;  2  Am. 

533 ,    10   Am.    B.    R.    I ;    Mayer   v.      B.    R.   383. 

Hellman,   91    U.    S.   496;    Boese   v.  As  to  when  a  receiver  does  not 


POWER    TO    ENACT    BANKRUPT    LAWS. 


31 


such  state  proceedings  are  void  as  against  the  trustee  of  the 
bankrupt  so  far  as  it  interferes  with  his  administration  of  the 
property  of  the  debtor." 

The  general  rule  is  that  where  the  property  of  a  debtor  has 
gone  into  the  custody  of  a  state  court,  its  right  to  control 
and  administer  it  for  the  purpose  of  that  suit  is  superior  to 
that  of  the  bankruptcy  court,  provided  such  suit  was  com- 
menced and  the  seizure  made  before  the  beginning  of  the  four 
months  period.^-  If  the  suit  in  the  state  court  was  begun 
and  the  seizure  made  within  that  period  the  right  of  the  bank- 
ruptcy court  over  the  property  is  not  only  superior,  but  after 
the  adjudication  is  exclusive,  providing  proper  steps  are  taken 
by  the  trustee  to  obtain  possession  of  the  property  for  the 
purpose  of  administering  it/^  The  trustee  should  apply  to 
the  state  court  for  an  order  to  deliver  to  him  the  assets  of  the 
debtor."  The  state  court  will  regularly  pass  such  an  order  in 
a  proper  case. 


hold  adversely,   see  In  re  Watts  & 
Sachs,   190  U.  S.   I. 

11  Randolph  v.  Scruggs,  190  U.  S. 
533 ,  ID  Am.  B.  R.  I ;  West  Co.  v. 
Lea,  174  U.  S.  590;  Bryan  v.  Bern- 
heimer,  181  U.  S.  188 ,  5  Am.  B.  R. 
623 ;  Armour  Packing  Co.  v.  Brown 
(Minn.),  79  N.  W.  Rep.  522;  Lum- 
ber Co.  V.  Sawyer  (Minn.),  78  N. 
W.    Rep.    1038. 

12  Consult  Metcalf  v.  Barker, 
187  U.  S.  165,  9  Am.  B.  R.  36; 
Pickens  v.  Roy,  187  U.  S.  17";  I^r^- 
zier  V.  Southern  Loan  &  Trust  Co., 
go  Fed.  707 ;  40  C.  C.  A.  76,  where 
the  suits  in  the  state  courts  had 
been  instituted  more  than  four 
months  before  the  commission  of 
the  acts  of  bankruptcy,  and  conse- 
quently the  state  courts  were  not 
deprived  of  jurisdiction  over  the 
property. 

In  Pickens  v.  Roy,  187  U.  S.  180, 
the  court,  in  referring  to  the  rules 
governing  cases  of  priority  of  juris- 
diction, imputes  to  Judge  Goff  the 


following  language,  which  is  ap- 
proved : 

"  The  bankruptcy  act  of  1898  does 
not  in  the  least  modify  this  rule,  but 
with  unusual  carefulness  guards  it 
in  all  of  its  details,  provided  the 
suit  pending  in  the  state  court  was 
instituted  more  than  four  months 
before  the  district  court  of  the 
United  States  had  adjudicated  the 
bankruptcy  of  the  party  entitled  to 
or  interested  in  the  subject-matter 
of  such  controversy." 

Though  there  is  error  in  the  ci- 
tation, as  Judge  Goff  did  not  sit  in 
Frazier  v.  Southern  Loan  &  Trust 
Co.,  99  Fed.  707;  40  C.  C.  A.  76, 
the  language  is  found  in  Pickens  v. 
Dent,  106  Fed.  657;  45  C.  C.  A. 
522,  the  decision  in  which  was  un- 
der review  in  Pickens  v.  Roy,  and 
there   affirmed. 

13  /„  re  Watts  &  Sachs,  190  U.  S. 
I  ;  In  re  Knight,  125  Fed.  Rep.  35. 

^*  In  re  Knight,  125  Fed.  Rep.  35; 
In  re  Watts  &  Sachs,  190  U.  S.  l. 


32 


LAW     AM)     rUOtKKDlNf.S    1  X     T.  A  X  K  K  r  I' TCY. 


If  the  st;itc  court  refuses  to  order  its  assignee  for  the  bene- 
fit of  creditors  to  deUver  assets  in  his  possessidn  to  the  trustee 
in  bankruptcy,  the  trustee  may  apply  to  the  court  of  bank- 
ruptcy for  an  order  to  bring  in  the  assignee  under  the  assign- 
ment, which  constitutes  an  act  of  bankruptcy,  and  require  him 
to  deliver  to  the  trustee  assets  of  the  estate  which  came  into 
his  possession  under  the  assignment/''  but  the  assignee  cannot 
be  required  b)^  a  summary  order  on  notice  to  pay  over  money, 
which  he  has  paid  out  in  the  administration  of  the  estate  in 
the  state  court,"  or  the  trustee  may  proceed  to  have  the  con- 
veyance to  the  assignee  set  aside  under  Sec.  67^/^  or  he  may 
apply  to  the  court  of  bankruptcy  for  an  order  to  stay  pro- 
ceedings in  the  state  court.'* 


1^  Bryan  v.  Bernheimer,  181  U.  S. 
188,  5  Am.  B.  R.  623;  In  re 
Thompson,  122  Fed.  Rep.  174;  Lei- 
digh  Carriage  Co.  v.  Stengel  (C.  C. 
A.,  6th  Cir.),  95  Fed.  Rep.  637,  2 
Am.  B.  R.  383 ;  In  re  Stokes,  106 
Fed.  Rep.  312;  In  re  Knight,  125 
Fed.  Rep.  35. 

1^  Louisville  Trust  Co.  v.  Com- 
ingor,  184  U.  S.  18,  7  Am.  B.  R. 
421,  affirming  Ex  parte  Comingor 
(C.  C.  A.,  6th  Cir.),  107  Fed.  Rep. 


898,  5  Am.  B.  R.  537;  In  re  Klein 
&  Co.,  8  Am.  B.  R.  559,  116  Fed. 
Rep.  523 ;  In  re  Carver  &  Co.,  7  Am. 
B  R.  539;  In  re  Manning,  10  Am. 
B.  R.  497. 

1^  Randolph  &  Scruggs,  190  U.  S. 
533 ,  10  Am.  B.  R.  I ;  In  re  Gutwil- 
lig,  90  Fed.  Rep.  475,  s.  c.  92  Fed. 
Rep.  2)2)7 ;  Davis  v.  Bohle,  92  Fed. 
Rep.  325- 

is/„  yg  Watts  &  Sachs,  190  U.  S. 
I ;  In  re  Knight,  125  Fed.  Rep.  35. 


COURTS    AND    THEIR    TERRITORIAL    J  URISUICTION.  33 


CHAPTER  III. 

THE      COURTS      OF      BANKRUPTCY      AND      THEIR      TERRITORIAL 

JURISDICTION. 

§  14.     Bankruptcy  courts  created. 

The  statute  creates  courts  of  bankruptcy  by  conferring 
jurisdiction  in  bankruptcy  on  the  district  courts  of  the  United 
States  in  the  several  states,  the  supreme  court  of  the  District 
of  Columbia,  the  district  courts  of  the  several  territories,  and 
the  United  States  courts  in  the  Indian  Territory  and  the  Dis- 
trict of  Alaska.^ 

The  jurisdiction  in  bankruptcy  is  conferred  upon  existing 
courts  instead  of  being  vested  in  new  tribunals.  But  these 
courts,  when  acting  as  courts  of  bankrujjtcy,  are  none  the 
less  separate  and  distinct  courts,  and  exercise  powers  and 
jurisdiction  separate  and  distinct  from  their  powers  and  juris- 
diction as  originally  constituted,  to  the  same  extent  as  if  they 
were  separate  and  distinct  tribunals.^ 

The  courts  of  bankruptcy  are  courts  of  record,  having  a 
limited  jurisdiction,  but  are  not  inferior  courts,  in  the  technical 
sense  of  those  words,  whose  judgments,  taken  alone  are  to  be 
disregarded.^ 

§  15.     Territorial  jurisdiction. 

The  several  courts  of  bankruptcy  have  the  same  territorial 
limits  respectively  as  the  courts  upon  which  bankruptcy  juris- 
diction is  conferred  now  have,  or  as  they  may  hereafter  be 
changed.*  Each  state  and  territory  is  divided  into  judicial 
districts.     In   many  states   there   are   two  or  more  districts, 

1  B.  A.  1898,  Sec.  I,  clause  8,  and  Co.,  loi  Fed.  Rep.  965,  4  Am.  B.  R. 

Sec.  2.  411:     Kennedy    v.     Bank,    8    How. 

'See     Norris'     Case     No.     10304,  586;  In   re  Williams,  120  Fed.  Rep. 

Fed.  Cas.,  s.  c.  4  N.  B.  R.  .i.S  .-?«• 

3  In     re     Columbia     Real     Estate  ♦  B.   A.    1898,   Sec.   2. 


34  LAW    AND    TROCEEDINGS    IN    BANKRUPTCY. 

aiul  stMiie  oi  tlie  large  districts  arc  again  divided  into  divisions. 
When  a  district  consists  of  a  state,  its  bonndaries  vary  as  those 
of  the  state  vary.''  A  court  of  bankruptcy  is  established  by 
the  act  of  1898  in  each  judicial  district,  whether  it  consists 
of  one  or  more  divisions. 

A  court  of  bankruptcy,  like  a  court  of  equity,  is  deemed 
always  open  for  filing  papers,  issuing  process,  making  orders, 
etc.  The  Bankruptcy  Act  seems  to  contemplate  that  from 
the  filing  of  the  petition  to  the  closing  of  the  estate,  the  pro- 
ceeding shall  be  continuous,  and  a  court  of  bankruptcy  always 
open,  like  surrogate  and  probate  courts,  where  estates  are 
administered  and  which  have  no  terms."  Bankruptcy  pro- 
ceedings may  be  entertained  and  determined  in  vacation,  in 
chambers,  and  during  the  respective  terms  of  the  courts  created 
courts  of  bankruptcy. 

The  time  and  place  of  holding  the  several  district  courts 
are  given  below,  in  connection  with  the  counties  comprising 
the  several  districts.  It  has  been  found  necessary  in  many 
districts,  where  court  is  held  at  different  places  in  the  district 
to  designate  certain  days,  in  addition  to  the  regular  term 
days,  on  which  the  judge  will  be  present  at  these  several 
places  for  the  purpose  of  hearing  bankruptcy  matters. 

The  judicial  districts  by  states  are  as  follows : 

Alabama  (fifth  circuit)  is  divided  into  three  districts, 
called  the  northern,  middle  and  southern  districts. 

The  northern  district  is  divided  into  three  divisions,  called 
the  northern,  eastern  and  southern  divisions  of  the  northern 
district. 

The  northern  division  of  the  northern  district  consists  of 
the  counties  of  Colbert,  Cullman,  Franklin,  Jackson,  Lauder- 
dale, Lawrence,  Limestone,  Madison,  Marion,  Marshall,  Mor- 
g-an  and  Winston. 

The  eastern  division  of  the  northern   district   consists  of 


^  Ex  parte  Devoe  Manufacturing  In  re  Lemon  Gale  Co.    (C.   C.  A., 

Co.,  108  U.  S.  401.  6th    Cir.),    112    Fed.    Rep.    296,    7 

«  In  re  Ives   (C.  C.  A.,  6th  Cir.),  Am.  B.  R.  291;  In  re  Bimberg,  121 

7  Am.  B.  R.  692,  113  Fed.  Rep.  911 ;  Fed  Rep.  942. 


COURTS    AND    THEIR    TERRITORIAL    JURISDICTION.        35 

The  time  and  place  of  holding  district  courts  are  the  second 
Mondays  in  June  and  December,  at  Batesville;  the  second 
Mondays  in  March  and  October,  at  Helena;  and  the  first 
Mondays  in  April  and  October,  at  Little  Rock. 

The  western  district  is  divided  into  the  Texarkana  division 
and  the  Fort  Smith  division. 

The  Texarkana  division  of  the  western  district  includes  the 
counties  of  Sevier,  Howard,  Pike,  Little  River,  Hempstead, 
Miller,  Lafayette,  Columbia,  Nevada,  Ouachita,  Calhoun  and 
Union. 

The  Fort  Smith  division  of  the  western  district  comprises 
the  counties  of  Benton,  Boone,  Carroll,  Crawford,  Franklin, 
Johnson,  Logan,  Madison,  Montgomery,  Newton,  Polk,  Se- 
bastian, Scott,  Washington  and  Yell. 

The  time  and  place  of  holding  the  district  courts  are:  At 
Texarkana,  second  Mondays  in  May  and  November;  at  Fort 
Smith,  second  Mondays  in  January  and  June. 

California  (ninth  circuit)  is  divided  into  two  districts 
called  the  northern  and  southern  districts. 

The  counties  in  the  northern  district  are  Alameda,  Alpine, 
Amador,  Butte,  Calaveras,  Colusa,  Contra  Costa,  Del  Norte, 
Eldorado,  Glenn,  Humboldt,  Inyo,  Lake,  Lassen,  Marin, 
Mariposa,  Mendocino,  Merced,  Modoc,  Mono,  Monterey, 
Napa,  Nevada,  Placer,  Plumas,  Sacramento,  San  Benito,  San 
Francisco,  San  Joaquin,  San  Mateo,  Santa  Clara,  Santa  Cruz, 
Shasta,  Sierra,  Siskiyou,  Solano,  Sonoma,  Stanislaus,  Sutter, 
Tehema,  Trinity,  Tuolumne,  Yolo  and  Yuba.  The  time  and 
j)lace  of  holding  district  courts  are:  San  Francisco,  first 
Monday  in  March,  second  Monday  in  July  and  first  Monday 
in  November. 

The  counties  of  the  southern  district  are  San  Luis  Obispo, 
Fresno,  Tulare,  Kern,  Santa  Barbara,  Ventura,  Los  Angeles, 
San  Bernardino,  San  Diego,  Orange,  Riverside,  Madera  and 
Kings.  The  time  and  place  of  holding  district  court  is ' 
the  second  Monday  in  January  and  the  second  Monday  in 
August,  at  Los  Angeles. 

Colorado  (eighth  circuit)  constitutes  one  judicial  district.' 
Suits    removed    from    state    courts    in    Archuleta,   Conejos, 

'  Act  of  June  26,  1876,  19  Stat,  at  L-  61. 


36  LAW    AND    PROCKliDIN C.S    IN     BANKRIPTCY. 

fifty- fourth  meridian  line  south  to  the  west  side  of  Tohtan- 
kella  Mountain  and  to  the  Yukon  river;  thence  in  a  south- 
easterly direction  to  the  western  side  of  Mount  McKinley; 
thence  in  a  southwesterly  direction  to  the  most  northern  point 
of  Lake  Clark;  thence  alonsj;'  the  northwest  side  of  Lake  Clark 
to  the  sixtieth  degree  of  north  latitude;  thence  west  along 
said  degree  of  latitude  to  Kuskokwim  bay.  This  division 
shall  also  include  the  mainland  west  of  said  bay  and  all  the 
islands  north  of  the  fifty-ninth  degree  of  north  latitude. 

The  third  division  shall  consist  of  all  that  portion  of  the 
district  of  Alaska  not  included  within  the  first  or  second  di- 
visions of  said  district  as  hereinbefore  described. 

The  time  and  place  of  holding  courts  are  the  first  Monday 
in  May.  at  Sitka,  and  the  first  Monday  in  November,  at 
Wrangell. 

Arizona  (ninth  district)  is  divided  into  four  districts.'' 

The  counties  in  the  district  are  :  First  district,  Cochise,  Pima 
and  Santa  Cruz. 

Second  district,  Pinal,  Gila  and  Graham. 

Third  district,  Maricopa  and  Yuma. 

Fourth  district.  Yavapai,  Apache,  Coconino,  Navajo  and 
Mohave. 

The  time  and  place  of  holding  courts  are :  First  district : 
First  Mondays  in  April  and  October,  at  Tucson.  Second  dis- 
trict :  First  Mondays  in  May  and  November  at  Florence. 
Third  district :  Second  Mondays  in  April  and  October,  at 
Phoenix.  Fourth  district :  First  Mondays  in  June  and  No- 
vember, at  Prescott. 

Arkansas  (eighth  circuit)  is  divided  into  two  districts, 
called  the  eastern  and  western  districts. 

The  eastern  district  is  divided  into  three  divisions,  called 
the  eastern,  northern  and  western  divisions. 

The  eastern  division  of  the  eastern  district  (returnable  to 
Helena)  includes  the  counties  of  Mississippi,  Crittenden,  Lee, 
Phillips,  Clay,  Craighead,  Poinsett,  Greene,  Cross,  St.  Francis 
and  Monroe. 

^  Act  of  Feb.  II,  1891.  26  Stat,  at   L.   747. 


COURTS    AND    THEIR    TERRITORIAL    JURISDICTION.         T,J 

Manatee,  Lee,  De  Soto,  Hillsboro,  Hernando,  Polk  and 
Pasco. 

The  time  and  place  of  holding  district  courts  are  second 
Monday  in  February,  at  Tampa ;  first  Mondays  in  May  and 
November,  at  Key  West;  first  Monday  of  December,  at  Jack- 
sonville. 

Georgia  is  divided  into  two  districts,  the  northern  district 
and  the  southern  district. 

The  northern  district  is  divided  into  two  divisions,  called 
the  eastern  division  of  the  northern  district  and  the  western 
division  of  the  northern  district. 

The  eastern  division  of  the  northern  district  comprises  the 
counties  of  Banks,  Bartow,  Campbell,  Clarke,  Clayton,  Chat- 
tooga, Carroll,  Cobb,  Coweta,  Catoosa,  Cherokee,  Dade,  De- 
kalb, Douglas,  Dawson,  Elbert,  Fannin,  Fayette,  Franklin, 
Floyd,  Fulton,  Forsyth,  Gordon,  Greene,  Gilmer,  Gwinnett, 
Habersham,  Hall,  Hart,  Haralson,  Henry,  Jackson.  Lump- 
kin, Morgan,  Milton,  Madison,  Murray,  Newton,  Oglethorpe, 
Oconee,  Paulding,  Pickens,  Polk,  Rabun,  Rockdale,  Spald- 
ing, Towns,  Union,  Walker,  Walton,  Whitfield  and  White. 

The  time  and  place  of  holding  district  courts  are  at  Atlanta 
on  second  Monday  in  March  and  first  Monday  in  October. 

The  western  division  of  the  northern  district  comprises  the 
counties  of  Chattahoochee,  Clay,  Early,  Harris,  Heard,  Mer- 
iwether, Marion,  Miller,  Muscogee,  Quitman,  Randolph, 
Schley,  Stewart,  Talbot,  Taylor,  Terrell,  Troup  and  Webster. 

The  district  courts  of  this  division  are  held  at  Columbus 
on  first  Monday's  in  May  and  December. 

The  southern  district  is  divided  into  three  divisions,  called 
tlie  eastern  division  of  the  southern  district,  the  western  di- 
vision of  the  southern  district,  and  the  northeastern  division 
of  the  southern  district. 

The  eastern  division  of   the  southern  district  comprises  the 
'  ounties  of  Appling,  Berrien,  Bulloch,  Bryan,  Brooks,  Clinch, 
'  amden,     Coffee,     Charlton,    Colquitt,    Chatham,     Decatur, 
.'hols,  Emanuel,  Effingham,  Glynn,  Iwrin,    Lowndes,    Lib- 
ay,     Montgomery,     Mclntosli,     Pierce,    Screven,    Tattnall, 
Thomas,  Ware,  Wayne  and  Worth. 

The  district  court  is  held  at  Savannah,  second  Tuesdays  in 
lebruary.  May,  August  and  November. 


38  LAW    AM)    PUOCEKDINGS    IN    BANKRUPTCY. 

courts  are :  San  Francisco,  lirsl  Monday  in  March,  second 
Monday  in  July  and  tirst  Monday  in  November. 

The  southern  district  is  divided  into  two  divisions  called  the 
northern  and  southern  divisions  of  the  southern  district. 

Counties  in  the  district. —  Northern  division  :  Fresno,  Inyo, 
Kern.  Kings,  Madera.  Mariposa,  Merced  and  Tulare.  South- 
ern division :  Los  Angeles,  Orange,  Riverside,  San  Bernadino, 
San  Diego.  San  Luis  Obispo,  Santa  Barbara,  and  Ventura. 

Times  and  places  of  holding  district  courts :  Northern  di- 
vision :  First  Monday  in  May  and  second  Monday  in  Novem- 
ber, at  Fresno.  Southern  division :  Second  Mondays  in  Jan- 
uary and  July,  at  Los  Angeles. 

Colorado  (eighth  circuit)  constitutes  one  judicial  district.* 
Suits  removed  from  state  courts  in  Archuleta,  Conejos,  Cos- 
tilla, Dolores.  La  Plata,  Mineral,  Montezuma,  Rio  Grande  and 
San  Juan  counties  shall  be  filed  at  Del  Norte.  Suits  removed 
from  state  courts  in  Baca,  Bent,  Chaffee,  Custer,  Delta,  Fre- 
mont, Gunnison,  Hinsdale,  Huerfano,  Kiowa,  Las  Animas, 
Mesa.  Montrose,  Otero,  Ouray,  Prowers,  Pueblo  and  San 
Miguel  counties  shall  be  filed  at  Pueblo.  Suits  removed  from 
state  courts  in  counties  not  specified  above  shall  be  filed  at 
Denver.  Bankruptcy  proceedings  from  these  counties  should 
be  filed  in  the  same  court  as  suits  removed  from  a  state  court. 

The  time  and  place  of  holding  district  courts  are :  At  Den- 
ver, first  Tuesdays  in  May  and  November;  at  Pueblo,  first 
Tuesday  in  April ;  at  Montrose,  second  Tuesday  in  September. 

Connecticut  (second  circuit)  constitutes  one  judicial  dis- 
trict. 

The  district  court  is  held  at  New  Haven  on  the  fourth 
Tuesdays  in  February,  and  August ;  at  Hartford,  fourth  Tues- 
day in  May  and  the  first  Tuesday  in  December. 

Delaware  (third  circuit)  constitutes  one  judicial  district. 

The  district  court  is  held  on  the  second  Tuesdays  in  Janu- 
ary, April,  June  and  September,  at  Wilmington. 

The  District  of  Columbia.  The  district  comprises  all 
the  District  of  Columbia. 

•Act  of  June  26,   1876,   19  Stat,   a^  T..  61. 


COURTS    AND    THEIR    TERRITORIAL    JURISDICTION.  39 

The  supreme  court  is  held  on  the  first  Mondays  in  January, 
April  and  October. 

Florida  (fifth  circuit)  is  divided  into  two  districts,  called 
the  northern  district  and  the  southern  district. 

The  northern  district  embraces  the  counties  of  Calhoun, 
Escambia,  Franklin,  Gadsden,  Holmes,  Jackson,  Jefferson, 
Lafayette,  Leon,  Levi,  Liberty,  Santa  Rosa,  Taylor,  Wakulla, 
Walton  and  Washington. 

The  time  and  place  of  holding  district  courts  are  first  Mon- 
day in  February,  at  Tallahassee;  first  Monday  in  March,  at 
Pensacola. 

The  counties  of  the  southern  district  are  Alachua,  Baker, 
Bradford,  Brevard,  Citrus,  Clay,  Columbia,  Dade,  Duval, 
Hamilton,  Lake,  Madison,  Marion,  Nassau,  Orange,  Osceo- 
la, Putnam,  St.  Johns,  Sumter,  Suwannee,  Volusia,  Monroe. 
Manatee.  Lee.  De  Soto,  Hillsboro,  Hernando,  Polk  and  Pasco. 

The  time  and  place  of  holding  district  courts  are  seccwxi 
Monday  in  February,  at  Tampa;  first  Mondays  in  May  and 
November,  at  Key  West ;  first  Monday  of  December,  at  Jack- 
sonville; third  Monday  in  January,  at  Ocala. 

Georgia  is  divided  into  two  districts,  the  northern  district 
and  the  southern  district. 

The  northern  district  is  divided  into  four  divisions,  called 
the  eastern  division  of  the  northern  district,  the  western  divi- 
sion of  the  northern  district,  the  northern  division  of  the 
northern  district  and  the  northwestern  division  of  the  northern 
district. 

The  eastern  division  of  the  northern  district  comp'is.-s  the 
counties  of  Banks,  Clarke.  Elbert,  Franklin,  Greene,  Haber- 
sham. Hart,  Jackson,  Morgan,  Madison,  Oglethorpe,  Oconee, 
Rabun,   Walton  and  White. 

The  time  and  place  of  holding  district  courts  are  at  Atlanta 
on  second  Monday  in  March  and  first  Monday  in  October. 

The  western  division  of  the  nt^rlliern  district  comprises  the 
counties  of  Clay,  Early,  Harris,  Heard,  Meriwether,  Marion, 
Miller.  Muscogee,  Quitman,  Randolph,  Schley,  Stewart,  Tal- 
bot, Taylor,  Terrell,  Troup  and  Webster. 


40  LAW     AM)     rKOCEEDINC.S    IN     HANKRUPTCY. 

The  district  courts  of  this  (li\  ision  arc  held  at  Columbus 
on  first  Mondays  in  May  and  December. 

Northern  division  of  the  northern  district  comprises  the 
following  counties  of  Campbell.  Carroll,  Cherokee,  Clayton, 
Cobb,  Coweta,  Dawson,  Dekalb,  Douglas.  Fannin,  Fayette, 
Forsyth.  Fulton,  Gilmer.  Gwinnett.  Hall.  Henry,  Lumpkin, 
Milton,  Newton,  Pickens,  Rockdale,  Spalding,  Towns  and 
Union. 

The  time  and  place  of  holding  district  courts  are  at  Atlanta, 
first  Mondays  in  October  and  second  Mondays  in  March. 

Northwestern  division :  Bartow,  Catoosa,  Chattooga,  Dade, 
Floyd.  Gordon,  Haraison.  Murray,  Paulding,  Polk,  Walker 
and  Whitfield. 

The  time  and  place  of  holding  district  courts  are  at  Rome, 
third  Mondays  in  May  and  November. 

The  southern  district  is  divided  into  four  divisions,  called 
the  eastern  division  of  the  southern  district,  the  western  divi- 
sion of  the  southern  district,  the  northeastern  division  of  the 
southern  district  and  the  southwestern  division  of  the  southern 
district. 

The  eastern  division  of  the  southern  district  comprises  the 
counties  of  Appling,  Bulloch,  Bryan,  Camden,  Chatham, 
Emanuel,  Effingham,  Glynn,  Liberty,  Montgomery,  Mcintosh, 
Pierce.   Screven,  Tattnall  and  Wayne. 

The  district  court  is  held  at  Savannah,  second  Tuesdays  in 
February,  May,  August  and  November. 

The  western  division  of  the  southern  district  comprises  the 
counties  of  Baker,  Baldwin,  Bibb,  Butts,  Calhoun,  Crawford, 
Dodge,  Dooley,  Dougherty.  Hancock,  Houston,  Jasper,  Jones, 
Laurens.  Lee,  Macon,  Monroe.  Pike.  Pulaski.  Putnam,  Sum- 
ter. Telfair,  Twiggs,  Upson,  Wilcox  and  Wilkinson. 

The  district  court  of  this  division  is  held  at  Macon,  first 
Mondays  in  May  and  October. 

The  northeastern  division  of  the  southern  district  comprises 
the  counties  of  Burke,  Columbia,  Glascock,  Jefferson,  John- 
son, Lincoln,  McDuffie,  Richmond.  Taliaferro,  Washington, 
Wilkes  and  Warren. 


COURTS    AND    THEIR    TERRITORIAL    JURISDICTION.  4I 

The  district  court  of  this  division  is  held  at  Augusta  on  the 
first  Monday  in  April  and  the  third  Monday  in  November. 

The  southwestern  division  of  the  southern  district  comprises 
the  counties  of  Berrien,  Brooks,  Charlton,  Clinch,  Coffee,  Col- 
quitt. Decatur,  Echols,  Irwin,  Lowndes,  Mitchell,  Thomas, 
Ware  and  Worth. 

The  district  court  of  this  division  is  held  at  Valdosta,  second 
Mondays  in  June  and  December. 

Idaho  (ninth  circuit)  constitutes  one  judicial  district.  It 
is  divided  into  three  divisions,  called  the  northern,  central 
and  southern  divisions. 

The  northern  division  comprises  the  counties  of  Latah,  Nez 
Perces,  Idaho,  Shoshone  and  Kootenai.  The  district  court 
of  this  division  is  held  at  Moscow,  second  Monday  in  May 
and  fourth  Monday  in  October. 

The  central  division  comprises  the  counties  of  Ada.  Lin- 
coln, Blaine,  Boise.  Canyon,  Cassia,  Elmore,  Owyhee  and 
Washington.  The  district  court  of  this  division  is  held  at 
Boise,  second  Mondays  in  March  and  September. 

The  southern  division  comprises  the  counties  of  Bear  Lake, 
Bingham,  Bannock,  Custer,  Fremont,  Lemhi  and  Oneida. 
The  district  court  of  this  division  is  held  at  Pocatello  on  the 
second  Monday  in  April  and  the  first  Monday  in  October. 

Illinois  (seventh  circuit)  has  two  districts,  called  the  north- 
ern and  southern  districts. 

The  northern  district  is  divided  into  two  divisions,  the 
northern  and  southern  divisions  of  the  northern  district. 

The  northern  division  of  the  northern  district  comprises 
the  counties  of  Boone,  Bureau.  Carroll,  Cook,  Dekalb.  Du 
Page,  Grundy,  Jo  Daviess,  Kane,  Kankakee.  Kendall,  Lake, 
La  Salle,  Lee,  Mcllenry,  Ogle,  Stephenson,  Whiteside,  Will 
and  Winnebago.  The  time  and  ])lace  of  holding  district  courts 
of  this  division  are  on  the  first  Monday  in  July  and  the  tliird 
Monday  in   December,   in  Chicago, 

The  southern  division  of  the  northern  district  comprises 
the  counties  of  Fulton,  Henderson,  Henry,  Iroquois,  Knox, 
Livingston,  Marshall,  McDonough,  Mercer,  Peoria,  Putnam, 
Rock  Island,  Stark,  Tazewell,  Warren  and  Woodford.      The 


^J  LAW    AiNU    I'UOCKEUIXGS    IN'     BAiNKRUrTCY. 

district  courts  of  this  division  are  held  on  the  third  Mon- 
days in  April  and  October,  in  Peoria. 

The  southern  district  of  Illinois  embraces  the  counties  of 
Adams,  Alexander,  Bond,  Brown,  Calhoun,  Cass,  Champaign, 
Christian,  Clark,  Clay, Clinton,  Coles,  Crawford,  Cumberland, 
De  Witt,  Douglas,  Edgar,  Edwards,  Effingham,  Fayette,  Ford, 
Franklin,  Oallatin,  Greene,  Hamilton,  Hancock,  Hardin, 
Jackson,  Jasper,  Jefferson,  Jersey,  Johnson,  Lawrence,  Logan, 
Moultrie,  INIacon,  INIacoupin,  Madison,  Marion,  Mason,  Mas- 
sac, McLean,  Menard,  Monroe,  INIontgomery,  Morgan,  Perry, 
Piatt,  Pike,  Pope,  Pulaski,  Randolph,  Richland,  St.  Clair, 
Saline,  Sangamon,  Schuyler,  Scott,  Shelby,  Union,  Vermil- 
ion, Wabash,  Washington,  Wayne,  White  and  Williamson. 

The  time  and  place  of  holding  district  courts  of  this  dis- 
trict are  the  first  Mondays  in  January  and  June,  at  Springfield ; 
first  Monday  in  Mav,  at  Danville;  first  Monday  in  September, 
at  Ouincy,  and  first  Mondays  in  March  and  October,  at 
Cairo. 

Indiana  (seventh  circuit)  constitutes  one  judicial  district. 

The  time  and  place  of  holding  district  courts  are  the  first 
Tuesdays  in  May  and  November,  at  Indianapolis;  first  Mon- 
days in  January  and  July,  at  New  Albany;  first  Mondays  in 
April  and  October,  at  Evansville ;  second  Tuesdays  in  June  and 
December,  at  Fort  Wayne ;  third  Tuesdays  in  April  and  Oc- 
tober, at  Hammond. 

Indian  Territory  (eighth  circuit)  is  divided  into  three 
districts,  called  the  western,  central  and  southern  districts. 

The  western  district  comprises  the  Creek  and  Seminole  na- 
tions, and  portions  of  the  Cherokee  and  Choctaw  nations  adja- 
cent to  the  eastern  and  southern  boundary  of  the  Creek  Nation. 

The  time  and  place  of  liokling  courts  are :  At  Eufaula, 
second  Monday  in  April  and  fourth  Monday  in  November; 
at  Muscogee,  second  Monday  in  January  and  first  Monday  in 
October;  at  Okmulgee,  third  Monday  in  April  and  second 
Monday  in  December;  at  Sapulpa,  third  Monday  in  February 
and  first  Monday  in  December ;  at  Wagoner,  second  Monday 
in  March  and  second  Monday  in  November ;  at  Wewoka,  first 
Monday  in  February  and  fourth  Monday  in  October. 

The  central  district  comprises  the  Choctaw  nation  and  a 


COURTS    AND    THEIR    TERRITORIAL    JURISDICTION.  43 

small  portion  of  the  southeast  part  of  the  Chickasaw  nation. 
The  time  and  place  of  holding  district  courts  are:  Antlers, 
second  Monday  in  April  and  first  Monday  in  December;  Ato- 
ka, second  Monday  in  February  and  first  ^Monday  in  October ; 
Durant,  fourth  Monday  in  October  and  the  first  Monday  in 
March;  Poteau,  third  Monday  in  ]\Iarch  and  second  Monday 
in  November ;  South  McAlester,  first  Monday  in  January  and 
first  Monday  in  ]\Iay. 

The  southern  district  comprises  all  of  the  Chickasaw  nation, 
except  a  small  portion  of  southeast  part  of  same,  which  is 
attached  to  central  district. 

lowA  (eighth  circuit)  is  divided  into  two  districts,  called 
the  northern  and  southern  districts. 

The  northern  district  of  Iowa  is  divided  into  four  divisions, 
the  eastern  division  of  the  northern  district,  the  Cedar  Rapids 
division  of  the  northern  district,  the  central  division  of  the 
northern  district,  and  the  western  division  of  the  northern 
district. 

The  eastern  division  of  the  northern  district  comprises  the 
counties  of  Allamakee,  Blackhawk,  Bremer,  Buchanan,  Chick- 
asaw. Clayton,  Delaware,  Dubuque,  Fayette,  Floyd,  Howard, 
Jackson.  Mitchell  and  Winneshiek.  The  district  courts  of  the 
eastern  division  are  held  at  Dubuque  on  the  fourth  Tuesday  in 
April  and  the  first  Tuesday  in  December. 

The  Cedar  Rapids  division  of  the  northern  district  embraces 
the  counties  of  Benton,  Cedar,  Clinton,  Grundy,  Hardin,  Iowa, 
Johnson,  Jones,  Linn  and  Tama.  The  district  courts  of  the 
Cedar  Rapids  division  are  held  on  the  first  Tuesday  in  April 
and  the  second  Tuesday  in  September. 

The  central  division  of  the  northern  district  comprises  the 
counties  of  Butler,  Calhoun.  Cerro  Gordo,  Emmet,  Franklin, 
Hamilton,  Hancock,  Humboldt,  Kossuth,  Palo  Alto,  Poca- 
hontas, Webster.  Winnebago.  Worth  and  Wright.  The  dis- 
trict courts  of  the  central  division  of  the  northern  district  are 
held  at  Fort  Dodge  on  the  second  Tuesday  in  June  and  the 
second  Tuesday  in  November. 

The  western  division  comprises  the  counties  of  Buena  Vista, 
Cherokee.  Clay.  Dickinson.  Ida,  Lyon,  Monona,  O'Brien,  Os- 


44  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

ceola.  Plymouth.  Sac,  Sioux  and  Woodbury.  The  district 
courts  of  tlie  western  division  are  held  at  Sioiix  City  on  the 
fourth  Tuesday  in  May  and  the  first   Tuesday  in  October. 

The  southern  district  oi  Iowa  is  divided  into  three  divisions, 
called  the  eastern  division  of  the  southern  district,  the  central 
division  of  the  southern  district,  and  the  western  division  of 
the  southern  district. 

The  counties  in  the  eastern  division  of  the  southern  district 
are  Davis,  Des  Moines,  Henry.  Jefferson,  Keokuk,  Lee,  Lou- 
isa. Muscatine,  Scott.  Van  Buren.  Wapello  and  Washington. 
Courts  held  at  Keokuk.  The  district  court  of  the  eastern 
division  is  held  at  Keokuk  on  the  second  Tuesday  in  April 
and  the  third  Tuesday  in  October. 

The  counties  in  the  central  division  of  the  southern  district 
are  Boone,  Dallas,  Greene,  Guthrie,  Jasper,  Madison,  Mahaska, 
Marion,  Marshall,  Polk,  Poweshiek.  Story  and  Warren.  The 
district  courts  of  the  central  division  of  the  southern  district 
are  held  at  Des  Moines  on  the  second  Tuesday  in  May  and 
the  third  Tuesday  in  November. 

The  western  division  of  the  southern  district  comprises  the 
counties  of  Audubon,  Carroll,  Cass,  Crawford,  Harrison,  Mills, 
Montgomery,  Pottawattamie  and  Shelby.  District  courts 
held  at  Council  Bluffs  on  the  second  Tuesday  in  March  and 
third  Tuesday  in  September. 

Kansas  (eighth  circuit)  constitutes  one  judicial  district. 

It  is  divided  into  three  divisions,  called  the  first,  second  and 
third  divisions. 

The  first  division  includes  the  counties  of  Atchison,  Brown, 
Chase,  Cheyenne,  Clay,  Cloud,  Decatur.  Dickinson,  Doniphan, 
Douglas,  Ellis,  Franklin,  Geary,  Gove,  Graham,  Jackson,  Jef- 
ferson. Jewell.  Johnson,  Leavenworth,  Lincoln.  Logan,  Lyon, 
Marion,  Marshall,  Mitchell,  Morris,  Nemaha,  Norton,  Osage, 
Osborne.  Ottawa.  Phillips.  Pottawatomie,  Rawlins,  Republic, 
Riley,  Rooks.  Russell.  Saline.  Shawnee,  Sheridan,  Sherman, 
Smith,  Thomas,  Trego,  Wabaunsee,  Wallace,  Washington  and 
Wyandotte.  The  district  court  is  held  at  Topeka  on  the  sec- 
ond Monday  in  April,  at  Leavenworth  on  the  second  Monday 
in  October,  second  Monday  in  May  at  Salina  and  Kansas  City 


COURTS    AND    THEIR    TERRITORIAL    JURISDICTION.  45 

on  the  second  Monday  of  January  and  first  Monday  of  Octo- 
ber. 

The  second  division  includes  the  counties  of  Barber,  Barton, 
Butler,  Clark,  Comanche.  Cowley,  Edwards,  Ellsworth,  Fin- 
ney. Ford.  Grant,  Gray.  Greeley.  Hamilton,  Harper,  Harvey, 
Haskell.  Hodgeman.  Kearny.  Kingman,  Kiowa,  Lane,  Mc- 
Pherson.  Meade.  Morton.  Ness.  Pawnee.  Pratt.  Reno,  Rice, 
Rush.  Scott.  Sedgwick.  Seward,  Stafford.  Stanton,  Stevens. 
Sumner  and  \\'ichita.  The  district  courts  of  the  second  divi- 
sion are  held  on  the  second  Monday  in  March  and  the  second 
Monday  in  September,  at  Wichita. 

The  third  division  comprises  the  counties  of  Allen,  Ander- 
son. Bourbon.  Chautauqua.  Cherokee,  Cofifey,  Crawford,  Elk, 
Greenwood.  Labette,  Linn.  Miami.  Montgomery.  Neosho, 
Wilson  and  Woodson.  The  district  courts  for  the  third  divi- 
sion are  held  on  the  first  Monday  in  May  and  the  second  Mon- 
day in  November,  at  Fort  Scott. 

Kentucky  (sixth  circuit)  is  divided  into  two  districts, 
called  the  eastern  district  and  the  western  district. 

The  eastern  district  comprises  the  counties  of  Anderson, 
Bath.  Bell,  Boone.  Bourbon.  Boyd.  Boyle.  Bracken,  Breathitt, 
Campbell.  Carroll.  Carter,  Clark.  Clay.  Elliott,  Estill  Fayette, 
Fleming,  Floyd.  Franklin.  Gallatin.  Garrard.  Grant,  Greenup, 
Harlan,  Harrison.  Henry.  Jackson.  Jessamine,  Johnson.  Ken- 
ton. Knott.  Knox.  L<iurel.  Lawrence,  Lee,  Leslie.  Letcher, 
Lewis.  Lincoln,  Madison,  Magoffin.  Martin,  Mason.  Menifee, 
Mercer.  Montgomery,  Morgan,  Nicliolas.  Owen,  Owsley, 
Pendleton.  Perry,  Pike.  Powell,  Pulaski.  Robertson.  Rock- 
castle. Rowan.  Scott,  Shelby,  ^rrimble,  Wayne,  Whitley, 
Wolfe  and  Woodford.  The  time  and  place  of  holding  dis- 
trict courts  in  this  district:  Frankfort,  second  Monday  in 
March  and  fourth  Monday  in  Sejjtcmber ;  Covington,  first 
Monday  in  April  and  third  Monday  in  October;  Richmond, 
fourth  Monday  in  April  and  second  Monday  in  November; 
Ix)ndon.  seconrl  Mr)nday  in  May  and  fourth  Monday  in  No- 
vember;  Catlcttsburg.  fourth  Monday  in  May  and  second 
Monday  in  December. 

The  western  district  comprises  the  counties  of  Adair.  Allen, 


4.6  LAW    AND    PROCEEDINGS   IN    BANKRUPTCY. 

Ballard.  Barren,  Breckinridge,  Bullitt,  Butler,  Caldwell,  Callo- 
way. Carlisle,  Casey.  Christian,  Clinton,  Critteiiden,  Cumber- 
land. Daviess,  Edmonson,  Fulton,  Graves,  Grayson,  Green, 
Hancock,  Hardin.  Hart.  Henderson,  Hickman,  Hopkins,  Jef- 
ferson, Larue.  Livingston.  Logan.  Lyon.  McCracken,  Mc- 
Lean, Marion,  ]\Lirshall.  Meade,  Metcalfe,  Monroe,  Muhlen- 
berg, Nelson,  Ohio,  Oldham,  Russell,  Simpson,  Spencer,  Tay- 
lor, Todd.  Trigg.  Union,  Warren,  Washington  and  Webster. 
Time  and  place  of  holding  courts:  Louisville,  second  Mon- 
day in  March  and  second  Monday  in  October ;  Paducah,  third 
Monday  in  April  and  third  Monday  in  November ;  Owensboro, 
first  Monday  in  May  and  fourth  Monday  in  November ;  Bowl- 
ing Green,  third  Monday  in  May  and  second  Monday  in  De- 
cember. 

Louisiana  (fifth  circuit)  is  divided  into  two  districts,  called 
the  eastern  and  western  districts. 

The  eastern  district  is  divided  into  two  divisions,  the  New 
Orleans  division  and  the  Baton  Rouge  division. 

The  New  Orleans  division  comprises  the  parishes  of  As- 
sumption, Iberia,  Jefferson,  Lafourche,  Orleans,  Plaquemines, 
St.  Bernard,  St.  Charles,  St.  James,  Si.  John  the  Baptist,  St. 
Mary,  St.  Tammany,  Tangipahoa,  Terrebonne  and  Washing- 
ton. The  district  court  is  held  at  New  Orleans  the  third  Mon- 
days in  February,  May  and  November. 

The  Baton  Rouge  division  includes  the  parishes  of  Ascen- 
sion, East  Baton  Rouge,  East  Feliciana,  Iberville,  Living- 
ston, Pointe  Coupee,  St.  Helena,  West  Baton  Rouge  and  West 
Feliciana.  The  district  court  is  held  at  Baton  Rouge  on  the 
second  Mondays  in  April  and  November. 

The  parishes  in  the  western  district  are  Avoyelles,  Acadia, 
Bienville,  Bossier,  Caddo,  Calcasieu,  Caldwell,  Cameron,  Cat- 
ahoula, Claiborne,  Concordia,  De  Soto,  East  Carroll,  Frank- 
lin, Grant,  Jackson,  Lafayette,  Lincoln,  Madison,  Morehouse, 
Natchitoches,  Ouachita,  Rapides,  Red  River,  Richland,  Sa- 
bine, St.  Landry,  St.  Martin,  Tensas,  Union,  Vermilion,  Ver- 
non, Webster,  West  Carroll  and  Winn. 

Time  and  place  of  holding  district  courts  are  the  first  Mon- 
days of  January  and  June,  at  Opelousas ;  fourth  Mondays  of 
January  and  June,  at  Alexandria ;  third  Mondays  of  February 


COURTS    AND    THEIR    TERRITORIAL    JURISDICTION.  47 

and  October,  at  Shreveport ;  first  Mondays  of  April  and  Oc- 
tober at  Monroe. 

Maine  (first  circuit)  constitutes  one  judicial  district. 
The  district  court  is  held  on  the  first  Tuesdays  in  February 
and  December,  at  Portland;  first  Tuesday  in  June,  at  Bangor; 
first  Tuesday  in  September,  at  Bath. 

Maryland  (fourth  circuit)  constitutes  one  judicial  district. 
The  district  court  is  held  on  the  first  Tuesdays  in  March, 
June,  September  and  December,  at  Baltimore. 

Massachusetts  (first  circuit)  constitutes  one  judicial  dis- 
trict. 

The  district  court  is  held  on  the  third  Tuesday  in  March, 
fourth  Tuesday  in  June,  second  Tuesday  in  September  and 
first  Tuesday  in  December,  at  Boston. 

Michigan  (sixth  circuit)  is  divided  into  two  districts,  called 
the  eastern  and  western  districts. 

The  eastern  district  is  divided  into  two  divisions,  called 
the  northern  division  of  the  eastern  district,  and  the  southern 
division  of  the  eastern  district. 

The  northern  division  of  the  eastern  district  comprises  the 
counties  of  Alcona,  Alpena,  Arenac,  Bay,  Cheboygan,  Clare, 
Crawford,  Genesee,  Gladwin,  Gratiot,  Huron,  Iosco,  Isabella, 
Midland,  Montmorency,  Ogemaw,  Oscoda,  Otsego,  Presque 
Isle,  Roscommon,  Saginaw,  Shiawassee  and  Tuscola.  The 
district  courts  for  the  northern  division  are  held  at  Bay  City 
on  the  first  Tuesdays  in  May  and  October.  Terms  of  court 
at  Port  Huron  are  held  in  the  discretion  of  the  judge. 

The  southern  division  of  the  eastern  district  includes  the 
counties  of  Branch,  Calhoun,  Clinton,  Hillsdale,  Ingham, 
Jackson,  Lapeer,  Lenawee,  Livingston,  Macomb,  Monroe, 
Oakland,  St.  Clair,  Sanilac,  Washtenaw  and  Wayne.  The 
time  and  place  of  holding  district  courts  in  the  southern 
division  of  the  eastern  district  are  at  Detroit  on  the  first 
Tuesdays  in  March,  June  and  November. 

The  northern  division  of  the  western  districts  includes  the 
counties  of  Alger,  Baraga,  Chippewa,  Delta,  Dickinson,  Goge- 
bic, Houghton,  Iron,  Keweenaw,  Luce,  Mackinac,  Marquette, 
Menominee,  Ontonagon,  and  Schoolcraft.  The  district  court 
is  held  at  Marquette  on  the  first  Tuesdays  in  May  and  Sep- 
tember. 

The  soutliern  division   embraces  the  counties  of  Allegan, 


48  LAW    AND    iKOCEEDlNGS    IN    UANKRUPTCY. 

Antrim,  Barry,  Henzie,  Berrien,  Cass,  Charlevoix,  Eaton, 
Emmet,  Grand  Traverse,  Ionia,  Kalamazoo,  Kalkaska,  Kent, 
Lake,  Leelanau,  Manistee,  Mason,  Mecosta,  Missaukee,  Mont- 
calm, Muskegon,  Newaygo,  Oceana,  Osceola,  Ottawa,  St. 
Joseph,  Van  Buren  and  Wexford.  The  district  court  is  held 
at  Grand  Rapids  on  the  first  Tuesdays  in  March  and  October. 

Minnesota  (eighth  circuit)  constitutes  one  judicial  dis- 
trict, divided  into  six  divisions,  called  the  first,  second,  third, 
fourth,  fifth  and  sixth  divisions. 

The  first  division  comprises  the  counties  of  Winona,  Wa- 
basha, Olmsted,  Dodge,  Steele,  Mower,  Fillmore  and  Houston. 
The  district  courts  are  held  in  the  first  division  on  the  first 
Tuesday  in  June,  and  the  first  Tuesday  in  December,  at 
Winona. 

The  counties  which  comprise  the  second  division  are  Free- 
born, Faribault,  Martin,  Jackson,  Nobles,  Rock,  Pipestone, 
Murray,  Cottonwood,  Watonwan,  Blue  Earth,  Waseca,  Le- 
sueur,  Nicollet,  Brown,  Redwood,  Lyon,  Lincoln,  Yellow 
Medicine,  Sibley  and  Lac  qui  Parle.  The  district  court  of 
the  second  division  is  held  on  the  third  Tuesday  in  April,  and 
the  first  Tuesday  in  November,  at  Maukato. 

The  third  division  is  composed  of  the  counties  of  Chicago, 
Washington,  Ramsey,  Dakota,  Goodhue,  Rice  and  Scott.  The 
district  court  for  the  third  division  is  held  on  the  fourth 
Tuesday  in  June,  and  the  second  Tuesday  in  January,  at  St. 
Paul. 

The  fourth  division  consists  of  the  counties  of  Hennepin, 
Wright,  Meeker,  Kandiyohi,  Swift,  Chippewa,  Renville, 
McLeod,  Carver,  Anoka,  Sherburne  and  Isanti.  The  district 
court  for  the  fourth  division  is  held  on  the  first  Tuesday  in 
March,  and  the  first  Tuesday  in  September,  at  Minneapolis. 

The  fifth  division  comprises  the  counties  of  Cook,  Lake, 
St.  Louis,  Itasca,  Cass,  Crow  Wing,  Aitkin,  Carlton,  Pine, 
Kanabec,  Millelacs,  Morrison  and  Benton.  The  district  court 
for  the  fifth  division  is  held  on  the  second  Tuesday  in  May, 
and  the  second  Tuesday  in  October,  at  Duluth. 

The  sixth  division  comprises  the  counties  of  Stearns,  Pope, 
Stevens,  Bigstone,  Traverse,  Grant,  Douglas,  Todd,  Ottertail, 
Wilkins,   Clay,    Berker,  Wadena,    Norman,    Polk,    Marshall, 


COURTS    AND    THEIR    TERRITORIAL    J  URISUICTIOxV.  49 

Kittson,  Beltrami  and  Hubbard.  The  district  court  for  the 
sixth  division  is  held  on  the  fourth  Tuesday  in  March,  and 
the  fourth  Tuesday  in  September,  at  Fergus  Falls. 

Mississippi  (fifth  circuit)  has  two  districts,  a  northern  and 
a  southern  district. 

The  northern  district  comprises  the  counties  of  Alcorn, 
Attala,  Chickasaw,  Choctaw,  Clay,  Itawamba,  Lee,  Lowndes, 
Monroe,  Oktibbeha,  Pontotoc,  Tishomingo,  Winston,  Benton, 
Calhoun,  Carroll,  Coahoma,  De  Soto,  Granada,  Lafayette, 
Marshall,  Montgomery,  Panola,  Quitman,  Tallahatchie,  Tate, 
Tippah,  Tunica,  Union,  Webster,  Yalobusha  and  Prentiss. 

The  district  court  of  the  northern  district  are  held  on  the 
first  Mondays  in  June  and  December,  at  Oxford,  and  on  the 
first  Mondays  in  April  and  October,  at  Aberdeen. 

The  counties  of  the  southern  district  of  Mississippi  are : 

(Jackson  division)  Adams,  Amite,  Copiah,  Covington, 
Franklin,  Hinds,  Holmes,  JefYersOn,  Lawrence,  Lincoln,  Le- 
flore, Madison,  Pike,  Rankin,  Simpson,  Smith,  Scott,  Wilkin- 
son and  Yazoo. 

( Vicksburg  division)  Warren,  Issaquena,  Sharkey,  Wash- 
ington, Bolivar,  Claiborne  and  Sunflower. 

(Biloxi  division)  Harrison.  Hancock,  Jackson,  Marion, 
Perry,  Greene  and  Pearl  River. 

(Meridan  division)  Kemper.  Noxubee,  Neshoba,  Wayne, 
Clarke,  Jasper,  Jones,  Leake,  Lauderdale  and  Newton. 

The  time  and  place  of  holding  district  courts  in  the  south- 
ern district  of  Mississippi  are  at  Jackson,  first  Mondays  in 
May  and  November ;  at  Vicksburg.  first  Mondays  in  January 
and  July ;  at  Biloxi,  third  Mondays  in  February  and  August ; 
at  Meridian,  second  Mondays  in  March  and  September. 

Missouri  (eighth  circuit)  has  two  districts,  called  the 
eastern  and  western  districts. 

The  eastern  district  of  Missouri  is  divided  into  two  divi- 
sions, called,  respectively,  the  eastern  division  of  the  eastern 
district,  and  the  nortlieni  (li\ision  of  the  eastern  district. 

The  eastern  division  of  the  eastern  district  of  Missouri 
comprises  the  counties  of  Audrain.  P.ollinger,  Butler.  Cape 
Girardeau,  Carter,  Crawford,   Dent,   Dunklin.    JManklin.  Gas- 


50  I-AW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

conade.  Iron.  Jefferson.  Lincoln,  Madison.  Mississippi,  Mont- 
gomery, New  Madrid.  Oregon,  Pemiscot.  Perry,  Reynolds, 
Ripley,  St.  Charles,  St.  Francois,  Ste.  Genevieve,  St.  Louis, 
Scott,  Shannon,  Stoddard,  Warren,  Washington,  Wayne,  and 
St.  Louis  City.  The  district  court  is  held  at  St.  Louis,  on  the 
first  Mondays  in  May  and  November. 

The  northern  division  of  the  eastern  district  of  Missouri 
comprises  the  counties  of  Marion,  Macon,  Randolph,  Mon- 
roe. Lewis,  Schuyler,  Scotland,  Adair,  Pike,  Ralls,  Knox, 
Shelby  and  Clark.  The  district  court  of  the  northern  divi- 
sion of  the  eastern  district  is  held  at  Hannibal,  on  the  fourth 
Monday  in  May  and  the  first  Monday  in  December. 

The  western  district  of  Missouri  is  divided  into  five  divi- 
sions, called,  respectively,  the  western  division  of  the  western 
district,  the  St.  Joseph  division  of  the  western  district,  the 
central  division  of  the  western  district,  the  southern  division 
of  the  western  district  and  the  southwestern  division  of  the 
western  district. 

The  western  division  of  the  western  district  contains  the 
counties  of  Barton,  Bates,  Caldwell,  Carroll,  Cass,  Chariton, 
Clay,  Grundy,  Henry,  Jackson,  Johnson,  Lafayette,  Linn, 
Livingston,  Mercer.  Putnam,  Ray,  St.  Clair,  Saline  and  Sul- 
livan. 

The  St.  Joseph  division  of  the  western  district  embraces 
the  counties  of  Andrew,  Atchison,  Buchanan,  Clinton,  Da- 
viess, Dekalb,  Gentry,  Harrison,  Holt,  Nodaway,  Platte  and 
Worth. 

The  central  division  of  the  western  district  comprises  the 
counties  of  Benton.  Boone,  Calloway,  Camden,  Cole,  Cooper, 
Hickory,  Howard.  Maries,  Miller,  Moniteau,  Morgan,  Osage, 
Pettis  and  Phelps. 

The  southern  division  of  the  western  district  comprises 
the  counties  of  Christian.  Cedar,  Dade,  Dallas,  Douglas, 
Greene,  Howell.  Laclede,  Ozark,  Polk,  Pulaski,  Taney,  Texas, 
\\'ebster  and  Wright. 

The  southwestern  division  of  the  western  district  comprises 
the  counties  of  Barry,  Barton,  Jasper,  Lawrence,  McDonald, 
Newton,  Stone  and  Vernon. 


COURTS    AND    THEIR    TERRITORIAL    JURISDICTION.  5 1 

The  time  and  place  of  holding*district  courts  in  the  western 
district  of  Missouri  are  at  Kansas  'City,  fourth  Monday  in 
April  and  first  ]\Ionday  in  November ;  at  St,  Joseph,  first  Mon- 
day in  March  and  third  Monday  in  September ;  at  Springfield, 
first  Mondays  in  April  and  October;  at  Jefferson  City,  third 
Mondays  in  March  and  October;  Joplin,  second  Mondays  in 
January  and  June. 

Montana  (ninth  circuit)  constitutes  one  judicial  district. 

It  is  divided  into  two  divisions,  the  southern  division  and 
the  other  counties  of  the  district  not  included  in  the  southern 
division. 

The  southern  division  includes  the  counties  of  Beaverhead, 
INIadison  and  Silverbow. 

The  other  counties  in  the  district  are  Broadwater,  Cascade, 
Choteau,  Carbon,  Custer,  Dawson,  Deerlodge,  Flathead, 
Fergus,  Granite,  Gallatin,  Jefferson,  Lewis  and  Clarke, 
Meagher,  Missoula,  Park,  Ravalli,  Sweetgrass,  Teton,  Yellow- 
stone and  Valley. 

The  time  and  place  of  holding  courts  are  the  first  Mondays 
in  April  and  November,  at  Helena,  and  the  first  Tuesdays 
in  February  and  September,  at  Butte. 

Nebraska  (eighth  circuit)  constitutes  one  judicial  dis- 
trict. 

The  time  and  place  of  holding  courts  are  at  Omaha  City 
on  the  first  Monday  in  May  and  the  second  Monday  in  Nov- 
ember; Lincoln,  third  Monday  in  January  and  first  Monday 
in  October;  Hastings,  third  Monday  in  April;  Norfolk, 
fourth  Monday  in  April. 

Nevada  (ninth  circuit)  constitutes  one  judicial  district. 

The  district  court  is  held  at  Carson  City  on  the  first  Mon- 
days in  February,  May  and  October. 

New  Hampshire  (first  circuit)  comprises  the  entire  state. 

The  time  and  place  of  holding  court  are  at  Portsmouth  on 
the  third  Tuesdays  in  March  and  September;  Concord  on  the 
third  Tuesdays  in  June  and  December;  Littleton  on  the  last 
Tuesday  in  August. 

New  Jersey  (third  circuit)  constitutes  one  judicial  dis- 
trict. 

The  district  court  is  held  on  the  third  Tuesdays  in  January. 
April,  June  and  September,  at  Trenton. 


t;^  LAW    AND    rROCKF.DTNGS    TN    BANKRITPTCY. 

New  Mexico  (eii^lith  circuit)  is  divided  into  five  judicial 
districts,  called  the  first,  second,  third,  fourth  and  fifth  dis- 
tricts. 

The  counties  in  tlie  first  district  are  Santa  Fe,  Taos,  Rio 
Arriba  and  San  juan.  The  United  States  ce)urt  for  the  first 
district  is  held  at  Santa  Fe  first  Monday  in  January,  and  last 
Monday  in  May. 

The  second  district  comprises  the  counties  of  Bernalillo,  Mc- 
Kinley  and  Valencia.  The  United  States  court  for  the  second 
district  is  held  at  Albuquerque  third  Mondays  in  March  and 
October. 

The  third  district  includes  the  counties  of  Donna  Ana, 
Grant,  Luna,  Otero  and  Sierra.  The  United  States  court  for 
the  third  district  is  held  at  Las  Cruces  first  Mondays  in  Feb- 
ruary and  September. 

The  fourth  district  comprises  the  counties  of  San  Miguel, 
Mora,  Colfax,  Union  and  Guadaloupe.  The  United  States 
court  for  the  fourth  district  is  held  at  Las  Vegas  first  Mon- 
days in  May  and  November. 

The  fifth  district  comprises  the  counties  of  Socorro,  Lin- 
coln, Chaves  and  Eddy.  The  United  States  court  for  the 
fifth  district  is  held  at  Socorro  third  Monday  in  May  and 
fourth  Monday  in  November. 

New  York  (second  circuit)  is  divided  into  four  districts, 
called  the  northern,  the  eastern,  the  western  and  the  southern 
districts. 

The  northern  district  of  New  York  comprises  the  counties 
of  y\lbany.  Broome,  Cayuga,  Chenango,  Clinton,  Cortland, 
Delaware,  Essex,  Franklin,  Fulton,  Hamilton,  Herkimer,  Jef- 
ferson, Lewis,  Madison,  Montgomery,  Oneida,  Onondaga, 
Oswego,  Otsego,  Rensselaer,  St.  Lawrence,  Saratoga,  Sche- 
nectady, Schoharie,  Tioga,  Tompkins,  Warren  and  Washing- 
ton, with  the  waters  thereof. 

District  courts  for  the  northern  district  are  held  on  the  sec- 
ond Tuesday  in  February,  at  Albany ;  first  Tuesday  in  Decem- 
ber, at  Utica;  second  Tuesday  in  June,  at  Binghamton ;  first 
Tuesday  in  October,  at  Auburn ;  first  Tuesday  in  April,  at 
Syracuse;  and,  in  the  discretion  of  the  judge  of  the  court,  one 


COURTS    AND    THEIR    TERRITORIAL    JURISDICTION.  53 

term  annually  at  such  time  and  place  within  the  counties  of 
Saratoga.  Onondaga.  St.  Lawrence,  Clinton.  Jefferson,  Os- 
wego and  Franklin  as  he  may  from  time  to  time  appoint. 

The  eastern  district  of  New  York  includes  the  counties  of 
Kings.  Queens.  Richmond,  Nassau  and  Suffolk,  with  the 
waters  thereof. 

The  time  and  place  of  holding  district  courts  for  the  eastern 
district  of  New  York  are  on  the  first  Wednesday  in  every 
month,  at  Brooklyn. 

The  southern  district  of  New  York  comprises  the  counties 
of  Columbia.  Dutchess.  Greene,  New  York,  Orange,  Putnam, 
Rockland.  Sullivan.  Ulster  and  Westchester. 

The  district  court  for  the  southern  district  of  New  York  is 
held  on  the  first  Tuesday  in  each  month,  at  New  York  city. 

The  western  district  of  New  York  comprises  the  counties  of 
Allegany.  Cattaraugus.  Chautauqua,  Chemung.  Erie.  Genesee, 
Livingston.  Monroe.  Niagara,  Ontario,  Orleans,  Schuyler, 
Seneca,  Steuben.  Wayne.  Wyoming  and  Yates,  wath  the  waters 
thereof. 

The  time  and  place  of  holding  district  court  for  the  western 
district  of  New  York  are  on  the  second  Tuesday  in  January, 
at  Elmira ;  second  Tuesdays  in  March  and  November,  at  Buf- 
falo; second  Tuesday  in  July,  at  Jamestown;  second  Tuesday 
in  October,  at  Lockport. 

North  Carolina  (fourth  circuit)  has  two  districts,  called 
the  eastern  and  western  districts. 

The  eastern  district  of  North  Carolina  includes  the  counties 
of  Beaufort,  Bertie,  Bladen,  Brunswick,  Camden,  Carteret, 
Chowan,  Chatham,  Columbus,  Craven,  Cumberland,  Curri- 
tuck, Dare,  Duplin,  Durham,  Edgecombe,  Franklin,  Gates, 
(Tranville,  Greene,  Halifax,  Harnett,  Hertford,  Hyde,  John- 
ston, Jones,  Lenoir,  Martin,  Moore,  Nash,  New  Hanover, 
Northampton,  Onslow,  Pamlico,  Pasquotank,  Pender,  Person, 
Perquimans,  Pitt,  Richmond,  Robeson,  Sampson,  Tyrrell, 
Vance,  Wake,  Warren,  Washington,  Wayne  and  Wilson. 

The  time  and  place  of  holding  courts  are  Raleigh,  fourth 
Monday  in  May  and  first  Monday  in  December;  Wilmington, 
first   Monday  after  the  fourth    Monday  in  April  and  October; 


54  I'AW    AND    rUOCEEDINGS    IN    BANKRUPTCY. 

Newbern,  fourth   Mondays  in  April  and  October;    Elizabeth 
Citv,  third  Mondays  in  April  and  October. 

The  western  district  comprises  the  counties  of  Alamance, 
Alexander,  Alleghany,  Anson,  Ashe,  Buncombe,  Burke,  Cab- 
arrus, Caldwell,  Caswell,  Catawba, Cherokee,  Clay,  Cleveland, 
Davie,  Davidson,  Forsyth,  Gaston,  Graham,  Guilford,  Hay- 
wood, Henderson,  Iredell,  Jackson,  Lincoln,  Macon,  Madison, 
McDowell,  Mecklenburg,  Mitchell,  Montgomery,  Orange, 
Polk,  Randolph,  Rockingham,  Rowan,  Rutherford,  Stanly, 
Stokes,  Surry,  Swain,  Transylvania,  Union, Watauga,  Wilkes, 
Yadkin  and  Yancey. 

The  time  and  place  of  holding  district  courts  are  on  the 
first  Mondays  in  April  and  October,  at  Greensboro;  third 
Mondays  in  April  and  October,  at  Statesville;  first  Mondays 
in  May  and  November,  at  Asheville;  first  Mondays  in  June 
and  December,  at  Charlotte;  and  second  Mondays  in  July  and 
November,  at  Wilkesboro. 

North  Dakota  (eighth  circuit)  constitutes  one  judicial 
district. 

The  time  and  place  of  holding  district  courts  are  on  the 
first  Tuesday  in  July,  at  Devil's  Lake;  first  Tuesday  in  March, 
at  Bismarck;  third  Tuesday  in  May,  at  Fargo;  second  Tues- 
day in  November,  at  Grand  Forks. 

Ohio  (sixth  circuit)  is  divided  into  two  districts,  the  north- 
ern district  and  the  southern  district. 

The  northern  district  is  divided  into  two  divisions,  called 
the  eastern  division  of  the  northern  district,  and  the  western 
division  of  the  northern  district. 

The  eastern  division  of  the  northern  district  comprises  the 
counties  of  Ashland,  Ashtabula,  Cuyahoga,  Carroll,  Colum- 
biana, Crawford,  Geauga,  Holmes,  Lake,  Lorain,  Medina, 
Mahoning,  Portage,  Richland,  Summit,  Stark,  Tuscarawas, 
Trumbull  and  Wayne.  The  time  and  place  of  holding  dis- 
trict courts  are  on  the  first  Tuesdays  in  February,  April  and 
October,  at  Cleveland. 

The  western  division  of  the  northern  district  includes  the 


COURTS    AND    THEIR    TERRITORIAL    JURISDICTION.  55 

counties  of  Auglaize,  Allen,  Defiance,  Erie,  Fulton,  Henry, 
Hancock,  Hardin,  Huron,  Lucas,  Mercer,  Marion,  Ottawa, 
Paulding,  Putnam,  Seneca,  Sandusky,  Van  Wert,  Williams, 
Wood  and  Wyandot.  The  district  court  for  the  western 
division  of  the  northern  district  is  held  at  Toledo  on  the  first 
Tuesdays  in  June  and  December. 

The  southern  district  is  divided  into  two  divisions,  called 
the  eastern  division  of  the  southern  district,  and  the  western 
division  of  the  southern  district. 

The  eastern  division  of  the  southern  district  includes  the 
counties  of  Athens,  Belmont,  Coshocton,  Delaware,  Fairfield, 
Fayette,  Franklin,  Gallia,  Guernsey,  Harrison,  Hocking, 
Jackson,  Jefferson,  Knox,  Licking,  Logan,  Madison,  Meigs, 
Monroe,  Morgan,  Morrow,  Muskingum,  Noble,  Perry,  Pick- 
away, Pike,  Ross, Union, Vinton  and  Washington.  Thedistrict 
court  for  the  eastern  division  of  the  southern  district  is  held 
on  the  first  Tuesdays  in  June  and  December,  at  Columbus. 

The  western  division  of  the  southern  district  includes  the 
counties  of  Adams,  Brown,  Butler,  Champaign,  Clark,  Cler- 
mont, Clinton,  Darke,  Greene,  Hamilton,  Highland.  Law- 
rence, Miami,  Montgomery,  Preble.  Scioto,  Shelby  and  War- 
ren. The  time  and  place  of  holding  district  courts  for  the 
western  division  of  the  southern  district  are  on  the  first  Tues- 
days in  February,  April  and  October,  at  Cincinnati. 

Oklahoma  (eighth  circuit).  The  counties  of  this  territory 
are  assigned  to  districts  as  follows : 

First  district  —  Lincoln.  Logan  and  Payne. 

Second  district  —  Canadian,  Cleveland,  Custer,  Kingfisher 
and  W^ashita. 

Third  district  —  Oklahoma  and  Pottawatomie. 

Fourth  district  —  Kay.  Noble,  Osage  Nation  and  Pawnee. 

Fifth  district  —  Blaine,   Garfield,   Grant  ajid   Roger  Mills. 

Sixth  district  —  Beaver,  Day,  Dewey,  Woods  and  Wood- 
ward. 

Seventh  district  —  Caddo,  Comanche,  Greer  and  Kiowa. 

The  United  States  courts  are  held  in  each  county.  The 
time  of  holding  them  in  this  territory  has  been  frequently 
altered. 

Oregon   fnintli  circuit)   crmstitnes  diic   indicin]  district. 


56  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

The  district  court  is  held  at  Portland  on  the  first  Mondays 
in  March.  July  and  Noveniher. 

Pennsylvania  (third  district)  is  divided  into  two  districts, 
the  eastern  and  the  western  districts. 

The  eastern  district  comprises  the  counties  of  Berks,  Bucks, 
Chester.  Delaware.  Lancaster.  Lehig-h.  Montgomery,  North- 
ampton. Philadelphia  and  Schuylkill. 

The  district  court  is  held  on  the  second  Mondays  in  March 
and  June,  third  Monday  in  September,  and  second  Monday 
in  December,  at  Philadelphia. 

The  middle  district  comprises  the  counties  of  Adams,  Brad- 
ford, Cameron,  Carbon,  Center,  Clinton,  Columbia,  Cumber- 
land, Dauphin,  Franklin,  Fulton,  Huntingdon,  Juniata,  Lack- 
awanna, Lebanon,  Luzerne,  Lycoming,  Mifflin,  Monroe,  Mon- 
tour. Northumberland,  Perry,  Pike,  Potter,  Snyder,  Sullivan, 
Susquehanna,  Tioga,  Union,  Wayne,  Wyoming  and  York. 

The  times  and  places  of  holding  district  courts :  Scranton, 
fourth  Monday  in  February  and  third  Monday  in  October ; 
Harrisburg.  first  Monday  in  May  and  first  Monday  in  Decem- 
ber; Williamsport,  second  Monday  in  January  and  second 
Monday  in  June. 

The  western  district  comprises  the  counties  of  Allegheny, 
Armstrong,  Beaver,  Bedford,  Blair,  Butler,  Cambria,  Clarion. 
Clearfield,  Crawford,  Elk,  Erie,  Fayette,  Forest,  Greene,  In- 
diana, Jefiferson,  Lawrence,  McKean.  Mercer,  Somerset,  Ven- 
ango, Warren,  Washington  and  Westmoreland. 

The  time  and  place  of  holding  district  courts  are  at  Pitts- 
burg, first  Monday  in  May  and  third  Monday  in  October;  at 
Erie,  third  Monday  in  July  and  second  Monday  in  January. 

Rhode  Island  (first  circuit)  constitutes  one  judicial  dis- 
trict. 

The  district  court  is  held  at  Providence  on  the  first  Tues- 
days in  February  and  August ;  at  Newport  the  second  Tues- 
day in  May  and  the  third  Tuesday  in  October. 

South  Carolina  (fourth  circuit)  constitutes  one  judicial 
district.® 

■'  There  has  been  much  confusion       R.    S.    Sec.   546,    whether   the   State 
with    reference   to    the    meaning   of       of  South  Carolina  was  divided  into 


COURTS    AND    THEIR    TERRITORIAL    JURISDICTION.  57 

The  district  court  is  held  on  the  tirst  Tuesdays  in  June  and 
December,  at  Charleston;  third  Tuesdays  in  April  and  Octo- 
ber, at  Greenville ;  fourth  Tuesday  in  November,  at  Columbia ; 
first  Tuesday  in  March,  at  Florence. 

South  Dakota  (eighth  circuit)  constitutes  one  judicial 
district,  divided  into  four  divisions,  called  the  northern,  cen- 
tral, southern  and  western  divisions. 

The  northern  division  (court  at  Aberdeen)  includes  the 
counties  of  Brookings,  Hamlin.  Deuel.  Grant,  Roberts,  Cod- 
ington, Clark,  Day,  Marshall,  Spink,  Brown,  McPherson, 
Edmunds.  Campbell.  W^alworth.  and  Sisseton  and  Wahpeton 
reservations. 

The  central  division  (court  at  Pierre)  comprises  the  coun- 
ties of  Buffalo,  Faulk.  Jerauld,  Hand.  Hughes.  Hyde,  Potter, 
Stanley,  Sully;  also  Cheyenne  and  part  of  Standing  Rock  In- 
dian reservations. 

The  southern  division  (court  at  Sioux  Falls)  includes  the 
counties  of  Aurora.  Beadle.  Bonhomme,  Brule,  Charles  Mix, 
Clay,  Davison,  Douglas,  Gregory,  Hanson,  Hutchinson, 
Kingsbury,  Lake,  Lincoln,  Lyman,  McCook,  Miner.  Minne- 
haha, Moody,  Sanborn.  Turner,  Union,  Yankton;  also  Crow 
Creek,  Lower  Brule  and  Yankton  Indian  reservations. 

The  western  division  (court  at  Dead  wood)  comprises  the 
counties  of  Butte,  Custer.  Fall  River,  Lawrence,  Meade,  Pen- 
nington, and  the  Rosebud  and  Pine  Ridge  Indian  reservations. 

The  time  and  place  of  holding  district  courts  in  South  Da- 
kota are  at  Sioux  Falls,  first  Tuesday  in  April  and  third  Tues- 
day in  October ;  at  Aberdeen,  first  Tuesday  in  May  and  second 
Tuesday  in  November;  at  Deadwood.  third  Tuesday  in  May 
and  first  Tuesday  in  September ;  at  Pierre,  second  Tuesday  in 
June  and  first  Tuesday  in  October. 

Tennessee  (sixth  circuit)  is  divided  into  three  districts. 
the  eastern,  middle  and  western  districts.  The  eastern  district 
of  Tennessee  is  divided  into  three  divisions  called  respectively 

two  districts  or  two  divisions;  but  Barrett  v.  United  States,  169  U.  S. 

it  is  now  settled  that  the  state  con  218:  Liicker  v.  Phcenix  Co.,  66  Fed. 

stitntes  one  district  divided  into  two  Rep.   161  ;   Young  v.   Insurance  Co., 

divisions.     See    26    Stat,   at    L.   71  ;  29   Fed.   Rep.  273. 


58  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

the  northern  cHvision  of  the  eastern  district,  the  southern  divi- 
sion of  the  eastern  district  and  the  northeastern  division  of  the 
eastern  district.  The  northern  division  of  the  eastern  district 
of  Tennessee  comprises  the  counties  of  Anderson,  Blount, 
Campbell,  Claiborne,  Grainger,  Jefferson,  Knox,  Louaon, 
Monroe,  Morgan,  Roane,  Scott,  Sevier  and  Union. 

The  southern  division  of  the  eastern  district  of  Tennessee 
comprises  the  counties  (if  iiledsoe,  Bradley,  Cumberland,  Fen- 
tress, Hamilton.  James,  McMinn,  Marion,  Meigs,  Polk,  Rhea, 
Sequatchie. 

The  northeastern  division  of  the  eastern  district  of  Ten- 
nessee comprises  the  counties  of  Carter,  Cocke,  Greene,  Ham- 
blen, Hancock,  Hawkins.  Johnson,  Sullivan,  Unicoi  and 
Washington. 

The  time  and  place  of  holding  district  courts  in  the  eastern 
district  are  second  Mondays  in  March  and  September,  at 
Knoxville;  first  Mondays  in  April  and  October,  at  Chatta- 
nooga ;  second  Mondays  in  May  and  November,  at  Greenville. 

The  middle  district  comprises  the  counties  of  Bedford,  Can- 
non, Cheatham,  Clay,  Coffee,  Dtividson,  Dekalb,  Dickson, 
Franklin,  Giles,  Grundy,  Hickman,  Humphreys,  Houston, 
Jackson,  Lawrence,  Lewis,  Lincoln,  Macon,  Marshall,  Maury, 
Montgomery,  Moore,  Overton,  Putnam,  Robertson,  Ruther- 
ford, Smith,  Stewart,  Sumner,  Trousdale,  Van  Buren,  War- 
ren, Wayne,  White.  Williamson  and  Wilson. 

The  time  and  j^lace  of  holding  district  courts  are  at  Nash- 
ville on  the  third  Mondays  in  April  and  October. 

The  western  district  of  Tennessee  is  divided  into  two  divi- 
sions called  respectively  the  eastern  division  of  the  western 
district  and  the  western  division  of  the  western  district.  The 
eastern  division  of  the  western  district  comprises  the  counties 
of  Benton,  Carroll,  Chester,  Crockett,  Decatur,  Gibson,  Har- 
din, Hardeman,  Henderson,  Henry,  Lake,  Madison,  Mc- 
Nairy,  Obion,  Weakley  and  Perry. 

The  western  division  of  the  western  district  comprises  the 
counties  of  Dyer,  Fayette,  Haywood,  Lauderdale,  Shelby  and 
Tipton. 

The  time  and  place  of  holding  district  courts  in  the  western 


COURTS    AND    THEIR    TERRITORIAL    JURISDICTION.  59 

district  are  at  Jackson  on  the  fourth  ^Mondays  in  April  and 
October ;  at  IMemphis  on  the  fourth  Mondays  in  May  and 
September. 

Texas  (fifth  circuit)  is  divided  into  four  districts,  the 
northern,  eastern,  western  and  southern  districts. 

The  counties  in  the  northern  district  are :  Returnable  to 
Waco  —  Brazos,  Robertson,  Leon,  Limestone,  Freestone,  Mc- 
Lennan, Falls,  Bell.  Coryell,  Foard,  Hamilton,  Bosque,  Som- 
ervell and  Hill. 

Returnable  to  Dallas  —  Dallas,  Ellis,  Hunt,  Johnson,  Kauf- 
man, Navarro  and  Rockwall. 

Returnable  to  Fort  Worth  —  Archer,  Armstrong,  Bailey, 
Baylor,  Briscoe,  Carson,  Castro,  Childress,  Clay,  Cochran, 
Collingsworth,  Comanche,  Cottle,  Dallam,  Dawson,  Deaf 
Smith,  Donley,  Erath,  Floyd,  Foard,  Gray,  Hale,  Hall,  Hans- 
ford, Hardeman,  Hartley,  Hemphill,  Hockley,  Hood,  Hutch- 
inson, Jack,  Lamb,  Lipscomb,  Moore,  Motley,  Ochiltree,  Old- 
ham, Palo  Pinto,  Parker,  Parmer,  Potter,  Randall,  Roberts, 
Sherman,  Swisher,  Tarrant,  Wheeler,  Wichita,  Wilbarger, 
Wise  and  Young. 

Returnable  to  Abilene  —  Andrews,  Borden,  Callahan,  Cros- 
by. Dickens,  Eastland,  Fisher,  Gaines,  Garza,  Haskell,  How- 
ard. Jones.  Kent,  King.  Knox,  Lubbock,  Lynn,  Martin.  Mid- 
land, Mitchell,  Nolan,  Scurry.  Shackelford,  Stephens,  Stone- 
wall, Taylor,  Terry.  Throckmorton  and  Yoakum. 

Returnable  to  San  Angelo  —  Brown,  Coke.  Coleman,  Con- 
cIk).  Crockett,  Glasscock,  Irion,  Menard,  Mills,  Runnells, 
Schleicher,  Sterling,  Sutton.  Tom  Green  and  Upton. 

The  time  and  ])lace  of  holding  courts  for  the  northern  dis- 
trict are  at  Dallas,  second  Monday  of  January  and  the  first 
Monday  of  May;  at  Fort  Worth,  second  Monday  of  AL'irch 
and  the  first  Monday  of  November;  at  Abilene,  second  Mon- 
day of  April  and  the  first  Monday  of  October;  at  San  Angelo, 
fourth  Monday  of  April  and  the  third  Monday  in  October. 

The  counties  in  the  eastern  district  are:  Returnable  to 
Paris  —  Delta,  Fannin,  Grayson,  Lamar  and  Red  River. 

Returnable  to  Texarkana  —  Bowie.  Franklin  and  Titus. 

Returnable  to  Beaumont  —  Hardin,  Jasper,  Jefferson,  Lib- 


6o  LAW   AM)  i'U(H"i:r>:niN(".s  ix   rankruptcy. 

erty.  Newton,  (,)ran.i;o.  Sahiiio,  San  Augustine  and  Tyler. 

Returnable  to  Pyler  —  Anderson,  Angelina,  Cherokee, 
Gregg,  Henderson,  Houston,  Nacogdoches,  Panola,  Rains, 
Rusk,  Shelby,  Smith,  Trinity,  Van  Zandt  and  Wood. 

Returnable  to  Jefferson  —  Camp,  Cass,  Harrison,  Hopkins, 
Marion.  Morris  and  Upshur. 

Returnable  to  Sherman  —  Collin,  Cooke,  Denton,  Grayson 
and  Montague. 

The  time  and  place  of  holding  court  for  the  eastern  district 
are  Tyler,  fourth  Mondays  in  January  and  April ;  Jefferson, 
first  Monday  in  October  and  first  Monday  in  February ;  Paris, 
fourth  Monday  of  October  and  second  Monday  of  March ; 
Beaumont,  third  Monday  in  November  and  first  Monday  in 
April. 

Returnable  to  Sherman  —  First  Monday  in  January  and 
third  Monday  in  May. 

The  counties  in  the  western  district  are :  Returnable  to 
Austin  —  Bastrop,  Blanco,  Burleson,  Burnett,  Caldwell,  Fay- 
ette, Gillespie,  Hays,  Kimble,  Lampasas,  Lee,  Llano,  McCul- 
loch.  Mason,  San  Saba,  Travis,  Washington  and  Williamson. 

Returnable  to  Waco  —  Bell,  Bosque,  Coryell.  Falls,  Free- 
stone, Hamilton,  Hill,  Leon,  Limestone,  McLennan,  Milam, 
Robertson  and  Somervell. 

Returnable  to  San  Antonio  —  Atascosa,  Bandera,  Bee, 
Bexar.  Comal,  Dewitt,  Dimmit,  Edwards,  Frio,  Gonzales, 
Guadalupe,  Karnes,  Kendall,  Kerr,  Kinney,  Live  Oak,  Maver- 
ick, Medina,  Uvalde,  Valverde,  Wilson  and  Zavalla. 

Returnable  to  El  Paso  —  Brewster,  C'-ane,  Ector,  El  Paso, 
Jeff  Davis,  Loving,  Pecos,  Presidio,  Reeves,  Ward  and  Wink- 
ler. 

The  time  and  place  for  holding  district  courts  are  at  Austin, 
fourth  Monday  in  January  and  second  Monday  in  June;  at 
Waco,  second  Monday  in  November  and  fourth  Monday  in 
February;  at  San  Antonio,  third  Monday  in  December  and 
first  Monday  in  May ;  at  El  Paso,  first  Monday  in  October  and 
first  Monday  in  April. 

Counties  in  the  southern  district  are :    Returnable  to  Galves- 


COURTS    AXD    THEIR    TERRITORIAL    JURISDICTION. 


6l 


ton  —  Austin.    Brazoria.    Chambers,    Fort    Bend,    Galveston, 
Matagorda  and  Wharton. 

Returnable  to  Houston  —  Brazos.  Calhoun.  Colorado,  Go- 
liad, Grimes,  Harris.  Jackson.  Lavaca.  Madison,  Montgomery, 
Polk.  San  Jacinto,  Trinity,  Victoria,  Walker  and  Waller. 

Returnable  to  Laredo  —  Aransas,  Duval,  Lasalle,  McMul- 
len.  Neuces,  Refugio,  San  Patricio,  Webb  and  Zapata. 

Returnable  to  Brownsville  —  Cameron,  Hidalgo  and  Starr. 

Times  and  places  of  holding  district  courts  are  at  Galveston, 
second  Monday  in  January  and  first  Monday  in  June:  at 
Houston,  fourth  Mondays  in  February  and  September ;  at  La- 
redo, third  Monday  in  April  and  second  Monday  in  Novem- 
ber ;  at  Brownsville,  second  Monday  in  May  and  first  Monday 
in  December. 

Utah   (eighth  circuity    constitutes  one  judicial  district. 

The  time  and  place  of  holding  courts  are  on  the  second 
Mondays  in  April  and  November,  at  Salt  Lake ;  second  Mon- 
days in  March  and  September,  at  Ogden. 

Vermont  (second  circuit)  constitutes  one  judicial  district. 

The  time  and  place  of  holding  district  courts  are  the  fourth 
Tuesday  in  February,  at  Burlington ;  the  third  Tuesday  in 
May,  at  Windsor;  the  first  Tuesday  in  October,  at  Rutland. 

One  of  the  stated  terms  of  the  district  court  may,  when 
adjourned,  be  adjourned  to  meet  at  Montpelier. 

Virginia  (fourth  circuit)  is  divided  into  two  districts,  the 
eastern  and  western  districts. 

The  counties  in  the  eastern  district  are  Accomac,  Alexan- 
dria, Amelia,  Brunswick,  Caroline,  Charles  City,  Chesterfield, 
Culpeper,  Dinwiddie,  Elizabeth  City,  Essex,  Fairfax,  Fau- 
quier, Gloucester,  Goochland,  Greensville,  Hanover,  Henrico, 
Isle  of  Wight,  James  City,  King  and  Queen,  King  George, 
King  William,  Lancaster,  Loudoun,  Louisa,  Lunenburg, 
Mathews,  Mecklenburg,  Middlesex,  Xansemond,  New  Kent, 
Norfolk,  Northampton,  Northumberland,  Nottoway,  Orange, 
Powhatan,  Prince  Edward,  Prince  George,  Prince  William, 
Princess  Anne,  Richmond,  Southampton,  Spottsylvania,  Staf- 
ford, Surry,  Sussex,  Warwick,  Westmoreland  and  York. 

The  time  and  place  of  holding  district  courts  for  the  east- 
ern district  are  the  first    Mondays    in    April    and    October, 


62  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

at  Richmond;  the  first  Mondays  in  May  and  November, 
at  Norfolk;  the  first  Mondays  in  January  and  July,  in 
Alexandria. 

Counties  in  the  western  district  are  Albemarle,  Alleghany, 
Amherst,  Appomattox,  Augusta,  Bath,  Bedford,  Bland,  Bote- 
tout,  Buchanan,  Buckingham,  Campbell,  Carroll,  Charlotte, 
Clarke,  Craig,  Cumberland,  Dickenson,  Floyd,  Franklin, 
Frederick,  Fluvanna,  Giles,  Grayson,  Greene,  Halifax, 
Henry,  Highland,  Lee,  Madison,  Montgomery,  Nelson,  Pat- 
rick, Page,  Pulaski,  Pittsylvania,  Rappahannock,  Roanoke, 
Rockbridge,  Rockingham,  Russell,  Scott,  Shenandoah, 
Smyth,  Tazewell,  Warren,  Washington,  Wise  and  Wythe. 

The  time  and  place  of  holding  district  courts  for  the  west- 
ern district  are  at  Danville,  Tuesdays  after  the  second  Mon- 
days in  April  and  November;  Lynchburg,  Tuesdays  after 
the  second  Mondays  in  March  and  September;  Abingdon, 
Tuesdays  after  the  first  Mondays  in  May  and  October; 
Harrisonburg,  Tuesdays  after  the  first  Mondays  in  June  and 
December;  Charlottesville,  second  Monday  in  January  and 
first  Monday  in  July ;  Roanoke,  second  Monday  in  February 
and  third  Monday  in  June. 

Washington  (ninth  circuit)  constitutes  one  judicial  dis- 
trict, divided  into  four  divisions,  called  the  northern,  south- 
ern, .eastern  and  western  divisions. 

The  northern  division  comprises  the  counties  of  King,  Kit- 
sap, Island.  Whatcom,  Skagit,  Jefferson,  Clallam,  San  Juan 
and  Snohomish.  The  time  and  place  of  holding  district  courts 
for  the  northern  division  are  at  Seattle,  first  Tuesdays  in  June 
and  December. 

The  southern  division  includes  the  counties  of  Wallawalla, 
Columbia,  Garfield,  Asotin,  Whitman,  Franklin,  Yakima  and 
Klickitat.  The  district  courts  for  the  southern  division  are 
held  at  Wallawalla,  first  Tuesdays  in  May  and  November. 

The  eastern  division  consists  of  the  counties  of  Spokane, 
Chelan.  Stevens,  Douglas,  Okanogan,  Kittitas,  Lincoln  and 
Adams.  The  district  courts  for  the  eastern  division  are  held 
at  Spokane,  first  Tuesdays  in  April  and  September. 

The  western  division  embraces  the  counties  of  Pierce,  Thurs- 
ton, Mason,   Chehalis,  Lewis,   Pacific,  Wahkiakum,   Cowlitz, 


COURTS    AND    THEIR    TERRITORIAL    JURISDICTION.  63 

Clarke  and  Skamania.  The  district  courts  for  the  western 
division  are  held  at  Tacoma,  first  Tuesdays  in  February  and 
July. 

West  Virginia  (fourth  circuit)  is  comprised  of  two  dis- 
trists,  the  northern  and  southern  district. 

The  northern  district  is  comprised  of  the  following  coun- 
ties :  Barbour.  Berkeley.  Brooke,  Calhoun,  Doddridge,  Gil- 
mer, Grant,  Hampshire,  Hancock,  Hardy,  Harrison,  Jefferson, 
Lewis,  Marion,  Marshall,  Mineral,  Monongalia,  Morgan, 
Ohio,  Pendleton,  Pleasants,  Preston,  Randolph,  Ritchie,  Tay- 
lor, Tucker,  Tyler,  Upshur,  Wetzel,  Wirt  and  Wood. 

Times  and  places  of  holding  courts :  Wlieeling,  first  Tues- 
day in  April  and  third  Tuesday  in  September;  Clarksburg, 
third  Tuesday  in  April  and  first  Tuesday  in  October;  Mar- 
tinsburg,  third  Tuesday  in  October. 

The  southern  district  is  comprised  of  the  following  coun- 
ties:  Boone,  Braxton.  Cabell.  Clay,  Fayette,  Greenbrier, 
Jackson,  Kanawha,  Lincoln,  Logan,  AIcDowell,  Mason,  Mer- 
cer, Mingo,  Monroe.  Xicholas,  Pocahontas,  Putnam,  Raleigh, 
Roane,  Summers,  Wayne,  \\'ebster  and  Wyoming. 

Time  and  place  of  holding  court  for  the  southern  district : 
At  Addison,  first  Monday  in  September;  at  Huntington,  first 
Tuesday  in  April  and  first  Tuesday  after  the  third  Monday 
in  September;  at  Bluefield,  first  Tuesday  in  May  and  third 
Tuesday  in  October;  at  Charleston,  first  Tuesday  in  June  and 
third  Tuesday  in  November. 

District  court  is  held  at  Wheeling,  April  i  and  September 
20;  Clarksburg,  April  15  and  October  i;  Charleston,  May  i 
and  November   10;  Martinsburg,  Octol)er   15. 

Wiscoxsi.v  (seventh  circuit)  is  divided  into  two  districts, 
the  eastern  and  western  districts. 

The  counties  in  the  eastern  district  are  Brown,  Calumet, 
Dodge,  Door,  Fond  du  Lac.  Florence,  Forest.  Green  Lake, 
Kenosha,  Kewaunee.  Langlade  (except  townshi])s  31,  32,  33 
and  34  of  ranges  9  and  10  east),  Marquette.  Manitowoc,  Mil- 
waukee, Marinette.  Oconto.  Oneida  ( towns  35,  36,  37,  38  and 
39  of  range  11  east),  Outagamie,  Ozaukee,  Racine,  Shawano, 
Sheboygan,  Vilas  (towns  40,  41  and  42  of  range  11  east), 


64  LAW    AND    rROCEKHINCS    IN     HANKRViPTCY. 

Walworth,  Washington.  W  aukcslia.  \\'anj)aca,  Waushara  and 
Winnebago. 

The  time  and  place  of  holding  district  courts  are  on  the  first 
Mondays  of  January  and  October,  at  Milwaukee;  second 
Tuesday  of  June  at  Oshkosh. 

The  western  district  comprises  the  counties  of  Adams,  Ash- 
land. Barron,  Bayfield,  Buffalo,  Burnett,  Chippewa,  Clark,  Co- 
luiubia.  Crawford.  Dane.  Douglas,  Eau  Claire,  Grant,  Green. 
Iowa.  Iron.  Jackson.  Jefferson.  Juneau.  La  Crosse,  Lafayette, 
Lincoln,  and  that  part  of  Langlade  lying  and  being  in  town- 
ships 31.  32,  TfT^  and  34.  north  of  ranges  9  and  10,  east  of  the 
fourth  principal  meridian ;  also  Marathon.  Monroe,  Oneida 
(except  towns  35.  36.  37.  38  and  39  of  range  11  east),  Pepin. 
Pierce,  Polk,  Portage,  Richland,  Rock,  St.  Croix,  Sauk,  Tay- 
lor, Trempealeau,  Vernon,  Vilas  (except  towns  40,  41  and  42 
of  range  11  east),  Washburn  and  Wood. 

The  time  and  place  of  holding  district  courts  of  the  western 
district  are  on  the  first  Tuesday  in  December,  at  Madison ;  first 
Tuesday  in  June,  at  Eau  Claire;  third  Tuesday  in  September, 
at  La  Crosse ;  and  third  Tuesday  in  June,  at  Superior.  "  The 
clerk  residing  at  Madison  shall  attend  all  terms  of  said  courts 
at  Eau  Claire  as  clerk  thereof." 

Wyoming  (eighth  circuit)  constitutes  one  judicial  district, 
which  includes  Yellowstone  National   Park. 

The  time  and  place  of  holding  district  courts  are  at  Chey- 
enne, second  Mondays  in  May  and  November;  at  Evanston, 
first  Monday  in  July,  and  at  Sheridan  or  in  National  Park  at 
such  dates  as  the  courts  may  order. 

Appellate  Courts  —  Territorial  Jurisdiction. 

The  Supreme  Court. —  The  territorial  jurisdiction  of  the 
Supreme  Court  of  the  United  States  includes  all  of  the  states 
and  territories. 

One  term  is  held  annually  on  the  second  Monday  in  Octo- 
ber and  such  adjourned  or  special  terms  as  it  may  find  neces- 
sary for  the  dispatch  of  business. 

Circuit  Courts  of  Appeals. —  The  territorial  jurisdic- 
tion and  time  of  holding  court  of  the  several  circuit  courts  of 
appeals  is  as  follows : 


COURTS    AND    THEIR    TERRITORIAL    JURISDICTION.  6$ 

The  first  circuit  includes  the  states  of  Maine,  New  Hamp- 
shire, Massachusetts  and  Rhode  Island. 

One  term  of  the  circuit  court  of  appeals  is  held  annually  a* 
Boston,  Mass.,  on  the  first  Tuesday  of  October. 

The  second  circuit  includes  Vermont,  Connecticut  and  New 
York. 

One  term  of  the  circuit  court  of  appeals  for  the  second  cir- 
cuit is  held  annually  at  New  York,  N.  Y.,  on  the  third  Tuesday 
of  October  and  such  adjourned  sessions  as  the  court  may  from 
time  to  time  designate. 

The  third  circuit  includes  the  states  of  New  Jersey,  Penn- 
sylvania and  Delaware. 

The  circuit  court  of  appeals  for  the  third  circuit  holds  two 
terms  in  a  year  at  Philadelphia,  Pa.  The  March  term  com- 
mences on  the  first  Tuesday  in  March  and  the  September  term 
on  the  third  Tuesday  of  September  in  each  year. 

The  fourth  circuit  includes  the  states  of  North  Carolina, 
South  Carolina,  Maryland,  Virginia  and  West  Virginia. 

The  circuit  court  of  appeals  for  the  fourth  circuit  holds 
three  terms  annually  at  Richmond,  Va.,  beginning  on  the  first 
Tuesday  in  February,  May  and  November  respectively. 

The  fifth  circuit  includes  the  states  of  Georgia,  Florida,  Ala- 
bama, Mississippi,  Louisiana  and  Texas. 

The  circuit  court  of  appeals  for  the  fifth  circuit  holds  a 
term  of  court  at  Montgomery.  Ala.,  on  the  first  Monday  in 
September;  at  Atlanta,  Ga.,  on  the  first  Monday  in  October; 
.^t  Fort  Worth.  Tex.,  on  the  first  Monday  in  November,  and 
at  New  Orleans,  La.,  on  the  third  Monday  in  November. 

The  sixth  circuit  includes  the  states  of  Ohio,  Michigan, 
Kentucky  and  Tennessee. 

The  circuit  court  of  appeals  for  the  sixth  circuit  holds  one 
term  annually  at  Cincinnati,  Ohio,  beginning  on  the  first  Tues- 
day after  the  first  Monday  in  October  and  adjourned  sessions 
on  the  first  Tuesdav  after  the  first  Monday  in  each  month 
except  August  and  vSejitembcr. 

The  se7'Cfifh  circuit  includes  the  states  of  liuiiana,  Illinois 
and  Wisconsin. 


66  LAW    AND    TROCEEDINGS    IN    BANKRUPTCY. 

The  circuit  court  of  appeals  for  the  seventh  circuit  holds 
one  term  annually  at  Chicago,  Til.,  beginning  on  the  first 
Tuesday  in  October. 

The  eighth  circuit  includes  the  states  of  Minnesota,  Iowa, 
Missouri,  Arkansas,  Nebraska,  Colorado,  Kansas,  Wyoming, 
North  Dakota,  South  Dakota,  Utah,  and  the  territories  of  New 
Mexico,  Oklahoma  and  Indian  Territory. 

The  circuit  court  of  appeals  for  the  eighth  circuit  holds  one 
term  annually  at  St.  Paul,  Minn.,  beginning  on  the  first  Mon- 
day in  May,  one  term  annually  at  Denver,  Colo.,  beginning  the 
first  Monday  in  September,  and  one  term  annually  at  St, 
Louis,  Mo.,  beginning  the  first  Monday  in  December. 

The  ninth  circuit  includes  the  states  of  California,  Oregon, 
Nevada,  Washington,  Idaho  and  Montana,  also  includes  the 
territories  of  Alaska,  Arizona  and  Hawaii. 

The  circuit  court  of  appeals  for  the  ninth  circuit  holds  the 
October  term  at  San  Francisco,  beginning  on  the  first  Monday 
in  October,  a  term  at  Seattle,  Wash.,  beginning  on  the  second 
Monday  in  September,  and  a  term  in  Portland,  Ore.,  begin- 
ning on  the  third  Monday  in  September. 


JURISDICTION    OF   COURTS   OF   BANKRUPTCY.  67 


CHAPTER  IV. 

THE  JURISDICTION  OF  COURTS  OF  BANKRUPTCY. 

§16.     The  statutory  jurisdiction. 

The  jurisdiction  of  a  court  of  bankruptcy  is  purely  statu- 
tory. Congress  has  conferred  power  upon  the  courts  of  bank- 
ruptcy in  the  present  act  as  follows: 

"Sec.  2.  That  the  courts  of  bankruptcy  as  hereinbefore 
defined,  viz.,  the  district  courts  of  the  United  States  in  the 
several  states,  the  supreme  court  of  the  District  of  Columbia, 
the  district  courts  of  the  several  territories,  and  the  United 
States  courts  in  the  Indian  Territory  and  the  District  of 
Alaska,  are  hereby  made  courts  of  bankruptcy,  and  are  hereby 
invested,  within  their  respective  territorial  limits  as  now 
established,  or  as  they  may  be  hereafter  changed,  with  such 
jurisdiction  at  law  and  in  equity  as  will  enable  them  to  exer- 
cise original  jurisdiction  in  bankruptcy  proceedings,  in  vaca- 
tion in  chambers  and  during  their  respective  terms,  as  they 
are  now  or  may  be  hereafter  held,  to 

"(i)  adjudge  persons  bankrupt  who  have  had  their  princi- 
pal place  of  business,  resided,  or  had  their  domicile  within 
their  respective  territorial  jurisdictions  for  the  preceding  six 
months,  or  the  greater  portion  thereof,  or  who  do  not  have 
tlieir  principal  place  of  business,  reside,  or  have  their  domi- 
cile within  the  United  States,  but  have  property  within  their 
jurisdictions,  or  who  have  been  adjudged  bankrupts  by  courts 
of  competent  jurisdiction  without  the  United  States  and  have 
property  within  their  jurisdictions; 

"(2)  allow  claims,  disallow  claims,  reconsider  allowed  or 
disallowed  claims,  and  allow  or  disallow  them  against  bank- 
rupt estates; 

"(3)  appoint  receivers  or  the  marshals,  upon  application  of 
parties  in  interest,  in  case  tlie  courts  shall  find  it  absolutely 
necessary,  for  the  preservation  of  estates,  to  take  charge  of 
tlie  property  of  bankrupts  after  the  filing  of  the  petition  and 
until  it  is  dismissed  or  the  trustee  is  qualified; 


68  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

"(4)  arraign,  try,  and  punish  bankrupts,  officers,  and  other 
persons,  and  the  agents,  officers,  members  of  the  board  of 
directors  or  trustees,  or  other  similar  controlling  bodies,  of 
corporations  for  violations  of  this  act,  in  accordance  with  the 
laws  of  procedure  of  the  United  States  now  in  force,  or  such 
as  may  be  hereafter  enacted,  regulating  trials  for  the  alleged 
violation  of  laws  of  the  United  States; 

"(5)  authorize  the  business  of  bankrupts  to  be  conducted 
for  limited  periods  by  receivers,  the  marshals,  or  trustees,  if 
necessary  in  the  best  interests  of  the  estates ; 

"(6)  bring  in  and  substitute  additional  persons  or  parties 
in  proceedings  in  bankruptcy  when  necessary  for  the  com- 
plete determination  of  a  matter  in  controversy ; 

•'(7)  cause  the  estates  of  bankrupts  to  be  collected,  reduced 
to  money  and  distributed,  and  determine  controversies  in 
relation  thereto,  except  as  herein  otherwise  provided ; 

"(8)  close  estates,  whenever  it  appears  that  they  have  been 
fully  administered,  by  approving  the  final  accounts  and  dis- 
charging the  trustees,  and  reopen  them  whenever  it  appears 
they  were  closed  before  being  fully  administered; 

"(9)  confirm  or  reject  compositions  between  debtors  and 
their  creditors,  and  set  aside  compositions  and  reinstate  the 
cases ; 

"(10)  consider  and  confirm,  modify  or  overrule,  or  return, 
with  instructions  for  further  proceedings,  records  and  find- 
ings certified  to  them  by  referees ; 

"(11)  determine  all  claims  of  bankrupts  to  their  exemp- 
tions; 

"(12)  discharge  or  refuse  to  discharge  bankrupts  and  set 
aside  discharges  and  reinstate  the  cases; 

"(13)  enforce  obedience  by  bankrupts,  officers,  and  other 
persons  to  all  lawful  orders,  by  fine  or  imprisonment  or  fine 
and  imprisonment; 

"(14)  extradite  bankrupts  from  their  respective  districts 
to  other  districts; 

"(15)  make  such  orders,  issue  such  process,  and  enter  such 
judgments  in  addition  to  those  specifically  provided  for  as  may 
be  necessary  for  the  enforcement  of  the  provisions  of  this  act ; 

"(16)  punish  persons  for  contempts  committed  before 
referees ; 


JURISDICTION    OF    COURTS    OF    BANKRUPTCY.  69 

"(17)  pursuant  to  the  recommendation  of  creditors,  or 
when  they  neglect  to  recommend  the  appointment  of  trustees, 
appoint  trustees,  and  upon  complaints  of  creditors,  remove 
trustees  for  cause  upon  hearings  and  after  notices  to  them ; 

"(18)  tax  costs,  whenever  they  are  allowed  by  law,  and 
render  judgments  therefor  against  the  unsuccessful  party,  or 
the  successful  party  for  cause,  or  in  part  against  each  of  the 
parties,  and  against  estates,  in  proceedings  in  bankruptcy  ;  and 

"( 19)  transfer  cases  to  other  courts  of  bankruptcy. 

"Nothing  in  this  section  contained  shall  be  construed  to 
deprive  a  court  of  bankruptcy  of  any  power  it  would  possess 
were  certain  specific  powers  not  herein  enumerated." 

§17.     The  general  extent  of  bankruptcy  powers. 

A  court  of  bankruptcy,  being  created  by  congress,  depends 
solely  for  its  jurisdiction  and  powers  upon  the  laws  of  the 
United  States.'  It  has  no  powers  except  those  which  are 
expressly  granted  by  congress,  and  such  implied  powers  as 
may  be  necessary  lo  give  full  force  and  effect  to  the  jurisdic- 
tion conferred  upon  it. 

In  construing  this  bankrupt  act,  which  gives  full  and  com- 
plete jurisdiction  over  a  subject  to  courts  constituted  for  the 
purpose,  the  strict  rule  of  construction,  which  is  applied 
where  a  special  statute  gives  to  a  court  power  to  do  a  parti- 
cular thing  and  prescribes  the  mode  in  which  the  power  shall 
be  executed,  has  no  application.'^ 

W«  rr  Williams,  120  Fed.  Rep.  38.  of  the    present    act,    said:    "The 

Consult   In   re   Morris   No.  9825,  national    bankruptcy    act     estab- 

Fed.  Cas.,  s.  c.  Crabbe,  70;  Camp-  li^hes  a  uniform  system,  and  reg- 

beirs  Case,  No.  2349.  Fed.  Cas,.    i  ^^^.^^^^   -^  ^^H  their"  details,  the  re- 

N.   B.   R.    165;   Clark  v.   Binniiicer,  ,   -■  •    ,  .  1  j    .•         r  j  1  .l 

o„  .,     '  ^    '  lations,  rights,  and  duties  of  debt- 

38  Howards   Prac.   -541.  ,         ,.  

,  A/r      ■         ,.'      T    1       II  or  and  creditor.     It  should  be  in- 

Jn  re  Morris,  supra,  Judge   Hop- 

kinson,    in    an    exhaustive    opinion,  terpreted  reasonably  and  accord-^ 

reached  the   conclusion  that  neither  '"^  ^^  ^  f^""  ""Port  of  its  terms. 

a    Chancellor    in     England    nor    a  with  a   view  to    effect  its  objects 

United  States  judge,  had  any  pow-  and  to  promote  justice." 
ers    in    bankruptcy    matters,    other         See  also  in  re  Cal.  Pac.  R.  Co., 

than  those  arising  expressly  or  im-  No.  2315,   Fed.    Cas.,  3   vSaw.  240; 

pliedly    from    the    bankrupt    statute.  /«  r<^  Muller,  No.  9912,   I'ed.  Cas., 

2  In    Blake.    Moffilt    &    Towne    v.  s.  c.  Deady.  5 13 ;   /«  r^  Locke,  No. 

Francis-Valentine      Co..      8<;      Fed.  ^^^^  p^j  Cas.',  s.  c.  i  Lowell,  293; 

Rep.   691,   Judge   Hawley.   speaking  j^^  ^^,  Silverman,  No.  12855.  Fed. 

Cas.,  s.  c.  I  Saw.  410. 


yO  .    LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

The  language  ()f  the  act  of  1898,  conferring  the  jurisdiction 
of  the  bankrujKcy  courts,  is  very  broad  and  general.  It  is 
•that  these  courts  "  are  hereby  made  courts  of  bankruptcy,  and 
are  hereby  invested,  within  their  respective  territorial  limits 
as  now  established,  or  as  they  may  be  hereafter  changed,  with 
such  jurisdiction  at  law  and  in  equity  as  will  enable  them  to 
exercise  original  jurisdiction  in  bankruptcy  proceedings,  in 
vacation,  in  chambers  and  during  their  respective  terms,  as 
they  are  now  or  may  be  hereafter  held."  "  The  section  pro- 
ceeds to  enumerate  crt'tain  specific  powers,  and  concludes  as 
follows :  "  Nothing  in  this  section  contained  shall  be  con- 
strued to  deprive  a  court  of  bankruptcy  of  any  power  it  would 
possess  were  certain  specific  powers  not  herein  enumerated." 

It  was  evidently  the  intention  of  Congress  to  establish  a 
complete  system  of  bankruptcy  proceedings,  and  to  confer  on 
the  courts  of  bankruptcy,  constituted  by  the  act,  special  juris- 
diction over  the  whole  subject  and  extending  to  all  matters, 
acts  and  things  to  be  done  under  and  in  virtue  of  bankruptcy. 

The  object  and  policy  of  the  bankrupt  law  is  that  proceed- 
ings under  it  shall  be  summary  in  order  to  settle  the  bankrupt's 
affairs  as  speedily  and  with  as  little  delay  as  may  be  consistent 
with  justice.  But  summary  proceedings  do  not  imply  that 
no  notice  is  required  to  be  served  on  the  persons  to  be  afifected 
by  the  order  of  the  court  and  a  reasonable  time  within  which 
to  make  a  defense.*  The  proceedings  in  bankruptcy  gener- 
ally are  in  the  nature  of  proceedings  in  equity.^ 

Proceedings  in  bankruptcy  are  instituted  by  the  filing  of  the 
petition,"  which  is  a  caveat  to  all  the  world,  and  in  effect  an 
attachment  and  injunction,^  and  on  adjudication  title  to  the 
bankrupt's  property  becomes  vested  in  the  trustee  with  actual 
or  constructive  possession  and  is  in  the  custody  of  the  bank- 
ruptcy court. ^     The  proceedings  end  in  the  distribution  of  the 

3  B.  A.   1898,  Sec.  2  and  Sec.  16,  ^  In  re  Union  Trust  Co.,  122  Fed. 

ante.  Rep.  937;  In  re  Rochford  (C.  C.  A., 

*  Smith    V.    Belford    (C.    C.    A.,  8th  Cir.),  124  Fed.  Rep.  182. 

6th  Cir.),  106  Fed.  Rep.  658,  5  Am.  ^  In  re  Kindt,  98  Fed.  Rep.  867; 

R.   R.   291;    Boyd  v.   Gliicklich    (C.  3  Am.  B.  R.  546. 

C  A.,  8th  Cir.),  116  Fed.  Rep.  131,  ^Mueller  v.  Nugent,  184  U.  S.  i ; 

8   Am.   B.    R.   393.  Bank  v.  Sherman,  loi  U.  S.  403. 


JURISDICTION    OF    COURTS   OF    BANKRUPTCY.  7I 

assets  among  the  creditors  and  the  discharge  or  refusal  to  dis- 
charge the  bankrupt. 

The  jurisdiction  of  a  court  of  bankruptcy  includes  the 
power  to  make  or  refuse  an  adjudication  in  bankruptcy,*  and 
to  administer  the  estate  of  the  debtor  and  to  grant  or  refuse 
to  grant  him  a  discharge.  By  estate  is  meant  the  property 
in  the  possession  of  the  debtor  at  the  time  proceedings  in  bank- 
ruptcy are  commenced  to  which  the  trustee  may  fairly  make  a 
pretension  of  claim.**  In  the  exercise  of  its  summary  jurisdic- 
tion a  court  of  bankruptcy  m.ay  order  the  bankrupt  or  his  agent 
to  pay  over  to  the  trustee  such  property  as  he  has  in  his  posses- 
sion and  punish  him  for  contempt  of  court  if  he  disobeys/*'  or 
compel  restitution  by  persons  who  have  forcibly  or  unlawfully 
seized  and  taken  out  of  the  custody  of  the  court  property  which 
had  lawfully  come  into  its  possession  as  a  part  of  the  bank- 
rupt's property/^  or  determine  claims  against  the  bankrupt's 
proi)erty  in  the  possession  of  the  court/"  or  determine  valid- 
ity and  the  relative  priority  of  conflicting  claims  to  a  fund 
arising  from  the  sale  of  property,"  or  determine  whether  par- 
ticular property  in  question  is  a  part  of  the  bankrupt's  estate 
and  subject  to  distribution  to  his  creditors,"  or  to  order  paid 
to  the  trustee  money  in  the  hands  of  a  sheriff  acquired  by  levy 
and  sale  within  four  months  prior  to  the  filing  of  the  petition 
in  bankrui)tcy,^°  but  not  when  the  money  has  been  paid  over  to 

"  In  re  Columbia  Real  Estate  Co.,  12  White    v.    Shloerb,    178    U.    S. 

loi  Fed.  Rep.  965,  4  Am.  B.  R.  411.  542,  4  Am.   B.   R.   178;   Keegan  v. 

"  In  re  New  England  Piano  Co.,  King,    96    Fed.    Rep.    768 ;    In    re 

122  Fed.  Rep.  937,  9  Am.  B.  R.  767;  Whitencr   (C.  C.  A.,  5th  Cir.),  105 

White  V.   Schlocrb,   178  U.   S.   542,  Fed.    Rep.    180,    5   Am.    B.    R.    198; 

4  Am.   B.   R.    178.  In  re   Kellogg,   113    Fed.   Rep.    120, 
1"  Mueller  v.  Nugent,  184  U.  S.  i,  7  Am.  B.  R.  623,  affirmed  121  Fed. 

5  Am.  B.  R.  176;  In  re  Rosser  (C.  Rep.   Z?,:S- 

C.    A.,    8th    Cir.),    loi    Fed.    Rep.  "  Chauncey  v.  Van  Dyke   (C.  C. 

562,  4  Am.  B.  R.  153;  In  re  Wilson,  A.,  8th   Cir),    119  Fed.    Rep.    i  ,  9 

116  Fed.  Rep.  419,  8  Am.  B.  R.  612.  Am.   B.   R.  414;   In   re   McCullum, 

An   assignee    for   creditors    is   an  113    Fed.    Rep.   393,    7   Am.    B.    R. 

agent  of  the  debtor.    Bryan  v.  Bern-  596;  In  re  Rochford   (C.  C.  A.,  8th 

heimer,  181  U.  S.  188.  5  Am.  B.  R.  Cir.),  124  Fed.  Rep.  182,  10  Am.  B. 

623 :    In   re   Stokes,    106    Fed.    Rep.  R.  608. 

312.  1* /n   re   Kellogg,    113    Fed.    Rep. 

"White   V.    Schlnerb,    178   U.    S.  120,  7  Am.   B.   R.  623. 

542.  4  Am.  B.  R.  178.  i!"- Clarke  v.  Larremore,  188  U.  S. 


72.  LAW    AND    TROCEEDINCS    IN    BANKRUPTCY. 

the  judgment  creditor.*"  or  to  order  i)aid  to  the  trustee  prop- 
erty in  the  hands  of  a  bailee  or  agent  who  does  not  claim  title 
to  such  property.  "  or  to  enjoin  the  prosecution  of  suits  found- 
ed ui>on  provable  debts  or  to  prevent  the  transfer  or  disposi- 
tion of  the  debtor's  property  or  any  interference  with  the  ad- 
ministration of  the  debtor's  estate,**  or  to  order  an  assessment 
upon  the  stockholders  of  a  bankrupt  corporation  for  unpaid 
subscriptions.*® 

A  court  of  bankruptcy  has  no  power  to  compel  a  third  per- 
son claiming  property  in  his  possession  adversely  to  the  trustee 
to  turn  it  over  to  him  by  summary  proceedings.^"  An  as- 
signee for  the  benefit  of  creditors  does  not  hold  his  title  for 
value  but  is  simply  an  agent  for  the  distribution  of  the  proceeds 
of  the  debtor's  property  among  his  creditors.^* 

A  court  of  bankruptcy  may  appoint  receivers  or  marshals 
to  take  charge  of  the  bankrupt's  estate,^^  or  to  appoint  trustees 
when  the  creditors  fail  to  elect,  or  to  punish  for  failure  to  obey 
lawful  orders  and  punish  for  contempts  committed  before  ref- 
erees. 

In  administering  an  estate  it  is  the  duty  of  a  court  of  bank- 
ruptcy to  determine  the  proportionate  share  of  each  creditor, 

486 ,  9  Am.  B.  R.  476,  affirming  In  ^o  ggg    Sec.    20,    post.     Bardes    v. 

re    Kenney     (C.    C.    A.,    2d    Cir.),  Hawarden    Bank,    178    U.    S.    524, 

105    Fed.    Rep.    897,    5    Am.    B.    R.  4  Am.  B.  R.   163 ;  Louisville  Trust 

355.  Co.  V.   Comingor,  184  U.   S.   18 ,  7 

i«/n  re  Blair,  102  Fed.  Rep.  987,  Am.    B.    R.   421. 

4  Am.    B.    R.   220;   In  re   Knicker-  ^i  Bryan  v.  Bernheimer,  181  U.  S. 
bocker,  121    Fed.   Rep.   1004.  188,  5  Am.  B.  R.  623;  Leidigh  Car- 
See    observation    of    Mr.    Justice  riage  Co.  v.  Stengel   (C.  C.  A.,  6th 

Brewer  in  Clarke  v.  Larremore,  188  Cir.).  95   Fed.   Rep.  637,  2  Am.   B. 

U.  S.  486.  R.  313- 

But  see  In  re  Breslauer,   10  Am.  As  to  who  is  an  adverse  claimant, 

B.  R.  22-  s^^  Sec.  20,  post. 

"  Mueller  v.  Nugent,  184  U.  S.  i ,  22  Bryan    v.    Bernheimer,    181    U. 

5  Am.  B.  R.  176;  In  re  Moore,  104  S.  188,  5  Am.  B.  R.  623;  Boone- 
Fed.  Rep.  896,  5  Am.  B.  R.  151,  ville  Nat.  Bank  v.  Blakey  (C.  C.  A., 
In  re  Stokes,  106  Fed.  Rep.  312.  7th  Cir.),  107  Fed.  Rep.  891  ,  6  Am. 

IS  Sec.   22,   post.  B.  R.  13;  In  re  Florcken,  107  Fed. 

'9/n   re    Miller    Electric    Mainte-      Rep.  241,  5  Am.  B.  R.  802. 
nance  Co.,  ill  Fed.  Rep.  515 ,  6  Am. 
B.  R.  701. 


JURISDICTION    OF    COURTS    OF    BANKRUPTCY, 


73 


declare  dividends,  order  payment  and  close  the  estate,"  and 
in  proper  cases  to  reopen  it  for  further  proceedings.^* 

These  powers  and  the  others  mentioned  in  Sec.  2  of  the  act 
are  powers  in  bankruptcy  as  distinguished  from  law  or  equity. 
This  distinction  is  important  for  the  reason  that  controversies 
arise  in  connection  with  the  administration  of  nearly  every 
estate,  which  can  be  determined  only  in  a  suit  at  law  or  equity 
and  not  in  the  bankruptcy  proceeding.^"* 

The  summary  jurisdiction  of  a  court  of  bankruptcy  may  be 
exercised  only  with  reference  to  those  persons  who  are  parties 
to  the  proceedings,  and  such  as  may  be  brought  in  and  made 
parties  under  Sec.  2.  clause  6,  of  the  act.  Such  are  the  bank- 
rupt, the  petitioning  creditors  and  such  other  claimants  as  may 
be  properly  brought  in  or  who  voluntarily  appear  and  become 
parties.^®  It  has  been  held  that  petitioning  creditors,  by  nam- 
ing an  assignee  in  a  state  proceeding  as  a  party  to  the  petition 


" /n  re  Carr,  ii6  Fed.  Rep.  555, 
8  Am.    B.   R.  635. 

"  In  re  Shaffer,  104  Fed.  Rep. 
982,  4  Am.  B.  R.  728;  In  re  New- 
ton, 107  Fed.  Rep.  439,  6  Am.  B. 
R.  52. 

"^^  See  Sec.  20,  post. 

2"  In  Fisher  v.  Cushman  (C.  C. 
A.,  ist  Cir.),  103  Fed.  Rep.  867, 
4  Am.  B.  R.  654,  the  court  said : 
"  So  far  as  Ida  C.  Fisher  is  con- 
cerned, there  can  be  no  question  of 
jurisdiction,  inasmuch  as  the  pro- 
cerdings  have  taken  place  in  the 
case  in  which  she  was  adjudged 
bankrupt,  and  the  court  therefore 
clearly  had  the  power  to  proceed 
summarily  for  the  purpose  of  mere- 
ly compelling  her  to  give  her  sig- 
nature on  the  transfer  of  the  li- 
cense. So  far  as  Rollin  B.  Fisher 
is  concerned  it  is  maintained  that 
he  was  entitled  to  appropriate  the 
license,  or  an  interest  in  it,  to  his 
personal  use,  and  that  therefore  the 
court  could  not,  in  the  case  of  Ida 
C.  Fisher  in  bankruptcy,  proceed 
summarily   against   him    with   refer- 


ence thereto.  This  objection  is  met, 
however,  by  the  fact  that  Rollin 
B.  Fisher  is  himself  in  bankruptcy, 
and  his  assignee  submitted  himself 
to  the  proceedings  in  the  district 
court,  which  disposes  of  all  sub- 
stantial questions  so  far  as  Rollin 
B.  Fisher  is  concerned." 

In  White  v.  Schloerb,  178  U.  S. 
542;  4  Am.  B.  R.  178,  the  supreme 
court  said :  "  Not  going  beyond 
what  the  decision  of  the  case  before 
us  requires,  we  are  of  opinion  that 
the  judge  of  the  court  of  bank- 
ruptcy was  authorized  to  compel 
persons,  who  had  forcibly  and  un- 
lawfully seized  and  taken  out  of 
the  judicial  custody  of  that  court 
property  which  had  lawfully  come 
into  its  possession  as  part  of  the 
bankrupt's  property,  to  restore  that 
property  to  its  custody  ;  and  there- 
fore our  answer  to  the  first  ques- 
tion must  be:  'The  District  Court 
sitting  in  bankruptcy  had  jurisdic- 
tion by  summary  proceedings  to 
compel  the  return  of  the  property 
seized.' " 


74  LAW    AND    PROCEEDINGS   IN    BANKRUPTCY. 

for  an  adjudication  and  praying  a  subpoena  for  him,  cannot 
thereby  bring  him  into  the  case  for  the  purpose  of  future  in- 
quiries and  determinations  to  be  made  in  the  progress  of  the 
case."  It  seems,  however,  that  an  assignee,  not  hokHng  title 
adversely  to  the  trustee,  may  be  compelled  by  order  of  the 
bankruptcy  court  to  deliver  the  property  of  the  banknipt  in  his 
possession  to  the  trustee  in  bankruptcy."**  Persons  who  claim 
property  in  their  possession  adversely  to  the  trustee  and  who 
are  not  parties  and  who  have  not  voluntarily  appeared  for  the 
purpose  of  l)€Coming  parties  cannot  be  compelled  to  come  into 
court  under  a  rule  to  show  cause  or  other  summary  process."^* 

When  an  application  is  made  to  the  court  to  make  a  sum- 
mary order  directing  a  respondent  to  surrender  the  possession 
of  certain  property  that  is  alleged  by  a  trustee  to  belong  to  the 
bankrupt's  estate,  the  court  may  examine  the  ground  set  up 
by  the  respondent  for  his  refusal  to  deliver  possession,  and  to 
determine  whether  a  real,  and  not  merely  a  pretended,  contro- 
versy exists  upon  this  subject.^^ 

Should  it  appear  that  the  claim  is  fictitious  or  colorable  the 
court  of  bankruptcy  may  retain  jurisdiction  on  the  theory  that 
the  property  is  then  constructively  in  the  possession  of  the 
court  of  bankruptcy.^'' 

The  district  courts  have  jurisdiction  of  suits  on  trustees' 
bonds.^^ 

The  district  courts  as  courts  of  bankruptcy  are  invested  with 
"  such  jurisdiction  at  law  and  in  equity  as  will  enable  them  to 

^'' Ex  parte  Comingor   (C.  C.  A.,  Wall.  551;  Ex  parte  Comingor  (C. 

6th   Cir.),   107  Fed.   Rep.  898,  s.  c.  C.  A.,  6th  Cir.),  107  Fed.  Rep.  898, 

5  Am.  B.  R.  537:   Louisville  Trust  5  Am.   B.  R.  537;  Louisville  Trust 

Co.  V.  Comingor,  184  U.  S.  18.  Co.    v.    Comingor,    184    U.    S.    18; 

-^  In  re  Thompson,  122  Fed.  Rep.  In  re  Ward,  104  Fed.  Rep.  985,  s.  c. 

174:    In   re   Knight,   125   Fed.   Rep.  5  Am.  B.  R.  215 ;  Jaquith  v.  Rowley, 

35 :  Bryan  v.  Bernheimer.  181  U.  S.  188  U.  S.  620 ,  9  Am.  B.  R.  525. 

188,  5  Am.  B.  R.  623;  Leidigh  Car-  -^  In  re  Baird,  8  Am.  649;  Muel- 

riage  Co.  v.  Stengel   (C.  C.  A.,  6th  ler  v.   Nugent,   184  U.   S.   i,   IS,  5 

Cir.),  95  Fed.  Rep.  637,  2  Am.  B.  Am.  B.  R.   176. 

R.  383;  In  re  Stokes,  106  Fed.  Rep.  ^^  In  re  Tune,  115  Fed.  Rep.  906, 

312,  3  N.  B.  N.  443;  In  re  Smith,  8  Am.  B.  R.  285;  In  re  Michie,  116 

92  Fed.  Rep.  135,  2  Am.  B.  R.  g.  Fed.  Rep.  749,  8  Am.  B.  R.  734. 

28*  Bardes  v.  Hawarden  Bank,  178  3i  u.  S.  v.  Union  Surety  &  Guar- 

U.    S.   524;    Marshall    v.   Knox,    16  anty  Co.,  9  Am.  B.  R.  114. 


JURISDICTION    OF    COURTS    OF    BANKRUPTCY.  75 

exercise  original  jurisdiction  in  bankruptcy  proceedings  "  in 
the  particulars  named,  it  being  provided  that  the  specification 
of  certain  powers  should  not  deprive  them  of  powers  they 
would  possess  but  for  the  enumeration.  The  proceedings  in 
administration  of  the  estate  are  equitable  in  their  nature,  but 
the  bankruptcy  courts  act  under  specific  statutory  authority, 
and  when  on  an  issue  of  fact  as  to  the  existence  of  ground  for 
adjudication  a  jury  trial  is  demanded,  it  is  demanded  as  of 
right,  and  the  trial  is  a  trial  according  to  the  course  of  the 
common  law.^^* 

§  1 8.     Bankruptcy  jurisdiction  exclusive. 

The  original  jurisdiction  in  bankruptcy,  conferred  on  these 
courts,  is  exclusive  of  the  courts  of  the  several  states,''-  and 
also  of  the  courts  of  the  United  States,  not  created  courts  of 
bankruptcy.  The  circuit  courts  have  no  bankruptcy  juris- 
diction under  the  act  of  1898.^^ 

The  exclusive  jurisdiction,  however,  is  confined  to  matters 
in  bankruptcy,  and  does  not  extend  to  matters  at  law  or  in 
equity  which  may  grow  out  of  bankruptcy  proceedings.'^*  This 
principle  is  recognized  in  section  23  of  the  act  of  1898,  which 
j)rovides  for  instituting  such  suits  in  the  circuit  courts  of  the 
United  States  and  in  the  state  courts.  The  former  acts  did 
not  expressly  confer  or  recognize  any  jurisdiction  in  the  state 
courts,  but  the  federal  and  state  judges  held  that  R.  S.  Sec. 
711  did  not  divest  the  state  courts  of  any  jurisdiction  at  law 
<<r  in  equity.'"''' 

^'*  Elliott  V.  Toeppner,   187  U.  S.  the  act  is  any  bankruptcy  jurisdic- 

-7  ,  9  Am.  B.  R.  50.    See  also  R.  S.,  tion     conferred     upon     the     circuit 

c.  566.  courts.      As    to    when    bankruptcy 

■'-' R.  S.  Sec.  711;  In  re  Watts  &  proceedings   may   be   had    in   a   cir- 

Sachs,    190  U.   S.   I  ;   In  re  Knight,  cuit    court,    owing    to    the    district 

I-';   Fed.   Rep.  35;   Akins  v.  Strad-  judge  being  disqualified  to  act,  see 

'•  V,  51    la.  414;   Broach   v.   Powell,  Sec.    24,   post. 

I  Ga.  79;  Southern  v.  Fisher,  6  S.  •''•*  Bardes  v.  Hawarden  Bank,  178 

C.  .345.  U.  S.  524,  4  Am.  B.  R.  163;  Small 

^^  B.  A.  1898,  Sec.  23.  where  jur-  v.    Muller    (N.    Y.    Sup.    Ct.    App. 

isdiction   at   law   and    in    equity,   as  Div.),  8  Am.    B.   R.  448;   Reed   v. 

distinguished    from    proceedings    in  Equitable   Trust    (Sup.   Ct.   Ga.),   8 

bankruptcy,    is   conferred    upon    the  Am.    B.    R.   242. 

circuit  courts,   and    in  no  place   in  ^n  Eyster  v.   Gaflf,  91    U.   S.   521 ; 


76  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

When  jurisdiction  in  bankruptcy  attaches,  which  it  does  as 
soon  as  the  petition  is  tiled,'"'  it  extends  over  the  bankrupt  and 
his  estate,  and  all  parties  and  (luestions  connected  therewith. 
The  filing  of  the  petition  is  a  caveat  to  all  the  world,  and  in 
effect  an  attachment  and  injunction.^^ 

The  trustee  is  vested  with  the  title  of  the  bankrupt's  property 
as  of  the  date  when  he  is  adjudged  a  bankrupt,  and  it  is  then 
in  the  legal  custody  o(  the  court.  Property  thus  surrendered 
to  a  trustee  cannot  be  affected  by  any  other  court,  or  a  person 
acting  under  process  from  any  other  court  attempting  to  inter- 
fere with  or  withdraw  the  property  from  the  possession  of  the 
trustee.^'  All  claims  against  the  bankrupt's  property  and  all 
controversies  concerning  the  same,  including  title  to  the  prop- 
erty, which  was  in  his  possession  at  the  time  of  filing  the  i>eti- 
tion,  should  be  presented  and  adjudicated  in  the  court  of  bank- 
ruptcy."'" Where  the  bankruptcy  court  in  the  exercise  of  its 
customary  jurisdiction  obtains  the  lawful  custody  of  property 
to  which  liens  attach,  it  has  jurisdiction  to  determine  the  rela- 
tive priorities  of  conflicting  claims  to  the  fund  realized  from 
the  sale  of  the  property.*" 

Burbank  v.  Bigelow,  92  U.  S.   179;  lor  v.   Carry],   20  How.   583;    Free- 

Oaflin  V.  Houseman,  93  U.  S.  130 ;  man  v.  Howe,  24  How.  450 ;  Shields 

Clark   V.    Ewing,    3    Fed.    Rep.   83;  v.   Coleman,   157  U.  S.   168;   Porter 

Scott  V.  Kelly.  22  Wall.  57;  I»  re  v.  Sabin,  149  U.  S.  473- 

Miller.  No.  9551,  Fed.  Cas.,  s.  c.  6  ^i.  white   v.    Schloerb,    178   U.    S. 

Biss.  30:    Cook  V.  Whipple,  55   N.  542.  4  Am.  B.  R.  178,  2  N.  B.  N. 

Y.  150.  721  ;  Keegan  v.  King,  96  Fed.  Rep. 

38  B.  A.   1898,   Sec.    I,  clause  10;  758;   In   re   Russell    (C.   C.   A.,   2d 

In  re   Kindt,  98   Fed.    Rep.   867,   3  Cir.),  loi  Fed.  Rep.  248,  3  Am.  B. 

Am.  B.  R.  546;  White  v.  Schloerb,  R.  658;  In  re  Chambers  Calder  Co., 

178  U.  S.  542,  4  Am.  B.  R.  178.  98  Fed.  Rep.  865,  3  Am.  B.  R.  537, 

37  Mueller  v.  Nugent,  184  U.  S.  i ,  2  N.   B.   N.  388;   In  re  Corbett,  5 
5  Am.  B.  R.   176.  Am.  B.  R.  224;  104  Fed.  Rep.  872, 

38  White    V.    Schloeb,    178    U.    S.  In  re  Whitener  (C.  C.  A.,  5th  Cir.), 
545.  105    Fed.    Rep.    180,    5    Am.    B.    R. 

A  referee  or  a  trustee  is  an  officer  198,  3  N.  B.  N.  316;  /"  re  Emslie 

of  the  court,  and  his  possession  is  (C.  C.  A.,  2d  Cir.),  102  Fed.  Rep. 

the  possession  of  the  court,  and  the  291  ,  4  Am.  B.  R.  126,  2  N.  B.  N. 

f?miliar  cases  turning  upon  the  re-  992. 

lations    of    marshals    and    receivers  *«  Chauncey    *.    Dyke    Bros.    (C. 

are   applicable   with   equal    force   to  C.    .\.,    8th    Cir.),     119    Fed.    Rep. 

the   protection    of   a   trustee.     Tay-  i ,    9    Am.    B.    R:    444. 


JURISDICTION    OF    COURTS    OF    BANKRUPTCY. 


77 


All  suits  against  the  bankrupt,  founded  upon  a  claim  from 
which  a  discharge  would  be  a  release,  and  pending  at  the 
time  of  the  filing  of  a  petition  against  him,  may  be  stayed 
until  after  an  adjudication  or  dismissal  of  the  petition;  if  such 
person  is  adjudged  a  bankrupt  such  action  may  be  further 
stayed  until  twelve  months  after  the  date  of  such  adjudication; 
or  if  within  that  time  such  person  applies  for  a  discharge, 
then  until  the  question  of  such  discharge  is  determined."  The 
court  may.  however,  direct  the  trustee  to  prosecute  or  defend 
a  pending  suit.*^ 

The  filing  of  a  petition  in  bankniptcy  does  not  propria  vigore 
abate  or  suspend  a  suit  pending  in  a  state  court  at  the  time." 
Although  the  bankrupt  court  has  exclusive  jurisdiction  of  all 
proceedings  in  bankruptcy,  it  does  not.  u[X)n  such  proceedings 
being  instituted,  draw  to  it  all  manner  of  controversies  wnth 
the  bankrupt.*^  State  courts  are  entitled  to  notice  of  some 
kind  before  they  are  required  to  yield  jurisdiction  over  a  pend- 
ing case.**  Some  cases  may  proceed  to  final  settlement  in  the 
state  court;  others  must  be  stayed  if  application  is  made  for 
that  purpose.*'*  Where  a  state  court  loses  its  jurisdiction  of 
the  res  by  reason  of  a  lien  being  annulled  by  the  bankruptcy 


"  B.  A.  1898,  Sec.  II.  See  Sec. 
22,  t>ost. 

*=*  Taylor  v.  Taylor  (^N.  J.  Chan.), 
43  Atlantic  Rep.  440.  4  Am.  B.  R. 
211;  Continental  Nat.  Bank  v.  Katz 
(Sup.   Ct.    Cook   Co.,   111.),   I    Am. 

B.  R.  19;  Reid,  Murdock  &  Co.  v. 
Cross  (Sup.  Ct.  Cook  Co.,  Ill),  i 
Am.  B.  R.  34;  Heath  v.  Shaffer, 
',1  Fed.  Rep.  647;  2  Am.  B.  R.  gS,; 
In  re  Gerdes,  102  Fed.  Rep.  318, 
4  Am.  B.  R.  346;  In  re  Horton  (C. 

C.  A.,  8th  Cir.),  102  Fed.  Rep.  086, 
4  Am.  B.  R.  486;  In  re  Scholtz,  106 
Fed.  Rep.  834:  Reed  v.  Equitable 
Trust  (Sup.  Ct  Ga.),  8  Am.  B.  R. 
242. 

In  Pickens  v.  Dent  (C.  C.  A., 
4th  Cir).  106  Fed.  Rep.  65.^.  the 
court  said:  "The  institution  of  the 
proceedings   in  bankruptcy   did   not 


devest  that  [the  state]  court  of  its 
jurisdiction  over  appellant  and  his 
property ;  and  it  was  clearly  not 
only  the  right,  but  the  duty,  of  that 
court  to  proceed  to  final  decree  in 
said  cause,  even  if  it  was  advised 
of  the  fact  that  the  district  court  of 
the  United  States  for  the  district 
of  West  Virginia  had  adjudicated 
one  of  the  defendants  thereto  to  be 
a    bankrupt."     Affirmed    187    U.    S. 

177. 

«^  Pickens  v.  Roy,  187  U.  S.  177; 
In  re  Wells,  8  Am.  R.  R.  75.  Ii4 
Fed.  Rep.  222 ;  In  re  Lesser,  100  Fed. 
Rep.  4.33,  3  Am.  B.  R.  815;  Lock- 
wood  V.  Exchange  Bank,  190  U.  S. 
294. 

♦*/n  re  Watts  &  Sachs,  190  U. 
S.  I  ;  /«  re  Knight,  125  l<'cd.  Rep.  35. 

*6  See  Sec.  22,  post. 


yS  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

of  the  defendant  tlie  court  of  bankruptcy  may  acquire  juris- 
diction of  it.-"' 

Where  the  subject  of  a  suit  relates  to  matter  subsequent  to 
the  commencement  of  bankruptcy  proceedings,  or  to  property 
not  properly  a  part  of  the  bankrupt's  estate,  the  suit  is  not 
effected  by  the  bankruptcy  proceedings.  Thus  a  debt  created 
after  the  institution  of  bankruptcy  proceedings  may  be  col- 
lected out  of  property  subsequently  acquired  by  the  bankrupt. 
Upon  the  same  principle  it  would  seem  that  a  security  on  a 
homestead  may  be  enforced  in  a  state  court  pending  the  bank- 
ruptcy. 

§  19.     Limitations  to  the  exercise  of  jurisdiction. 

Although  full  power  and  authority  is  conferred  upon  courts 
of  bankruptcy,  extending  to  all  matters  of  bankruptcy  without 
limitation,  there  are  two  principal  restrictions  to  the  exercise 
of  this  authority : 

First.  The  power  conferred  extends  only  to  persons,  cor- 
porations, partnerships,  etc.,  who  are  subject  to  be  adjudged 
bankrupts.  These  courts  have  no  authority  over  persons  other 
than  those  specified  in  the  act  to  be  subject  to  its  provisions. 

Second.  The  courts  of  bankruptcy  are  expressly  limited  to 
the  exercise  of  bankruptcy  jurisdiction  within  their  "  respect- 
ive territorial  limits." 

The  language  of  this  act  in  this  respect  is  similar  to  the  act 
of  1867,  where  the  jurisdiction  of  courts  of  bankruptcy  was 
limited  to  "  their  respective  districts."  With  reference  to  the 
meaning  of  this  expression  in  the  act  of  1867,  Mr.  Justice 
Bradley,  in  Lathrop  v.  Drake,*^  said :  "  When  the  act  says 
that  they  shall  have  jurisdiction  in  their  respective  districts  it 
means  that  the  jurisdiction  is  to  be  exercised  in  their  re- 
spective districts.  Each  court  within  its  own  district  may 
exercise  the  powers  conferred;  but  those  powers  extend  to  all 
matters  of  bankruptcy  without  limitation." 

A  district  court,  sitting  as  a  court  of  bankruptcy,  has  no 
greater  power  or  authority  outside  of  its  own  district  than  it 

♦6  In  re  Tune,  8  Am.  B.  R.  285.         •*^  Qi   U.  S.  517- 


JURISDICTION    OF    COURTS    OF    BANKRUPTCY.  79 

had  before  the  bankrupt  statute  was  enacted.  Thus  it  has 
been  held  that  a  writ  of  subpoena  or  other  process  cannot  be 
served  beyond  the  Hmits  of  the  district  of  the  court  issuing  the 
writ.*^  An  exception  to  this  rule  exists  in  subpoenas  for  wit- 
nesses under  a  special  provision  applicable  to  courts  of  bank- 
ruptcy, being  courts  of  the  United  States.*'* 

There  is  no  objection  to  a  person  living  without  the  district 
entering  his  appearance  voluntarily.  In  such  case  the  court 
has  complete  jurisdiction  over  him  as  though  he  had  been 
legally  served  with  process. °'*  So  also  if  a  nonresident  of  the 
district  comes  into  the  case  for  the  purpose  of  proving  a  claim 
he  is  subject  to  the  jurisdiction  of  the  court,  irrespective  of 
his  place  of  residence,^^  and  is  bound  to  take  notice  of  and  obey 
the  orders  of  the  court  to  the  same  extent  as  any  other  party 
to  the  proceedings.  When  a  voluntary  appearance  has  been 
entered  it  cannot  be  withdrawn  without  permission  of  the 
court.^^  Jurisdiction  cannot  be  conferred  by  consent  or  volun- 
tary appearance  when  otherwise  the  court  is  without  jurisdic- 
tion of  the  subject-matter.^^ 

Clearly  the  words  "  in  their  respective  territorial  limits  "  do 
not  confine  the  jurisdiction  of  the  court  of  bankruptcy  to  cases 
arising   within   the   district    of   the   court.'^*     Ancillary   suits 

*^  In  re  Waukesha  Water  Co.,  8  ^'♦Fisher  v.  Cushman    (C.   C.   A. 

Am.  B.  R.  715,  116  Fed.  Rep.  1009;  ist  Cir.),   103   Fed.   Rep.  860,  867, 

Jobbins  v.  Montague,  No.  7329,  Fed.  4  Am.  B.   R.  646 ;  In   re  Smith,  9 

Cas.,    s.    c.    5    Ben.    425;    Paine    v.  Am.  B.  R.  98;  In  re  Kirtland,  No. 

Caldwell,  No.  10674,  Fed.  Cas.,  s.  c.  7851,  Fed.  Cas.,  s.  c.  10  Blatch.  515; 

I    Hask.    452;    In    re    Hirsch,    No.  In  re  Ulrich,  No.  14327,  Fed.  Cas., 

6529,  Fed.  Cas.,  s.  c.  2  Ben.  493 ;  In  s.  c.  3  Ben.  355. 

re  Litchfield,  13  Fed.  Rep.  868.  "'i  In    re    Kyler,    No.    7956,    Fed. 

*»  R.    S.    Sec.    876    provides   that  Cas.,  s.  c.  2  Ben.  414 ;  In  re  Sabin, 

"  subpoenas   for  witnesses,  who  are  No.  12195,  Fd.  Cas.,  s.  c.  18  N.  B. 

required   to   attend   a   court   of  the  R.  151 ;  In  re  Pease,  29  Fed.  Rep. 

United   States,  in  any  district,  may  595 :  In  re  Anderson,  23  Fed.  Rep. 

run  into  any  other  district:  Pro-id-  482;  Clay  v.  Smith,  3  Pet.  411. 

ed,   That    in    civil    causes    the    wil-  ^^  In   re  Ulrich,   No.    14327.   Fed. 

nesses  living  out  of  the  district  in  Cas.,  s.  c.  3  Ben.  355.     See  also  U. 

which  the  court  is  held  do  not  live  S.  v.  Curry,  6  How.  106;  Fldrcd  v. 

at  a  greater  distance  than  one  him-  Michigan  Ins.  Bank,  17  Wall  545. 

dred  miles  from  the  place  of  holding  ■"••'  Jobbins  v.  Montague,  No.  7329, 

the    same."     See   also    B.    A.    1898,  Fed.  Cas.,  s.  c.  5  Ben.  425- 

Sec.  41.  "  Lathrop  v.  Drake,  91  U.  S.  516; 


8o  LAW    AND    PROCEHDINCS    IN    HANKRUPTCY. 

i]fro\ving  out  of  the  original  proceedings  may  be  prosecuted  in 
courts  of  bankruptcy  in  other  districts  unless  restricted  by 
some  other  clause  of  the  bankrupt  act."*"* 

§  20.    Jurisdiction  of  plenary  suits  at  law  and   in  equity  as 
distinguished  from  summary  proceedings. 

Prior  to  the  decision  of  the  supreme  court  in  Bardes  v. 
Hawarden  Bank."^"  the  district  courts  and  the  circuit  courts  of 
appeals  expressed  widely  different  opinions  as  to  the  jurisdic- 
tion of  the  courts  of  bankruptcy  to  entertain  independent  suits 
at  law  or  in  equity  against  third  parties  to  collect  debts  or  re- 
cover property  belonging  to  the  bankrupt  estate.  Most  of 
these  courts  held  that  they  had  jurisdiction  of  such  suits.^^ 

It  is  now  settled  that  the  bankruptcy  act  of  1898  conferred 
no  jurisdiction  ujx)n  the  courts  of  bankruptcy  of  suits  at  law 
or  in  equity  brought  by  trustees  against  third  parties  to  re- 
cover property  or  collect  debts,  or  to  set  aside  transfers  of 
property  alleged  to  be  fraudulent  under  the  act,  except  by  con- 
sent of  the  defendant.^*  But  the  courts  of  bankruptcy  are 
vested  with  jurisdiction  by  the  proposed  defendant's  consent 
to  entertain  such  suits. ^^  It  is  not  necessary  that  the  proposed 
defendant's  consent  should  be  in  writing  or  upon  the  record  in 
express  terms.  He  will  be  presumed  to  consent  if  he  appears 
and  pleads  to  the  merits  and  will  not  be  allowed  thereafter  to 

Burbank  v.  Bigelow,  92  U.  S.  179;  U.  S.  524,  4  Am.  B.  R.  163;  Mitch- 
Marshall  V.  Knox,  16  Wall.  551;  ell  v.  McClure,  178  U.  S.  539,  4 
Sherman  v.  Bingham,  No.  12762,  Am.  B.  R.  177;  Hicks  v.  Knost,  178 
Fed.  Cas.,  s.  c.  3  Cliflf.  552;  Mason  U.  S.  541,  4  Am.  B.  R.  178;  Jac- 
V.  Hartford  P.  &  F.  R.  Co.,  19  Fed.  quith  v.  Rowley,  188  U.  S.  620,  9 
Rep.  53  ;  Shainwald  v.  Lewis,  5  Fed.  Am.  B.  R.  525  ;  Wall  v.  Cox,  181 
Rep.  513-  U.   S.  244,  5  Am.  B.  R.  727;   Real 

^^  See    Ancillary    Proceedings    in  Estate    Trust   Co.   v.   Thompson,   7 

other  Districts,   Sec.  21,  post.  Am.  B.  R.  520. 

58178   U.    S.   524;   4   Am.    B.    R.  f"*  Bardes  v.  Hawarden  Bank,  178 

163 ;  2  N.  B.  N.  725.  U.  S.  524 ;  4  Am.  B.  R.  163 ;  In  re 

^'  The  cases  are  collated  in  a  note  Durham,  1 14  Fed.  Rep.  750,  8  Am.  B. 

to    Bardes    v.    Hawarden    Bank,    4  R.  115;  Philips  v.  Turner  (C.  C.  A. 

Am.   B.  R.  163.  5th  Cir.),  114  Fed.  Rep.  726,  8  Am. 

°'*  Bardes  v.  Hawarden  Bank,  178  B,  R.  171.  , 


JURISDICTION    OF    COURTS    OF    BANKRUPTCY.  8l 

object  to  the  jurisdiction  of  the  court ''"  or  withdraw  his  con- 
sent.®^ A  stipulation  to  pay  a  fund  into  the  registry  of  the 
court  to  be  dealt  with  by  that  court,  the  rights  of  the  parties 
to  be  determined  upon  summary  petition,  is  not  a  consent  to 
the  jurisdiction  of  the  court  of  a  plenary  suit.**""  A  general 
appearance  to  a  petition  will  not  prevent  the  defendant  from 
objecting  to  the  jurisdiction  of  the  court  to  an  amended  peti- 
tion, which  for  the  first  time  states  a  case  against  him."*  Prov- 
ing a  claim  in  bankruptcy  as  a  secured  debt  is  not  such  a  con- 
sent as  to  give  a  court  of  bankruptcy  jurisdiction  of  a  contro- 
versy by  the  claimant  to  enforce  such  debt  in  state  court."* 

Under  these  decisions,  prior  to  the  amendment  of  February 
5.  1903,"'  the  trustee  was  required  to  resort  to  the  state  courts 
to  recover  proj)erty  in  the  possession  of  third  parties  or  to  col- 
lect debts  due  an  estate  by  persons  not  parties  to  the  proceed- 
ings, "  unless  by  consent  of  the  proposed  defendant."  and  in 
such  cases  as  could  be  prosecuted  in  the  circuit  courts  of  the 
United  States  under  Sec.  23a  of  the  bankruptcy  act  of  iSgS."" 

It  should  be  observed  that  the  limitations  of  Sec.  236  apply 
only  to  suits  instituted  by  trustees  and  do  not  affect  proceed- 
ings which  may  be  properly  instituted  by  petitioning  creditors 
before  the  appointment  of  a  trustee."^  It  does  not  affect  pro- 
ceedings against   trustees.     Any  claim   made  to   property  in 

"^  In  re  Connolly,   100  Fed.   Rep.  tioned  in  Sec.  2T,b,  means  consent  to 

620,  3  Am.  B.  R.  842;  In  re  Steuer,  the   tribunal    in    which    the    contro- 

104    Fed.    Rep.    976,    5    Am.    B.    R.  versy  is  to  be  carried  on,   and  not 

j'x;;   In  re  Durham,   114  Fed.   Rep.  to  the  mode  of  procedure,  which  is 

750,  8  Am.  B.  R.  115.  regulated    by   general    principles    of 

"' /n   re   Durham,    114   Fed.    Rep.  law  unless  other  provision  is  made. 

750.  8  Am.  B.  R.   115.  ...    We  are,  therefore,  inclined  to 

"-'  Havens  &  Geddes  Co.  v.  Pierek  think   that   this   petitioner    was   not 

'(".  C.  A.  7th  Cir.),   120  Fed.   Rep.  precluded    from    his    right    to    raise 

J 14.  9  Am.  B.  R.  569.  the   objection  to  the  mode   of  pro- 

'■'' /n  re   Hemby-Ihitchinson   Pub.  ceeding  at   the   time   he   did,   which 

'    ' ,  105  Fed.  Rep.  909,  5  Am.  B.  R.  was  before  the  making  of  the  final 

').     In    Ex    parte    Comingor,    107  order,  and   that  the  court  erred   in 

I  «  d.  Rep.  898,  5  Am.  B.  R.  537,  af-  refusing  to  entertain  it." 

fi^rmed   in   184  U.   S.   18,  the  circuit  «*  Pickens  v.  Dent,  187  U.  S.   177. 

nrt  of  appeals   for  the   sixth  cir-  «•'>  32  Stat,  at  L.  797. 

't    said:  •»«  Sec  Sec.  25.  pnst. 

"  It    should    be    observed    in    this  "^  Bryan  v.  Hcrnheimcr,  181  U.  S. 

connection    that    the    consent    men-  i88,  S  Am.   B.   R.  623. 


8a  LAW    AND    PROCEEDINGS   IN    BANKRUPTCY. 

the  lawful  custody  of  a  court  of  bankruptcy  or  an  officer  there- 
of must  be  adjuclicated  in  that  court  and  by  no  other  court."* 
Sec.  2  of  the  bankrupt  act  of  1898  confers  ample  jurisdiction 
for  this  purpose. 

By  the  amendment  of  February  5,  1903,  Congress  conferred 
upon  the  bankruptcy  courts  jurisdiction  of  suits  for  the  recov- 
ery of  property  under  Sec.  60b,  Sec.  6ye  and  Sec.  yoe.^^  It 
has  been  held  that  the  courts  of  bankruptcy  have  jurisdiction 
of  suits  at  law  and  in  ecjuity  by  a  trustee  begun  since  February 
5,  1903,  and  are  not  limited  to  suits  brought  by  trustees  ap- 
pointed in  bankruptcy  proceedings  in  which  the  adjudication 
took  place  after  the  amendment  was  adopted.'"*  The  effect  of 
this  amendment  is  unquestionably  to  confer  sufficient  jurisdic- 
tion at  law  or  in  equity  upon  the  courts  of  bankruptcy  for  the 
purpose  of  recovering  property  in  the  possession  of  third  par- 
ties claimed  as  preferential  or  fraudulent  transfers.  Congress 
evidently  intended  to  confer  on  the  courts  of  bankruptcy  full 
powers  at  law  or  in  equity  in  respect  to  this  subject-matter. 
If  a  suit  in  equity  is  begun,  founded  upon  the  recovery  of 
fraudulent  transfers,  a  court  of  bankruptcy  has  power  to  settle 
all  controversies  arising  out  of  this  subject-matter  and  for  this 

«8  White   V.    Schloerb,    178  U.   S.  erty,  and  to  hear  and  determine  the 

542,  4  Am.  B.  R.   178,  2  N.  B.  N.  issues  presented  by  the  intervention, 

721  ;  Keegan  v.  King,  96  Fed.  Rep.  not  only  on  general  principles   (see 

758 ,  3  Am.  B.  R.  79 ;  In  re  Russell  Morgan's  L.  &  T.  R.  &  S.  S.  Co.  v. 

(C.  C.  A.  2d  Cir.),  loi   Fed.  Rep.  Texas  Cent.  Ry.  Co.,  137  U.  S.  171), 

248 ,  3  Am.  B.  R.  658 ;  In  re  Cham-  but  under  the  specific  provisions  of 

bers,   Calder  &    Co.,   98   Fed.    Rep.  Sec.    2    of    the    bankruptcy    act    of 

865,  3  Am.  B.  R.  537,  2  N.  B.  N.  1898." 

388;   In  re   Corbett,   104  Fed.   Rep.  In  Fisher  v.  Cushman   (C.  C.  A. 

872,  5  Am.  B.  R.  224;  In  re  Ems-  ist  Cir.),  103  Fed.  Rep.  867,  4  Am. 

lie  (C.  C.  A.  2d  Cir.),  102  Fed.  Rep.  B.  R.  654,  the  court  said: 

291 ,  4  Am.  B.  R.  126 ,  2  N.  B.  N.  "  The   rule   is    settled   beyond   all 

992.  doubt  that  any  person   claiming  an 

In    re    Whitener    (C.    C.    A.    5th  equitable  or  legal  interest  in  a  fund 

Cir.),  105  Fed.  Rep.  180,  5  Am.  B.  in    the    registry   of   a   court   is    en- 

R.   198,  3  N.  B.   N.  316,  the  court  titled  to  intervene  in  that  behalf." 

said :  *"'  Sees.  22b,  60b,  67?  and  70^,  as 

"  The  property  being  in  the  cus-  amended   Feb.   5,    1903 ;   32   Stat,  at 

tody  of  the  district  court  sitting  in  L.  797. 

b?nkruptcy.  that  court  had  jurisdic-  '"Pond  v.  N.  Y.  Exch.  Bank,  124 

tion    to    entertain    the    intervention  Fed.  Rep.  992 ,  10  Am.  B.  R.  343. 
filed  bv  Ramseur,  claiming  the  prop- 


JURISDICTION    OF    COURTS    OF    BANKRUPTCY.  83 

purpose  may  entertain  cross  bills  and  other  pleadings  usual  in 
a  court  of  equity. 

There  is  also  conferred  upon  the  courts  of  bankruptcy  con- 
current with  the  circuit  courts  of  the  United  States  a  limited 
jurisdiction  of  suits  at  law  to  punish  certain  offenses  named  in 
the  act." 

Plenary  Suits  Against  Adverse  Claimants. —  It  is 
well  settled  that  summary  proceedings  on  motion  and  notice 
or  rule  to  show  cause  cannot  be  substituted  for  plenary  suits 
at  law  or  in  equity  to  recover  property  in  the  possession  of 
third  persons  who  claim  to  own  it.^^*  This  applies  with  equal 
force  to  controversies  arising  before  and  since  the  amendment 
of  1903.  The  reason  for  this  rule  is  that  such  parties  would 
be  deprived  of  the  usual  processes  of  law  in  defense  of  their 
rights  in  a  summary  proceeding.  The  defendant  in  such  cases 
may  be  entitled  to  a  trial  by  jury,  or  to  put  in  evidence  upon 
an  issue  regularly  made  by  pleadings,  or  to  have  the  decree  or 
judgment  reviewed  upon  appeal  or  writ  of  error,  or  to  have 
the  judgment  or  decree  enforced  by  execution  and  not  by 
process  for  contempt  for  disobeying  a  summary  order  of 
court." 

'■I  B.  A.   1898,  Sec.  23c.     See  also  ly,  if  not  universally,  state  statutes 

Chap.  21.  founded  on  public  policy  forbid  im- 

^'*Jaquith  v.   Rowley,   188  U.  S.  prisonment  as  a  remedy  to  compel 

'ijo .   9   Am.    B.    R.   525 ;   Louisville  the    satisfaction    of   debts   or   other 

Trust   Co.   V.   Comingor,   184  U.    S.  obligations    not    founded    on    wilful 

iX,   7  Am.   B.   R.  421;   Marshall   v.  wrong,  and  this  policy  may  not  be 

Knox,  16  Wall.  556;  Smith  v.  Ma-  countervailed  by  the  consent  of  par- 

'iii,  14  Wall.  419;  hi  re  Young  (C.  ties   to   a   proceeding   which    results 

('.  A.  8th  Cir.),  iii  Fed.  Rep.   158,  in   defeating   it.     And  such   statutes 

7  .\m.  B.  R.   14.  are  given  effect  in  the  courts  of  the 

''^ Ex  parte  Comingor    (C.  C.  A.  United   States  by  Rev.   Stat.,   Sees. 

6th  Cir.),  107  Fed.  Rep.  898,  5  Am.  990,  991." 

B.    R.    5.37.   affirmed    184   U.    S.    18,  See  also  Mallory  Mfg.  Co.  v.  Fox, 

Judge    Severens.    speaking    for    the  20  Fed,  409,  per  Wallace  C.  J. ;  Low 

circuit  court  of  appeals,  said :  v.    Durfee,    5-   Fed.    Rep.    256,    per 

"The  judgment  would  not  be  en-  Lowell,    C.    J.;    Ex   parte   Hooson, 

forced  by  execution,  but  by  process  Law  Rep.  8  Ch.  App.  251. 
for  contempt.  The  proceeding  when  As  to  the   right  to  trial  by  jury, 

employed   for  such   a  purpose   is   in  see  Jones  v.   MacKenzie    (C.  C.  A. 

the  nature  of  a  civil  remedy  for  the  8th  Cir.),  122  Fed.  Rep.  390. 
recovery  of  money.     Quite  general- 


84  LAW     AM)     rkOfKKDINGS    IN     HANKRn'TCY. 

The  general  rule  is  that  the  trustee  must  hrins;-  an  independ- 
ent suit  at  law  or  in  ecjuity  to  reeover  money  or  property  in  the 
jxissession  of  a  j^erson  who  claims  title  to  it  as  against  the 
trustee  in  bankruptcy.'''  It  is  not  necessary  in  order  to  be  an 
adverse  claimant  that  he  should  claim  to  be  the  absolute  owner 
of  the  property  in  his  jxossession.  It  is  sufficient  if  money  was 
deposited  with  him  to  indemnify  him  for  a  liability  and  that 
liability  has  not  been  determined  and  satisfied.^*  But  a  court 
of  bankruptcy  has  full  power  by  summary  proceedings  to  de- 
termine all  controversies  relating  to  the  title  of  property  which 
is  in  the  custody  of  the  court  or  an  officer  thereof/"  or  to  com- 
pel a  person  to  deliver  to  the  trustee  property,  claimed  as  part 
of  the  bankrupt's  estate,  in  his  possession  to  which  he  has  no 
claim  of  title  as  against  the  trustee,  such  as  a  naked  bailee,^" 
agent  "*'  or  assignee  for  the  benefit  of  creditors/^ 

The  form  of  pleading  is  immaterial  where  the  court  has  ju- 
risdiction to  proceed  by  way  of  plenary  suit  and  no  seasonable 
objection  is  taken  to  the  form  of  procedure,  and  where  under 
the  form  of  procedure  adopted  the  rights  of  the  respondent  are 
substantially  as  in  a  plenary  suit." 

''•■'  Bardes  v.  Hawarden  Bank.  178  "^  In    re    Stokes,    106    Fed.    Rep. 

U.  S.  524.  4  Am.  B.  R.  163;  Louis-  312;   Leidigh   Carriage  Co.  v.  Sten- 

ville    Trust    Co.    v-.    Comingor,    184  gel  (C,  C.  A.  6th  Cir.),  95  Fed.  Rep. 

U.  S.  18,  7  Am.  B.  R.  421,  affirm-  637,  2  Am.   B.  R.  383;  Mueller  v. 

ing  Ex  parte  Comingor    (C.  C.  A.  Nugent,  184  U.  S.  i ,  5  Am.  B.  R. 

6th  Cir.),  107  Fed.  Rep.  898,  5  Am.  176;  Bryan  v.  Bernheimer,  181  U.  S. 

B   R.  s:^7-  188 ,  5  Am.  B.  R.  623. 

"*  Jacquith  v.   Rowley,   188  U.    S.  ''^  In    re    Steuer,    104    Fed.    Rep. 

620.  9  Am.  B.  R.  525.  976,  5  Am.  B.  R.  209;  3  N.  B.  N. 

'^  White   V.    Schloerb,    178   U.    S.  206;  Milner  v.  Meek,  95  U.  S.  252; 

542.  4  Am.  B.  R.  178;  In  re  Roch-  Stickney  v.  Wilt,  23  Wall.  150. 

ford    (C.  C.  A.  8th  Cir.),  124  Fed.  In  re  Kenney  (C.  C.  A.  2d  Cir.), 

Rep.  182,  10  Am.  B.  R.  608;  Keegan  105  Fed.  Rep.  897,  5  Am.  B.  R.  355, 

V.    King,   96   Fed.   Rep.    758;    In   re  this    rule   was    applied   but   not    di- 

Whitener   (C.   C.  A.  5th   Cir.),   105  rectly  decided. 

Fed.   Rep.    180,   5   Am.   B.    R.    198;  In    re    Steuer,   supra,   an    amend- 

/r.   re  Kellogg,   113  Fed.   Rep.   120,  raent  was  permitted  to  be  made  to  a 

7  .^m.  B.  R.  623  (affirmed  C.  C.  A.  petition   for  an  injunction  and  then 

2d  Cir.),  121   Fed.  Rep.  333.  sustained  to  recover  a  preference  by 

""^  Mueller  v.  Nugent,  184  U.  S.  I  ,  Judge  Lowell,  who  said: 
5  Am.  B.  R.  176;  In  re  Moore,  104  "In  order  that  proceedings  to  re- 
Fed.  Rep.  869,  5  Am.  B.   R.   151.  cover  property  may  be  validly  com- 


J 


JURISDICTION    OF    COURTS    OF    BANKRUPTCY. 


85 


It  has  been  held  that  a  plenary  suit  at  law  or  in  equity  was 
necessary  in  the  following  cases :  An  action  of  replevin  to  re- 
cover specific  property/*  or  a  suit  to  set  aside  fraudulent  trans- 
fer of  money  or  property  and  to  recover  the  same  for  the 
estate,*"  or  to  restrain  a  third  party  from  dealing  with  prop- 
erty claimed  to  belong  to  the  bankrupt's  estate,*^  or  to  recover 
fees  paid  by  an  assignee  to  himself  and  his  attorney  for  services 
rendered  in  a  state  court.*^  or  to  recover  a  judgment  which 
was  collected  by  execution  and  the  money  paid  over  to  the 
judgment  creditor  before  the  petition  in  bankruptcy  was  filed 
against  the  judgment  debtor,**  or  a  proceeding  to  foreclose  a 
collateral  security  held  by  the  bankrupt  to  secure  a  debt  of  a 
third  person,**  or  a  bill  by  creditors  to  reach  and  subject  to 
their  claims  exempt  property  of  a  bankrupt,*^  or  a  suit  to  re- 
cover money  deposited  with  a  surety  to  indemnify  him  for  his 
liability  upon  a  bail  bond  where  that  liability  has  not  been  de- 
termined and  satisfied.*" 

A  claimant  to  property  which  has  been  seized  by  a  marshal 
under  a  warrant  issued  pursuant  to  Sec.  2,  clause  3,  as  forming 
a  part  of  the  bankrupt's  estate,  is  entitled  to  have  the  contro^ 


menced  by  petition  in  bankruptcy, 
the  petition  must  contain  a  complete 
statement  of  the  cause  of  action, 
and  a  sufficient  prayer  for  relief. 
Upon  such  a  petition  process  must 
b«'  issued,  and  the  parties  must  be 
given  full  opportunity  to  present 
evidence  and  arguments  in  their 
own  behalf.  In  other  words,  though 
the  formal  requisites  of  a  bill  in 
e(|uity  may  be  wanting,  j'et  the  sub- 
stantial requisites  of  equitable  jus- 
tice must  be  complied  with  as  fully 
ir  a  petition  in  bankruptcy  as  in  a 
bill   in  equity." 

^"Mitchell  V.  McGure,  178  U.  S. 
539,  4  Am.  B.  R.  177;  Cooke  v. 
Scovil,  53  Atl.  Rep.  692. 

•"•  Bardes  v.  Hawardcn  Bank.  178 
U.  S.  524.  4  Am.  B.  R.  163:  Hicks 
V.  Knost,  178  U.  S.  541  ,  4  Am.  B. 
R.  178:  In  re  Michie,  8  Am.  B.  R. 
734.  116  Fed.  Rep.  749. 


'^i  In  re  Ward,  104  Fed.  Rep.  985 , 

5  Am.  B.  R.  215. 

^-  Louisville  Trust  Co.  v.  Comin- 
gor,  184  U.  S.  18,  7  Am.  B.  R. 
421,  affirming  Ex  parte  Comingor 
(C.  C.  A.  6th  Cir.),  107  Fed.  Rep. 
898.  5  Am.  B.  R.  537;  In  re  Klein 

6  Co.,  8  Am.  B.  R.  559;  In  re  Car- 
ver &  Co.,  113  Fed.  Rep.  138,  7  Am. 
B.  R.  5.3Q- 

**•''  In  re  Blair.  102  Fed.  Rep.  987 , 
4  Am.  B.  R.  220;  In  re  Knicker- 
bocker, 121  Fed.  Rep.  1004. 

Consult  observation  of  Mr.  Jus- 
tice Brewer  in  Clark  v.  Larremore, 
188  U.  S..  at  p.  4<K). 

«•*  McKey  v.  Smith,  105  Fed.  Rep. 
809. 

"^'Woodruff  V.  Cheeves  (C.  C. 
A.  5th  Cir.),  T05  Fed.  Rep.  601,  5 
.Am.  B.  R.  296. 

8«Jacquith  v.  Rowley,  188  U.  S. 
620.  9  Am.  B.  R.  525. 


86 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


versy  determined  by  a  plenary  action  which  may  be  either  in  a 
court  of  bankruptcy  or  elsewhere." 

It  has  been  held,  on  the  other  hand,  that  the  following  are 
not  adverse  claimants:  An  assignee  for  the  benefit  of  cred- 
itors,^^^  a  person  who  has  mere  possession  of  the  property  with- 
out claim  of  title.**"  or  a  mortgagee  who  enters  into  possession 
under  a  default  clause  in  the  mortgage  before  the  expiration 
of  the  time  named  in  that  clause."" 

§  21.     Ancillary  proceedings  in  other  districts. 

As  has  been  stated,  each  court  of  bankruptcy  is  restricted 
in  the  exercise  of  its  authority  within  its  own  territorial 
limits."  It  will,  however,  be  necessary  to  institute  proceed- 
ings ancillary  to  and  in  aid  of  the  proceedings  in  bankruptcy 
in  courts  without  the  district  in  which  the  principal  proceed- 
ings are  had."-  That  the  courts  of  bankruptcy  for  such  other 
districts  have  jurisdiction  to  entertain  auxiliary  proceedings 
to  perfect  and  accomplish  the  objects  of  the  act  can  hardly 


8T/n  re  Young  (C.  C.  A.  8th 
Cir.),  Ill  Fed.  Rep.  158,  7  Am.  B. 
R.  14. 

88  Bryan  v.  Bernheimer,  181  U.  S. 
188 ,  5  Am.  B.  R.  623 ;  Leidigh  Car- 
riage Co.  V.  Stengel  (C.  C  A.  6th 
Cir.),  95  Fed.  Rep.  637,  2  Am.  B. 
R.  383;  In  re  Stokes,  106  Fed.  Rep. 
312. 

8»/n  re  Moore,  104  Fed.  Rep. 
869,  5  Am.  B.  R.  151. 

90 /,j  Ye  Waterloo  Organ  Co.,  118 
Fed.  Rep.  904,  9  Am.  B.  R.  427. 

^1  Sec.  19,  ante. 

"2  In  re  Schrom,  97  Fed.  Rep. 
760 ,  3  Am.  B.  R.  352 ;  Judge  Shiras 
said: 

"The  property  is  not  within  the 
territorial  jurisdiction  of  this  court. 
The  adjudication  in  bankruptcy  has 
not  yet  been  had,  and  this  court 
has  not  yet  been  clothed  with  the 
full  jurisdiction  over  the  property 
of  the  alleged  bankrupt  that  will 
accrue  after  the  adjudication  has 
taken  place.     Of  course,  no  trustee 


has  yet  been  appointed.  Under  these 
circumstances  it  is  difficult  to  see 
how  this  court  can  exercise  juris- 
diction or  control  over  the  property 
in  Illinois,  or  can  confer  any  au- 
thority on  its  receiver  to  bring  suit 
in  Illinois  against  third  parties  to 
obtain  possession  of  the  property. 
The  proper  course  to  pursue  is  for 
the  petitioning  creditors  to  take  pro- 
ceedings in  the  proper  court,  state 
or  federal,  in  Illinois,  in  their  own 
name,  setting  up  the  proceedings 
now  pending  in  bankruptcy  in  this 
court  as  the  basis  of  their  action, 
and  asking  that  court  to  protect  the 
rights  of  creditors  in  the  property 
situated  in  Illinois,  either  by  the  ap- 
pointment of  a  receiver,  by  injunc- 
tion, or  any  other  appropriate  rem- 
edy. If  the  adjudication  in  bank- 
ruptcy is  had,  then  the  trustee  who 
will  be  appointed  can  then  appear 
in  that  case  on  behalf  of  creditors, 
and  take  control  of  the  proceed- 
ings." 


JURISDICTION    OF    COURTS    OF    BANKRUPTCY.  8/ 

be  considered  an  open  question  in  view  of  the  decisions  of  the 
courts  under  prior  acts  and  the  reasoning  upon  which  these 
decisions  are  based."^  But  the  extent  of  ancillary  jurisdiction 
of  the  bankruptcy  courts  under  the  law  of  1898  will  depend 
upon  the  judicial  construction  of  the  act.  Ancillary  jurisdic- 
tion has  been  exercised®*  and  denied.''^ 

The  courts  of  other  districts,  so  far  as  an  ancillary  jurisdic- 
tion exists,  are  auxiliary,  not  in  any  sense  implying  power 
to  carry  out  and  enforce  the  judgment  and  orders  of  one  an- 
other, except  upon  due  process  in  the  particular  district.®^  In 
such  cases  it  is  necessary  to  acquire  jurisdiction  of  persons  and 
property  by  the  same  means  employed  in  other  cases.^^ 

§  22.     Power  to  stay  proceedings  in  other  courts. 

The  same  reason  does  not  exist  for  refusing  to  interfere  by 
injunction  to  stay  proceedings  in  a  federal  court  that  exists 
when  the  case  is  pending  in  a  state  court.  The  courts  of 
bankruptcy  have  enjoined  proceedings  in  federal  courts  when 
such  proceedings  interfered  with  the  exercise  of  bankruptcy 
jurisdiction." 

All  courts  of  the  United  States  are  forbidden  "  to  stay  pro- 
ceedings in  any  court  of  a  state,  except  in  cases  where  such 
injunctions  may  be  authorized  by  any  law  relating  to  proceed- 
ings in  bankruptcy.®*     The  bankruptcy  act  of  1898  expressly 

»''Lathrop  v.  Drake,  91  U.  S.  516;  321;  Ross-Meeham  Foundry  Co.  v. 

Burbank  v.  Bigelow,  92  U.  S.   179;  Southern  Car  and  Foundry  Co.,  124 

Sherman    v.    Bingham,    No.    12762,  Fed.  Rep.  403. 

Fed.  Cas.,  s.  c.  3  Cliff.  552;  Moore  «« Shainwald    v.    Lewis,    5     Fed. 

V.  Jones,  No.  9768  Fed.  Cas.,  s.  c.  Rep.  513. 

23  Vt.   739:  Ex  parte  Martin,  No.  "^ /n  re  People's  Mail  Steamship 

9149  Fed.  Cas.,  s.  c.  5  Law  Rep.  158;  Co.,    No.    10970   Fed.   Cas.,    s.    c.   3 

Goodall    V.    Tuttle,    No.    5533    Fed.  Ben.   226,   the  court  of  bankruptcy 

Cas.,  s.  c.  3  Biss.  219;  In  re  Tifft,  enjoined    proceedings    in    admiralty 

No.  14034  Fed.  Cas.,  s.  c.  19  N.  B.  upon  a  libel  in  rem.     But  see  The 

R.  201  ;  Shainwald  v.  Lewis,  5  Fed.  Ironsides,  No.  7069  Fed.  Cas.,  s.  c. 

Rep.  513;  Mason  v.  Hartford  P.  &  4  Biss.  518. 

F.  R.  Co.,  19  Fed.  Rep.  53.  "**  R.  S.  Sec.  720 ;  Haines  v.  Car- 

»*/«  re  Reiser,  115  Fed.  Rep.  199.  pcnter,  91   U.   S.  254;   Dial   v.  Rey- 

»•'■■ /h  re  Williams,   120  Fed.   Rep  nolds,  96  U.   S.  340 ;   Peck  v.  Jcn- 

38;  In  re  Williams,   123  Fed.  Rep.  ncss,  7  How.  625. 


88 


LAW    AND    PROCEEDINGS    IN    HANKRUPTCY. 


confers  power  upon  courts  of  bankruptcy  to  issue  injunctions 
to  stay  proceedings  within  this  exception."" 

The  court  has  power  to  stay  any  suit  which  is  founded  upon 
a  claim  from  which  a  discharge  would  be  a  release  and  which 
is  pending  against  a  person  at  the  time  of  the  filing  of  the  peti- 
tion against  him/""  It  should  be  observed  that  this  power  is 
limited  to  suits  founded  upon  a  claim  from  which  a  discharge 
would  be  a  release.^"^  The  word  "  suit  "  is  broad  enough  in 
its  scope  to  include  all  forms  of  procedure  at  law  or  in  equity, 
or  in  admiralty,  where  the  personal  liability  of  the  debtor  is 
sought  to  be  fixed  or  determined  by  final  judgment.  The  stay 
may  be  had  at  any  stage  in  the  suit  while  it  is  pending  in  the 
state  court,  even  after  execution  ^""  and  before  the  sheriff  has 
paid  the  money  to  the  execution  creditor.^"^ 

Under  the  act  of  1867  power  to  grant  injunctions  was  ex- 
pressly conferred  for  the  purpose  of  preventing  any  transfer  or 
disposition  of  the  debtor's  property  or  any  interference  there- 


99  B.  A.  1898,  Sec.  iia  and  Sec.  2, 
clause  15;  Clarke  v.  Larremore,  188 
U.  S.  486,  9  Am.  B.  R.  476,  af- 
firming In  re  Kenney,  105  Fed.  Rep. 
897 ,  5  Am.  B.  R.  355 ;  Wagner  v. 
U.  S.  (C.  C.  A.  6th  Cir.),  104  Fed. 
Rep.  133,  4  Am.  B.  R,  596;  In  re 
Goldberg,  117  Fed.  Rep.  692,  9  Am. 
B.  R.  156;  In  re  Ball,  118  Fed.  Rep. 
672,  9  Am.  B.  R.  276 ;  Blake,  Moffat 
&  Towne  v.  Francis  Valentine  Co., 

89  Fed.   Rep.  691  ;   In  re  Gutwillig, 

90  Fed.  Rep.  475,  on  rehearing,  p. 
481,  s.  c.  (C.  C.  A.  2d  Cir.),  92  Fed. 
Rep.  zzT ,  I  Am.  B.  R.  388;  Lea  v. 
West  Co.,  91  Fed.  Rep.  237 ,  i  Am. 
Am.  B.  R.  261,  s.  c.  174  U.  S.  590. 

i-w  B.  A.  1898,  Sec.  iia;  In  re 
Kenney,  95  Fed.  Rep.  427 ,  2  Am. 
B.  R.  494,  s.  c.  Clarke  v.  Larre- 
more, 188  U.  S.  486;  9  Am.  B.  R. 
476;  In  re  Goldberg,  117  Fed.  Rep. 
692;  9  Am.  B.  R.  156;  In  re  Butts, 
120  Fed.  Rep.  966;  In  re  Ball,  118 
Fed.  Rep.  672;  Bear  v.  Chase  (C.  C. 


A.  4th  Cir.),  99  Fed.  Rep.  920,  3 
Am.  B.  R.  746;  In  re  Lesser  (C.  C. 
A.  2d  Cir.),  99  Fed.  Rep.  913,  3 
Am.  B.  R.  758. 

In  re  Hilton,  4  Am.  B.  R.  774,  a 
suit  on  an  unliquidated  claim,  which 
might  be  proved  in  bankruptcy,  but 
was  voluntarily  withheld  for  fifteen 
months,  was  stayed. 

101  White  V.  Thompson  (C.  C.  A. 
5th  Cir.),  119  Fed.  Rep.  868;  In  re 
Butts,  120  Fed.  Rep.  966;  In  re 
Cole,  106  Fed.  Rep.  837 ;  Continental 
National  Bank  v.  Katz  (Supr  Ct. 
Cook  Co.,  111.),  I  Am.  B.  R.  19. 

^02  In  re  Kletchka,  92  Fed.  Rep. 
901 ,  I  Am.  B.  R.  479 ;  In  re  Dc 
Lany  &  Co..  124  Fed.  Rep.  280. 

103  /„  y^,  Kenney,  95  Fed.  Rep. 
427 ,  s.  c.  sub  noni  Clarke  v.  Larre- 
more, 188  U.  S.  486.  9  Am.  B.  R. 
476. 

But  see  In  re  Shoemaker,  112 
Fed.  Rep.  648,  7  Am.  B.  R.  437. 


JURISDICTION    OF    COURTS    OF    BANKRUPTCY. 


89 


with.*"*  This  power  was  frequently  exercised.^"'*  The  same 
power  has  been  exercised  under  the  provisions  of  the  present 
act.^"« 

The  court  of  bankruptcy  has  also  exercised  jurisdiction  to 
enjoin  suits  against  the  bankrupt  instituted  after  the  com- 
mencement of  the  bankruptcy  proceedings."^ 

An  application  to  stay  suits  may  be  made  to  the  state  court 
in  which  the  suit  is  pending,"*  or  to  a  court  of  bankruptcy. 
The  provisions  of  the  bankruptcy  act  relating  to  staying  suits 
is  binding  upon  the  state  courts  and  is  applied  and  enforced 
by  them  quite  as  much  as  by  the  bankruptcy  courts."® 

The  application  to  the  state  court  is  usually  made  by  petition 
or  motion  supported  by  a  certified  copy  of  the  petition  in  bank- 
ruptcy. Where  the  adjudication  has  been  made  before  the  ap- 
plication in  state  court  a  certified  copy  of  the  order  should  also 
be  filed  in  the  state  court.  A  copy  of  this  petition  or  motion 
and  exhibits  should  be  served  on  the  plaintiff  and  brought  to 
the  notice  of  the  state  court.^"     If  a  proper  case  is  made  the 


'"♦Act  of  March  2,  1867;  14  Stat 
at  L.  536;  R.  S.  Sec.  5024. 

i""  Chapman  v.  Brewer,  114  U.  S. 
158;  In  re  Mallory.  No.  8991  Fed. 
Cas..  s.  c.  I  Saw.  88,  6  N.  B.  N. 
22;  Markson  v.  Heaney,  No.  9098 
Fed.  Cas.,  s.  c.  i  Dill.  497,  4  N.  B. 
N.  510;  Irving  v.  Hughes,  No.  7076 
Fed.  Cas.,  s.  c.  2  N.  B.  N.  61  ;  Jones 
V.  Leach,  No.  7475  Fed.  Cas.,  s.  c. 
1  N.  B.  N.  595;  In  re  Wallace,  No. 
1 7094  Fed.  Cas.,  s.  c.  Deady  433 ,  2 
N.  B.  N.  134. 

^"^ /«  re  Gntman,  114  Fed.  Rep. 
irKX;.  8  Am.  B.  R.  232;  Lea  v.  West 
(  ",  91  Fed.  Rep.  237,  i  Am.  B.  R, 
y>i,  s.  c.  174  U.  S.  590;  In  re  Cut- 
v.illig  (C.  C.  .^.  2d  Cir.),  92  Fed. 
f<pp-  .3.37.  I  Am.  B.  R.  388,  affirm- 
nig  90  Fed.  Rep.  475;  In  re  Knight, 
125  Fed.  Rep.  35;  In  re  Emslie  (C. 
("  A.  2d  Cir.),  102  Fed.  Rep.  291, 
4  Am.  B.  R.  126. 

'"  In  re  Basch,  97  Fed.  Rep.  761  . 
3  Am.   B.   R.  235;   In  re  Chambers, 


Calder  &  Co.,  98  Fed.  Rep.  865.  3 
Am.  B.  R.  537;  In  re  Kleinhans, 
113  Fed.  Rep.  107,  7  Am.  B.  R. 
604. 

See  also  White  v.  Schloerb,  178 
U.  S.  542. 

'"^  As  was  done  in  Continental 
Nat.  Bk.  V.  Katz  (Supr.  Ct.  Cook 
County,  111.),  I  Am.  B.  R.  19:  Rcid 
V.  Cross  (Supr.  Ct.  Cook  Co..  III.). 
I  Am.  B.  R.  34;  Victor  v.  Lewis 
(N.  Y.  Supr.  Ct.  App.  Div.),  i  Am. 
B.  R.  667 :  Reed  v.  Equitable  Trust 
(Supr.  Ct.  Ga.),  8  Am.  B.  R.  242. 

10!'  In  re  Geister,  97  Fed.  Rep. 
322,  3  Am.  B.  R.  228;  Carter  v. 
People's  Nat.  Bank,  35  S.  E.  Rep. 
61,  4  Am.  B.  R.  211  (note)  ;  Reed 
V.  Equitable  Trust  (Sup.  Ct.  Ga.), 
8  Am.  B.  R.  242;  Delavergue  v. 
Farrand,  i  Mich.  (N.  P.)  90:  Car- 
penter Bros.  V.  O'Connor,  16  O.  C. 
C    526. 

no/„  ye  Geister,  97  Fed.  Rep.  322, 
3  Am.   B.   R.  228,  the  court  said: 


90  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

State  court  will  order  i)rocee(ling-s  stayed  in  accordance  with 
Sec.  I  la  of  the  bankrui)tcy  act,  that  is,  until  after  an  adjudi- 
cation or  the  dismissal  of  the  petition.  If  the  debtor  has  been 
adjudg^ed  a  bankrupt,  the  stay  may  be  until  twelve  months 
after  the  date  of  such  adjudication,  or  if  within  that  time  such 
person  applies  for  a  discharge,  then  until  the  question  of  such 
discharge  is  determined.  If  the  discharge  has  been  granted 
it  should  be  pleaded  in  the  state  court  in  bar  of  the  suit  instead 
of  making  an  application  to  stay  the  suit. 

The  application  to  stay  suits  in  a  state  court  may  be  made 
in  the  court  of  bankruptcy  administering  the  estate.  The 
'  application  for  an  injunction  should  be  filed  in  the  clerk's  office 
and  not  in  that  of  the  referee."^  The  application  is  regularly 
made  by  the  bankrupt,  the  petitioning  creditors  or  the  trustee, 
if  one  has  been  appointed.  It  is  made  by  petition  or  motion 
supported  by  affidavits.  The  affidavit  may  be  sworn  to  by  the 
attorney  of  the  creditors,  when  they  live  at  a  distance  and  his 
authority  to  make  the  application  will  be  presumed."^  The 
petition  should  state  the  suit,  the  court  in  which  it  is  pending, 
the  cause  of  action,  and  show  that  it  is  founded  upon  a  debt 
provable  in  bankruptcy  and  that  the  suit  is  one  that  may  be 
properly  stayed."^  The  petition  should  also  state  the  names 
of  the  persons  to  be  enjoined.  If  such  persons  are  n5t  already 
before  the  court  they  must  be  brought  in  by  subpoena."*     The 

"The  bankrupt  who  is  the  de-  692,  9  Am.  B.  R.  156;  In  re  Klein, 
fendant  in  the  state  court  should  file  97  Fed.  Rep.  31 ,  3  Am.  B.  R.  174; 
in  that  court  a  proper  pleading  set-  In  re  Gerdes,  102  Fed.  Rep.  318,  4 
ting  forth  the  pendency  of  the  pro-  Am.  B.  R.  346;  In  re  Emslie  (C. 
ceedings  in  bankruptcy,  and,  based  C.  A.  2d.  Cir.),  102  Fed.  Rep.  291  , 
thereon,  should  ask  a  stay  as  pro-  4  Am.  B.  R.  126;  Bear  v.  Chase 
vided  for  in  Sec.  ii;  and,  upon  (C.  C.  A.  4th  Cir.),  99  Fed.  Rep. 
being  thus  informed  of  the  pend-  920,  3  Am.  B.  R.  746. 
ency  of  the  proceedings  in  bank-  ^^*  See  Bryan  v.  Bernheimer,  181 
ruptcy,  it  will  become  the  duty  of  U.  S.  188 ,  5  Am.  B.  R.  623. 
the  state  court  to  grant  the  stay  Sec.  2,  clause  6,  of  the  act  author- 
prayed  for."  izes    the    court    of   bankruptcy    "to 

^1^  In   re   Gerdes,    102   Fed.    Rep.  bring  and  substitute  additional  per- 

318.  4  Am.  B.  R.  346.  sons    or    parties    in   proceedings    in 

112 /„  Yg  Goldberg,  117  Fed.  Rep.  bankruptcy   when   necessary   in   the 

692,  9  Am.  B.  R.  156.  complete  determination  of  the  mat- 

!"/„  re  Goldberg,   117  Fed.  Rep.  ter  in  controversy." 


i 


JURISDICTION    OF    COURTS    OF    BANKRUPTCY.  01 

authority  of  a  court  of  bankruptcy  to  enjoin  proceedings  in  a 
state  court  should  be  exercised  through  persons  subject  to  the 
jurisdiction  of  the  bankruptcy  court  and  the  writ  of  injunction 
directed  to  them  and  not  to  the  state  court.^^^ 

The  proceedings  upon  such  an  apphcation  may  be  ex  parte 
and  stay  may  be  granted  before  the  subpoena  is  served  upon  the 
bankrupt.  The  injunction  and  the  subpoena  to  new  parties 
may  be  served  at  the  same  time.^^® 

The  application  for  a  stay  of  proceedings  must  be  heard  and 
decided  by  the  judge  and  not  by  the  referee."^  The  judge 
may  refer  such  an  application  or  any  specific  issue  arising 
thereon  to  the  referee  to  ascertain  and  report  the  facts/"  but 
the  judge  must  make  the  order  granting  or  refusing  the  in- 
junction. 

The  court  of  bankruptcy  has  exclusive  power  to  determine 
whether  the  suit  pending  in  the  state  court  is  one  founded  upon 
a  provable  claim  and  whether  it  should  be  stayed  or  not."" 
Whether  the  court  will  exercise  this  extraordinary  power  rests 
in  the  sound  discretion  of  the  judge."**  This  discretion  can 
be  reviewed  by  a  circuit  court  of  appeals  on  petition  for  re- 


"^Ej-  parte  Christy,  3  How.  292;  ferred    creditors    from    taking    any 

Sameon  v.   Burton,   No.   12285   Fed.  further    proceedings     in     the     state 

Cas.,  s.  c.  5  Ben.  343.  court.     The  injunction  and  subpcena 

""  In  Stengel  v.  The  Leidigh  Car-  were  served  at  the  same  time. 

riage  Co.,  in  the  district  court  for  ^^^  Gen.  Ord.  12,  par.  3. 

the  southern  district  of  Ohio    (not  ^i**  Wagner  v.  U.  S.  (C.  C.  A.  6th 

reported),  the  Leidigh  Carriage  Co.  Cir.),  104  Fed.  Rep.  133,  4  Am.  B. 

of  Dayton,  on  July   13,   1898,  made  R.  596. 

an  assignment  with  preferences  in  ^'"/ji  re  Knight,  125  Fed.  Rep. 
the  form  of  confessed  judgments  35,  39,  Judge  Evans  said: 
to  the  amount  of  something  like  "  Doubtless  the  court,  while  it 
$50,000.  Attachments  were  issued  may,  under  Sec.  Ii  of  the  statute, 
and  levies  made  under  these  judg-  stay  proceedings  in  actions  in  a 
ments  prior  to  the  assignment,  and  state  court  in  certain  cases,  can  de- 
some  or  all  of  the  property  had  cline  to  exercise  its  jurisdiction  and 
been  sold,  but  the  funds  arising  power  in  that  respect.  But  this  de- 
tberefrom  had  not  been  distributed.  pcnds  entirely  upon  its  own  discre- 
Upon  an  application  for  an  injunc-  tion  —  a  discretion  which  cannot  be 
tion  Judge  Thompson  enjoined  the  controlled  otherwise  than  by  appcl- 
assignee,    the    sheriff   and    the    pre-  late  proceedings  in  a  higher  court. 


S 


92 


LAW    AND    TROCEEDINC.S    IN    RANKRUPTCY. 


view.'"''  but  will  iu)t  ho  interfered  with  by  the  appellate  court 
unless  it  apj)ears  that  it  has  been  abused. 

A  stay  will  be  granted  only  when  some  benefit  to  the  bank- 
rupt's estate  will  be  derived  thereby.  Thus  a  suit  to  foreclose 
a  nmrtgage  or  other  lien  may  be  stayed  when  the  property  is 
likely  to  be  sold  for  more  than  the  amount  of  the  lien  debt/'"^ 
but  not  when  it  is  insufficient  to  pay  it.^"" 

The  courts  of  bankruptcy  have  granted  injunctions  to  stay 
proceedings  in  the  state  courts  in  the  following  cases:  attach- 
ment suits/"^  an  action  upon  an  unliquidated  claim  which 
might  be  liquidated  and  proved  in  bankruptcy,^'"*  a  suit  to 
enforce  a  mechanic's  lien/"^  or  a  suit  to  foreclose  a  mortgage/^*' 
a  sheriff  from  paying  money  collected  upon  execution  to  the 
judgment  creditor/"^  a  trust  company  from  paying  proceeds 


This  discretion  has  been  exercised 
by  this  court  in  several  instances  — 
among  them,  in  the  case  of  Hol- 
loway,  93  Fed.  Rep.  639,  and  in  the 
case  of  Porter,  109  Fed.  Rep.  iii. 
Doing  this  did  not  depend  upon  any 
want  of  power  in  such  cases,  but 
because  it  was  discreet  not  to  exer- 
cise the  power,  inasmuch  as  no  ben- 
efit could  come  to  the  general  cred- 
itors by  staying  a  suit  in  the  state 
court,  the  entire  avails  of  which 
must  go  to  the  plaintiff  in  the  action 
there  pending." 

^-°  As  was  done  in  Bear  v.  Chase 
(C.  C.  A.  4th  Cir.),  99  Fed.  Rep. 
920 ,  3  Am.  B.  R.  746 ;  In  re  Kenney 
(C.  C.  A.  2d  Cir.),  105  Fed.  Rep. 
897;  White  V.  Thompson  (C.  C.  A. 
5th  Cir.),  119  Fed.  Rep.  868. 

i-'i/h  re  Ball,  118  Fed.  Rep.  672; 
III  re  Booth,  96  Fed.  Rep.  943 ,  2 
Am.  B.  R.  770 ;  In  re  San  Gabriel 
Sanatorium  Co.  (C.  C.  A.  9th  Cir.), 
102  Fed.  Rep.  310,  4  Am.  B.  R. 
197 ;  In  re  Pittlekow,  92  Fed.  Rep. 
901  ,  I  Am.  B.  R.  472 ;  In  re  Na- 
than, 92  Fed.  Rep.  590. 

122  Heath  v.  Shaffer,  93  Fed.  Rep. 
647 ,  2  Am.  B.  R.  98 ;  In  re  Hollo- 
way,  93  Fed.  Rep.  638,  i  Am.  B.  R. 


659;  In  re  Porter,  109  Fed.  Rep. 
Ill,  6  Am.  B.  R.  259;  In  re  Ger- 
des,  102  Fed.  Rep.  318,  4  Am.  B. 
R.  346. 

123  Bear  v.  Chase  (C.  C.  A.  4th 
Cir.),  99  Fed.  Rep.  920,  3  Am.  B. 
R.  746;  In  re  Goldberg,  117  Fed. 
Rep.  692 ,  9  Am.  B.  R.  156. 

124  In  re  Hilton,  4  Am.  B.  R.  774. 
125 /„    re    Emslie    (C.    C.    A.    2d 

Cir.),  102  Fed.  Rep.  291,  4  Am.  B. 
R.  126. 

126 /m  re  Ball,  118  Fed.  Rep.  672; 
In  re  Booth,  96  Fed.  Rep.  943 ,  2 
Am.  B.  R.  770;  In  re  San  Gabriel 
Sanatorium  Co.  (C.  C.  A.  9th  Cir.), 
102  Fed.  Rep.  310,  4  Am.  B.  R. 
197 ;  In  re  Pittlekow,  92  Fed.  Rep. 
901 ,  I  Am.  B.  R.  472 ;  In  re  Nathan, 
92  Fed.  Rep.  590. 

But  see  Heath  v.  Shaffer,  93  Fed. 
Rep.  647,  2  Am.  B.  R.  98;  In  re 
Holloway,  93  Fed.  Rep.  638,  i  Am. 
B.  R.  659;  In  re  Porter,  109  Fed. 
Rep.  111,6  Am.  B.  R.  259 ;  In  re 
Gerdes,  102  Fed.  Rep.  318,  4  Am. 
B.  R.  346. 

127  In  re  Kenney,  95  Fed.  Rep. 
427 ,  s.  c.  Clarke  v.  Larremore,  188 
U.  S.  486,  9  Am.  B.  R.  476. 


JURISDICTION    OF    COURTS    OF    BANKRUPTCY. 


93 


of  a  sale  deposited  with  it  to  abide  a  final  judgment  in  a  state 
court/-^  an  action  by  a  plaintiff  against  his  bankrupt  vendee/-" 
to  prevent  arrest  and  imprisonment  upon  an  execution  issued 
from  a  state  court/^"  an  action  of  ejectment  by  a  landlord/''^ 
a  bank  from  endorsing  a  promissory  note  given  by  a  debtor  of 
the  bankrupt,""  to  prevent  a  transfer  of  property  mortgaged 
by  the  mortgagee/'"  a  proceeding  in  the  state  court  which 
would  defeat  the  provisions  of  a  bankrupt  act  or  interfere  with 
the  administration  of  the  estate  of  the  debtor,"*  and  proceed- 
ings under  a  general  assignment  for  the  benefit  of  creditors/'" 
The  courts  of  bankruptcy  have  refused  to  stay  suits  in  the 
following  cases :  a  suit  founded  upon  a  claim  from  which  a 
discharge  would  not  be  a  release,"**  as  a  suit  to  enforce  ali- 
mony/'*" or  an  action  founded  in  fraud,"^  or  controversies  re- 
lating to  exempt  property,""  or  an  execution  on  judgment  in  a 
suit  upon  a  bail  bond,""  a  creditors'  bill  or  other  suit  to  enforce 
a  valid  lien  or  attachment  begun  more  than  four  months  prior 


^2«  hi  re  Riker,  5  Am.  B.   R.  720. 

^-*/m  re  Butts,  120  Fed.  Rep. 
966. 

^■■'"  Knott  V.  Putnam,  107  Fed. 
Rep.  907,  6  Am.  B.  R.  80. 

^•''^  In  re  Chambers,  Calder  &  Co., 
98  Fed.  Rep.  865 ,  3  Am.  B.  R.  537. 

^^'- In  re  Jackson,  94  Fed.  Rep. 
797,  2  Am.  B.  R.  501. 

^^^  In  re  Nathan,  92  Fed.  Rep. 
590. 

^^*  In  re  Hornstcin,  122  Fed.  Rep. 
266;  In  re  Knight,  125  Fed.  Rep.  35 ; 
In  re  Gutman,  114  Fed.  Rep.  1009, 
8  Am.  B.  R.  252;  In  re  Russell  (C. 
C.  A.  2d  Cir.),  loi  Fed.  Rep.  248, 
3  Am.  B.  R  658. 

See  also  White  v.  Schloerb,  178 
U.  S.  542. 

135 /„  ^^  Krinsky,  112  Fed.  Rep. 
972,  7  Am.  B.  R.  535 ;  In  re  Knight, 
125  Fed.  Rep.  35 ;  In  re  Gutwillig, 
90  Fed.  Rep.  481  (C.  C.  A.  2d  Cir.), 
92  Fed.  Rep.  zij .  i  Am.  B.  R.  388 ; 


Lea  V.  West  Co.,  91  Fed.  Rep.  237 , 
I  Am.  B.  R.  261,  s.  c.  174  U.  S. 
590. 

Consult  Randolph  v.  Scruggs,  190 
U.  S.  533 ,  ID  Am.  B.  R.  I. 

130  White  V.  Thompson  (C.  C.  A. 
5th  Cir.),  119  Fed.  Rep.  868;  Con- 
tinental Nat.  Bank  v.  Katz  ( Supr. 
Ct.  Cook  Co.,  111.),  I  Am.  B.  R.  19; 
/;•  re  Cole,  106  Fed.  Rep.  837 ;  In  re 
Shepard,  97  Fed.  Rep.  187. 

^^^  In  re  Shepard,  97  Fed.  Rep. 
187. 

See  also  Audubon  v.  Shufeldt, 
181  U.  S.  575;  Dunbar  v.  Dunbar, 
190  U.  S.  340. 

138  /„  re  Cole,  106  Fed.  Rep.  837. 

i"*"  White  V.  Thompson  (C.  C.  A. 
5th  Cir.),  119  Fed.  Rep.  868. 

See  also  Lockwood  v.  Exch.  Bk., 
190  U.  S.  294. 

140 /„  ,.(,  Franklin,  106  Fed.  Roi). 
666;  Jacquith  v.  Rowley,  188  U.  S. 
620,  9  Am.  B.  R.  525. 


94  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

to  the  commencement  of  bankruptcy  proceedings,"^  a  replevin 
action  where  the  property  is  in  the  possession  of  the  state 
court,""  or  generally  where  the  property  in  controversy  is  law- 
fully in  the  possession  of  the  state  court  having  jurisdiction-  to 
administer  the  same,"^  an  action  against  a  marshal  individually 
for  trespass,"*  an  action  to  foreclose  a  lien  and  for  personal 
judgment,"^  an  action  to  enjoin  third  parties  from  disposing 
of  property  which  the  court  of  bankruptcy  cannot  order  paid 
to  a  trustee,^*®  to  enjoin  creditors  from  prosecuting  their  claims 
against  a  corporation  to  judgment  for  the  purpose  of  fixing 
the  statutory  liability  of  its  officers  and  stockholders."^  But 
the  execution  of  such  judgment  against  the  bankrupt  corpora- 
tion will  be  enjoined."^ 

The  language  of  the  injunction  should  be  in  accordance  with 
the  statute.  If  the  application  is  made  before  an  adjudica- 
tion the  stay  should  be  until  after  the  adjudication  or  dismissal 
of  the  petition.""*  If  the  debtor  has  been  adjudged  a  bankrupt 
the  suit  may  be  stayed  until  twelve  months  after  the  date  of 
such  adjudication,  and  if  within  that  time  such  perscn  applies 
for  a  discharge,  then  until  the  question  of  such  discharge  is 
determined."''  No  injunction  should  be  granted  to  stay  a  suit 
after  the  discharge  is  granted.""     If  an  injunction  had  been 


141  Metcalf  V.  Barker,   187  U.   S.  "^'  In   re   Greater   American    Ex- 

165,  reversing  In  re  Lesser,  100  Fed.  position,  102  Fed.  Rep.  986 ,  4  Am. 

Rep.  433,  3  Am.  B.  R.  815,  In  re  B.  R.  486;  Reed  v.  Equitable  Trust 

Beaver  Coal  Co.  (C.  C.  A.  9th  Cir.),  (Sup.  Ct.  Ga.),  8  Am.  B.  R.  242. 

113  Fed.  Rep.  889,  7  Am.  B.  R.  542;  i*** /w    re    Ward,    104    Fed.    Rep. 

/m  rr  Sncll,  125  Fed.  Rep.  154;  Reed  985,     5    Am.     B.     R.    215;    In    re 

V.  Equitable  Trust   (Sup.  Ct.  Ga.),  Browne,  104  Fed.  Rep.  762,  5  Am. 

8  Am.  B.  R.  242;  Keegan  v.  King,  B.  R.  220. 

96  Fed.  Rep.  758,  3  Am.  B.  R.  79.  But  see  In  re  Smith,  8  Am.    B. 

"2/„    re    Wells,    114    Fed.    Rep.  R.  55. 

222,  8  Am.  B.  R.  75.  1*^ /m  re  Remington  Auto.  &  Mo- 

143  Pickens  V.  Roy,  187  U.  S.  177,  tor  Co.,   119  Fed.  Rep.  441;  In   re 

9  Am.  B.  R.  47;  Frazier  V.  Southern  Marshal]  Paper  Co.  (C.  C.  A.  ist 
Loan  &  Trust  Co.  (C.  C.  A.  4th  Cir.),  102  Fed.  Rep.  872,  4  Am.  B. 
Cir.),  99   Fed.   Rep.  707.     See  also  R.  468. 

Sec.  23, /-oj/.  i4>*B.   A.    1898,   Sec.    no. 

14*  McLean  v.  Mayo,  7  Am.  B.  R.  i*"  B.   A.    1898,   Sec.    no. 

115.  ""B.   A.    1898,   Sec.   no. 


JURISDICTION    OF    COURTS    OF    BANKRUPTCY.  95 

granted  prior  to  the  discharge  it  should  be  dissolved  when  the 
discharge  is  granted/^^ 

When  an  injunction  is  issued  it  should  be  served  upon  the 
parties  personally,  but  it  is  not  necessary  where  the  parties 
have  actual  notice  of  its  issuance. ^^- 

Staying  a  suit  in  a  state  court  is  not  a  dismissal.  It  does 
not  defeat  the  cause  of  action,  provided  no  discharge  is  granted. 
It  merely  susj>ends  proceedings  in  the  state  court  so  long  as 
the  injunction  is  in  force.  Future  action  in  the  state  court 
depends  upon  the  action  of  the  court  of  bankruptcy.  If  a 
discharge  is  refused  tiie  injunction  is  dissolved.  If  the  dis- 
charge is  granted  the  bankrupt  may  plead  it  in  the  suit.^^^ 

When  the  suit  is  pending  in  another  district  from  that  in 
which  the  original  case  is  pending,  it  would  seem  that  the 
court  of  bankruptcy  for  such  district  might  issue  the  injunc- 
tion in  the  exercise  of  ancillary  jurisdiction.^''* 

If  no  steps  are  taken  to  stay  proceedings  in  a  state  court,  or 
a  stay  is  refused,  such  proceedings,  after  the  adjudication  in 
bankruptcy  are  valid  and  binding. ^^^  The  fact  that  the  plain- 
tiff in  the  state  court  proves  his  claim  in  bankruptcy  does  not 
operate  to  deprive  the  state  courts  of  jurisdiction,  nor  amount 
to  a  consent  to  the  exercise  of  exclusive  jurisdiction  by  the 
court  of  bankruptcy.^^"  If  a  case  is  not  stayed  the  trustee  may 
apply  to  the  court  of  bankruptcy  for  leave  to  prosecute  and 
defend  such  pending  suits. ^^^ 

Any  party  in  interest  may  move  to  dissolve  the  injunction. ^^* 

^"1 /rt  re  Flanders,  121  Fed.  Rep.  Lathrop    v.    Dralae,    91    U.    S.    516. 

936;  In  re  Rosenthal,  108  Fed.  Rep.  See   Ancillary  Jurisdiction,  Sec.  21. 

368,  5  Am.  B.  R.  799;  In  re  Herz-  Contra,     In     re     Richardson,     No. 

berg,  25  Fed.  Rep.  690.  ii774  Fed.  Cas.,  s.  c.  2  Ben.  517;  In 

162  jf^  re  Krinsky.   112  Fed.  Rep.  re  Williams,  120  Fed.  Rep.  38. 

972,  7  Am.  B.  R.  535.  ifi'' Boynton    v.    Ball,    121    U.    S. 

"3/m   re   Wesson,   88    Fed.    Rep.  466-7;    Pickens   v.    Roy,    187   U.   S. 

855;    In    re    Rosenljerg,    No.    12054  ^77 '<   Metcalf  v.   Barker,   187  U.  S. 

Fed.    Cas.,   s.  c.   3   Ben.    14;   In  re  165;   In   re   Gerdes,    102   Fed.    Rep. 

Thomas,  No.  13890  Fed.  Cas.,  s.  c.  318,    4    Am.    B.    R.    346;    Reed    v. 

3    N.    B.    N.    38;    Banque- Franco-  Equitable   Trust    (Sup.    Ct.   Ga.),  8 

Egyptienne  v.  Brown,  24  Fed.  Rep.  Am.  B.  R.  242. 

106;.  Ruiz  V.  Eicherman,  5  Fed.  Rep.  i""'"  Pickens  v.  Roy,  187  U.  S.  177. 

790.  1"  B.  A.  1898,  Sec.  lift  and  c. 

"♦Sherman      v.      Bingham.      No.  "'''* /h  re  Rosenthal,  108  Fed.  Rep. 

12762  Fed.   Cas..  s.  c.  3  Cliff.  552;  ./)8,  5  Am.  B.  R.  799. 


96  LAW    AND    TROCEliDINCS    IN     HANKRUPTCY. 

If  the  stay  of  proceedings  was  improperly  granted  the  court  of 
bankruptcy  may  set  aside  the  order  upon  motion  seasonably 
tiled  for  that  purpose.^'""  A  restraining  order  is  binding  and 
conclusive  upon  all  parties  until  it  is  set  aside/"** 

§  23.     Power  to  obtain  possession  of  property  —  In  custodia 
legis. 

Where  property,  claimed  to  belong  to  the  estate  of  the 
bankrupt,  is  voluntarily  surrendered  to  the  trustee  in  bank- 
ruptcy there  can  be  no  controversy. 

Where  the  property  is  in  the  possession  of  the  bankrupt  or 
his  agent,  at  the  time  the  petition  in  bankruptcy  was  filed,  the 
court  of  bankruptcy  in  which  the  case  is  pending  may  sum- 
marily order  him  to  deliver  to  the  trustee  such  property  and 
commit  him  for  contempt  if  he  fails  to  do  so.^"^ 

Where  property,  claimed  to  belong  to  the  bankrupt,  is  in 
the  possession  of  a  third  party  at  the  time  of  filing  the  petition 
in  bankruptcy,  who  claims  title  to  it  as  against  the  trustee,  the 
court  of  bankruptcy  cannot  summarily  order  such  property 
delivered  to  the  trustee.  A  plenary  suit  at  law  or  in  equity 
must  be  brought  to  recover  it  either  in  a  court  of  bankruptcy 
or  a  state  court.     This  subject  has  been  considered  elsewhere.^®^ 

Where  property  is  in  the  actual  and  lawful  possession  of  a 
state  court  or  an  officer  thereof  and  such  court  has  jurisdiction 
to  administer  such  property,  its  possession  will  not  ordinarily 
be  disturbed  by  process  issued  by  a  court  of  bankruptcy.^"^ 
Thus  where  the  possession  of  a  state  court  is  acquired  by  a 
judgment  creditor's  suit  begun  more  than  four  months  prior 
to  bankruptcy,^***  or  where  a  receiver  has  taken  possession  of 

150 /„  ,.(.  Snell,  125  Fed.  Rep.  154.  i"- Sec.  20,  ante. 

160  Wagner  v.  U.  S.  (C.  C.  A.  6th  i«-'  Pickens  v.  Roy,  187  U.  S.  177. 
Cir.),  104  Fed.  Rep.  133,  4  Am.  B.  9  Am.  B.  R.  47;  Metcalf  v.  Barker, 
R.  596.  187  U.  S.  165 ,  9  Am.  B.  R.  36;  Fra- 

161  Mueller  v.  Nugent,  184  U.  S.  zier  v.  Southern  L.  &  T.  Co.  (C.  C. 
1 ,  5  Am.  B.  R.  176;  In  re  Rosser,  A.  4th  Cir.),  99  Fed.  Rep.  707;  In  re 
(C.  C.  A.  8th  Cir.),  loi  Fed.  Rep.  Price,  92  Fed.  Rep.  987,  i  Am.  B. 
562,  4  Am.  B.  R.  153;  In  re  Wilson,  R.  606. 

116  Fed.  Rep.  419,  8  Am.  B.  R.  612,  i«*  Metcalf  v.   Barker,   187  U.   S. 

Ir.  re  Moore,  104  Fed.  Rep.  869,  5  165,   9   Am.    B.    R.   36;    Pickens   v. 

Am.   B.   R.   151;  In  re  Stokes,  106  Roy,  187  U.   S.   177,  9  Am.   B.  R. 

Fed.  Rep.  312.  47 ;  Frazier  v.  Southern  L.  &  T.  Co. 


JURISDICTION    OF    COURTS    OF    BANKRUPTCY. 


97 


property  under  an  order  of  a  state  court/^'^  or  where  property 
is  in  the  possession  of  administrators  and  executors/'^"'  or 
sheriffs  and  marshals/'*'  a  court  of  bankruptcy  will  not  ordi- 
narily disturb  such  possession.  The  general  rule  of  comity  in 
this  respect  is  recognized  and  applied  by  the  courts  of  bank- 
ruptcy and  the  state  courts  so  far  as  their  jurisdiction  is  con- 
current."* 

But  where  the  possession  of  the  state  court  would  have  the 
effect  of  defeating  the  operation  of  the  bankruptcy  law,  the 
courts  of  bankruptcy  may  sieze  such  property  for  the  purpose 
of  administering  it  in  accordance  with  that  law/^®  The  reason 
for  this  is  that  the  bankruptcy  law  places  the  administration 
of  the  affairs  of  insolvents  exclusively  under  the  jurisdiction 
of  the  bankruptcy  courts.^'"  In  this  respect  the  state  courts 
have  not  concurrent  jurisdiction  with  the  courts  of  bankruptcy 
and  the  general  rule  of  comity  has  no  application.  The  bank- 
ruptcy law  is  paramount  and  should  not  be  defeated  by  pro- 
ceedings in  a  state  court.  A  court  of  bankruptcy  will  not 
interfere  with  property  in  the  possession  of  a  state  court,  ex- 


(C  C.  A.  4th  Cir.),  99  Fed.  Rep. 
;o7. 

i<">/n  re  Price,  92  Fed.  Rep.  987, 
I  Am.  B.  R.  606. 

i««  Byers  v.  McAuley.  149  U.  S. 
O08;  Wickham  v.  Hull,  60  Fed.  Rep. 
326;  In  re  Pierce,  102  Fed.  Rep. 
977 .  4  Am.  B.  R.  489 ;  Moses  v. 
Pond   (N.  Y.  Sup.  Ct.),  4  Am.  B. 

R  655. 

'""  Covell  V.  Heyman,  iii  U.  S. 
176;  Krippendorf  v.  Hyde,  no  U.  S. 
276;  Senior  v.  Pierce,  31  Fed.  Rep. 
625;  Gumble  v.  Pitkin,  124  U.  S. 
131 ;  Freeman  v.  Howe,  24  How. 
450. 

'""See  Metcalf  v.  Barker.  187  U. 
S.  165,  9  Am.  B.  R.  36;  Frazicr  v. 
Southern  Loan  and  Trust  Co.  (C.  C. 
A.  4th  Cir.),  99  Fed.  Rep.  707;  Peck 
V.  Jenness,  7  How.  612. 

Speaking   of   the   general    rule   of 

I  comity  in  this   respect,  in  Compton 

V,  Jessup,  68  Fed.  Rep.  263,  278-*), 


s.  c.  15  C.  C.  A.  397,  412-3,  Judge 
Taft  said : 

"  Necessity  and  comity  both  re- 
quire that  where,  by  its  officers  act- 
ing under  color  of  its  order  or 
process,  a  court  has  taken  into  its 
custody  property  of  any  kind,  an- 
other court,  though  of  equal  and 
co-ordinate  jurisdiction,  should 
not  be  permitted  either  to  oust  the 
possession  of  the  first  court,  or  in 
any  way  to  interfere  with  its  com- 
plete control  and  disposition  of  the 
property  for  the  purpose  of  the 
cause  in  which  its  action  has  been 
invoked.  This  principle  has  been 
laid  down  by  the  supreme  court  of 
the  United  States  in  a  long  line  of 
cases." 

!'''"/»  re  Hf>rnstcin,  122  Fed.  Rep. 
266:  /m  re  Knight,  125  Fed.  Rep.  35; 
]r.  re  Watts  &  Sachs,  190  U.  S.  i. 

1^"  In   re  Watts  &   Sachs,   190  U. 

S       T 


98  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

cept  where  that  possession  was  acquired  in  a  i^roceeding  de- 
clared null  and  void  by  the  Bankrupt  Act.  Thus  an  assignee 
for  the  benefit  of  creditors  in  a  state  court,  where  the  assign- 
ment is  charged  as  an  act  of  bankruptcy  upon  which  an  adjudi- 
cation was  made,  may  be  compelled  to  deliver  property  in  his 
possession  as  such  assignee,  to  the  trustee  in  bankruptcy,^^^ 
or  a  sheriff  of  a  state  court  may  be  compelled  to  pay  to  the 
trustee  money  collected  upon  an  execution  on  a  judgment  void 
under  Sec.  67/,  which  he  has  not  paid  to  the  judgment  cred- 
itor,^^-  but  not  when  the  money  has  been  paid  over  to  the 
judgment  creditor.^"  Where  property  is  in  the  possession  of 
a  receiver  of  a  state  court,  the  appointment  of  which  receiver 
constitutes  an  act  of  bankruptcy  upon  which  an  adjudication 
is  made,  the  receiver  may  be  compelled  to  deliver  assets  of  the 
debtor  in  his  possession  to  a  receiver  or  trustee  in  bankruptcy 
subsequently  appointed."* 

The  court  of  bankruptcy  may  take  possession  of  property 
in  the  possession  of  a  garnishee,  because  a  garnishee  is  not  the 
officer  of  a  court/^^  or  in  the  possession  of  an  officer  of  a  state 


I'^i  Bryan  v.  Bernheimer,  181  U.  rected  the  surrender  of  the  property 
S.  188,  5  Am.  B.  R.  623;  In  re  to  him  (the  receiver  in  bankruptcy) 
Thompson,  122  Fed.  Rep.  174;  Lei-  at  once,  or  at  least  after  the  report 
digh  Carriage  Co.  v.  Stengel  (C.  C.  of  its  own  receiver  after  returning 
A.  6th  Cir.),  95  Fed.  Rep.  637,  2  from  Indianapolis."  And  again  at 
Am.  B.  R.  383;  In  r^' Stokes,  106  p.  35:  "It  has  been  already  as- 
Fed.  Rep.  312;  In  re  Knight,  125  sumed  that  the  bankruptcy  proceed- 
Fed.  Rep.  35.  ings  operated  to  suspend  the  further 
172/^  Yg  Kenney,  95  Fed.  Rep.  administration  of  the  insolvent's' es- 
427,  s.  c.  Clarke  v.  Larremore,  188  tate  in  the  state  court,  but  it  re- 
U.  S.  486,  9  Am.  B.  R.  476.  mained  for  the  state  court  to  trans- 
its jfi  Yg  Blair,  102  Fed.  Rep.  987,  fer  the  assets,  settle  the  accounts  of 
4  Am.  B.  R.  220;  In  re  Knicker-  its  receiver  and  close  its  connection 
booker,  121  Fed.  Rep.  1004.  with  the  matter.  Errors,  if  any, 
See  observation  of  Mr.  Justice  committed  in  so  doing  could  be 
Brewer  in  Clarke  v.  Larremore,  188  rectified  in  due  course  and  in  the 
U.  S.  486,  9  Am.  B.  R.  476.  designated  way." 

"*/n   re   Knight,    125    Fed.    Rep.  1^=^  Chase  v.  Cannon,  47  Fed.  Rep. 

35-  674. 

In  re  Watts  &  Sachs,  190  U.  S.  i.  But  see  Mack  v.  Winslow,  59 Fed. 

the   supreme    court    says   at   p.    28:  Rep.  316;  8  C.  C.  A.  134. 
"The  (state)  court  should  have  di- 


JURISDICTION    OF    COURTS    OF    BANKRUPTCY. 


99 


court  who  seized  the  property  without  legal  process  or  war- 
rant.^'« 

Where  the  property  is  in  the  actual  custody  of  a  state  court 
the  better  practice  is  to  apply  to  the  state  court  to  turn  over  the 
property  to  the  trustee  or  receiver  in  bankruptcy,  even  in  cases 
where  the  court  of  bankruptcy  may  order  such  surrender."^ 
The  court  of  bankruptcy  may  stay  proceedings  to  pennit  an 
application  for  this  purpose  to  the  state  court.     The  appli- 


1^6 /„  fg  Tyler,  104  Fed.  Rep. 
778,  5  Am.  B.  R.  152. 

See  also  Jervey  v.  The  Carolina, 
66  Fed.  Rep.  1013. 

As  to  the  effect  of  collusive  pro- 
ceedings to  get  property  out  of  the 
custody  of  a  court,  see  Daniel  v.  La- 
zarus, 65  Fed.  Rep.  718;  Gumble  v. 
Pitkin,  124  U.  S.  131. 

1"'  In  re  Watts  &  Sachs,  190  U.  S. 
i;  Wilson  v.  Parr  (Sup.  Ct.  Ga.), 
8  Am.  B.  R.  230. 

In  re  Knight,  125  Fed.  Rep.  35, 
Judge  Evans  said :  "  It  seems  so 
clear,  from  the  bankruptcy  law,  as 
construed  by  the  highest  courts,  that 
the  rights  of  the  receiver,  acquired 
under  the  circumstances  shown  by 
the  testimony,  are  subordinate  to 
those  of  the  trustee  and  to  those  of 
the  bankruptcy  court,  that  it  is  not 
doubted  that  the  Fulton  circuit 
court  will  acquiesce  in  that  view, 
and,  upon  proper  application  made 
to  it,  will  order  the  receiver  to  turn 
over  to  the  trustee  the  property  in 
his  hands.  To  the  end  that  an  ap- 
plication for  that  purpose  may  be 
made,  further  prf)cccdings  upon  the 
rule  will  for  the  present  be  held  in 
abeyance.  It  would  not  only  be  un- 
seemly, but  altogether  disagreeable 
to  this  court,  to  pursue  any  course 
which  would  be  wanting  in  the  ut- 
most respect  and  courtesy  to  the 
state  tribunal,  and  orders  will  be 
made  directing  the  trustee  to  apply 
to  that  court   for  leave   to  enter  a 


special  appearance  in  the  case  there 
pending,  styled  "  First  National 
Bank  of  Fulton  v.  Henry  Knight 
and  others,"  for  the  purpose  of  filing 
a  copy  of  this  opinion,  the  orders 
made  in  pursuance  thereof,  a  copy 
of  the  adjudication  in  bankruptcy, 
and  an  accompanying  application  for 
an  order  of  that  court  directing  its 
receiver  to  turn  over  to  the  trustee 
in  bankruptcy  the  property  of  the 
bankrupt  held  by  the  receiver.  For 
the  purpose  of  giving  ample  oppor- 
tunity for  doing  this,  the  rule  will 
be  respited  until  the  12th  day  of 
October,  1903,  at  which  time  the 
trustee  will  report  what  has  been 
done  in  the  premises." 

(The  state  court  took  the  same 
view  of  the  law,  and  on  October  ist 
ordered  its  receiver  to  turn  over  to 
the  trustee  in  bankruptcy  all  the 
property  in  his  hands.) 

In  Carpenter  Bros.  v.  O'Connor, 
16  O.  C.  C.  526,  an  application  was 
made  to  the  state  court  for  an  order 
directing  a  receiver  appointed  by 
that  court  after  an  adjudication  in 
a  court  of  bankruptcy,  to  deliver 
property  of  the  bankrupt  in  his  pos- 
session to  a  trustee,  subsequently 
appointed  by  the  creditors  in  the 
proceeding  in  bankruptcy,  on  the 
ground  that  the  trustee's  title  vested 
as  of  the  date  of  adjudication  and 
prior  to  the  property  coming  into 
the  possession  of  the  receiver.  The 
application  was  granted. 


lOO  LAW    AND    PROCEKDINC.S    IN     HANKRUTTCY. 

cation  to  the  state  court  is  reg-iilarly  made  by  petition  or  mo- 
tion supported  by  affidavits.  A  certified  copy  of  the  petition 
in  bankruptcy  and  order  of  adjudication,  if'one  has  been  made, 
should  be  exhibited  to  the  state  court.  In  practice  the  state 
courts  have  reo-idarly  passed  an  order  to  turn  over  the  property 
to  the  bankruptcy  court  to  be  administered  witliout  the  neces- 
sity of  issuing  process  from  the  baiikruptcy  court. 

In  order  to  place  property  in  the  custody  of  a  state  court 
there  must  be  a  seizure  under  process  of  the  court  or  some  act 
equivalent  thereto  to  obtain  actual  possession.  Filing  a  judg- 
ment creditor's  bill  and  service  of  process  is  an  equitable 
attachment, ^^*  but  the  mere  beginning  of  an  action  does  not 
ordinarily  bring  the  assets  of  the  debtor  into  the  custody  of  a 
state  court.  This  has  been  held  true  of  a  suit  to  foreclose  a 
mortgage."® 

Where  the  property  has  come  into  the  judicial  custody  of  a 
court  of  bankruptcy,  or  an  officer  thereof,  as  referee,  trustee  or 
receiver,  the  state  court  has  no  power  upon  its  process  to  take 
such  property  out  of  the  judicial  custody  of  the  court  of  bank- 
ruptcy.^^" This  includes  the  property  of  third  parties  claiming 
a  title  adverse  to  the  bankrupt  or  trustee,  where  the  officer  of 
the  court  of  bankruptcy  has  acquired  peaceable  possession  of 
the  property.^^^ 

The  filing  of  a  petition  in  bankruptcy  is  a  caveat  to  all  the 
world  and  in  effect  an  attachment  and  in j unction. ^^^  The 
effect  of  filing  such  a  petition  is  to  place  the  property  of  the 

"SMetcalf  v.    Barker,  187  U.  S.  (C.  C.  A.  2d  Cir.),   102  Fed.   Rep. 

165,  9  Am.  B.  R.  36.  291,  4  Am.  B.  R.  126,  2  N.  B.  N. 

i'^"  Carpenter   Bros.  v.   O'Connor,  992 ,    In   re   Neely,    108    Fed.    Rep. 

16  O.  C.  C.  526.  371  .  5  Am.  B.  R.  836 ;  In  re  Kel- 

180  White  V.  Schloerb,  178  U.   S.  logg,  121  Fed.  Rep.  32,3- 

542,  4  Am.  B.  R.  178,  2  N.  B.  N.  ^""^  In  re   Rodgers    (C.  C.  A.  7th 

721,  Keegan  v.  King,  96  Fed.  Rep.  Cir.),  125  Fed.  Rep.  169;  Haven  & 

758,  3  Am.  B.  R.  79;  In  re  Russell,  Geddes  Co.  v.  Pierek  (C.  C.  A.  7th 

(C.  C.  A.  2d  Cir.),   loi   Fed.  Rep.  Cir.),    120    Fed.    Rep.   244;    Antigo 

248 ,  3  Am.  B.  R.  658 ;  /n  r£?  Cham-  Screen    Door    Co.,    123    Fed.    Rep. 

bers,    Calder   &   Co.,   98    Fed.    Rep.  249. 

865,  3  Am.  B.  R.  537,  2  N.  B.  N.  '■<- Mueller  v.  Nugent,  184  U.  S. 

388,  In  re  Corbett,   104  Fed.   Rep.  i,  5  Am.  B.  R.  176. 
872,  5  Am.  B.  R.  224;  In  re  Emslie 


JURISDICTIOX    OF    COURTS    OF    BANKRUPTCY.  lOI 

bankrupt  constructively  in  the  custody  of  the  court  of  bank- 
niptcy.  Especially  if  the  petition  is  subsequently  sustained 
by  the  court/^^  Where  the  petition  is  dismissed  it  may  be 
doubted  if  the  mere  filing-  of  a  petition  will  be  held  such  cus- 
tody as  to  render  void  dealings  with  such  property  pending  an 
adjudication. 

A  claimant  of  such  property  in  the  custody  of  the  bankruptcy 
court  must  apply  to  that  court  to  have  it  restored,  and  his 
right  to  intervene  in  the  bankruptcy  proceedings  is  well  es- 
tablished/®* If  property  in  the  lawful  possession  of  the  court 
of  bankruptcy  is  seized  under  process  from  the  state  court, 
the  court  of  bankruptcy  may  by  summary  proceedings  compel 
the  return  of  such  property/**^  If  a  suit  is  begun  in  a  state 
court  affecting  property  in  the  custody  of  a  court  of  bank- 
ruptcy, it  may  stay  such  proceedings/^^ 

y  24.     When  a  circuit  court  may  have  jurisdiction  of  bank- 
ruptcy proceedings. 

The  bankrupt  statute  confers  no  general  power,  either  orig- 
inal or  supervisory,  upon  the  circuit  courts  to  entertain  bank- 
ruptcy proceedings. 

Where  there  is  no  jury  in  attendance  upon  the  district  court 
4  case  may  be  certified  for  trial  to  the  circuit  court  sitting  at 
the  same  place,  or.  by  consent  of  parties,  when  sitting  at  any 
other  place  in  the  same  district,  if  such  circuit  court  has  or  is 
to  have  a  jury  first  in  attendance.     This  has  special  reference 

!«.•?/«     rc    Weingcr     Bc-rgman     &  ^86  White  v.   Schloerb,    178  U.   S. 

Co.,    126    Fed.    Rep.    875.     Consult  542,  4  Am.  B.  R.  178;  2  N.  B.  N. 

White     V.     Schlocrh,     178     U.     S.  72i ,   In  re   Corbett,   104  Fed.   Rep. 

542,     4     Am.     H.     R.     178;     In     rc  872,  5  Am.   B.  R.  224. 

Brook.s,  91  Fed.  Rep.  508,  i  Am.  B.  J""  Keegan  v.  King,  96  Fed.  Rep. 

R.  S.li  ;   Wayne  Knitting  Mills  Co.,  758,  3  Km.  R.  R.  79;  /«  rc  Cham- 

V.    Nugent,    104    F'cd.    Rep.    530,    4  hers,    Caldcr    &   Co.,   98    F^ed.    Rep. 

Am.  B.  R.  747,  s.  c.  184  U.  S.  i.  865,  3  Am.  B.  R.  537,  2  N.  B.  N. 

'"^/n  re  Whitener  (C.  C.  A.  5th  388,    In   re    Emslie    (C.    C.    A.    2d 

Cir.),  105  Fed.  Rep.  180,  5  Am.  B.  Cir.),  102  Fed.  Rep.  291,  4  Am.  B. 

R    198.  3  N.  B.  N.  316;  Fisher  v.  R.  126.  2  N.  B.  N.  992:  In  rc  Klein- 

Cushman    (C.  C.  A.    ist  Cir.),   103  hans,   113  F'cd.  Rep.   107,  7  Am.  B. 

Fed.   Rep.  867,  4  Am.   B.   R.  654;  R   604. 

In  re  Rodgcrs  TC.  C.  A.  7th  Cir.),  See  also  Sec.  22,  ante. 
135  Fed.   Rep.   169. 


I02  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

to  a  trial  by  jury  with  resiKTt  to  the  (luestion  (if  the  liankrupt's 
insolvency  and  any  act  of  bankruptcy  alleged  to  have  been 
committed  by  him.  upon  an  involuntary  petition/" 

A  limited  jurisdiction  of  controversies  at  law  and  in  equity 
is  conferred  upon  the  circuit  courts  by  section  23.  Such  cases 
are  incidental  to,  but  are  not  strictly,  proceedings  in  bank- 
ruptcy.'^"* 

The  bankruptcy  proceedings,  strictly  so  called,  may  be  certi- 
fied to  the  circuit  court  for  the  district  in  case  the  district  judge 
is  disqualified.^'*'* 

The  authority  for  such  proceedings  is  found  in  the  Revised 
Statutes. 

Sec.  601.  "Whenever  it  appears  that  the  judge  of  any 
district  court  is  in  any  way  concerned  in  interest  in  any  suit 
pending  therein,  or  has  been  of  counsel  for  either  party,  or 
is  so  related  to  or  connected  with  either  party  as  to  render  it 
improper,  in  his  opinion,  for  him  to  sit  on  the  trial,  it  shall 
be  his  duty,  on  application  by  either  party,  to  cause  the  fact 
to  be  entered  on  the  records  of  the  court;  and,  also,  an  order 
that  an  authenticated  copy  thereof,  with  all  the  proceedings 
in  the  suit,  shall  be  forthwith  certified  to  the  next  circuit 
court  for  the  district ;  and  if  there  be  no  circuit  court  therein, 
to  the  next  circuit  court  in  the  state;  and  if  there  be  no  cir- 
cuit court  in  the  state,  to  the  next  convenient  circuit  court 
in  an  adjoining  state;  and  the  circuit  court  shall,  upon  the 
filing  of  such  record  with  its  clerk,  take  cognizance  of  and 
proceed  to  hear  the  case,  in  like  manner  as  if  it  had  originally 
and  rightfully  been  commenced  therein." 

18"^  B.  A.   1898,   Sec.   19.  hold    the    same    until    the    petition 
188  Sec.  25,  post.  should  be  dismissed  or  an  adjudica- 
tes In  Farrund,  Williams  &  Clark  tion    be   made    and    a    trustee    duly 
V.   Milburn  &   Co.    (eastern  district  appointed   and   qualified.     The   case 
of    Michigan,    1899,    not    reported),  thereafter   proceeded   in  the  circuit 
the   district   judge   was    disqualified  court. 

by  .reason  of  being  related  to  one  of  But   see   comment   of   the    circuit 

the  parties.     The  case  was  certified  court  of  appeals  for  the  fifth  circuit 

to  the  circuit  court  and  the  circuit  nn  this  practice.     In  re  Seebold,  105 

judge,   Taft,   ordered   a   warrant   to  Fed.  Rep.  910,  5  Am.  B.  R.  358. 

seize  the  goods  of  the  alleged  bank-  See  also   Spencer  v.   Lapsley,  20 

rupt   pursuant   to    Sec.   69,   and   to  How.  264. 


JURISDICTION    OF    COURTS    OF    BANKRUPTCY.  IO3 

Sec.  637.  "  When  any  cause,  civil  or  criminal,  of  what- 
ever nature,  is  removed  into  a  circuit  court,  as  provided  by 
law,  from  a  district  court  wherein  the  same  is  cognizable,  on 
account  of  the  disability  of  the  judge  of  such  district  court. 
or  by  reason  of  his  being  concerned  in  interest  therein,  or 
having  been  of  counsel  for  either  party,  or  being  so  related 
to  or  connected  with  either  party  to  such  cause  as  to  render 
it  improper,  in  his  opinion,  for  him  to  sit  on  the  trial  thereof, 
such  circuit  court  shall  have  the  same  cognizance  of  such  cause, 
and  in  like  manner,  as  the  said  district  court  might  have,  or 
as  said  circuit  [court]  might  have  if  the  same  had  been  orig- 
inally and  lawfully  commenced  therein,  and  shall  proceed  to 
hear  and  determine  the  same  accordingly. "^''° 

§  25.     Jurisdiction  of  the  circuit  courts  at  law  and  in  equity. 

The  bankrupt  statute  confers  no  jurisdiction  in  bankruptcy, 
either  original,  supen-isory  or  appellate,  upon  the  circuit  courts 
of  the  United  States.  But  they  ''  have  jurisdiction  of  all  con- 
troversies at  law  and  in  equity,  as  distinguished  from  proceed- 
ings in  bankruptcy,  between  trustees  as  such  and  adverse 
claimants  concerning  the  property  acquired  or  claimed  by  the 
trustees,  in  the  same  manner  and  to  the  same  extent  only  as 
though  bankruptcy  proceedings  had  not  been  instituted  and 
such  controversies  had  been  between  the  bankrupts  and  such 
adverse  claimants."  ^" 

A  controversy,  in  order  that  it  may  be  cognizable,  under 
this  clause,  in  the  circuit  courts  of  the  United  States,  first, 
must  be  a  controversy  at  law  or  in  equity,  as  distinguished 
from  proceedings  in  bankruptcy ;  second,  the  parties  must  be 
a  trustee  in  bankrujjtcy  and  adverse  claimants ;  third,  the 
controversy  must  be  concerning  property  acquired  or  claimed 
by  the  trustee;  and,  fourth,  it  must  be  such  a  proceeding  as 

""Consult  also  R.  S.  Sees.  587  to  i»i  B.  A.  1898,  Sec.  23a;  Goodier 

590 ;    Spencer  v.   Lapsley,   20  How.  v.  Barnes,  94  Fed.  Rep.  798 .  2  Am. 

264;   Ex  parte   United    States,   No.  B    R.  328;   McFarlan  Carriage  Co. 

^144",  Fed.  Cas.,  s.  c.   i   Gall.  338;  v.  Solanas   (C.  C.  A.  5th  Cir.),  106 

The    Richmond.   9    Fed.    Rep.   863 ;  Fed.   Rep.    145 ;   Spencer  v.   Duplan 

Wallace  v.   Loomi-    97   U.   S.   146,  Silk  Co.,  191  U.  S.  — . 
156. 


I04  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

coukl  have  been  instituted  by  the  bankrupt  had  no  proceeding's 
in  bankruptcy  intervened.  All  four  of  these  conditions  must 
concur  to  give  jurisdiction. 

Controversies  at  Law  and  in  Equity. —  This  clause  can 
not  be  construed  as  vesting  in  the  circuit  courts  jurisdiction  of 
controversies  at  law  or  in  equity  of  which  they  have  not  already 
jurisdiction.  It  is  rather  a  regulation  of  jurisdiction.  What 
are  controversies  at  law  or  in  equity  are  to  be  determined  by 
the  general  rules  of  jurisprudence.  No  fixed  rule  can  be 
stated  defining  precisely  what  are  suits  at  law  or  in  equity  as 
distinguished  from  bankruptcy  proceedings.  The  question 
has  been  frequently  considered  by  the  supreme  court,  and  each 
particular  case  was  held  either  to  be  the  one  or  the  other, 
without  attempting  to  lay  down  a  general  rule  of  distinction.^"^ 

The  district  and  circuit  courts  were  given  concurrent  juris- 
diction of  suits  at  law  and  in  equity,  as  distinguished  from 
bankruptcy  proceedings,  under  the  act  of  1867.^"^  Actions  at 
law  and  suits  in  equity  were  frequently  before  the  court  in 
matters  relating  to  bankruptcy.  Thus  the  parties  sought  the 
aid  of  the  court  in  actions  of  replevin, ^'•*  in  assumpsit,"^  in 
trover  ^'"''  and  by  a  bill  in  equity.^**^  These  cases  are  useful  to 
illustrate  the  distinction  between  suits  at  law  or  in  equity  and 
proceedings  in  bankruptcy. 

i»2  Consult  Morgan  v.  Thornhill,  Fed.    Cas.,    s.   c.   8    N.    B.    R.   548; 

II  Wall.  65,  75;  Smith  v.  Mason,  14  Brooke  v.  McCraken,  No.  1932  Fed. 

Wall.  419,  430;   Marshall  v.  Knox,  Cas.,  s.  c.  10  N.  B.  R.  461;  Babbitt 

16  Wall.  551  ;  Burbank  v.  Bigelow,  v.  Walbrun,  No.  695  Fed.  Cas.,  s.  c. 

92   U.    S.    179;    McFarlan    Carriage  6  N.  B.  R.  359;  Wadsworth  v.  Ty- 

Co.  V.  Solanas  (C.  C.  A.  5th  Cir.),  ler.  No.  17032  Fed  Cas.,  s.  c.  2  N.  B. 

106  Fed.  Rep.  145.  R.  316;  Cragen  v.  Carmichael,  No. 

193  R.  s.  Sec.  4979.  3319  Fed.  Cas.,  s.  c.  2  Dill.  519. 

i»*  Haiighey    v.    Albin,    No.    6222  i»'^ /m    re    Bowie,    No.    1728    Fed. 

Fed.  Cas.,  s.  c.  2  Bond  244.  Cas.,  s.  c.  i  N.  B.  R.  628;  March  v. 

^^^  Street   v.   Dawson,    No.    13533  Heaton,  No.  9061   Fed.  Cas.,  s.  c.  i 

Fed.  Cas.,  s.  c.  4  N.  B.  R.  207 ;  Van  Low.  278 ;  Bradshaw  v.  Klein,  No. 

Dyke    v.    Tinker,    No.    16849    Fed.  1790   Fed.    Cas.,    s.    c.    2    Biss.    20; 

Cas.,  s.  c.  II  N.  B.  R.  308.  Shaffer  v.  Fritchery,  No.  12697  Fed. 

i»«Carr   v.    Gale,    No.   2434    Fed.  Cas.,  s.  c.  4  N.  B.  R.  548;  Taylor  v. 

Cas.,  s.  c.  2  Ware  330,  and  No.  2435  Rasch,  No.  13801  Fed.  Cas.,  s.  c.  5 

Fed.  Cas.,  s.  c.  3  Woodb.  &  M.  38;  N.  B.  R.  399;  Wilt  v.  Stickney,  No. 

Mitchell     V.    McKibben,    No.    9666  17854  Fed.  Cas.,  s.  c.   15   N.   B.   R. 


JURISDICTION    OF    COURTS    OF    BANKRUPTCY.  IO5 

Parties  and  Adv^erse  Claims. —  It  is  essential  that  one 
party  shall  be  the  trustee  and  the  other  party  an  adverse  claim- 
ant, or  claimants,  and  that  the  controversy  be  concerning  the 
property  acquired  or  claimed  by  the  trustee.^'*^*  This  pro- 
vision is  very  similar  to  that  used  in  the  act  of  1867,  which 
was  "  any  person  claiming  an  adverse  interest  .  .  .  touch- 
ing any  property  or  rights  of  the  bankrupt  transferable  or 
vested  in  such  assignee."^'*^  This  provision  was  frequently 
construed  by  the  courts. ^'"* 

If  the  trustee  is  dead  and  no  one  has  been  appointed  in  his 
stead,  a  creditor  may  file  a  bill  to  detain  property  of  a  bank- 
rupt to  be  administered  by  a  trustee  subsequently  appointed.'-"" 

Who  are  necessary  parties  to  such  actions  at  law  or  suits  in 
equity  is  determined  by  the  general  rules  governing  such  pro- 
ceedings in  the  circuit  courts. 

The  Status  of  the  Bankrupt  Determines  Jurisdic- 
tion.— The  circuit  courts  have  jurisdiction  only  in  the  same 
manner  and  to  the  same  extent  as  though  bankruptcy  pro- 
ceedings had  not  been  instituted  and  such  a  controversy  had 
been  between  the  bankrupt  and  the  adverse  claimants.  This 
clause  is  a  limitation  upon  the  exercise  of  the  jurisdiction  of 
tile  circuit  courts. 

The  judiciary  act  of  1887,  as  amended  August  13,  il 


23;  Warren  v.  Nat.  Bank,  No.  17202  Knox,    16    Wall.    551;    Burbank    v. 

Fed.  Cas.,  s.  c.  10  Blatch.  493:  Bank  Bigelow,  92  U.  S.  179;  Bachman  v. 

V.  Cooper,  20  Wall.  171;  Garrison  v.  Packard,  No.  709  Fed.  Cas.,  s.  c.  2 

Markley,  No.  5256  Fed.   Cas.,  s.   c.  Saw.   264;   Carr  v.   Gale,   No.   2434 

7  N.  B.  R.  246;  Sutherland  v.  Lake  Fed.  Cas.,  s.  c.  2  Ware  330,  and  No. 

Superior  Canal  Co.,  No.  13643  Fed.  2435  Fed.  Cas.,  s.  c.  2  Woodb.  &  M. 

Cas.,  s.  c.  9  N.  B.  R.  298 ;  Becchcr  v.  38 :  Mitchell  v.  McKibbcn,  No.  9666 

Bininger,  No.    1222  Fed.  Cas.,  s.  c.  Fed.    Cas.,   s.   c.   8    N.    B.    R.    548; 

7   Blatch.    170;    Kellogg  v.   Rus.sell,  Street    v.  Dawson,   No.   13533   Fed. 

No.  7666  Fed.  Cas.,  s.  c.  11   Blatch.  Cas.,  s.  c.  4  N.  B.  R.  207:  Haughey 

519.  V.  Albin,  No.  6222  Fed.  Cas.,  s.  c.  2 

^''''*  As  to  who  are  adverse  claim-  Bond    244;    Brooke    v.    McCraken, 

ants    under    this    act,    see    Sec.    20,  No.   1932   Fed.   Cas.,  s.  c.    10  N.   B. 

ante  R.    461  ;    Spaulding    v.    McGovern, 

'""  R.  S.  Sec.  4979.  No.   13217  Fed.  Cas.,  s.  c.  10  N.  B. 

""•Consult   Morgan   v.   Thoniliill.  R.   188. 
tt    Wall.   65.   75;    Sm'th    v.    Mason,  -"'•Clark  v.  Clark,  17  How.  315. 

14     Wall.     419,    430;     Marshall     v.  '•'"'25  Stat,  at  L.  433- 


I06  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

conferred  jurisdiction  upon  the  circuit  courts  in  "  cases  aris- 
ing under  the  constitution  and  laws  of  the  United  States." 
It  is  well  settled  that  where  the  plaintiff  holds  an  office  like 
that  of  a  receiver  appointed  by  the  court,  or  a  receiver  of  a 
national  bank,  that  the  suit  involves  a  federal  question,  and 
may  be  prosecuted  in  the  circuit  courts  without  regard  to  the 
citizenship  of  the  parties.  This  rule  was  applied  under  the 
act  of  1867  with  reference  to  assignees,"""  A  trustee,  being 
an  officer  of  the  court  under  the  present  act,  would  have  un- 
doubtedly been  entitled  to  have  prosecuted  suits  in  the  circuit 
courts  on  this  ground,  were  it  not  for  the  restriction  contained 
in  section  23a.  As  it  is,  however,  in  order  that  the  circuit 
courts  may  take  cognizance  of  the  controversy,  there  must 
exist  a  diversity  of  citizenship,  as  between  the  bankrupt  and 
the  adverse  claimants,  and  the  amount  involved  must  exceed 
two  thousand  dollars.  The  citizenship  of  the  trustee  is  im- 
material. The  averments  of  the  first  pleading  must  show 
that  all  these  jurisdictional  requisites  exist. 

When  a  suit  is  begun  in  a  state  court  in  which  these  jurir.- 
dictional  requisites  exist,  it  may  be  removed  to  a  circuit  court 
and  there  tried  as  if  originally  begun  there. ^''^ 

202  Burbank  v.  Bigelow,  92  U.  S.  Blatch.  342;   Connor  v.   Scott,  No. 

179;  Claflin  V.  Houseman,  93  U.  S.  3119  Fed.  Cas.,  s.  c.  4  Dill.  242. 

130 ;  Woolridge  v.  McKenna,  8  Fed.  ^o.-s  Spencer    v.    Duplan    Silk    Co., 

Rep.    650;    Payson    v.    Dietz,    No.  191   U.   S.  526;  s.  c.    (C.  C.  A.  3d 

T0861    Fed.   Cas.,  s.  c.   2   Dill.   504;  Cir.),  115  Fed.  Rep.  689,  8  Am.  B. 

Atkinson    v.    Purdy,    No.   616    Fed.  R.    367,    reversing    112    Fed.    Rep. 

Cas.,    s.    c.    Crabbe    551;    Wehl    v.  638,  7  Am.  B.  R.  563. 
Wald,  No.  17356  Fed.  Cas.,  s.  c.  17 


REFEREES.  IO7 


CHAPTER  V. 

REFEREES. 

§  26.    The  appointment,  removal  and  districts  of  referees. 

The  ofl&ce  of  referee  is  created  by  statute.  ^  Referees  are 
officers  of  the  courts  of  bankruptcy.  They  are  appointed 
within  the  territorial  limits  of  each  court  of  bankruptcy  by 
the  judge  of  that  court. ^ 

The  number  of  referees  rests  in  the  discretion  of  the  judge.' 
There  should  be  a  sufficient  number  to  expeditiously  transact 
the  bankruptcy  business  within  each  district.  The  term  of 
office  is  two  years.*  They  are,  however,  at  all  times  subject 
to  removal  by  the  judge,  because  their  services  are  not  needed, 
or  for  other  cause.*  Whenever  the  office  of  a  referee  is  va- 
cant, or  its  occupant  is  absent  or  disqualified  to  act,  the  judge 
may  act  or  may  appoint  another  referee,  or  another  referee 
holding  an  appointment  under  the  same  court  may,  by  the 
order  of  the  judge,  temporarily  fill  the  vacancy.^ 

The  court  is  also  authorized  to  designate  and  from  time  to 
time  change  the  districts  of  referees,  so  that  each  county 
where  the  services  of  a  referee  are  needed  may  constitute  at 
least  one  district.^ 

§  27.     Qualifications  of  referees. 

No  person  is  eligible  to  be  a  referee  unless  he  is  competent 
to  perform  the  duties  of  that  office. 

Under  the  act  of  1867  no  person  was  eligible  for  appoint- 
ment as  register  unless  he  was  an  attorney  at  law."  Although 
no  such  restriction  is  contained  in  the  present  statute,  judges 
of  some  of  the  districts  have  publicly  announced  that  no  per- 
son would  be  appointed  a  referee  unless  he  is  an  attorney. 
It  may  be  doubted  if  a  person  may  be  considered  competent 

1  B.  A.  i8g8,  Sec.  33-  *  R-  A,  1898.  Sec.  34. 

2  R.  A.  1898,  Sec.  34.  5  B.  A.  1898,  Sec.  43.  See  Bray  v. 

3  B.  A.  1898,  Sec.  27 ;  Bray  v.   Cobb,  91  Fed.  Rep.  102. 
Cobb,  I  Am.  B.  R.  153;  91  Fed.    «  B.  A.  1898,  Sec.  34. 
Rep.  102.  "^  R.  S.  Sec.  4904. 


108  LAW    AND    PROCEEDINGS    IN     HANKKll'TCY. 

to  perform  the  duties  unless  he  has  pursued  studies  in  law 
and  been  admitted  to  practice  in  a  court  of  record. 

No  person  is  eligible  for  the  appointment  if  he  holds  any 
"office  of  profit  or  emolument  under  the  laws  of  the  United 
States  or  of  any  state,  other  than  commissioners  of  deeds, 
justices  of  the  peace,  masters  in  chancery  or  notaries  public. "  ' 
By  profit  or  emolument  is  meant  "the  profit  arising  from 
office  or  employment;  that  which  is  received  as  a  compensa- 
tion for  services  or  which  is  annexed  to  the  position  of  office 
as  salary,  fees  and  perquisites."^  Such  are  the  office  of 
postmaster,^  U.  S.  surveyor  general,*  inspector  of  customs,^ 
county  recorder  or  county  commissioner,*  or  a  member  of 
a  state  legislature.^ 

No  person  is  eligible  for  appointment  who  is  related  by 
consanguinity  or  affinity  within  the  third  degree,  as  deter- 
mined by  the  common  law,  to  any  of  the  judges  of  the  courts 
of  bankruptcy  or  circuit  courts  of  the  United  States,  or  of 
the  justices  or  judges  of  the  appellate  courts  of  the  districts 
wherein  they  may  be  appointed.^  Every  generation  in  lineal 
consanguinity  constitutes  a  different  degree,  reckoning  either 
upwards  or  downwards.  The  method  of  computing  the 
degree  of  collateral  relationship  at  common  law,  in  the  words 
of  Mr.  Justice  Blackstone,  is  as  follows:  "We  begin  at  the 
common  ancestor,  and  reckon  downwards :  and  in  whatsoever 
degree  the  two  persons,  or  the  most  remote  of  them,  is  distant 
from  the  common  ancestor,  that  is  the  degree  in  which  they 
are  related  to  each  other."  ® 

No  person  is  eligible  to  appointment  unless  he  resides  in 
or  has  his  office  in  the  territorial  district  for  which  he  is  to 
be  appointed.  •" 

»B.  A.  1898,  Sec.  35.  «Dailey    vs.    State,    8    Blackf. 

■''Century    Dictionary,     subject,  (Ind.)  329. 

Emolument;  Standard  Dictionary,  ^  State  v.  Valle,  41    lo.  29. 

subject.    Emolument;     Webster's  ^'B.  A.  1898,  Sec.  35. 

Dictionary,    subject.  Emolument;  ^2  Black.  Com.   206;    Coke  on 

Apple  vs,  Crawford  Co.,   105  Pa.  Litt.    23;    3    Washburn  on   Real 

St.  300.  Property,  star  p.   406;  McDowell 

8  McGregor  v.  Balch,  14  Vt.  428.  v.  Addams,  45  Penn.  St.  432. 

*  People  V.  Whitman,  10  Cal.  38.  »<»  B.  A.  1898,  Sec.  35. 

^  Crawford  v.  Dunbar,  52  Cal.  36. 


REFEREES.  IO9 

§  28.     The  oath  and  bond  of  a  referee. 

The  referee  must  take  the  same  oath  of  office  as  that  pre- 
scribed for  the  judges  of  the  United  States  courts." 

Before  entering  upon  the  duties  of  his  office  every  referee 
must  enter  into  a  bond  to  the  United  States  in  such  sum  as 
shall  be  fixed  by  the  court,  not  to  exceed  $5,000,  conditioned 
for  the  faithful  performance  of  his  official  duty.^^  The  court 
fixes  the  time  within  which  the  bond  is  to  be  given  and  ap- 
proves the  sureties.  If  a  referee  fails  to  give  bond  within 
such  time  he  is  deemed  to  have  declined  the  appointment  and 
there  is  a  vacancy  in  his  office.^^  There  shall  be  at  least  two 
sureties  upon  each  bond,  each  of  whom  must  qualify  in  a  sum 
equal  at  least  to  the  amount  of  the  bond.^*  Corporations  or- 
ganized for  the  purpose  of  becoming  sureties  on  bonds,  or 
authorized  by  law  to  do  so,  may  be  accepted  as  sureties.^^  The 
court  shall  require  evidence  as  to  the  actual  value  of  the  prop- 
erty of  sureties,  and  all  sureties  must  be  approved  by  the  court.^** 
Such  bonds  are  filed  of  record  in  the  office  of  the  clerk.'^ 
They  may  be  sued  upon  in  the  name  of  the  United  States  for 
the  use  of  any  person  injured  by  a  breach  of  their  conditions.'^ 
Such  suits  must  be  brought  within  two  years  after  the  alleged 
breach  of  the  bond.'** 

^  29.     General  powers  of  referees. 

The  territorial  jurisdiction  of  a  referee  is  generally  limited 
by  the  county  or  district  for  which  he  is  appointed,'**  except 
when  he  is  specially  designated  by  the  judge  to  temporarily 
fill  a  vacancy  in  another  county  or  district  within  the  jurisdic- 
tion of  the  court."" 

Referees  are  appointed  for  the  purpose  of  assisting  the  judge 
of  the  court  of  bankruptcy  in  the  performance  of  his  duties. 
The  referee  has  the  same  power  generally  as  the  judge  has 


"  B.  A.   1898,  Sec.  36,  Form  No.  '"  B.  A.  1898,  Sec.  50/1. 

33;  R.  S.  Sec.  712.  1"  B.  A.  1898,  Sec.  50/. 

''■J  B.  A.  1898.  Sec.  50a.  "B.    A.    1898,    Sec.   .38   and    Sec. 

'■''  B.  A.  1898,  Sec.  5ofe.  34,   clause  2. 

i*B.  A.  1898,  Sec.  50.-,  ,.  ^"B.    A.    1898,    Sec.   43;    Bray    v. 

IS  B.  A.  1898,  Sec.  50g.  Cobb,    i    Am.    B.    R.    153,  Qi    Fed. 

^^  B.  A.  1898,  Sec.  so  a,  d.  Rep.  102. 


no  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

in  the  performance  of  his  judicial  duties  under  the  bankrupt 
act,  subject  to  a  few  exceptions  to  be  noted  presently."^  After 
a  case  has  been  referred  to  a  referee  all  the  proceedings  there- 
after, except  such  as  are  required  by  the  statute  or  general 
orders  to  be  had  before  the  judge,  are  had  before  the  referee.-^ 
The  time  when  and  the  place  where  the  referees  shall  act  upon 
the  matters  arising  under  the  several  cases  referred  to  them 
shall  be  fixed  by  special  order  of  the  judge,  or  by  the  referee, 
and  at  such  times  and  places  the  referees  may  perform  the 
duties  which  they  are  empowered  by  the  act  to  perform."- 

The  referee  has  power  to  act  only  by  virtue  of  a  reference 
by  the  clerk  or  the  judge  of  a  court  of  bankruptcy. 

The  clerk  is  required  to  refer  a  petition  in  case  the  judge 
is  absent  from  the  district  or  the  division  of  the  district."^  A 
voluntary  petition  should  be  referred  immediately,  an  involun- 
tary petition  on  the  next  day  after  the  last  day  on  which  plead- 
ings may  be  filed."*  Such  references  are  general  in  their 
nature. 

The  judge,  after  an  adjudication,  may  refer  the  case  gener- 
ally to  a  referee  or  specially  with  only  limited  authority  to  act  in 
the  premises  or  to  consider  and  report  upon  specified  issues.^* 
The  power  of  the  referee  in  such  cases  depends  upon  the  order 
of  reference.  The  judge  may  refer  the  case  to  any  referee 
within  the  territorial  jurisdiction  of  the  court  if  the  con- 
venience of  the  parties  in  interest  will  be  served  thereby,  or  for 
cause,  or  if  the  bankrupt  does  not  do  business,  reside  or  have 
his  domicile  in  the  district  r^  or  for  the  convenience  of  parties 
or  for  cause  he  may  transfer  a  case  from  one  referee  to  an- 
other.-*' 

The  statute  provides  that  the  word  "  court "  when  used  in 
the  statute  may  include  the  referee  and  that  the  word  "  judge  " 


21  B.  A.   1898,   Sec.  38;   White  v.  -^B.   A.   1898,   Sec.    18,  f  and  g; 

Schloerb,   178  U.  S.  542,  4  Am.   B.  Official  Form  No.  15,  Form  No.  32, 

R.  178;  Mueller  v.  Nugent,  184  U.  post. 

S.  1 ,  5  Am.  B.  R.  176;  In  re  Tudor,  24  3.  A.  1898,  Sec.  22.  ^.^j  '«f 

96    Fed.    Rep.    942 ,    2    Am.    B.    R.  25  b.  A.  1898.  Sec.  22. 


26  B.  A.  1898,  Sec.  22b. 


22  Gen.  Ords.  12  and  20  and  B.  A. 
1898,  Sec.  38,  clause  4. 


REFEREES.  Ill 

excludes  the  referee.-'     Consequently  the  referee  has  no  power 
to  perform  these  duties  which  are  imposed  by  the  act  on  the 
judge  alone ;  Urst,  to  issue  a  warrant  to  the  marshal  against  the 
bankrupt  to  compel  his  immediate  examination  or  detention 
upon  satisfactory  proof  that  the  bankrupt  is  about  to  leave  the 
district ;  ^*  second,  to  confirm  or  set  aside  compositions  and 
order  distribution  of  the  consideration;"''  third,  to  extend  the 
time  for  filing  a  petition  for  his  discharge  by  the  bankrupt,  to 
hear  applications  for  a  discharge,  to  refuse  or  grant  the  same, 
and  to  revoke  discharges  once  granted ;  ^°  fourth,  to  determine 
the  issues  presented  whenever  the  facts  alleged  in  a  petition 
for  involuntary  bankruptcy  are  controverted  by  either  the  bank- 
rupt or  his  creditors ;  ^^  fifth,  to  punish  or  commit  persons  who 
have  disobeyed  the  orders  or  process  of  courts  of  bankruptcy 
or  misbehaved  during  a  hearing,  even  though  the  contempt  be 
with  reference  to  the  process  or  orders  of,  or  in  the  presence 
of  the  referee  who  can  only  certify  the  facts  to  the  judge  for  his 
action ;  ^"  sixth,  to  refer  causes  after  adjudication  either  gener- 
ally or  specifically  to  a  referee,  and  transfer  causes  from  one 
referee  to  another ;  ^^  and,  seventh,  to  order  notices  to  creditors 
to   be   given   otherwise  than  by  the   referee.^*     The   referee 
should  not  collect  the  estate  of  the  bankrupt  nor  issue  sub- 
poenast  these  should  be   done  by  the  trustee   and   clerk   re- 
spectively.'^ 

There  are  also  certain  powers  ordinarily  to  be  exercised  by 
the  judge,  but  which  are  to  be  exercised  by  the  referee  only 
when  the  judge  is  absent  from  the  division  of  the  district  in 
which  the  proceedings  are  pending  and  they  are  referred  or 
certified  by  the  clerk  to  the  referee.  These  are:  first,  to  make 
adjudications  on  voluntary   and  on  uncontested   involuntary 


27  B.  A.  1898,  Sec.  I,  cl.  7  and  16.  ^-V,.   A.   1898,   Sec.  416,  and   see 

28  B.   A.    1898,  Sec.   9,   cl.   b,  and  post,    "  Proceedings    in    Contempt." 
Sec.  38,  cl.  4.  Chap.  XXII.;  Smith  v.  Belford  (C. 

29  B.  A.   1898,   Sec.   i2d  and   Sec.  C.  A.  6th  Cir.),  106  Fed.  Rep.  658, 
130;  Gen.  Ord.   12,  cl.  3-  5  Am.  B.  R.  291. 

30  B.    A.    1898,    Sees.    14   and    15,  ^^  B.  A.  1898.  Sec.  22. 
and   Sec.   38,   cl.   4;    Gen.   Ord.    12,  •■»*  B.  A.  1898,  Sec.  58c. 

cl.  3.  35 /„    re    Pierce,    in    Fed.    Rep. 

31  B.  A.  1898,  Sec.  iSd.  S16,  6  Am.  B.  R.  747- 


112  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY, 

petitions ;  •"'  and,  second,  to  take  possession  of  the  bankrupt's 
property  pending  the  adjncHcation  and  release  it."  This  last 
power  may  be  exercised  by  the  referee  also  on  certification  of 
the  judge's  illness  or  inability  to  act,^^  but  adjudications  can 
only  be  made  in  cases  of  the  judge's  absence. 

The  statute  also  confers  on  the  referee  jurisdiction  to  per- 
form such  part  of  the  duties,  except  as  to  questions  arising  out 
of  the  applications  of  bankrupts  for  compositions  or  discharges, 
as  are  by  this  act  conferred  on  "  courts  "  of  bankruptcy  and 
as  shall  be  prescribed  by  rules  or  orders.     Accordingly  by  the 
General   Orders   of  the   supreme   court   have   further   limited 
the  ]:)Owers  of  the  referees  by  providing  that  applications  for  an 
injunction  to  stay  proceedings  of  a   court  or  officer  of  the 
United  States,  or  of  a  state  shall  be  heard  and  decided  by  the 
"  judge,"  ^^  and  that  where  the  bankrupt  has  not  made  a  de- 
posit for  the  fees  of  the  clerk,  referee,  and  trustee,  the  judge 
may  order  these  fees  paid  out  of  the  estate ;  or  may,  after  notice 
to  the  bankrupt,  and  satisfactory  proof  that  he  then  has  or 
can  obtain  the  money  with  which  to  pay  those  fees,  order  him 
to  pay  them,  within  a  time  specified,  and  if  he  fails  to  do  so, 
may  order  his  petition  to  be  dismissed. ^^ 
_^       In  all  orders  made  by  a  referee  it  must  be  recited,  according 
as  the  fact  may  be,  that  notice  was  given  and  the  manner 
thereof;  or  that  the  order  was  made  by  consent;  or  that  no 
adverse  interest  was  represented  at  the  hearing;  or  that  the 
order  was  made  after  hearing  adverse  interests.*" 

The  action  of  referees  is  subject  always  to  review  by  the 
judge  of  the  court  of  bankruptcy.*^  It  would  therefore  ap- 
pear that  in  any  proceeding  before  a  referee  a  party  is  at  lib- 
erty to  take  the  opinion  of  the  jndge  upon  any  point  or  matter 
arising  in  the  course  of  such  proceeding.*^ 

The  referee  is  required  to  preside  at  the  first  meeting  of 


30  B.  A.   1898,  Sec.  18^,  ^  and  g,  ••'«  Gen.  Ord.  12,  cl.  3. 

and  Sec.  38,  cl.   i,  and  "flower  to  ^®  Gen.    Ord.    35,    par.    4;    In    re 

make    an    adjudication";    Sec.    30,  Plympton,   103  Fed.  Rep.  775. 

post.  40  Gen.  Ord.  23. 

37  B.    A.    1898.    Sees.   69   and    38,  *^  Gen.  Ord.  27.     B.  A.  1898,  Sec. 

cl.   3 ;   and   "  Power  to  take  posses-  38  and  Sec.  2,  clause  10. 

sion,  etc." :  Sec.  2^,  f^nst.  *-  See  Sec.  32a. 


REFEREES. 


II 


the  creditors  in  the  absence  of  the  judge,*'  but  he  should  not 
interfere  with  or  influence  the  choice  of  trustee."  He  can, 
however,  pass  on  the  right  of  a  person  who  claims  to  be  a 
creditor,  to  vote.'*^  Where  a  trustee  is  elected  by  creditors  the 
referee  can  not  remove  him  and  appoint  another,  but  should 
report  his  disapproval  to  the  judge,  who  alone  can  remove  the 
trustee  elected.*®  It  is  his  duty  to  prepare  a  list  of  debts  proved 
at  this  meeting,*^  and  to  notify  the  trustee  of  his  appointment 
and  the  penal  sum  of  his  bond.**  In  the  absence  of  an  appoint- 
ment of  a  trustee  by  the  creditors  he  may  appoint  the  trustee ;  ** 
but  should  only  do  so  where  the  creditors  have  had  full  oppor- 
tunity to  elect  one  and  have  failed.^"  The  referee  regularly 
approves  the  bond  of  the  trustee."  The  referee  may  furnish 
on  application  a  certified  copy  of  any  proceeding  before  him  -^ 
to  be  used  as  evidence  in  a  state  or  federal  court.  Certified 
copies  of  proceedings  before  a  referee,  or  of  papers,  when 
issued  by  the  referee,  are  admitted  as  evidence  with  like  force 
and  effect  as  certified  copies  of  the  records  of  district  courts 
of  the  United  States  are  now  or  may  hereafter  be  admitted  as 
evidence.^^ 


*3B.   A.    1898.   Sec.   55b. 

**  In  re  Smith,  No.  12971  Fed. 
Cas.,  2  Ben.  113. 

•*5 /n  re  Malino,  118  Fed.  Rep. 
368,  8  Am.  B.  R.  205;  In  re  Day- 
ville  Woolen  Co.,  114  Fed.  Rep. 
674 ,  8  Am.  B.  R.  85 ;  In  re  Rekers- 
dres,  108  Fed.  Rep.  206 ,  5  Am.  B. 
R.  811  ;  In  re  McGill  (C.  C.  A.  6th 
Cir.),  106  Fed.  Rep.  57.  5  Am.  B. 
R.  155 ;  In  re  Henschel,  109  Fed. 
Rep.  861  at  865. 

*«Gen.  Ord.  13;  In  re  Hare,  119 
Fed.  Rep.  246;  In  re  Mackellar, 
116  Fed.  Rep.  547;  but  .see  In  re 
Rekersdres,  108  Fed.  Rep.  206,  5 
Am.  B.  R.  811. 

*''  Official  Form  No.  19 ,  see  Form 
>*o.  38,  post. 

■***  Gen.  Ord.  16 ;  Official  Form 
No.  24 ,  see  Form  No.  43,  post. 

"B.    A.    1898,    Sec.    44;    Official 


Form  No.  23 ,  see  Form  No.  42, 
post;  In  re  Mackellar,  116  Fed. 
Rep.  547 ;  In  re  Nice  &  Schreiber, 
123  Fed.  Rep.  987;  In  re  McGill 
(C.  C.  A.  6th  Cir.),  106  Fed.  Rep. 
57,  5  Am.  B.  R.  158;  In  re  Kuffler, 
97  Fed.  Rep.  187,  3  Am.  B.  R. 
162 ;  In  re  Brooke,  100  Fed.  Rep. 
432 ,  4  Am.  B.  R.  50 ;  In  re  Rich- 
ards, 103  Fed.  Rep.  849 ,  4  Am.  B. 
R.  631. 

Where  there  are  no  assets  the 
referee  may  in  his  discretion  order 
that  no  trustee  be  appointed.  In  re 
Smith,  93  Fed.  Rep.  791. 

''**  In  re  Lewensohn,  98  Fed.  Rep. 
576 ,  3  Am.  B.  R.  299 ;  In  re  Nice  & 
Schreiber,  123  Fed.  Rep.  987;  In  re 
Mackellar,  116  Fed.  Rep.  547. 

f'"^  Official  Form  No.  26 ,  see  Form 
No.  45,  post. 

52  B.  A.  1898,  Sec.  2irf. 


114  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

Referees  can  not  act  in  cases  in  which  they  are  directly  or 
indirectly  interested, ''•'  practice  as  attorneys  and  counselors  at 
law  in  bankruptcy  proceedings,  or  purchase,  directly  or  indi- 
rectly, any  property  of  an  estate  in  bankruptcy.^* 


§  30.     Power  to  make  an  adjudication. 

Every  referee  within  his  own  territorial  limits  has  power 
to  consider  all  petitions  referred  to  him  by  the  clerk  and  make 
the  adjudications  or  dismiss  the  petitions.^^  This  includes 
petitions  in  involuntary  as  well  as  in  voluntary  bankruptcy. 
It  is  the  duty  of  the  clerk  to  refer  a  petition,  in  either  voluntary 
or  involuntary  bankruptcy,  to  the  referee  whenever  the  judge  is 
absent  from  the  district  or  the  division  of  the  district.^**  It  is 
regularly  the  duty  of  the  judge  to  consider  the  petition  and 
make  the  adjudication  thereon."  A  referee  has  power  to  con- 
sider the  petition  and  make  the  adjudication  only  when  the 
petition  has  been  specially  referred  to  him  for  that  purpose. 
The  action  of  the  referee  in  such  cases  is  subject  to  review  by 
the  judge.^* 

When  there  is  a  reference  by  the  clerk  of  a  petition  it  may 
be  considered  in  the  nature  of  a  default.  The  consideration 
necessary  is  probably  the  same  as  that  required  m  taking  a 
decree  pro  confesso.  The  matter  of  the  petition  ought  to  be 
opened  and  explained  to  the  referee  so  that  he  may  see  that 
a  proper  case  of  bankruptcy  is  made.  It  is  not  necessary 
that  he  should  hear  evidence  in  addition  to  the  affidavit  at- 
tached to  the  petition.  If  such  a  proper  case  is  made  by  the 
petition  it  is  the  duty  of  the  referee  to  adjudge  the  person  a 
bankrupt.  The  case  then  proceeds  as  though  the  adjudica- 
tion had  been  made  by  the  judge. 


53  The  fact  that  a  referee  owes  a  ^^  B.   A.    1898,   Sec.   18,   clauses   f 

debt  to  the  bankrupt  does  not  dis-  and  g. 

quaHfy  him.     Bray  v.  Cobb,  91  Fed.  °^  B.   A.    1898,    Sec.   2,   clause    i ; 

Rep.  102,  I  Am.  B.  R.  153.  Official  Forms  Nos.  11  and  12,  see 

s*B.  A.   1898,   Sec.  2,9b;  Cobb  v.  Forms  Nos.  28  and  29, /^o.yL 

Bray,  91  Fed.  Rep.  102.  ^»  B.  A.  1898,  Sec.  38a;  Gen.  Ord. 

!^5  B.   A.   1898,   Sec.  38,  clause  i ;  27. 
Official  Forms  Nos.  11  and  12,  see 
Forms  Nos.  28  and  29,  post. 


REFEREES.  1 1 5 

§  31.     Power  to  administer  oaths  and  examine  witnesses. 

Referees  are  also  authorized  to  exercise  the  powers  vested 
in  courts  of  bankruptcy  for  the  administration  of  oaths  to 
and  the  examination  of  persons  as  witnesses,  and  for  requir- 
ing the  production  of  documents  in  proceedings  before  them, 
except  the  power  of  commitment.^^  The  subpoena  should  be 
issued  by  the  clerk,  not  by  the  referee.*"" 

The  referee  is  given  power  to  administer  the  oaths  required 
by  the  bankrupt  act  in  all  cases  except  upon  hearings  in  court."^ 

Under  these  provisions  the  referee  is  empowered  to  take 
evidence  with  reference  to  questions  pending  before  him,  and 
to  summon  witnesses  for  the  purpose  of  examining  them.  The 
subpoena  must  be  duly  issued  by  the  clerk  of  the  court  of  bank- 
ruptcy."' Subpoenas  for  witnesses  may  run  into  another  dis- 
trict, provided  no  person  shall  be  required  to  attend  as  a 
witness  before  a  referee  at  a  place  outside  of  the  state  of  his 
residence,  and  more  than  one  hundred  miles  from  such  place 
of  residence,  and  only  in  case  his  lawful  mileage  and  fees 
for  one  day's  attendance  shall  be  first  paid  or  tendered  to  him.*"^ 

Generally  any  witness  competent  to  testify  in  a  court  of 
bankruptcy  may  be  compelled  by  subpoena  to  appear  and  bring 
with  him  documents  and  papers  mentioned  in  the  subpoena. 
It,  however,  may  be  doubted  if  the  referee  has  power  to  compel 
a  trustee  to  appear  as  a  witness  or  to  produce  documents.''* 
The  court  in  proper  cases  may  call  the  trustee  to  an  account, 
but  whether  the  referee  has  a  supervisory  power  of  this  char- 
acter may  be  questioned. 

The  referee  is  authorized,  upon  the  application  of  the  trustee, 
to  employ  a  stenographer  at  the  expense  of  the  estate,  at  a 
compensation  not  to  exceed  ten  cents  per  folio  for  reporting 
and  transcribing  proceedings  before  him.*"^     He  may,   when 

69  6.  A.  1898,  Sec.  38,  clause  2.  876;   In  re  Woodward,   No.    18000 

80 /n    re    Pierce,    in    Fed.    Rep.  Fed.  Cas.,  s.  c.  12  B.  R.  297. 

516,  6  Am.  B.  R.  747.  °*/w  re  Hicks,  2  Fed.  Rep.  851; 

61  B.  A.  1898,  Sec.  20,  clause  i.  but  see  B.  A.  1898,  Sec.  49. 

«2Gen,   Ord.  3;   R.   S.   Sees.  911  «=^  B.  A.  1898,  Sec.  38,  clause  5;  In 

and  912;  In  re  Pierce,  in  Fed.  Rep.  re  Rozinsky,   loi   Fed.   Rep.  229,  3 

S16,  6  Am.  B.  R.  747.  Am.  B.  R.  830;  as  to  taxing  such 

83  B.  A.  1898,  Sec.  41 ;  R.  S.  Sec.  fees  as  costs  see  In  re  Todd,  6  Am. 

B.  R.  88 ,  109  Fed.  Rep.  265. 


Il6  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY, 

necessary,  employ  a  clerk,  whose  hire  will  be  paid  as  part  of 
the  costs  of  administration,"" 

The  examination  of  witnesses  before  the  referee  "^  may  be 
conducted  by  the  party  in  person  or  by  his  counsel  or  attor- 
ney, and  the  witnesses  shall  be  subject  to  examination  and 
cross-examination,  which  shall  be  had  in  conformity  with 
the  mode  now  adopted  in  courts  of  law.  A  deposition  taken 
upon  an  examination  before  a  referee  must  be  taken  down  in 
writing  by  him,  or  under  his  direction,  in  the  form  of  narra- 
tive, unless  he  determines  that  the  examination  shall  be  by 
question  and  answer.  When  completed  it  shall  be  read  over 
to  the  witness  and  signed  by  him  in  the  presence  of  the  ref- 
eree. The  referee  must  note  upon  the  deposition  any  question 
4  objected  to,  with  his  decision  thereon,  and  the  court  has  power 
to  deal  with  the  costs  of  incompetent,  immaterial  or  irrelevant 
depositions,  or  parts  of  them,  as  may  be  just. 

The  referee  has  no  power  to  punish  for  contempt  committed 
in  proceedings  before  him.®®  Where  a  person,  in  proceedings 
before  a  referee,  disobeys  or  resists  any  lawful  order  or  process 
or  writ,  misbehaves  during  a  hearing  or  so  near  the  place 
thereof  as  to  obstruct  the  same,  or  neglects  to  produce,  after 
having  been  ordered  to  do  so,  any  pertinent  documents,  or 
refuses  to  appear  after  having  been  properly  summoned,  or 
upon  hearing  refuses  to  take  an  oath  as  a  witness,  or,  having 
taken  the  oath,  refuses  to  be  examined  according  to  law,"® 
proceedings  must  be  taken  in  the  court  of  bankruptcy  for  com- 
mitment. In  such  cases  the  referee  certifies  the  facts  to  the 
judge.  The  judge,  in  a  summary  manner,  hears  the  evidence 
as  to  the  acts  complained  of  and  makes  such  orders,  and  de- 
crees such  punishment  as  he  would  had  the  contempt  been  com- 
mitted in  proceedings  before  the  court.^" 


««/«    re    Pierce,    in    Fed.    Rep.  «»  Smith  v.  Belford  (C.  C.  A.  6th 

516,  5  Am.  B.  R.  747;  In  re  Teho,  Cir.),  106  Fed.  Rep.  658,  5  Am.  B. 

loi    Fed.    Rep.   419,   4   Am.    B.    R.  R.  291. 

235,  In  re  Todd,  109  Fed.  Rep.  265  ,  «"  B.  A.  1898,  Sec.  41. 

6  Am.  B.  R.  881.  70  B.  A.  1898,  Sec.  41  and  Sec.  2. 

^7  Gen.  Ord.  22;  B.  A.  1898,  Sec.  clauses    13  and   16.     See  also   Con- 

39,    clause    9.     See    also    Examina-  tempt,  Chap.  XXII,  post. 
tions,  Sec.  208,  post. 


REFEREES.  I  I  7 

§  32.     Power  to  take  possession  and  release  the  bankrupt's 
property. 

It  is  properly  within  the  province  of  the  judge  to  take  pos- 
session and  release  the  property  of  the  bankrupt.  Yet  the 
referee  is  clothed  with  this  power,  provided  the  clerk  issues 
a  certificate  showing  the  absence  of  the  judge  from  the  judi- 
cial district  or  the  division  of  the  district,  or  his  sickness  or 
inability  to  act."  This  language  evidently  means  that  the 
referee  has  the  same  power  to  act  in  cases  properly  referred 
to  him  as  the  judge  has  when  no  reference  is  made.  The 
referee  has  no  authority  to  take  possession  of  or  release  the 
property  under  any  other  circumstances. 

The  referee  may  appoint  a  receiver  or  the  marshal,  upon 
application  of  parties  in  interest,  in  case  it  shall  be  necessary 
for  the  preservation  of  the  estate,  to  take  charge  of  the  prop- 
erty of  the  bankrupt  at  any  time  after  the  filing  of  the  peti- 
tion and  until  it  is  dismissed  or  the  trustee  is  qualified.''^  If 
necessary  for  the  best  interest  of  the  estates,  the  referee  may 
authorize  the  business  of  the  bankrupt  to  be  conducted  for  a 
limited  period  by  a  receiver,  the  marshal  or  the  trustee." 

In  case  it  becomes  necessary  to  take  possession  of  the  prop- 
erty after  the  petition  is  filed  and  before  an  adjudication,  a 
warrant  may  issue  to  the  marshal  to  seize  and  hold  the  prop- 
erty subject  to  further  orders.''*  In  such  cases  an  indemnity 
bond,  in  such  an  amount  as  the  referee  shall  fix,  with  such 
sureties  as  he  shall  approve,  is  required.  Such  property  may 
be  released  upon  the  bankrupt  giving  a  bond  in  such  sum 
and  with  such  sureties  as  the  referee  may  approve.  In  case 
the  petition  is  dismissed  the  referee  has  power  to  release  the 


'1  B.   A.    1898,   Sec.  38,  clause  3.  in    possession    until    a    trustee    was 

See  also  B.  A.  1898,  Sec.  69.  appointed. 

^2  B.  A.  1898,  Sec.  2,  clause  3,  and  Where  the  property  is  of  a  per- 

Sec.  38,  clause  4.  ishable  nature,  see  in  re  Vila,  No. 

In  re  Mahcr,  at  Cincinnati,  Ref-  16941    Fed.   Cas.,   s.  c.  5   Law  Rep. 

eree  Waite  appointed  a  receiver  of  17;  Gen.  Ord.  18. 

a   stable   of   horses   on   the   applica-  '•'  B.  A.  1898,  Sec.  2,  clause  5,  and 

tion   of  a   voluntary  bankrupt,   who  Sec.   38,  clause  4. 

was  unable  to  obtain  hay  and  grain  ^*  B.    A.    1898,   Sec.    38,   clause    3. 

to    feed    them.     The    receiver    was  and  Sec.  69. 


Il8  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

property.  After  the  adjudication  the  referee  may  direct  a 
receiver  appointed  hy  him  or  a  marshal  to  take  possession  of 
the  property  before  the  trustee  is  appointed.  In  such  case 
no  bond  is  required. 

It  should  be  observed,  however,  that  the  referee  has  power 
to  act  only  in  the  absence  of  the  judge,  or  his  sickness,  or 
disability  to  act.  If  any  person  refuses  to  obey  a  proper  order 
of  the  referee  the  court  may  enforce  it  by  an  order  of  attach- 
ment for  contempt. '^^  The  referee  may  also  have  the  property 
insured  by  the  direction  of  the  judge.'^** 

As  soon  as  a  trustee  is  appointed  and  qualified  he  is  vested 
by  law  with  the  title  to  the  bankrupt's  property  as  of  the 
date  of  the  adjudication,  except  property  exempt  by  law,"^^ 
and  is  entitled  to  the  possession  of  the  property.  The  bank- 
rupt regularly  surrenders  possession  of  his  property  to  the 
trustee.  If  the  bankrupt  does  not  turn  over  his  property  to 
his  trustee  the  referee  has  power  to  order  him  to  do  so.^* 


§  32a.  Review  of  referees'  rulings  by  judge. 

Any  ruling  or  order  of  a  referee  may  be  reviewed  by  the 
judge  of  the  court  of  bankruptcy.'**  When  a  bankrupt,  cred- 
itor, trustee  or  other  person  desires  a  review  by  the  judge  of 
any  order  made  by  the  referee,  he  must  file  with  the  referee 
his  petition  therefor,  setting  out  the  errors  complained  of ;  and 
the  referee  shall  certify  to  the  judge  the  questions  presented, 
a  summary  of  the  evidence  relating  thereto,  and  the  finding  and 
order  of  the  referee  thereon.®"  It  is  a  specific  order  or  ruling 
which  may  be  reviewed.  A  general  review  of  the  proceedings 
before  the  referee  is  not  contemplated.^^ 

A  bankrupt,  creditor,  trustee  or  other  person  may  apply  for 
a  review  of  the  ruling  or  order  of  the  referee.     The  application 


■^5  In   re   Speyer,    42    How.    Prac.  ts  /„  ,.^  Tudor,  96  Fed.  Rep.  942, 

397;  In  re  Kempner,  No.  7689  Fed.  2  Am.  B.  R.  808. 

Cas.,  s.  c.  6  B.  R.  521.  ^93.  A.  1898,  Sec.  2,  cl.  10;  Gen. 

76 /m   re   Carow,   41    How.    Prac.  Ord.  27. 

112.  **<•  Gen.  Ord.  27. 

77  B.  A.  1898,  Sec.  70.  SI  In  re  Kelly  Dry  Goods  Co.,  102 

Fed  Rep.  747  ,  4  Am.  B.  R.  528. 


REFEREES.  II9 

should  be  made  by  a  person  interested  or  whose  rights  are 
affected  by  the  ruling  or  order  complained  of. 

The  application  should  be  in  the  form  of  a  petition  filed 
with  the  referee.^^  The  petition  should  be  filed  after  the  order 
or  ruling  sought  to  be  reviewed  has  been  made  by  the  referee  ®^ 
and  not  before.®*  No  time  is  specified  in  the  statute  ®r  general 
orders  within  which  this  petition  must  be  filed,  but  the  courts 
have  held  that  it  must  be  within  a  reasonable  time.*^ 

The  petition  should  clearly  set  forth  the  error  complained  of 
and  pray  that  the  order  or  ruling  of  the  referee  may  be  re- 
viewed.^® 

The  petition  should  be  signed  by  the  petitioner  or  his  at- 
torney. It  need  not  be  verified  by  an  affidavit  for  the  reason 
that  it  does  not  allege  facts.  The  facts  are  brought  up  by  the 
certificate  or  record  of  the  evidence. 

When  such  a  petition  has  been  filed  with  the  referee  he  must 
forthwith  certify  to  the  judge  the  question  presented,  a  sum- 
mary of  the  evidence  relating  thereto,  and  the  finding  and 
order  of  the  referee  thereon.^'  The  summary  of  the  evidence 
mentioned  in  General  Order  27  may  be  all  the  evidence  taken 
stenographically  or  the  substance  thereof  as  agreed  upon  by 
the  parties.*^  The  summary  and  not  the  complete  evidence 
should  be  certified  whenever  the  rules  of  justice  will  permit.*'' 
Where  this  is  done  the  district  court  may  require  original  evi- 
dence or  parts  thereof  certified  to  it.''"    If  exhibits  are  attached 


«2  Gen.    Ord.    27 ;    In    re    Russell,  In  re  Reliance  Storage  and  Ware- 

105    Fed.    Rep.   501,    5    Am.    B.    R.  house  Co.,  100  Fed.  Rep.  619,  4  Am. 

566;    In   re   Schiller,  96   Fed.    Rep.  B.  R.  49. 

400,  2  Am.  B.  R.  704 ;  In  re  Hawley,  so  For     forms     of     petition,     see 

116    Fed.    Rep.   428,    8   Am.    B.    R.  Forms  Nos.  130  to  12,A,  post. 

632.  ^'■^  Gen.    Ord.    27.      For    form    of 

83  In    re    Russell,    105    Fed.    Rep.  certificate,    see    Forms    Nos.    135   to 

501,  5  Am.  B.  R.  566,  In  re  Scott,  139,  post.     In  re  Kurtz,  11  Am.  B. 

99  Fed.  Rep.  404 ,  3  Am.  B.  R.  625 ;  R.  129. 

In  re  Schiller,  96  Fed.  Rep.  400,  2  s*  B.  A.  1898,  Sec.  39a,  cl.  S  and  9. 

Am.  B.  R.  704.  ^"  Cunningham    v.    German    Nat. 

8*7n  re  Smith,  93  Fed.  Rep.  791.  Bank  (C.  C.  A.  6th  Cir.),  103  Fed. 

^5/;j   re   Scott,  99  Fed.  Rep.  404,  Rep.  932,  4  Am.  B.  R.  192. 

3  .Am.  B.  R.  625 ;  In  re  Chambers,  ""  Cunningham    v.    German    Nat. 

Calder   &   Co.,   6   Am.    B.    R.   709;  Bank  (C.  C.  A.  6th  Cir.),  103  Fed. 

Rep.  932,  4  Am.  B.  R.  192. 


I20  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

to  the  certificate  they  should  be  referred  to  in  the  certificate 
and  marked  in  some  manner  to  identify  them. 

It  has  been  held  that  exceptions  may  be  taken  to  the  proceed- 
ings and  contained  in  the  certificate  and  exhibits  attached  to 
it."^  Where  a  referee  makes  a  ruling  upon  the  admissibility 
of  evidence  in  the  course  of  an  examination  the  certificate 
should  show  the  ruling  and  the  question  should  be  answered 
in  any  case  and  tlie  examination  continued,  and  the  question 
decided  by  the  court  after  the  deposition  is  completed."' 

The  certificate  should  be  prepared  and  signed  by  the  referee 
and  by  him  transmitted  to  the  clerk  of  the  court. 

When  the  certificate  is  filed  in  the  clerk's  office  it  becomes 
the  duty  of  the  judge  to  consider  and  confirm,  modify  or  over- 
rule, or  return  with  instructions  for  further  proceedings  such 
records  and  findings.''''  If  the  question  be  improperly  certified 
the  court  may  refuse  to  give  an  opinion.''* 

The  case  is  regularly  set  for  hearing  upon  the  petition  and 
exhibits  without  answer  or  pleading  on  the  part  of  the  re- 
spondent. The  judge  will  usually  hear  arguments  of  counsel. 
If  the  judge  is  not  satisfied  with  the  evidence  certified  by  the 
referee  he  may  allow  further  evidence  to  be  taken  before  him.*^ 
or  refer  the  matter  to  the  referee  for  further  proofs. 


"1  In  re  Cogley,  107  Fed.  Rep.  y2i,  enough.     No   formal   exceptions   to  \/'^ 

5  Am.  B.  R.  731  ;  Dressel  v.  North  the  referee's  findings  or  rulings  need 

State    Lumber   Co.,    119    Fed.    Rep.  be  filed.    If  this  practice  shall  seem 

531,  9  Am.  B.  R.  541 ;  In  re  Carver,  lax  to  some,  the  answer  is  that  it 

113    Fed.    Rep.    138;    7    Am.    B.    R.  has  hitherto  been  found  convenient 

539;     Carolina    Cooperage    Co.,    96  in   this   district,  both   for  the  judge 

Fed.  Rep.  604.  and  for  the  parties,  and  it  has  not 

In  re  Swift,  118  Fed.  Rep.  348,  g  been  abused.    A  stricter  practice  has 

Am.  B.  R.  237,  Judge  Lowell  said :  been    adopted    in    some    other    dis- 

"  Counsel    for    the    joint    creditors  tricts,  doubtless  because  it  has  been 

raised     certain     formal     objections,  deemed  convenient  there." 
based  upon  the  state  of  the  record.  ^-  In    re    Lipset,    Levittan    &    Co.,  -^  •^ 

It  is  sufficient  to  say  that  this  court  119  Fed.  Rep.  379,  9  Am.  B.  R.  32 ;f"^ 

has  not  hitherto  required,  and  does  Dressel  v.  North  State  Lumber  Co., 

not  intend  to  require  hereafter,  any  119  Fed.  Rep.  531,  9  Am.  B.  R.  541. 
particular  formalities  to  be  observed  ^^  R.  S.  Sec.  2,  cl.  10. 

in  seeking  a  review  by  the  judge  of  ^^  In  re  Smith,  93  Fed.  Rep.  791. 

the  orders  or  other  proceedings   of  '*^  In  re  Stotts,  93  Fed.  Rep.  438, 

a  referee.     If  the  matter  in  dispute  i  Am.  B.  R.  641. 
i;3     substantially     set     out,    that     is 


REFEREES. 


121 


Ordinarily  the  review  by  the  judge  of  an  order  made  by  the 
referee  will  be  confined  to  the  errors  pointed  out  in  the  petition 
for  review,  but  the  judge  may  notice  an  error  not  assigned.'*^ 

The  judge  reviews  both  law  and  fact.  No  fixed  rule  can 
be  laid  down  with  reference  to  the  weight  to  be  given  by  the 
judge  to  the  finding  of  fact  by  the  referee  in  making  his 
ruling  or  order.  ^' 

If  the  order  of  the  referee  is  modified  or  reversed  the  judge 
will  usually  direct  the  proper  order  to  be  entered  with  reference 
to  the  further  proceedings.  A  certified  copy  of  this  order 
should  be  furnished  the  referee  for  his  direction  and  guid- 
ance.®" 


8«/m    re   Gottardi,    7    Am.    B.    R. 

"■^  In  re  Grant  Bros.,  118  Fed.  Rep. 
73,  9  Am.  B.  R.  93;  In  re  Carver, 
113  Fed.  Rep.  138,  7  Am.  B.  R. 
539;  In  re  Covington,  110  Fed.  Rep. 
143,  6  Am.  B.  R.  2)72)\  I»  ^^  Mayer, 
98  Fed.  Rep.  839,  3  Am.  B.  R.  533, 
In  re  McCormick,  97  Fed.  Rep.  566 , 
3  Am.  B.  R.  340 ;  In  re  Waxelbaum, 
loi  Fed.  Rep.  228,  4  Am.  B.  R. 
120;  In  re  Booth,  96  Fed.  Rep.  943, 
2  Am.  B.  R.  770. 

In  re  Swift,  118  Fed.  Rep.  348,  9 
Am.  B.  R.  237,  Judge  Lowell,  speak- 
ing on  this  subject,  said:  "Again, 
no  precise  quantitative  weight  is  in 
this  district,  assigned  to  the  findings 
of  fact  made  by  a  referee.  If  those 
findings  are  based  largely  upon  the 
good  or  bad  faith  of  witnesses  seen 
and  heard  by  the  referee,  this  court 
will  always  bear  in  mind  that  the 
referee's  means  of  judgment  are,  in 
an  important  respect,  better  than  its 
own.  If.  on  the  other  hand,  the 
findings  depend  upon  inferences  to 
be  drawn  from  admitted  facts,  this 
court's  means  of  judgment  are  near- 
ly  as   good    as   the   referee's.     The 


weight  to  be  assigned  to  the  ref- 
eree's findings  in  the  two  cases  sup- 
posed is  by  no  means  the  same.  No 
labor  saving  formula  will  determine 
the  weight  of  the  finding,  or  show 
j  nst  how  strongly  the  court  must  in- 
cline against  it  in  order  to  reverse  it. 
To  say  that  the  finding  should  not 
be  set  aside  unless  it  is  '  clearly 
erroneous,'  'manifestly  erroneous,' 
'  so  manifestly  erroneous  as  to  in- 
voke the  sense  of  justice  of  the 
crurt,"  'or  'unless  it  discloses  preju- 
dicial errors  by  the  referee,  some  of 
which  may,  without  exaggeration, 
be  denominated  gross,'  is  to  darken 
counsel,  if  more  is  meant  than  that 
the  court  will  not  set  aside  the 
finding  unless  it  is  deemed  erron- 
eous, after  due  allowance  for  the 
circumstances  under  which  it  was 
made.  Artificial  and  quantitative 
presumptions  of  fact  are  foreign  to 
the  spirit  of  the  common  law,  and 
the  introduction  of  these  presump- 
tions has  been  rare  and  unfortu- 
nate." 

o«  For  forms  cf  orders,  see  Forms 
Nos.  143  to  14s,  post. 


122  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

§  33.     The  administrative  duties  of  referees. 

Ill  addition  to  his  judicial  duties,  the  statute  enumerates 
certain  administrative  duties  of  the  referee. 

It  provides ""'  that  referees  shall 

First,  declare  dividends  and  prepare  and  deliver  to  trustees 
dividend  sheets,  showing  the  dividends  declared  and  to  whom 
payable ; 

Second,  examine  all  schedules  of  property  and  lists  of  credi- 
tors filed  by  bankrupts,  and  cause  such  as  are  incomplete  or 
defective  to  be  amended. 

Third,  furnish  such  information  concerning  the  estates  in 
process  of  administration  before  them  as  may  be  requested  by 
the  parties  in  interest.  This  does  not  include  furnishing  copies 
of  proceedings  pending  before  them.^°*' 

Fourth,  give  notices  to  creditors  as  provided  by  the  stat- 
ute ;^°^ 

Fifth,  make  up  records  embodying  the  evidence,  or  the  sub- 
stance thereof,  as  agreed  upon  by  the  parties  in  all  contested 
matters  arising  before  them,  whenever  requested  to  do  so  by 
either  of  the  parties  thereto,  together  with  their  findings  there- 
in, and  transmit  them  to  the  judges ; 

Sixth,  prepare  and  file  the  schedules  of  property  and  lists 
of  creditors  required  to  be  filed  by  the  bankrupts,  or  cause  the 
same  to  be  done,  when  the  bankrupts  fail,  refuse  or  neglect  to 
do  so ;  "- 

Seventh,  safely  keep,  perfect  and  transmit  to  the  clerks  the 


^^  B.  A.   1898,  Sec.  390.  compositions    or    the    discharge    of 

1"°  In    re    Lewin,    103    Fed.    Rep.  bankrupts ;  (3)  all  meetings  of  cred- 

850 ,  4  Am.  B.  R.  632.  itors ;     (4)     all    proposed    sales    of 

I'^i  B.  A.  1898,  Sec.  58a,  provides  property;    (5)    the   declaration    and 

that   "  creditors   shall   have   at   least  time  of  payment  of  dividends ;    (6) 

ten    days'    notice    by   mail,   to   their  the  filing  of  the  final  accounts  of  the 

respective  addresses  as  they  appear  trustee,  and  the  time  when  and  the 

in  the  list  of  creditors  of  the  bank-  place  where  they  will  be  examined 

rupt,    or    as    afterwards    filed    with  and  passed  upon;  (7)  the  proposed 

the  papers  in  the  case  by  the  cred-  compromise  of  any  controversy,  and 

itors,    unless    they   waive    notice    in  (8)    the   proposed   dismissal   of   the 

writing,  of   (i)   all  examinations  of  proceedings." 

the  bankrupt ;  (2)  all  hearings  upon  i**-  See  Gen.  Ord.  9. 
applications  for  the  confirmation  of 


REFEREES.  1 23 

records  herein  required  to  be  kept  by  them,  when  the  cases  are 
concluded ; 

Eighth,  transmit  to  the  clerks  such  papers  as  may  be  on 
file  before  them  whenever  the  same  are  needed  in  any  pro- 
ceedings in  courts,  and  in  like  manner  secure  the  return  of 
such  papers  after  they  have  been  used,  or,  if  it  be  impracti- 
cable to  transmit  the  original  papers,  transmit  certified  copies 
thereof  by  mail ; 

Ninth,  upon  application  of  any  party  in  interest,  preserve 
the  evidence  taken  or  the  substance  thereof  as  agreed  upon 
by  the  parties  before  them  when  a  stenographer  is  not  in  at- 
tendance ;  ^°^  and 

Tenth,  whenever  their  respective  offices  are  in  the  same 
cities  or  towns  where  the  courts  of  bankruptcy  convene,  call 
upon  and  receive  from  the  clerks  all  papers  filed  in  courts  of 
bankruptcy  which  have  been  referred  to  them. 

All  notices  are  given  by  the  referee,  unless  otherwise  ordered 
by  the  judge."*  In  sending  notices  the  referee  is  entitled  to 
use  an  official  penalty  envelope,  and  need  not  pay  postage.^"^ 

A  penalty  envelope  for  conducting  the  official  business  by  a 
referee  may  be  in  the  following  form  : 


JOHN  DOE,  DEPARTMENT  OF  JUSTICE. 

Referee  in  Bankruptcy. 

^..,^..,.,.....   ^                                                       OFFICIAL  BUSINESS. 
CINCINNATI,  O.  

Penalty  for  Private  Use,  $300. 


103  7n  re  Rozinsky,  loi   Fed.  Rep.  "■*  B.   A.   1898,   Sec.  sSr. 

229,  3  Am.  B.  R.  830;  In  re  Todd,  los  Post   Office  Department,  First 

109  Fed.  Rep.  265 ,  6  Am.  B.  R.  88.      Assistant    Postmaster    General,   Di- 


124  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

§  34.     Records  of  referees, 

A  record  of  proceedings  in  each  case  before  a  referee  is  re- 
quired to  be  kept  as  nearly  as  may  be  in  the  same  manner  as 
records  are  now  kept  in  equity  cases  in  the  circuit  courts  of 
the  United  States.^*>" 

The  referee  is  required  to  endorse  on  each  paper  filed  with 
him  the  date  and  the  hour  of  filing  and  a  brief  statement  of 
its  character."'^  He  must,  upon  application  of  any  party  in 
interest,  preserve  the  evidence  taken  or  the  substance  thereof, 
as  agreed  between  the  parties  before  him,  when  a  stenographer 
is  not  in  attendance."^  If  a  stenographer  is  in  attendance  a 
transcript  of  his  notes  is  used."^  These  papers,  together  with 
such  orders  as  the  referees  from  time  to  time  makes,  such 
notices  as  he  is  required  to  give  and  a  record  of  the  proceed- 
ings in  each  case  required  to  be  kept  in  a  separate  book  or 
books,  constitute  the  record  of  the  case."*' 

The  record  is  frequently  kept  on  one  or  more  sheets  of 
paper,  upon  which  are  stated  the  proceedings  in  the  same 
form  as  proceedings  are  usually  stated  in  an  appearance  docket. 
These  separate  sheets  form  the  first  pages  of  the  record. 
The  various  sheets  constituting  the  record  should  be  firmly 
and  neatly  bound  together,  when  the  case  is  concluded,  by 
the  referee,  should  be  certified  by  him  and  transmitted  to 
the  clerk  of  the  court  of  bankruptcy,  and  there  remain  as  a 
part  of  the  record  of  the  court. "^ 

Whenever  a  bankrupt,  creditor,  trustee  or  other  person  shall 
desire  a  review  by  the  judge  of  any  order  made  by  the  referee 

vision  of  Correspondence,  Washing-  for  conducting  the  official  business, 

ton,  August  6,  1898.  for  which  he  is  appointed. 

Postmaster,  Cincinnati,  O.,  Sir:—  Very  respectfully, 

Your    letter    of    August    i,    ad-  Geo.  M.  Allen,  Acting  First  As- 
dressed   to    the    Assistant    Attorney  sistant   Postmaster-General. 
General  for  the  Post  Office  Depart-  io«  B.  A.  1898,  Sec.  420. 
ment,  has  been  referred  to  this  office  i**^  Gen.  Ord.  2. 
for  reply.     Answering  your  inquiry  io«  B.  A.   1898,  Sec.  39,  clause  9; 
you   are    advised   that   a   referee   in  Gen.    Ord.    22. 

bankruptcy,  appointed  by  the  Court  i^^  B.  A.   1898,  Sec.  38,  clause  5 ; 

in   Bankruptcy,   is   entitled   to  make  Gen.  Ord.  22. 

use  of  the  official  penalty  envelope,  ^^^  b.  A.  1898.  Sec.  426. 

iiiR.  A.  1898,  Sec.  42c. 


REFEREES.  1 25 

he  applies  to  the  referee  by  petition  that  the  question  may 
be  certified  to  the  judge  for  review. ^^'  He  is  required  there- 
upon to  make  up  a  record  embodying  the  evidence  or  sub- 
stance thereof,  as  agreed  upon  between  the  parties,  together 
with  his  findings,  certify  to  the  same  and  transmit  the  record 
to  the  judge."^ 

He  is  also  required  to  transmit  to  the  clerk  such  papers  as 
may  be  on  file  before  him  whenever  the  same  are  needed  in 
any  proceedings  in  courts,  and  in  like  manner  secure  the 
return  of  such  papers  after  they  have  been  used,  or  if  it  be 
impracticable  to  transmit  the  original  papers,  transmit  cer- 
tified copies  thereof  by  mail.^^*  These  last  two  are  partial  or 
interlocutory  records,  and  do  not  affect  the  making  of  the 
final  record  above  referred  to  at  the  proper  time. 

§  35.     Offenses  of  referees. 

Referees  are  forbidden  by  the  statute  to  act  in  cases  in 
which  they  are  directly  or  indirectly  interested ;  "^  to  practice 
as  attorneys  and  examiners  at  law  in  any  bankruptcy  pro- 
ceedings ;  or  to  purchase,  directly  or  indirectly,  any  property 
of  an  estate  in  bankruptcy. 

The  statute  provides  ""  that 

"A  person  shall  be  punished  by  fine,  not  to  exceed  five 
hundred  dollars,  and  forfeit  his  office,  and  the  same  shall 
thereupon  become  vacant,  upon  conviction  of  the  offense  of 
having  knowingly 

"  first,  acted  as  a  referee  in  a  case  in  which  he  is  directly 
or  indirectly  interested ;  or 

"  second,  purchased,  while  a  referee,  directly  or  indirectly, 
any  property  of  the  estate  in  bankruptcy  of  which  he  is  ref- 
eree; or 

"  third,   refused,    while  a   referee  or  trustee,   to   Derniit    a 


"3  Gen.  Ord.  27.     See  ante,  Sec.  102,  i  Am.  B.  R.  153;  B.  A.  1898, 

320.  Sec.  39&. 

"3B.  A.  1898,  Sec.  39,  clause  S;  ii«  B.  A.  1898,  Sec.  296. 

Gen.  Ord.  27.  A  circuit  court  or  a  court  of  bank- 

^^*  B.  A.  1898,  Sec.  39,  clause  8.  ruptcy    has    jurisdiction    to    punish 

^^^  Cobb    V.    Bray,    91    Fed.    Rep.  for   any   of   these    offenses.      B.    A. 

1898.  Sec.  23c  and  Sec.  2,  clau.se  4. 


126  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

reasonable  opportunity  for  the  inspection  of  the  accounts  re- 
lating to  the  affairs  of,  and  the  papers  and  records  of  estates 
in  his  charge  by  parties  in  interest  when  directed  by  the  court 
so  to  do." 

§  36.     Compensation  and  expenses  of  referees. 

The  compensation  is  fixed  by  the  statute  "^  as  follows : 

"  Referees  shall  receive  as  full  compensation  for  their  serv- 
ices, payable  after  they  are  rendered,  a  fee  of  fifteen  dollars 
deposited  with  the  clerk  at  the  time  the  petition  is  filed  in 
each  case,  except  when  a  fee  is  not  required  from  a  voluntary 
bankrupt,  and  twenty-five  cents  for  every  proof  of  claim  filed 
for  allowance,  to  be  paid  from  the  estate,  if  any,  as  a  part  of 
the  costs  of  administration,  and  from  estates  which  have  been 
administered  before  them  one  percentum  commissions  on  all 
moneys  disbursed  to  creditors  by  the  trustee,  or  one-half  of  one 
percentum  on  the  amount  to  be  paid  to  creditors  upon  the 
confirmation  of  a  composition. 

Sec.  72,  added  by  the  amendment  of  1903,  provides  "  That 
neither  the  referee  nor  the  trustee  shall  in  any  form  or  guise 
receive,  nor  shall  the  court  allow  them,  any  other  or  further 
compensation  for  their  services  than  that  expressly  authorized 
and  prescribed  in  this  act."  "^ 

The  bankruptcy  act  as  originally  passed  allowed  referees 
ten  dollars  instead  of  fifteen  dollars,  and  no  fee  for  filing 
claims.  Commissions  were  allowed  on  "  sums  to  be  paid  out 
as  dividends."  This  was  held  not  to  include  commissions  on 
moneys  paid  secured  creditors,  because  they  were  not  divi- 
dends.^^'^     This  rule  applies  to  all  proceedings  begun  prior  to 

^'^''  B.  A.  1898,  Sec.  40,  as  amended  116  Fed.  Rep.  731 ,  In  re  Ft.  Wayne 

Feb.  5,  1903 ;  32  Stat,  at  L.  797.  Elec.    Corp.,    94    Fed.    Rep.    109,    i 

^^*  32  Stat,  at  L.  797 ;  Dressel  v.  Am.  B.  R.  706 ;  In  re  Gardner,  103 

North  State  Lumber  Co.,  119  Fed.  Fed.   Rep.  922,  4  Am.   B.   R.  420; 

Rep.  531.  In  re  Fielding,  96  Fed.  Rep.  800,  3 

But    see  In   re   Goldville   Mining  Am.    B.   R.    135 ;   In  re   Goldsmith, 

Co.,  123  Fed.  Rep.  579;  10  Am.  B.  118    Fed.    Rep.    763,   9    Am.    B.    R. 

R.   552.  419;    In    re    Barker,    iii    Fed.    Rep. 

119 /,j  yc  utt  (C.  C.  A.,  7th  Cir.),  501  ,  7  Am.  B.  R.  132.   But  see  In  re 

105    Fed.    Rep.    754 .    5    Am.    B.    R.  Barber,  97  Fed.  Rep.  547 ,  3  Am.  B. 

383,  In  re  Smith,  108  Fed.  Rep.  39,  R.  306. 
5  Am.  B.  R.  559;  In  re  Lumber  Co., 


REFEREES.  I27 

February  5,  1903/-°     Under  the  provision  of  the  amendment 
referees  are  clearly  entitled  to  commissions  on  moneys  paid>^ 
secured  creditors  as  well  as  on  dividends  to  unsecured  cred- 
itors. 

"  Whenever  a  case  is  transferred  from  one  referee  to  another 
the  judge  shall  determine  the  proportion  in  which  the  fee 
and  commissions  therefor  shall  be  divided  between  the  ref- 
erees. 

"  In  the  event  of  the  reference  of  a  case  being  revoked 
before  it  is  concluded,  and  when  the  case  is  specially  referred, 
the  judge  shall  determine  what  part  of  the  fee  and  commis- 
sions shall  be  paid  to  the  referee." 

The  compensation  of  referees  prescribed  by  the  act  is  in 
full  compensation  for  all  services  performed  by  them  under 
the  act  or  under  the  general  orders,  but  does  not  include  ex- 
penses necessarily  incurred  by  them  in  the  performance  of  their 
duties  under  the  act  and  allowed  by  special  order  of  the  judge. ^-^ 
Thus  a  referee  will  not  be  allowed  any  extra  compensation 
for  hearing  specifications  in  opposition  to  a  discharge,^"  nor 
for  preparing  the  dividend  sheet,  nor  for  hearing  the  evidence 
during  the  examination,^-^  nor  for  hearing  numerous  claims  for 
specific  liens,^^*  nor  for  services  in  giving  notice  of  application 
for  discharge.^-^  No  allowance  will  be  made  for  notices  sent 
to  creditors  other  than  those  required  by  Sec.  58  of  the  act, 
nor  for  the  employment  of  a  stenographer  in  adjustment  cor- 
respondence or  other  business  of  the  estate.^""  Clerk  hire 
will  be  allowed  where  the  services  of  a  clerk  are  necessary.^-^ 


120  Act  of  Feb.  5,   1903,  Sec.  19;  Co.,  116  Fed.  Rep.  731,  8  Am.  B.  R. 

32  Stat,  at  L.  797.  651;   In   re   Barker,    in    Fed.    Rep. 

"1  Gen.  Ord.  35,  par.  2.  Soi,  7  Am.  B.  R.  132. 

"2 /n  r^  Troth,  104  Fed.  Rep.  291 ,  125 /„    yg    Dixon,    114    Fed.    Rep. 

4  Am.   B.   R.   780 ;   Bragasa   v.   St.  675,  8  Am.  B.  R.  i45- 

Louis   Cycle    (C.    C.   A.,   5th    Cir.),  126 /„  ^^  Mammouth  Pine  Lumber 

107  Fed.  Rep.  77 ,  5  Am.  B.  R.  700;  Co.,  116  Fed.  Rep.  731,  8  Am.  B.  R. 

contra,  Fellows  v.  Frendenthal   (C.  651. 

C  A.,  7th  Cir.),  102  Fed.  Rep.  731 ,  *"  Gen.  Ord.  35;  In  re  Pierce,  in 

4  Am.  B.  R.  490;  In  re  Grossman,  Fed.   Rep.  516,   6  Am.   B.   R.   747; 

III  Fed.  Rep.  507,  6  Am.  B.  R.  510.  In    re   Tebo,    loi    Fed.   Rep.   419,   4 

123 /m   re    Barker,    in    Fed.    Rep.  Am.  B.  R.  235;  In  re  Todd,  109  Fed. 

501 ,  7  Am.  B.  R.  132.  Rep.  265 :  6  Am.  B.  R.  88. 

"*7»  re  Mammouth  Pine  Lumber 


128  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

It  has  been  held  that  where  a  trustee  and  adverse  claimant  to 
property  try  the  right  to  it  before  the  referee  the  referee  is  do- 
ing work  in  addition  to  his  duty,  and  a  reasonable  fee  as  well  as 
a  stenographer's  fee  should  be  taxed  against  the  unsuccessful 
claimant/^^  but  it  is  doubtful  if  this  would  be  allowed  since 
the  passage  of  Sec.  72  of  the  act.^'"  The  referee's  claim  for 
commissions  must  be  presented  to  and  passed  upon  by  the 
court. ^^"  Every  referee  is  required  to  keep  an  accurate  account 
of  his  traveling  and  incidental  expenses,  and  of  those  of  any 
clerk  or  other  officer  attending  him  in  the  performance  of  his 
duties  in  any  case  which  may  be  referred  to  him,  and  to  make 
return  of  the  same  under  oath  to  the  judge,  with  proper 
vouchers,  when  vouchers  can  be  procured,  on  the  first  Tuesday 
in  each  month. ^^^ 

Before  incurring  any  expense  in  publishing  or  mailing  no- 
tices, or  in  traveling,  or  in  procuring  the  attendance  of  wit- 
nesses, or  in  perpetuating  testimony,  the  referee  may  require, 
from  the  bankrupt  or  other  person  in  whose  behalf  the  duty 
is  to  be  performed,  indemnity  for  such  expense.^''^  Money 
advanced  for  this  purpose  by  the  bankrupt  or  other  person 
shall  be  repaid  him  out  of  the  estate  as  part  of  the  cost  of 
administering  the  same.^^^ 

In  any  case  in  which  the  fees  of  the  referee  are  not  required 
by  the  act  to  be  paid  by  a  debtor  before  filing  his  petition  to 
be  adjudged  a  bankrupt,  the  judge,  at  any  time  during  the 
pendency  of  the  proceedings  in  bankruptcy,  may  order  those 
fees  to  be  paid  out  of  the  estate,  or  may,  after  notice  to  the 
bankrupt  and  satisfactory  proof  that  he  then  has  or  can  ob- 
tain the  money  with  which  to  pay  those  fees,  order  him  to 
pay  them  within  a  time  specified,  and,  if  he  fails  to  do  so, 
may  order  his  petition  to  be  dismissed. ^^^ 

12® /n  re  Todd,  109  Fed.  Rep.  265;       Co.,    116   Fed.   Rep.   731,   8   Am.    B. 
8  Am.  B.  R.  88.  R.  651. 

12832  Stat,  at  L.  797.  131  Gen.  Ord.  26. 

130  /„  Yg  Mammouth  Pine  Lumber  1^2  Gen.  Ord.  10 ;  Sec.  62,  B.  A. 

133  Gen.  Ord.  35,  par.  4. 


CLERKS^    MARSHALS    AND    ATTORNEYS.  1 29 


CHAPTER  VI. 

CLERKS,     MARSHALS    AND    ATTORNEYS, 

§  37.     Duties  of  the  clerk. 

The  word  clerk,  as  used  in  the  bankrupt  act,  means  the 
clerk  of  a  court  of  bankruptcy,  unless  such  a  meaning  is  in- 
consistent with  the  context.^ 

The  clerk  is  required  to  keep  a  docket,"  in  which  the  cases 
shall  be  entered  and  numbered  in  the  order  in  which  they  are 
commenced.  It  must  contain  a  memorandum  of  the  filing- 
of  the  petition  and  of  the  action  of  the  court  thereon,  of  the 
reference  of  the  case  to  the  referee,  and  of  the  transmission 
by  him  to  the  clerk  of  his  certified  record  of  the  proceedings, 
with  the  dates  thereof,  and  a  memorandum  of  all  proceedings 
in  the  case,  except  those  duly  entered  on  the  referee's  certified 
record  aforesaid.  The  docket  must  be  arranged  in  a  manner 
convenient  for  reference,  and  shall  at  all  times  be  open  to 
public  inspection.  The  clerk  is  also  required  to  endorse  on 
each  paper  filed  with  him  the  date  and  hour  of  filing  and  a 
brief  statement  of  its  character.^  He  issues  all  process,  sum- 
mons and  subjKEnas  under  the  seal  of  the  court.* 

The  clerks  are  also  required  to  prepare  and  keep  in  their 
respective  offices  complete  and  convenient  indexes  of  all  peti- 
tions and  discharges  in  bankruptcy  heretofore  or  hereafter 
filed  in  the  said  courts,  and  when  requested  so  to  do,  issue 
certificates  of  search  certifying  as  to  whether  or  not  any  such 
petitions  or  discharges  have  been  filed  ;  •'  and  they  are  entitled 
to  receive  for  such  certificates  the  same  fees  as  now  allowed 
by  law  for  certificates  as  to  judgments  in  said  courts ; "  pro- 

'  B.   A.   1898,   Sec.  I,  clause  5.                 ^'  Sec.  71.  added  by  the  amendment 

2  Gen.   Ord.    i.  of   1903   to  the   Bankruptcy  Act,  32 

3  Gen.   Ord.   2.  Stat,  at   L.  797. 
*Gen.    Ord.    3.  «  R.   S.   Sec.  828. 


130  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

vided,  that  said  bankruptcy  indexes  and  dockets  shall  at  all 
times  be  open  to  inspection  and  examination  l)y  all  persons  or 
corporations  without  any  fee  or  charge  therefor. 

It  is  the  duty  of  a  clerk  to  refer  a  case  to  a  referee  if  the 
judg-e  is  absent  from  the  district  or  division  of  the  district  in 
which  the  petition  is  filed.  In  voluntary  cases  the  reference 
is  made  immediately  upon  the  filing  of  the  petition.^  In 
involuntary  cases  the  reference  is  made  on  the  next  day  after 
the  last  day  on  which  pleadings  may  be  filed,  provided  none 
have  been  filed  by  the  bankrupt  or  any  of  his  creditors.®  For 
the  purpose  of  enabling  the  referee  to  exercise  the  powers  of 
the  judge  for  the  taking  possession  of  and  releasing  the  prop- 
erty of  the  bankrupt  the  clerk  may  issue  a  certificate  showing 
the  absence  of  the  judge  from  the  judicial  district  or  division 
of  the  district,  or  his  sickness  or  inability  to  act.^* 

The  clerks  are  required  to  respectively  ** 

( 1 )  account  for,  as  for  other  fees  received  by  them,  the 
clerk's  fee  paid  in  each  case  and  such  other  fees  as  may  be 
received  for  certified  copies  of  records  which  may  be  prepared 
for  persons  other  than  officers ; 

(2)  collect  the  fees  of  the  clerk,  referee  and  trustee  in  each 
case  instituted  before  filing  the  petition,  except  the  petition 
of  a  proposed  voluntary  bankrupt  which  is  accompanied  by 
an  affidavit  stating  that  the  petitioner  is  without,  and  can  not 
obtain,  the  money  with  which  to  pay  such  fees ; 

(3)  deliver  to  the  referees  upon  application  all  papers  which 
may  be  referred  to  them,  or,  if  the  offices  of  such  referees  are 
not  in  the  same  cities  or  towns  as  the  offices  of  such  clerks, 
transmit  such  papers  by  mail,  and  in  like  manner  return 
papers  which  were  received  from  such  referees  after  they  have 
been  used ; 

(4)  and  within  ten  days  after  each  case  has  been  closed  pay 

■^  B.    A.  1898,    Sec.    iSg.     Official  That  a  deputy  clerk  cannot  refer  »^ 

Form  No.  15,  Form  No.  32,  post.  a  case,  see  Bray  v.  Cobb,  i  Am.  B. 

8  B.    A.  1898,    Sec.    18/.      Official  R.  i53.  9i  Fed.  Rep.  102. 

Form  No.  15,  Form  No.  32,  post.  ^  B.  A.   1898,  Sec.  51. 

8*  B.  A.  1898,  Sec.  38,  clause  3- 


CLERKS,    MARSHALS    AND    ATTORNEYS.  I3I 

to  the  referee,  if  the  case  was  referred,  the  fee  collected  for 
him,  and  to  the  trustee  the  fee  collected  for  him  at  the  time 
of  filing  the  petition. 

The  clerk  is  entitled  to  one  copy  of  the  petition  ^'^  and  to 
one  copy  of  the  schedule.^^ 

§  38.     Compensation  and  expenses  of  clerks. 

The  clerk  receives  as  full  compensation  for  his  service  to 
each  estate  a  filing  fee  of  ten  dollars,  except  when  a  fee  is 
not  required  from  a  voluntary  bankrupt.^^ 

Such  fee  is  in  full  compensation  for  all  services  performed 
by  him  in  regard  to  filing  petitions  or  other  papers  required 
by  the  act  to  be  filed  with  him,  or  in  certifying  or  delivering 
papers  or  copies  of  records  to  referees  or  other  officers,  or  in 
receiving  or  paying  out  money ;  but  does  not  include  copies 
furnished  to  other  persons,  or  expenses  necessarily  incurred 
in  publishing  or  mailing  notices  or  other  papers. ^^  In  any 
case  in  which  the  fees  of  the  clerk  are  not  required  by  the 
act  to  be  paid  by  a  debtor  before  filing  his  petition  to  be  ad- 
judged a  bankrupt,  the  judge,  at  any  time  during  the  pendency 
of  the  proceedings  in  bankruptcy,  may  order  those  fees  to  be 
paid  out  of  the  estate,  or  may,  after  notice  to  the  bankrupt 
and  satisfactory  proof  that  he  then  has  or  can  obtain  the  money 
with  which  to  pay  those  fees,  order  him  to  p3.y  them  within  a 
time  specified,  and  if  he  fails  to  do  so,  may  order  his  petition 
to  be  dismissed.'* 

The  actual  and  necessary  expenses  incurred  by  officers  in  the 
administration  of  estates  shall,  except  where  other  provisions 
are  made  for  their  payment,  be  reported  in  detail,  under  oath, 
and  examined  and  approved  or  disapproved  by  the  court.  If 
approved  they  shall  be  paid  or  allowed  out  of  the  estates  in 
whicl:  they  were  incurred.'"'  Before  incurring  any  expense 
in  j)ubHshing  or  mailing  notices,  or  in  traveling,  or  in  j)rocur- 
ing  the  attendance  of  witnesses,  or  in  perpetuating  testimony, 
the  clerk  may  require,  from  the  bankrupt  or  other  person  in 


^"  B.  A.   1898,  Sec.  sgc.  is  Gen.  Ord.  35,  par.  i. 

^^  B.  A.   i8q8.  Sec.  7,  clause  8.  "  Gen.  Ord.  35,  par.  4. 

^2  B.  A.  1898,  Sec.  52.  I'-'  B.  A.  1898,  Sec.  62. 


132  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

whose  behalf  the  duty  is  to  be  performed,  indemnity  tor  such 
expense.  Money  advanced  for  this  purpose  by  the  bankrupt 
or  other  person  shall  be  repaid  him  out  of  the  estate  as  part  of 
the  cost  of  administering  the  same.^^ 

§  39.     Marshals. 

The  word  "  officer,"  as  used  in  the  act,  includes  a  marshal, 
and  the  imposing  of  duty  upon  or  the  forbidding  of  an  act  by 
any  officer  includes  his  successor  and  any  person  authorized 
by  law  to  perform  the  duties  of  such  officer.^^ 

It  is  the  duty  of  the  marshal  to  serve  such  writs  and  process 
as  may  be  directed  to  him.  It  is  his  duty  to  serve  the  bank- 
rupt in  involuntary  proceedings  with  the  writ  of  subpoena  and 
a  copy  of  the  petition  filed  against  him.^^  The  judge  may  au- 
thorize him  to  seize  and  hold  the  property  of  the  bankrupt 
subject  to  further  orders,^**  or  to  conduct  the  business  of  the 
bankrupt  for  a  limited  period."**  Notices  are  usually  served 
'  by  the  referee,  and  not  by  the  marshal."^ 

§  40.     Compensation  and  expenses  of  marshals. 

Marshals  respectively  receive  from  the  estate  where  an  ad- 
judication in  bankruptcy  is  made,  except  as  by  the  act  other- 
wise provided,  for  the  performance  of  their  services  in  pro- 
ceedings in  bankruptcy,  the  same  fees,  and  account  for  them  in 
the  same  way,  as  they  are  entitled  to  receive  for  the  perform- 
ance of  the  same  or  similar  services  in  other  cases  in  accordance 
with  laws  now  in  force,  or  such  as  may  be  hereafter  enacted, 
fixing  the  compensation  of  marshals."^  A  marshal  has  been 
allowed  a  fee  of  $2  for  serving  a  petition  and  affidavits  and  a 
fee  of  $2  for  an  order  to  show  cause,  both  of  which  were 


21  B.  A.  1898,  Sec.  58c. 

22  B.  A.  1898,  Sec.  52b ;  R.  S.  Sec. 
829,  provides  for  fees  of  marshals. 
The  act  of  May  28,  1896,  Sec.  6, 
20  Stat,  at  L.  179,  provides  that  all 
fees  and  emoluments  of  U.  S.  mar- 
shals shall  be  charged  as  heretofore. 


i«Gen.   ' 

Ord. 

10. 

1^  B.  A. 

1898, 

Sec. 

I,  cl; 

ause 

18. 

18  B.  A. 

1898, 

Sec. 

i8a; 

Eq. 

Rule- 

13- 

18  B.  A. 

1898, 

Sec. 

69a, 

and 

Sec. 

2,  clause  3, 

20  B.    A. 

1898, 

,    Sec 

•    2, 

clause    5 ; 

Iti  re  Adams  Sartoria 

1  Co. 

,   lOI 

Fed. 

Rep.  215. 

CLERKS,    MARSHALS    AND    ATTORNEYS.  I33 

served  upon  the  same  person.-^  In  one  case  he  was  allowed 
$20  for  seventeen  days'  services ;  ^*  in  another  case  $3  a  day 
for  services  of  a  deputy  marshal,"^  and  in  another  case  $2.50 
a  day  for  services  of  a  deputy  marshal  and  $1  a  day  for  the 
services  of  a  watchman.^**  In  each  case  he  was  allowed  his 
actual  expenses  in  addition  to  this  compensation.  Actual  ex- 
penses, however,  do  not  include  the  cost  of  board  and  lodg- 
ing." The  marshal  must  make  return,  under  oath,  of  his/' 
actual  and  necessary  expenses  in  the  service  of  every  warrant 
addressed  to  him,  and  for  custody  of  property,  and  other 
services,  and  other  actual  and  necessary  expenses  paid  by  him, 
with  vouchers  therefor  whenever  practicable,  and  also  with  a 
statement  that  the  amounts  charged  by  him  are  just  and  rea- 
sonable."^ 

Before  incurring  any  expense  in  publishing  or  mailing 
notices,  or  in  traveling,  or  in  procuring  the  attendance  ot  wit-  , 
nesses,  or  in  perpetuating  testimony,  the  marshal  may  require, 
from  the  bankrupt  or  other  person  in  whose  behalf  the  duty 
is  to  be  performed,  indemnity  for  such  expense."^  Money  ad- 
vanced for  this  purpose  by  the  bankrupt  or  other  person  shall 
be  repaid  him  out  of  the  estate  as  part  of  the  cost  of  adminis- 
tering the  same.^"* 

§  41.     Duty  of  the  attorney-general  to  report  annually. 

The  attorney-general  is  required  annually  to  lay  before  con- 
gress statistical  tables  showing  for  the  whole  country,  and  by 
states  the  number  of  cases  during  the  year  of  voluntary  and 
involuntary  bankruptcy;  the  amount  of  the  property  in  the 
estates ;  the  dividends  paid  and  the  expenses  of  administering 


2^  In    re    Damon,    104    Fed.    Rep.  -*  In  re  Adams  Sartorial  Art  Co.. 

775;  5  Am.  B.  R.  13,^,  Judge  Hazel  loi  Fed.  Rep.  215;  4  Am.  B.  R.  107. 

said :      "  Those   charges,   having  al-  25  /„   ^g   Woodard,   95    Fed.    Rep. 

ways  been  made  in  accordance  with  955. 

custom     and     practice     of     United  '-"  In  re  Scott,  99  Fed.  Rep.  404 , 

States    courts,    must,    therefore,    be  4  Am.  B.  R.  625. 

regarded  as  reasonable.    The  charge  ^''  In  re  Scott,  99  Fed.  Rep.  404 , 

for  the  one  is  fixed  by  statute,  and  4  Am.  B.  R.  625. 

the  other  by  custom  and  tacit  con-  ^s  Qg^    Ord.   19;   In   re   Scott,  99 

currence."  Fed.  Rep.  404,  4  Am.  B.  R.  625. 

-"  Gen.  Ord.  ID. 


134  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

such  estates;  and  such  other  Hke  information  as  he  may  deem 
important.^" 

Officers,  including  clerks,  marshals,  receivers,  referees  and 
trustees,^^  are  required  to  furnish  in  writing  and  transmit  by- 
mail  such  information  as  is  within  their  knowledge,  and  as 
may  be  shown  by  the  records  and  papers  in  their  possession,  to 
the  attorney-general,  for  statistical  purposes,  within  ten  days 
after  being  requested  by  him  to  do  so.^^ 


§  41a.     Attorneys. 

A  court  of  bankruptcy  has  jurisdiction  of  a  voluntary  peti- 
tion, signed  and  sworn  to  by  the  bankrupt,  although  the  attor- 
ney for  the  bankrupt  is  not  authorized  to  practice  "  in  the 
circuit  or  district  court."  ^^  An  attorney  for  the  bankrupt  may 
act  as  notary  to  take  the  affidavit  of  the  bankrupt  to  a  petition 
and  schedule  prior  to  instituting  proceedings  in  bankruptcy.'* 
A  petition  in  involuntary  bankruptcy  should  be  verified  by  the 
petitioner  and  specification  in  opposition  to  the  discharge  by 
objecting  creditors.  An  attorney  may  verify  either  pleading 
if  he  is  cognizant  of  the  facts  and  can  make  positive  oath  to 
them.^^ 

It  has  been  held  that  an  attorney  may  take  the  oath  of  his 
client  to  prove  a  debt,'''  but'  this  is  not  good  practice.  The 
bankrupt's  attorney  should  not  represent  creditors  proving 
claims  against  the  estate,"  and  it  is  not  good  practice  for  the 
same  attorney  to  represent  the  trustee  and  the  bankrupt.'^  The 
trustee  may  employ  an  attorney  if  necessary  but  it  has  been 
held  that  the  court  will  not  make  directions  in  advance  with 


SOB.  A.   1898,   Sec.  53.  In  re   Nelson,  98  Fed.   Rep.   76,    i 

31  B.  A.  1898,  Sec.  I,  clause  18.  Am.    B.    R.    63. 

32  B.  A.  1898,  Sec.  54.  30 /„  yg  Kimball,  2  N.  B.  N.  46, 

33  7m  re  Kindt,  3  Am.  B.  R.  546,  100  Fed.   Rep.  777-     But  see  In  re 
98  Fed.  Rep.  403.  Brumelkamp,    i    N.    B.   N.   360,  95 

3*/m  re  Kindt,  2  Am.  B.  R.  306;  Fed.  Rep.  814. 

98  Fed.  Rep.  867.  37/,;  ,.^  Kimball,  i   N.  B.  N.  46, 

35 /m  re  Herzikopf,  118  Fed.  Rep.  100  Fed.   Rep.  777 '>  In  re  Wooten, 

loi  ;  In  re  Hunt,  108  Fed.  Rep.  282;  118  Fed.  Rep.  670,  9  Am-  B.  R.  247. 

In   re  Chequassat  Lumber  Co.,  112  38  Keyes  v.  McKirrow,  180  Mass. 

Fed.  Rep.  56 ,  7  Am.  B.  R.  87 ;  In  re  261 ,  9  Am.  B.  R.  322. 
Glass,   119  Fed.  Rep.  391.     But  see 


CLERKS,    MARSHALS    AND    ATTORNEYS.  1 35 

reference  to  such  employment.^"  An  attorney  for  creditors 
should  not  be  appointed  attorney  for  the  trustee,  where  there 
are  matters  in  controversy  between  different  classes  of  cred- 
itors.^" When  an  attorney  accepts  the  office  of  trustee  he  can- 
not also  be  attorney  for  creditors.*^  The  creditors  may  elect 
an  attorney  for  the  trustee.*' 

An  attorney,  agent  or  proxy  should  be  required  to  produce 
and  file  with  the  referee  written  authority  from  the  creditor 
to  represent  him  and  vote  at  the  creditors'  meeting."*^  But  an 
attorney  at  law  admitted  to  practice  in  the  district  or  circuit 
court  may  appear  in  bankruptcy  proceedings  generally  in  be- 
half of  his  client  without  written  power  of  attorney  as  in  other 
cases.'**  Notices  of  hearing  before  a  referee  may  be  given  by 
mail  to  the  attorneys  interested.*^ 

If  an  attorney  acts  in  good  faith  and  in  the  honest  belief 
that  his  advice  is  well  founded  and  in  the  just  interests  of  his 
client,  he  cannot  be  held  in  contempt  for  error  in  judgment.*® 

Fees  of  Attorneys. —  The  bankrupt  act  provides  that  the 
costs  of  administration,  to  which  priority  is  given,  shall  in- 
clude one  reasonable  attorney's  fee,  for  professional  services 
actually  rendered,  irrespective  of  the  number  of  attorneys  em- 
ployed, to  the  petitioning  creditors  in  involuntary  cases,  to  the 
bankrupt  in  involuntary  cases  while  performing  the  duties  pre- 
scribed in  the  act,  and  to  the  bankru])t  in  voluntary  cases,  as  the 
court  may  allow.*^  This  allowance  may  be  made  by  the  ref- 
eree,*** and  may  be  made  ex  parte  without  giving  notice  to  cred- 


'^  In  re  Abram,  103  Fed.  Rep.  272,  Cir.),  104  Fed.  Rep.  537,  5  .Xm.  B. 

4  Am.  B.  R.  575-  R-  32. 

*"/»!  re  Rusch,  103  Fed.  Rep.  607.  **  In    re    Gasser    (C.    C.    A.,  8th 

•*'  In  re  Evans,  116  Fed.  Rep.  909,  Cir.),  104  Fed.  Rep.  537,  5  Am.  B. 

8  Am.   B.   R.  730.  R.  32. 

*2 /n   re   Little   Lumber   Co.,    loi  *•'  In  re  Lcwin,  103  Fed.  Rep.  850. 

Fed.   Rep.   558.  ■•"  In  re  WatLs  &  Sachs,  190  U.  S. 

*^  In  re  Blankfein  &  Deitz,  2  N.  i. 

B.    N.    49;    In   re   Sugenheimer,  91  ^^  B.  A.  1898,  Sec.  64^,  cl.  3. 

Fed.  Rep.  744;  In  re  Eagles  &  Crisp,  ^^  In  re  Stotts,  93  Fed.  Rep.  438. 

2  N.  B.  N.  462 ,  99  Fed.  Rep.  695  ;  i   Am.  B.  R.  641 ;  In  re  Tebo,  loi 

hi  re  Richards,   103   Fed.  Rep.  849.  Fed.   Rep.   419,   4   Am.    B.    R.   235; 

But  see  In  re  Gasser  (C.  C.  A.,  8th  In  re  Drecben.   tot   Fed.  Rep.  no, 

4  Am.    B.    R.    146. 


136  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

itors.*^  Where  a  partnership  is  adjudged  a  bankrupt,  but  one 
attorney  fee  can  be  allowed,  though  each  of  the  partners  ap- 
peared throughout  the  proceedings  by  different  attorneys.^® 

Before  a  fee  will  be  allowed  to  an  attorney  for  a  voluntary 
bankrupt  he  must  show  that  he  actually  rendered  some  ser- 
vices." Where  the  referee  is  not  satisfied  with  the  evidence 
of  services  rendered,  he  may  suspend  the  claim  for  a  time  but 
must  make- an  allowance  within  a  reasonable  time  on  such  evi- 
dence as  he  may  have.^^ 

It  has  been  held  that  the  attorney  for  a  voluntary  bankrupt 
is  entitled  to  a  fee  only  for  services  which  are  beneficial  to  the 
estate,  and  that  no  fee  should  be  granted  for  services  rendered 
in  preparing  the  schedules  or  other  services  for  the  benefit 
of  the  bankrupt. °^  This  doctrine  is  dissented  from  by  Judge 
Brown.^*  Claims  for  such  fees  may  be  proved  against  the 
estate  under  general  order  ten.^^  A  fee  for  such  services  and 
for  all  other  services  in  assisting  the  bankrupt  in  performing 
the  duties  required  of  him  by  the  act  has  been  allowed  the  attor- 
ney of  an  involuntary  bankrupt.^"  Where  a  voluntary  bank- 
rupt before  filing  his  petition  paid  his  attorney  a  fee  for  services 
in  preparing  the  schedules  and  petition  he  cannot  recover 
this  and  the  filing  fee  from  the  estate  under  general  order 
ten.^^  A  fee  has  been  refused  where  the  bankrupt's  at- 
torney received  from  the  bankrupt's  brother  a  larger  fee  than 
would  ordinarily  be  allowed  by  the  court  out  of  the  estate.^^ 
An  attorney  for  the  bankrupt  is  not  entitled  to  a  fee  as 
a    matter    of    right.     Its    allowance    is    within    the    sound 

*9/n  re  Stotts,  93  Fed.  Rep.  438,  ^*  In  re  Kross,  96  Fed.  Rep.  816, 

I  Am.  B.  R.  641.  3  Am.  B.  R.  188. 

^"  In  re  Eschwege  &  Cohn,  8  Am.  ^5  /^  yg  Beck,  92  Fed.  Rep.  889 ,  1 

B.  R.  282.  Am.  B.  R.  535. 

51  In  re  Terrill,  103  Fed.  Rep.  781,  ^^  In  re  Michel,  95  Fed.  Rep.  803 , 

4  Am.  B.  R.  625.  In  re  Mayer,   loi   Fed.  Rep.  695,  4 

62  Jn   Ye   Dreeben,    loi    Fed.   Rep.  Am.  B.  R.  238 ;  In  re  Goldville  Mfg. 

110,  4  Am.  B.  R.  146.  Co..   123   Fed.  Rep.   579. 

53  In  re  Beck,  92  Fed.  Rep.  889,  i  ^•>''  In  re  Matthews,  97  Fed.  Rep. 

Am.  B.  R.  535,  In  re  Stotts,  93  Fed.  "jyz ,  3  Am.  B.  R.  265. 

Rep.  438,   I  Am.   B.  R.  641 ;  In  re  ^s  i^  ye  O'Connell,  98  Fed.  Rep. 

Smith,  108  Fed.  Rep.  39,  5  Am.  B.  83 ,  3  Am.  B.  R.  422. 
R.  559. 


CLERKS,    MARSHALS    AND    ATTORNEYS.  1 37 

discretion  of  the  court,^®  as  is  also  its  amount,'^''  and  this  dis- 
cretion niay  be  reviewed  on  appeal.*'^  The  fee  allowed  should 
be,  not  what  is  reasonable  for  the  work  done,  but  what  is  rea- 
sonable for  the  work  necessary.*'-  To  justify  an  allowance  of 
a  fee,  the  services  must  have  been  rendered  in  good  faith  and 
reasonably  necessary  for  the  purposes  of  the  act.*'^  Where  the 
bankrupt  tries  to  defeat  and  delay  the  proceeding's  no  fee 
should  be  allowed  to  his  attorney,*'*  nor  should  any  fee  be  al- 
lowed for  defending  him  for  contempt.^^  It  has  been  held 
that  a  fee  should  not  be  allowed  for  assisting  a  bankrupt  in 
getting  his  discharge."^ 

An  attorney  who  represents  the  creditors  in  voluntary  pro- 
ceedings is  not  entitled  to  fees  out  of  the  estate.*'^  An  attorney 
for  the  creditors  in  involuntary  proceedings  is  entitled  to  a 
reasonable  fee  as  a  matter  of  right.**®  An  attorney  for  the 
petitioning  creditors  is  not  entitled  to  a  fee  for  attending  cred- 
itors' meetings,  nor  for  doing  the  work  which  the  bankrupt 
act  requires  the  referee  to  do.**®  Where  a  creditor  employs  an 
attorney  the  attorney  has  a  lien  on  the  amount  secured  for  the 
creditor  which  the  bankruptcy  court  will  enforce.'^'' 

A  fee  is  also  allowed  to  the  attorney  of  the  trustee  in  both 
involuntary  and  voluntary  cases  when  his  services  are  reason- 


^'^  In  re  Carr,  117  Fed.  Rep.  572,  "* /n  re  Woodard,  95   Fed.   Rep. 

9  Am.  B.  R.  58;  In  re  Morris,  125  955,  2  Am.  B.  R.  692. 

Fed.  Rep.  841.  '^^  In  re  Mayer,  loi  Fed.  Rep.  695 , 

8<*  In  re  Beck,  92  Fed.  Rep.  889 ,  4  Am.  B.  R.  238.     But  see  language 

I  Am.  B.  R.  535;  In  re  Burrus,  97  in    Rosenthal   v.    Lehman,    120   Fed. 

Fed.   Rep.   926,  3   Am.   B.    R.   296;  Rep.  848,  9  Am.  B.  R.  626. 

In  re   Curtis    (C.   C.   A.,  7th   Cir.),  •"' /n   re    Brundin,    112    Fed.    Rep. 

100  Fed.  Rep.  784,  4  Am.  B.  R.  17;  306,    7    Am.    B.    R.    296.     But    see 

In   re  Tebo,    loi    Fed.   Rep.  419,   4  Rosenthal  v.  Lehman,  120  Fed.  Rep. 

Am.   B.  R.  235 ;  In  re  Mayer,    loi  848 ,  9  Am.  B.  R.  626. 

Fed.  Rep.  695,  4  Am.  B.  R.  238.  "^ /«  re  Smith,  108  Fed.  Rep.  39, 

«i/n    re    Roche    (C.    C.    A.,    5th  5  Am.  B.  R.  559. 

Cir.),  loi  Fed.  Rep.  956,  4  Am.  B.  ^^  In  re  Curtis  (C.  C.  A.,  7th  Cir.), 

R.  369:  In  re  Curtis  (C.  C.  A.,  7th  100  Fed.  Rep.  785.  4  Am.  B.  R.  17, 

Cir.),  100  Fed.  Rep.  784,  4  Am.  B.  Smith  v.  Cooper,  120  Fed.  Rep.  230. 

R    17.  •■''•  In  re  Harrison  Mercantile  Co., 

®2  In  re  Connell  &  Sons,  120  Fed.  95  Fed.  Rep.  123  ,  2  Am.  B.  R.  219. 

Rep.  846 ,  9  Am.  B.  R.  474.  ■^"  In  re  Rude.  loi  Fed.  Rep.  805 , 

"3  Rosenthal  v.  Lehman,  120  Fed.  4  Am.  B.  R.  319. 
Rep.  848 .  9  Am.  B.  R.  626. 


138  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

ably  necessary."  The  trustee  must  himself  decide  whether 
such  services  are  reasonably  necessary  as  the  court  will  not 
instruct  him  as  to  whether  or  not  he  should  employ  an  attor- 
ney." A  fee  will  not  be  allowed  where  there  was  no  reason- 
able expectation  that  the  work  of  an  attorney  would  gain  any- 
thing for  the  estate."  A  trustee  who  was  an  attorney  at  law 
has  been  allowed  compensation  for  his  professional  services 
such  as  he  would  have  been  obliged  to  pay  had  he  employed 
other  counsel.''*  The  attorney  for  a  trustee  is  not  entitled  to 
a  fee  for  professional  services  for  attending  examinations 
where  his  services  were  rendered  in  behalf  of  creditors  who 
were  his  real  clients.'^  or  in  general  when  the  attorney  for  the 
trustee  is  also  attorney  for  the  creditors.^*^  An  attorney  must 
disclose  his  dealings  with  his  client  to  enable  the  court  to  fix  the 
amount  of  his  compensation.'^  An  attorney  for  an  assignee 
under  a  general  assignment  for  creditors  in  a  state  court,  where 
the  property  of  the  debtor  is  later  administered  in  bankruptcy, 
is  entitled  to  a  reasonable  fee  for  services  rendered  such  as- 
signee before  and  after  the  petition  in  bankruptcy  is  filed,  which 
are  beneficial  to  the  estate,'®  but  he  is  not  entitled  to  a  fee  foi 
resisting  bankruptcy  proceedings.'®  Fees  for  services  rendered 
the  assignee  which  are  beneficial  to  the  estate  should  be  given 
priority  under  Sec.  d^b.^"     A  fee  for  services  rendered  the 


'1  In  re  Little  River  Lumber  Co.,  ^^  In  re  Rozinsky,   loi  Fed.  Rep. 

loi  Fed.  Rep.  558  ,  3  Am.  B.  R.  682 ;  229. 

In   re   Stotts,  93   Fed.   Rep.  438 ,1  "^^  In  re  Carolina  Cooperage  Co., 

Am.  B.  R.  641 ;  In  re  Salaberry,  107  96  Fed.  Rep.  950. 

Fed.  Rep.  95  ,  5  Am.  B.  R.  847.    But  "  In  re  Carr,  9  Am.  B.  R.  58. 

see  In  re  Smith,  108  Fed.  Rep.  39,  "^^  Randolph  v.  Scruggs,  190  U.  S. 

5  Am.  B.  R.  559.  533 ,  10  Am.  B.  R.  i. 

72  In    re    Abram,    103    Fed.    Rep.  ^^  Randolph  v.  Scruggs,  190  U.  S. 

272,  4  Am.  B.  R.  575.  533 .  10  Am.  B.  R.  i. 

73 /n  re  Rozinsky,  loi   Fed.  Rep.  so  Randolph  v.  Scruggs,  190  U.  S. 

229,  3  Am.  B.  R.  830.  533,  10  Am.  B.  R.  i.     See  also  In  re 

''^In   re    Mitchell,    i    Am.    B.    R.  Chase  (C.  C.  A.,  ist  Cir.),  124  Fed. 

687;  to  the  same  effect  In  re  Welge,  Rep.  753;  Summers  v.  Abbott  (C.  C. 

I  Fed.  Rep.  216;  contra,  In  re  Mul-  A.,  8th  Cir.),   122  Fed.  Rep.  36. 
daur.   No.   9905   Fed.   Cas.,   s.   c.   8 
Ben.  65. 


CLERKS,    MARSHALS    AND    ATTORNEYS. 


139 


debtor  in  preparing  the  deed  of  assignment  may  be  proved  as 
an  unsecured  claim. ^'^ 

The  amount  of  fees  allowed  attorneys  in  various  cases  are 
collated  below.^" 

A  court  of  bankruptcy  will  not  ordinarily  tax  as  costs  at- 
torneys' fees  upon  the  dismissal  of  a  petition  in  involuntary 
bankruptcy.^^  When,  however,  an  application  to  seize  and 
hold  the  property  of  the  bankrupt  pending  the  hearing  has  been 
granted  and  the  petition  afterwards  dismissed,  the  court  may 
allow  attorneys'  fees  as  costs  of  the  proceeding.®*  A  docket 
fee  of  twenty  dollars  may  be  taxed  as  costs  in  a  proper  case.^^ 
A  court  of  bankruptcy  has  refused  to  dismiss  a  voluntary  peti- 
tion until  the  attorney  for  the  trustee  had  been  paid.®'^     The 


81  Randolph  v.  Scruggs,  190  U.  S. 
533,  10  Am.  B.  R.   I. 

^2  Under  different  circumstances 
the  following  amounts  have  been  al- 
lowed as  reasonable  fees :  To  at- 
torney for  a  voluntary  bankrupt, 
fifty  dollars,  In  re  Beck,  92  Fed. 
Rep.  889 ,  I  Am.  B.  R.  535 ;  fifty  dol- 
lars, In  re  Kross,  96  Fed.  Rep.  816, 
3  Am.  B.  R.  188;  two  hundred  dol- 
lars, In  re  Burrus,  97  Fed.  Rep.  926 , 
3  Am.  B.  R.  296;  fifty  dollars.  In  re 
Smith,  108  Fed.  Rep.  39,  5  Am.  B. 

R.  559. 

To  attorney  for  involuntary  bank- 
rupt :  twenty-five  dollars,  In  re 
Carolina  Cooperage  Co.,  96  Fed. 
Rep.  950,  3  Am.  B.  R.  154;  fifty  dol- 
lars, and  twenty-five  dollars  per 
diem,  In  re  Mayer,  loi  Fed.  Rep. 
695,  4  .^m.  B.  R.  238;  ninety  dollars. 
In  re  Anderson,  103  Fed.  Rep. 
854,  4  Am.  B.  R.  640;  one  hundred 
and  twenty-five  dollars,  In  re  Carr, 
117  Fed.  Rep.  572,  —  Am.  B.  R.  — ; 
one  hundred  dollars,  In  re  Council 
&  Sons,  120  Fed.  Rep.  846,  9  Am. 
B.  R.  474- 

To  the  attorney  for  creditors :  one 
hundred  dollars  (for  preparing  the 
petition,  schedules,  etc.    This  is  gov- 


erned in  some  districts  by  rule  of 
court).  /;;  re  Harrison  Mercantile 
Co.,  95  Fed.  Rep.  123 ,  2  Am.  B.  R. 
219 ;  seventy-five  dollars,  In  re 
Woodard,  95  Fed.  Rep.  955  ,  2  Am. 
B.  R.  692 ;  two  thousand  dollars, 
In  re  Curtis  (C.  C.  A.,  7th  Cir.), 
100  Fed.  Rep.  784,  4  Am.  B.  R.  17; 
seventy-five  dollars.  In  re  Silverman, 
97  Fed.  Rep.  325 ,  3  Am.  B.  R.  227 ; 
In  re  Little  River  Lumber  Co.,  loi 
Fed.  Rep.  558,  3  Am.  B.  R.  682; 
one  hundred  and  fifty  dollars.  In  re 
Carr,  117  Fed.  Rep.  572,  —  Am.  B. 
R.  — :  one  thousand  dollars,  Smith 
v    Cooper,   120  Fed.   Rep.  230. 

To  attorney  for  trustee :  one  hun- 
dred and  twenty-five  dollars.  In  re 
Stotts,  93  Fed.  Rep.  438,  i  Am.  B. 
R.  641  ;  twenty  dollars,  In  re  Mitch- 
ell, I  Am.  B.  R.  687;  twenty-five 
dollars.  In  re  Salabcrry,  107  Fed. 
Rep.  95  .  5  Am.  B.  R.  847. 

**•■'  In  re  Ghiglione,  93  Fed.  Rep. 
186. 

«+/;;  re  Abraham  (C.  C.  A.,  5th 
Cir.),  93  Fed.  Rep.  767  (785). 

«•"•  In  re  Todd,  109  Fed.  Rep.  265 , 
6  Am.  B.  R.  88. 

8«  In  re  Salaberry,  107  Fed.  Rep, 
95 


140  l-AW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

court  will  not  enforce  a  provision  in  a  mortgage  -for  the  pay- 
ment "  of  an  attorney's  fee  of  ten  per  cent  of  the  amount  of 
the  debt."  " 

*^/«  re  Roche  (C.  C.  A.,  5th 
Cir.),  loi  Fed.  Rep.  956,  4  Am.  B. 
R.  369- 


WHO    MAY    BE    BANKRUPTS.  '  I4I 


CHAPTER  VII. 


WHO    MAY   BE  BANKRUPTS. 


§  42.     Voluntary  bankrupts. 

Any  person  who  owes  debts,  except  a  corporation,  is  entitled 
to  the  benefits  of  the  act  as  a  voluntary  bankrupt.^ 

The  language  of  this  provision  is  very  general  and  compre- 
hensive. A  person  is  defined  by  the  act  itself  to  include  part- 
nerships and  women.'  It  would  therefore  appear  that  any 
natural  person  or  association  of  persons  not  incorporated,  irre- 
spective of  trade,  business  or  profession,  may  become  vokm- 
tary  bankrupts.  The  only  condition  is  that  such  persons  si  all 
owe  debts  which  a  discharge  in  bankruptcy  would  release.  A 
person  whose  only  liability  is  a  judgment  on  which  an  appeal  is 
pending  ^  or  a  judgment  for  willful  and  malicious  injury  *  can- 
not become  a  voluntary  bankrupt.  A  creditor  cannot  resist^ 
voluntary  bankruptcy  on  the  ground  that  the  petitioner  is  sol- 
vent.°  No  limit  is  fixed  as  to  the  amount  of  the  indebtedness.* 
The  right  of  an  alien,  an  infant,  a  lunatic  and  a  married 
woman  to  become  voluntary  bankrupts  is  considered  in  another 
place.^ 

§  43.     Involuntary  bankrupts. 

The  act.  as  amended  Feb.  5,  1903,  provides*  that  "any 
natural  person,  excei)t  a  wage-earner,  or  a  person  engaged 
chiefly  in  farming  or  the  tillage  of  the  soil,  any  unincorporated 

1  B.  A.  1898,  Sec.  4a.  "  Under    the    act   of    1867,    R.    S. 

^  B.  A.   1898,  Sec.    I,  clause   19.  Sec.  5014.  a  person  was  required  to 

^  In  re  Yates,  114  Fed.  Rep.  365,  owe  debts,  provable  in  bankruptcy, 

8  Am.  B.  R.  69.  exceeding  the  sum  of  $300. 

*  In  re  Maples.  105  Fed.  Rep.  919,  •  See  Sees.  44  to  47,  post. 

F  Am.  B.  R.  426.  »*  B.  A.  1898,  Sec.  4b,  32  Stat,  at 

•'In    re    Carleton,    115    Fed.    Rep.  L.    797. 
24^,  8  Am.  B.  R.  270. 


142  LAW    AND    PROCEliDINGS    IN    BANKRUPTCY. 

company,  and  any  corporation  engaged  principally  in  manu- 
facturing, trading,  printing,  publishing,  mining,  or  mercantile 
l)ursuits,  owing  debts  to  the  amount  of  one  thousand  dollars 
or  over,  may  be  adjudged  an  involuntary  bankrupt  upon  de- 
fault or  an  impartial  trial,  and  shall  be  subject  to  the  provisions 
and  entitled  to  the  benefits  of  this  act.  Private  bankers,  but 
not  national  banks  or  banks  incorporated  under  state  or  terri- 
torial laws,  may  be  adjudged  involuntary  bankrupts." 

It  will  be  observed  that  the  provision  with  respect  to  per- 
sons against  whom  a  petition  may  be  filed  is  more  limited  in 
its  scope  than  in  the  case  of  a  person  voluntarily  seeking  the 
benefits  of  the  act.  It  is  limited,  first,  to  natural  persons,  not 
wage-earners  or  persons  engaged  chiefly  in  farming  or  the 
tillage  of  the  soil ; "  second,  to  unincorporated  companies ;  ^^ 
third,  to  corporations  engaged  principally  in  manufacturing, 
trading,  printing,  publishing,  mining  or  mercantile  pursuits, 
and,  fourth,  to  private  bankers.  A  trustee  in  bankruptc)^  lik^ 
any  other  person,  may  be  adjudged  a  bankrupt.^^  In  any  case 
there  must  be  an  indebtedness  of  $i,ooo  or  over  in  order  'o 
support  a  petition  in  involuntary  bankruptcy.^' 

The  statute  expressly  excludes,  first,  wage-earners,  and  de- 
fines a  wage-earner  to  mean  "  an  individual  who  works  for 
wages,  salary  or  hire  at  a  rate  of  compensation  not  exceeding 
$1,500  per  year."  ^^  A  bookkeeper  and  secretary  of  a  corpora- 
tion whose  salary  is  less  than  $1,500  per  year  is  within  this 
clause.^*  Second,  persons  engaged  chiefly  in  farming  and  the 
tillage  of  the  soil.^^     For  a  person's  principal  occupation  to  be 


®  An   involuntary  petition   against  and  it  is  waived  by  answering  on  the 

a  natural  person  is  defective  which  merits.  Green  River  Bank  v.  Craig, 

does    not   aver    that    the    defendant  no  Fed.  Rep.  137,  6  Am.  B.  R.  381. 
i3   not   a   wage   earner   or   a   person  ^0  See  also  B.  A.  1898,  Sec.  5. 

engaged   chiefly   in   farming   or    the  ^^  See   Merrick's   Estate,   5   Watts 

tillage  of  the  soil.    In  re  Bellah,  116  &  S.  (Penn.)  9. 
Fed.    Rep.   69,    8   Am.    B.    R.   310;  12  b.   A.    1898,    Sec.   4&. 

In  re  Taylor   (C.  C.  A.,  7th  Cir.),  i^  b.  A.  1898,  Sec.  i,  clause  27. 

102    Fed.    Rep.    728 ,   4   Am.    B.   R.  1*  In  re  Pilger,  1 18  Fed.  Rep.  206 , 

515.     Such  defect  may  be  cured  by  9  Am.  B.  R.  244. 
amendment.     Beach  v.  Macon  Gro-  ^^  In  re  Thompson,  102  Fed.  Rep. 

eery  Cc.    (C.   C.   A.,  5th   Cir.),   120  287,  4  Am.  B.  R.  340. 
Fed.    Rep.   736,   9   Am.    B.   R.   762;  In    re    Luckhardt,    loi    Fed.    Rep. 


WHO    MAY    BE    BANKRUPTS.  1 43 

farming  it  must  be  that  which  is  of  principal  concern  to  him, 
which  he  deems  of  paramount  importance  to  his  welfare  and 
on  which  he  chiefly  relies  for  his  livelihood.^®  The  owner  of 
a  farm  who  has  leased  it  to  another  for  a  year  is  not  a  person 
engaged  chiefly  in  farming  and  can  be  made  an  involuntary 
bankrupt/^  Third,  national  banks,  which  are  wound  up  when 
insolvent  by  special  statute  not  included  in  the  bankruptcy 
act ;  ^*  fourth,  banks  incorporated  under  state  or  territorial 
laws,  whose  affairs,  if  involved,  may  be  settled  under  the  laws 
of  the  state  or  territory  creating  them.^^  A  corporation  can- 
not be  a  private  banker  within  the  meaning  of  the  bankrupt 
act.^**  The  bankrupt  statute  does  not  authorize  or  justify  an 
adjudication  in  bankruptcy  against  the  individual  estate  of  a 
deceased  person."^  "  The  act  deals  with  living  persons.  A  de- 
ceased person  cannot  be  adjudged  a  bankrupt. 

The  right  to  force  an  alien,  an  infant,  a  lunatic  and  a  mar- 
ried woman  into  involuntary  bankruptcy  is  considered  in  an- 
other place.^^ 

§  44.     Aliens. 

The  act  does  not  limit  the  persons  who  may  be  adjudged 
bankrupts  to  citizens  or  even  to  residents  of  the  United 
States.  Hence  an  alien  may  become  either  a  voluntary  or  an 
involuntary  bankrupt."^ 


807,  a  merchant  who  had  committed  The  rule  seems  to  have  heen  other- 

an  act  of  bankruptcy  and  thereafter  wise    under    the    act    of    1867.      See 

abandoned  his  business  and  engaged  Thornhill  v.  Bank  of  Louisville,  No. 

in  farming  was  adjudged  an  invol-  13990,   Fed.   Cas.,   s.   c.   3   N.   B.   R. 

untary  bankrupt.  435. 

^^  In   re    Mackey,    no   Fed.    Rep.  20 /,j  ^-^  Surety  Guarantee  &  Trust 

355,  6  Am.  B.  R.  577.     See  also  In  Co.    (C  C.  A.,  7th  Cir.),  121    Fed. 

re    Drake,    114    Fed.    Rep.    229,    8  Rep.  72>,  9  Am.  B.  R.  129. 

Am.  B.  R.  137,  affirmed  in  Wulbern  21  Adams  v.  Terrell,  4  Fed.  Rep. 

v.  Drake   (C.  C.  A.,  4th  Cir.),  120  802;  In  re  Stevens,  No.  13393,  Fed. 

Fed.  Rep.  493  ,  9  Am.  B.  R.  695.  Cas.,  s.  c.  i  Low.  397 ;  In  re  Dag- 

1^  In    re    Matson,    123    Fed.    Rep.  gett.  No.  3536,  Fed.  Cas.,  s.  c.  8  N. 

743.  B.  R.  433.     In  these  cases  the  ques- 

^^  R.    S.    Sees.   5220  to   5243 ;   see  tion  arose  with  reference  to  reach- 

In  re  Manufacturer's  National  Bank,  ing  the  assets  of  a  deceased  person. 

No.   9051,    Fed.    Cas.,   s.   c.   5    Biss.  ^u  5^^  Sees.  44  to  47.  post. 

499.  23  /,j    fg    Goodfellow,    No.    5536, 

i»  Davis  V.  Stevens,  104  Fed.  235.  Fed   Cas.,   s.   c.   i   Low.  510;  In  re 


^ 


144 


LAW    AND    PROCEKDINGS    IN    BANKRUPTCY. 


A  foreigner  iimst  either  have  had  a  principal  place  of  busi- 
ness or  residence  within  the  United  States  for  six  months,  or 
the  greater  portion  thereof,  or  have  property  within  the  juris- 
diction of  the  court  of  bankruptcy.-*  "  The  governing  prin- 
ciple," said  Judge  Brett,"''  "  is  that  all  legislation  is  prima  facie 
territorial,  that  is  to  say,  that  the  legislation  of  any  country 
binds  its  own  subjects  and  the  subjects  of  other  countries 
who  for  the  time  being  themselves  within  the  allegiance  of 
the  legislating  power."  Hence  it  may  be  doubted  if  a  for- 
eigner would  be  adjudged  a  bankrupt  unless  he  had  assets  or 
owed  debts  contracted  in  the  United  States.'^  Such  would  be 
an  idle  proceeding. 

§  45.     Infants, 

An  infant  is  not  generally  liable  for  debt  contracted  by  him 
during  his  infancy."^  The  word  infant,  or  minor,  is  not  found 
in  the  bankrupt  act.     In  order  to  support  a  bankruptcy  petition 


Boynton,  10  Fed.  Rep.  277. 

In  Judd  V.  Lawrence,  i  Cush. 
(Mass.)  531,  it  was  held  that  a  for- 
eigner residing  within  the  common- 
wealth could  take  the  benefit  of  the 
state  insolvent  law. 

In  Cutter  v.  Folsom,  17  N.  H.  139, 
under  the  bankrupt  act  of  August 
19,  1841,  5  Stat,  at  L.  440,  it  was 
held  that  one  residing  within  the 
jurisdiction  of  the  circuit  court,  who 
was  a  member  of  a  foreign  firm, 
was  entitled  to  the  provisions  of 
the  act. 

2*  B.  A.  1898,  Sec.  2,  clause  i. 

25  £jjr  parte  Blain,  12  Chan.  Div. 
528. 

28  Consult  ex  parte  Blain,  12 
Chan.  Div.  522. 

27 /«  re  Derby,  No.  3815,  Fed. 
Cas.,  s.  c.  6  Ben.  232,  in  discussing 
the  rights  of  an  infant  to  be  ad- 
judged a  bankrupt.  Judge  Blatch- 
ford  said  :  "  The  general  contracts 
of    an    infant    having    no    force,    if 


disaffirmed  by  him  after  attaining 
his  majority,  it  is  idle  for  him  to 
set  forth,  in  a  voluntary  case,  com- 
menced during  his  infancy,  a  sched- 
ule of  his  creditors,  and  idle  for 
them  to  prove  their  debts  during  his 
infancy,  for  the  whole  proceedings 
must  be  in  vain  if  the  debts  are 
disaffirmed  by  him  after  he  attains 
his  majority."     .... 

"  But  there  are  other  difficulties 
attendant  on  an  involuntary  case. 
The  debt  of  a  petitioning  creditor 
must  be  a  debt  provable  at  the  time 
the  petition  is  filed."  He  then  pro- 
ceeds to  show  that  such  a  debt  is 
not  provable  under  the  different  sec- 
tions of  the  act  of  1867,  which  rea- 
sons are  applicable  with  equal  force 
to  the  act  of  1898. 

See  also  Belton  v.  Hodges,  9 
Bing.  365,  where  it  was  held  that 
a  commission  of  bankrupt  against 
an  infant  was  void,  not  merely  void- 
able. 


WHO    MAY    BE    BANKRUPTS.  T45 

there  must  be  capacity  in  the  infant  to  owe  the  debt.**  But 
whether  a  debt  for  necessities  would  support  a  bankruptcy  peti- 
tion seems  to  be  an  open  question  in  England."**  After  an 
infant  has  reached  his  majority  he  may  become  liable  for  a  debt 
created  during  infancy.  If  he  does  become  so  liable  he  is 
subject  to  be  adjudged  a  bankrupt. 

§  46.     Lunatics. 

Whether  a  lunatic  can  be  adjudged  either  a  voluntary  or  in- 
voluntary bankrupt  is  doubtful  under  the  authorities. 

In  England  the  words  of  the  statute  are  "  a  debtor/'  ^**  which 
may  be  considered  equivalent  to  "  any  person  who  owes  debts  " 
or  "  owing  debts."  ^^  Under  the  English  statutes  it  is  an  open 
question,  and  has  been  since  the  time  of  Lord  Eldon.^'  It  has 
been  held  that  a  person,  who  is  so  unsound  in  mind  as  to  be 
wholly  incapable  of  managing  his  affairs,  cannot,  in  that  con- 
dition, commit  an  act  for  which  he  can  be  forced  into  bank- 
ruptcy by  his  creditors  against  the  objection  of  his  guardian.^' 
It  has  also  been  held  that  an  insane  person  cannot  become  a 
voluntary  bankrui)t  because  he  is  not  a  "  qualified  "  person 
within  the  meaning  of  Sec.  59^.^*  But  if  he  commits  an  act 
of  bankruptcy  while  sane  he  has  been  adjudged  an  involuntary 
bankrupt  against  the  consent  of  his  guardian.^^     The  fact  that 


28 /»  re  Brice,  93  Fed.  Rep.  942,  29 /„  ^^  Soltykoff,  i  Q.  B.  (1891) 

2  Am.  B.  R.   197 ;  In  re  Dunnigan,  415. 

9S    Fed.    Rep.    428;    In    re    Duguid,  ^*>46  and  47  Vic.  chap.  52,  Sec.  4. 

TOO    Fed.    Rep.    274 ,    3    Am.    B.    R.  ^i  g   a.  1898,  Sec.  4  a  and  b. 

794 ,  2  N.   B.   N.  607 ;  In  re  Eide-  ^^  /„    ^e    Farham,    2    Chan.    Div. 

miller,  105  Fed.  Rep.  595.  (1895)   805. 

See  In  re  Derby,  No.  3815,  Fed.  ^^  hx  re  Funk,  loi  Fed.  Rep.  244, 

Cas.,  s.  c.  6  Ben.  232;  In  re  Book,  4  Am.  B.  R.  96;  In  re  Marvin,  No. 

No.    1637,    Fed.    Cas.,    s.    c.    3    Mc-  9178,   Fed.    Cas.,   s.   c.    i    Dill.    178; 

Lean  317,  where  an   infant  was  al-  In  re  Weitzel,  No.  17365.  Fed.  Cas., 

lowed    to   claim    the   benefit   of   the  s    c.   7  Biss.  289;  In  re   Pratt,   No. 

b?nkrupt  law  of  1841  ;  In  re  Cotton,  11371,  Fed.  Cas.,  s.  c.  2  Low.  96. 

No.  3269,   Fed.   Cas.,   s.   c.   6   Law.  ^^  In  re  Eisenberg,  117  Fed.  Rep. 

Rep.  546,  the  petitioner  who  applied  786,  8  Am.  B.  R.  551. 

for  an  injunction  was  a  minor,  and  ^'^  In  re  Weitzel,  No.  17365,  Fed. 

this  was  one  of  the  objections  to  his  Cas.,  s.  c.  7  Biss.  289;  In  re  Pratt, 

seeking  the  benefit  of  the  act.     The  No.    11371,   Fed.   Cas.,   s.  c.   2  Low. 

court    passed    the   question    without  96;    Ex    parte    Stamp,    i    De    Gex, 

deciding  it.  345;  Anon.   13  Ves.  590. 


146  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

a  person  has  been  adjudged  a  lunatic  does  not  imply  that  he 
will  always  remain  so.^*"  A  guardian  ad  litem  may  be  ap- 
pointed pending  the  determination  of  his  sanity  at  the  time 
the  act  of  bankruptcy  complained  of  was  committed." 

Where  a  bankrupt  becomes  insane  after  the  commencement 
of  proceedings  in  bankruptcy  they  are  not  abated  thereby,  but 
may  be  conducted  and  concluded  in  the  same  manner,  so  far 
as  possible,  as  though  he  had  not  become  insane.^® 

§  47.     Married  women. 

Under  the  former  bankrupt  acts  there  was  some  doubt,  as 
to  the  power  of  the  courts  of  bankruptcy  to  adjudge  a  married 
woman  a  bankrupt.^^  The  laws  of  the  several  states  have  ex- 
tended a  married  woman's  rights  with  reference  to  property 
within  the  last  quarter  of  the  century. 

In  order  to  come  within  the  provisions  of  the  bankrupt  act 
a  person  must  owe  a  debt.  The  true  rule  with  reference  to 
married  women  is  that  where  a  woman  may  owe  a  debt  she 
may  be  adjudged  a  voluntary  or  involuntary  bankrupt.**'  Her 
capacity  to  owe  is  determined  by  the  laws  of  the  state  of  her 
domicile,  as  interpreted  by  the  highest  court  in  the  state.** 
She  may  be  able  to  contract  and  owe  debts  and  accordingly  be 
adjudged  a  bankrupt  in  one  state  and  not  in  another  state. 

§  48.     Corporations. 

As  the  bankrupt  statute  does  not  restrict  the  classes  of  unin- 
corporated companies  or  partnerships,  it  may  become  important 
to  determine  what  is  a  corporation.  Corporations  are  defined 
by  the  act  to  mean  "  all  bodies  having  any  of  the  powers  and 

36  Saunders  v.  Mitchell,  61  Miss.  Cas.,  s.  c.  3  Biss.  415  ;  In  re  O'Brien, 
321.  No.  10397,  Fed.  Cas.,  s.  c.  i   N.  B. 
•"/n  re  Burka,  107  Fed.  Rep.  674,  R.  176;  In  re  Lyons,  No.  8649,  Fed. 
5  Am.  B.  R.  843.  Cas.,  s.  c.  2  Saw.  524,  and  note  dis- 
ss B.  A.  1898,  Sec.  8.  cussing  the  subject.    In  re  Kinkead, 
3»  The    cases    are    collected    and  No.  7824,  Fed.  Cas.,  s.  c.  3  Biss.  405 
considered    in    an    article    on    mar-  and  note.    In  re  Goodman,  No.  554°, 
ried  women  as  bankrupts,  13  Ameri-  Fed.   Cas.,  s.  c.   5   Biss.  401  ;   In  re 
can   Law    Register,    N.    S.    (March,  Howland.  No.  6791,  Fed.  Cas.,  s.  c. 
1874)    129.  2  N.  B.  R.  357- 
40  In   re   Collins,    No.   3006,    Fed. 


WHO    MAY    BE    BANKRUPTS.  I47 

privileges  of  private  corporations  not  possessed  by  individuals 
or  partnerships,  and  shall  include  limited  or  other  partnership 
associations  organized  under  laws  making  the  capital  sub- 
scribed alone  responsible  for  the  debts  of  the  association."  *^ 

The  act,  as  amended,  limits  the  classes  of  corporations  sub- 
ject to  be  adjudicated  bankrupts  upon  a  petition  by  creditors 
to  those  "  engaged  principally  in  manufacturing,  trading,  print- 
ing, publishing,  mining  or  mercantile  pursuits."  ■*-  Any  cor- 
poration not  falling  within  one  of  these  classes  is  not  subject 
to  be  adjudged  a  bankrupt.  The  classes  specified  are  evi- 
dently intended  to  cover  what  are  generally  known  as  private 
business  corporations.  The  petition  must  state  that  the  cor- 
poration is  engaged  in  one  of  these  pursuits  or  the  court  ac- 
quires no  jurisdiction  to  adjudge  it  a  bankrupt.*^  A  corpora- 
tion which  has  not  in  fact  engaged  in  one  of  these  pursuits 
cannot  be  adjudged  an  involuntary  bankrupt  although  its  char- 
ter authorizes  it  to  engage  in  them.^* 

Manufacturing  Companies. —  As  generally  understood 
and  defined  by  the  lexicographers,  a  manufacturing  company 
is  one  engaged  in  making  goods  or  wares  of  any  kind ;  pro- 
ducing articles  for  use  from  raw  or  prepared  materials  by  giv- 
ing to  these  materials  new  qualities,  i)roperties  or  combinations, 
whether  by  hand  lal)or  or  l)y  machinery.^^  This  is  probably 
the  meaning  of  the  word  as  used  in  the  bankrupt  act. 


*i  B.  A.  1898,  Sec.   I,  clause  6.  2J  Cir.),  102  Fed.  Rep.  1004;  In  re 

This  subject  is  also  considered  by  Tontine   Surety   Co.,   116   Fed.   Rep. 

Judge  Lurton   in  the   case   of   An-  401,  8  Am.  B.  R.  421. 

drews    Bros.    Co.    v.    Youngstown  *^  See    In    re    Tecopa    Mining    & 

Coke  Co.,  86  Fed.  Rep.  585.  s.  c.  30  Smelting  Co.,  no  Fed.  Rep.  120,  6 

C.  C.  A.  293,  where  the  question  was  Am.  B.  R.  250. 

whether  the  circuit  court  had  juris-  In  Columbia  Iron  Works  v.  Nat. 

diction  of  a  limited  partnership  as-  Lead  Co.,  126  Fed.  Rep.  — ,  11  Am. 

sociation  as  a  citizen  of  Pcnnsylva-  R.  R.  — ,  Judge  Severens,  speaking 

nia.  for  the  circuit  court  of  appeals  for 

*2  B.  A.  1898,  Sec.  4h,  32  Stat,  at  the  6th  circuit,  said  :     "  The  business 

L    797.  in  question  is  the  building  of  arti- 

■•^  In  re  Elmira  Steel  Co.,  109  Fed.  cles  of  commerce,  as  much  as  the 

r^ep.  456,  5  Am.  B.  R.  484.  building    of    locomotives    and    rail- 

**  In   re  New  York  &  W.  Water  way    cars,    or    the    manufacture    of 

Co.,  98  Fed.  Rep.  711  ,  3  Am.  B.  R.  their  constituent  parts.    The  distinc- 

508,  affirmed  In  re  Morris  (C.  C.  A.  tion  would  seem  to   run  along  the 


148 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


Trading  Companies. —  A  trading  company  is  one  whose 
business  is  buying  or  selling  or  barter,  its  object  being  to  buy 
and  sell  again  personal  property  for  gain.  What  constitutes 
a  trader  under  the  bankrupt  law  has  been  the  subject  of  ju- 
dicial interpretation,  both  in  this  country  and  in  England." 
Thus  the  term  trader  has  been  held  to  include  a  miller,*^  a 
baker/^  a  butcher,***  a  stair-builder,^"  a  furniture  dealer.^^  a 
grocer,^^  a  merchant  tailor,^^  a  theatrical  manager  ^*  but  not 
a  theatrical  corporation,^**  an  inn,  hotel  or  boarding-house 
keeper, '^^  or  a  livery-stable  keeper,^^*  or  a  druggist  or  a  physi- 
cian who  dispenses  and  is  paid  for  medicines  administered  to 


c       ) 


line  of  those  articles  which  are 
more  or  less  fixed  in  place,  and 
not  ordinarily  the  subjects  of  bar- 
gain and  sale  as  articles  of  com- 
merce, as  contradistinguished  from 
those  which  are  movable  and  or- 
dinarily regarded  as  subjects  of  sale 
and  manual  transfer,  articles  of 
trade  in  the  common  course  of  mer- 
cantile business.  The  associated 
words  seem  to  import  that  Congress 
intended  to  include  all  those  corpor- 
ations which  were  engaged  in  the 
manufacture  or  sale  of  articles  of 
commerce." 

*"  In  re  Eelcs,  No.  4302,  Fed.  Cas., 
s.  c.  5  Law  Rep.  273 ;  Wakeman  v. 
Hoyt,  No.  17051,  Fed.  Cas.,  s.  c.  5 
Law  Rep.  309,  and  cases  cited  in 
notes  below. 

•*'  Daniels  v.  Palmer,  35  Minn.  347. 

A  ship-building  company  has  been 
held  to  be  a  corporation  engaged 
principally  in  manufacturing.  Co- 
lumbia Iron  Works  v.  National 
Lead  Co.  (C.  C  A.,  6th  Cir.),  126 
Fed.  Rep.  — ;  11  Am.  B.  R.  — . 

■♦8  In  re  Cocks,  No.  2933,  Fed. 
Cas.,    s.   c.   3    Ben.   260. 

*9  In  re  Bassett,  8  Fed.  Rep.  266 ; 
Dally  V.  Smith.  4  Burr  2148;  Syl- 
vester V.  Edgecomb,  76  Me.  499. 


^^  In  re  Garrison,  No.  5254,  Fed. 
Cas.,  s.  c.  5  Ben.  430. 

'•''^  In  re  Newman,  No.  10175,  Fed. 
Cas.,  s.  c.  3  Ben.  20. 

^2  In  re  Good,  78  Cal.  399. 

^3  Archenbrown,  No.  505,  Fed. 
Cas.,  s.  c.  12  N.  B.  R.  17. 

^*  In  re  Duff,  4  Fed.  Rep.  519. 

54*  In  re  Oriental  Society,  104 
Fed.  Rep.  975,  5  Am.  B.  R.  219. 

^^  In  re  Ryan,  No.  12183,  Fed. 
Cas.,  s.  c.  2  Saw.  411.  King  v. 
Simmons,  i  H.  L.  Cas.,  754 ;  Gib- 
son V.  King,  10  M.  &  W.  667,  12 
L.  J.  Ex.  9;  Ex  parte  Daniell,  7  Jur. 
334 ;  In  re  Jones,  3  Chan.  Div.  457 ; 
s.  c.  25  W.  R.  186 ;  In  re  Sherwood, 
No.  12773,  Fed.  Cas.,  s.  c.  9  Ben.  66. 

But  see  In  re  Chesapeake  Oyster 
&  Fish  Co.,  112  Fed.  Rep.  960,  7 
Am.  B.  R.  173;  Saunderson  v. 
Rowles,  4  Burr,  2064;  Ex  parte 
Bowers,  2  Deac.  99;  Ex  parte  Na- 
tional Deposit  Bank,  26  W.  R.  624. 

In  re  San  Gabriel  Sanitorium  Co., 
95  Fed.  Rep.  271  ,  2  Am.  B.  R.  408, 
a  corporation  which  owned  and 
maintained  a  private  hospital  for 
profit  and  not  as  a  charity,  has  been 
adjudged  an  involuntary  bankrupt. 
See  note  55*. 

^^*  Groves  v.  Kilgore,  72  Me.  489 ; 


"^^^l^AMV/ii 


WHO    MAY    BE    BANKRUPTS. 


149 


his  own  patients,^**  a  smuggler  or  illegax  trader,"  or  an  electric 
light  company  whose  principal  business  was  furnishing  elec- 
tricity for  power  and  light.^* 

On  the  other  hand,  the  term  trader  has  been  held  not  to  in- 
clude a  stock  broker/''  or  railroad  contractor,*^"  or  a  mining 
company,®^  or  a  superintendent  of  a  common  carrier,^^  or  a 
carrier/''*  or  a  teamster  who  buys  and  sells  hay  and  straw  for 
the  purpose  of  keeping  his  teams,''*  or  a  fisherman  who  occa- 
sionally buys  fish  to  make  up  for  market  a  cargo  otherwise 
deficient,®^  or  a  person  who  from  time  to  time  buys  paintings, 


Ir.  re  Odell,  No.  10426,  Fed.  Cas., 
s.  c.  9  Ben.  209;  Wright  v.  Bird,  i 
Price  20;  Martin  v.  Nightingale, 
3  Bing.  421  ;  In  re  Morton  Boarding 
Stables,  108  Fed.  Rep.  791 ,  5  Am.  B. 
R.  763.  This  case  is,  however,  dis- 
approved In  re  Chesapeake  Oyster  & 
Fish  Co.,  112  Fed.  Rep.  960,  7  Am. 
B.  R.  173;  In  re  White  Star  Laun- 
dry Co.,  117  Fed.  Rep.  570,  9  Am. 
B.  R.  30 ;  Iti  re  Surety,  Guarantee 
&  Trust  Co.  (C  C.  A.,  7th  Cir.), 
121  Fed.  Rep.  y^ ,  9  Am.  B.  R.  129, 
and  hi  re  Quimby  Freight  Forward- 
ing Co.,   121    Fed.   Rep.   139. 

'"^  Ex  parte  Crabb,  8  De  Gex,  Mac. 
&  G.  277 ;  Ex  parte  Daubenny,  3 
Mont  &  Ayr,  16,  s.  c.  2  Deac.  72. 

"Cobb  V.  Symonds,  5  B.  &  A. 
516;  Ex  parte  Meymct,  i  Atk.  196. 

^^  In  re  Suburban  Electric  Co. 
(District  of  Kentucky,  1900,  not  re- 
ported.) 

But  see  In  re  New  York  &  W. 
Water  Co.,  98  Fed.  Rep.  711,  af- 
firmed in  In  re  Morris,  102  Fed. 
Rep.  1004. 

"*  In  re  Surety,  Guarantee  & 
Trust  Co.  (C.  C.  A.,  7th  Cir.),  121 
Fed.  Rep.  73 ,  9  Am.  B.  R.  129 ;  Ex 
parte  Conant,  77  Me.  275 ;  In  re 
Woodward.  No.  18001,  Fed.  Cas.,  s. 
c  8  Ben.  563 ;  In  re  Moss,  No. 
9877,  Fed.  Cas.,  s.  c.  19  N.  B.  R. 
132. 


•50  In  re  Smith.  No.  12981,  Fed. 
Cas.,   s.  c.  2   Low.  69. 

^1  In  re  Woodside  Coal  Co.,  105 
Fed.  Rep.  56,  5  Am.  B.  R.  186 ;  In  re 
Elk  Park  Min.  &  Mill  Co.,  loi  Fed. 
Rep.  422,  4  Am.  B.  R.  131 ;  In  re 
Rollins  Gold  &  Silver  Min.  Co.,  102 
Fed.  Rep.  982,  2  N.  B.  N.  988,  4 
Am.  B.  R.  327 ;  In  re  Chicago- 
Joplin  Lead  &  Zinc  Co.,  104  Fed. 
Rep.  67,  4  Am.  B.  R.  712;  McNa- 
mara  v.  Helena  Coal  Co.,  5  Am.  B. 
R.  48;  In  re  Keystone  Coal  Co.,  109 
Fed.  Rep.  872,  6  Am.  B.  R.  Z77. 
By  the  amendment  of  1903  a  mining 
company  may  now  be  made  an  in- 
voluntary bankrupt. 

«2/n  re  Merritt,  7  Fed.  Rep.  853. 

«3/n  re  Union  Pac.  R.  Co.,  No. 
14376,  Fed.  Cas.,  s.  c.  10  N.  B.  R. 
178;  In  re  Philadelphia  &  Lewes 
Transp.  Co.,  114  Fed.  Rep.  403;  In 
re  Quimby  Freight  Forwarding  Co., 
121    Fed.  Rep.  139. 

«*/n  re  Kimball,  7  Fed.  Rep.  461; 
In  re  Quimby  Freight  Forwarding 
Co.,  121  Fed.  Rep.  139. 

«•''  Ex  parte  Gallimore,  2  Rose, 
424. 

If  he  buys  fish  from  other  boats 
at  sea  and  sells  them  on  shore  he 
is  a  trader.  Heaney  v.  Birch,  r 
Rose,  356,  s.  c.  3  Camp.  233. 


150  LAW    AND    PROCEEDINGS   IN    BANKRUPTCY. 

but  not  in  the  course  of  his  regular  business,""  or  a  water  sup- 
ply company  engaged  in  the  business  of  obtaining,  transport- 
ing and  supplying  water  for  municipal  and  domestic  use  for 
fixed  rentals,"  or  a  saloon  and  restaurant,*'^  or  a  social  club,"'' 
or  a  laundry,'"  or  a  circulating  library,'^^  or  a  grain  ware- 
house."" 

"  Mercantile  Pursuits.  " —  Mercantile  pursuits,  as  gen- 
erally understood,  are  those  which  pertain  to  merchants  or  the 
traffic  carried  on  by  merchants,  or  having  1 )  do  with  trade  or 
commerce. 

This  phrase  was  evidently  intended  to  enlarge  the  scope  of 
the  classes  named  immediately  before  it.  It  is  substantially 
the  same  as  "  commercial,"  which  was  used  in  the  act  of  1867. 
Trading  corporations  include  most  concerns  engaged  in  mer- 
cantile pursuits,  yet  there  may  be  a  corporation  which  has  to 
do  with  trade  and  commerce  that  is  not,  strictly  speaking, 
within  the  class  of  traders.  Such  corporations  may  be  in- 
cluded in  the  expression  "  engaged  in  mercantile  pursuits."  '^ 

Railroad,  steamship,  steamboat  and  canal  companies  '  ^  anr^ 
insurance  companies  "  were  held  subject  to  be  adjudged  bank- 
rupts as  "  moneyed,  business  or  commercial  corporations 
under  the  act  of  1867.^"  The  provisions  of  the  present  act 
are  not  broad  enough  to  include  the  railroad  and  transporta- 
tion companies  and  insurance  companies.'^^     The  intent  of  the 


"•^  In  re  Chapman,  No.  2601,  Fed.  "'■''  In  re  Mutual  Mercantile  Agen- 

Cas.,  s.  c.  9  Ben.  311.  cy,  in  Fed.  Rep.  152,  6  Am.  B.  R. 

"■^  In  re  New  York  &  W.  Water  607. 

Co.,  98   Fed.   Rep.   711,  affirmed   in  '^*'^&\v  Orleans,  &c.,  R.  R.  Co.  v. 

In  re  Morris,  102  Fed.  Rep.  1004.  Delamore,  114  U.  S.  506,  and  cases 

68 /,j  Yf,  Chesapeake  Oyster  &  Fish  there  collated. 

Co.,  112  Fed.  Rep.  960,  7  Am.  B.  R.  ''^  In  re  Independent  Ins.  Co.,  No. 

173.  7017,  Fed.  Cas.,  s.  c.  i  Holmes  103 ; 

6»/»   re    Fulton    Club,    113    Fed.  In  re  Hercules  Mut.  Ins.   Co.,  No. 

Rep.  997 ,  7  Am.  B.  R.  670.  6402,   Fed.    Cas.,   s.   c.   6   Ben.   35 ; 

'^•'/n  re  White  Star  Laundry,  117  Ir.  re  Merchants'  Ins.  Co.,  No.  9441, 

Fed.   Rep.  570.  Fed.  Cas.,  s.  c.  3  Biss.  162. 

71 /m  re  Parmelee  Library  (C.  C.  "^^  R.  S.  Sec.  5122. 

A.,  7th  Cir.),  120  Fed.  Rep.  235.  "^"^  In    re    Philadelphia    &    Lewes 

■^2  Pacific    Coast    Warehouse    Co.,  Transp.    Co..    114    Fed.    Rep.    403; 

123  Fed.   Rep.   749.  Quimhy     Freight    Forwarding    Co., 


WHO    MAY    BE    BANKRUPTS.  I5I 

framers  of  this  law  seems  to  have  been  to  leave  such  corpora-  ^ 
tions  to  be  dealt  with  by  the  laws  of  the  state  creating  them.'* 
It  may  be  observed  that  the  law  and  practice  with  reference  to 
winding  up  the  affairs  of  such  insolvent  corporations  became; 
very  largely  settled  under  the  existing  statutes  during  the 
twenty-five  years  previous  to  the  passage  of  the  bankrupt  act. 
To  have  extended  the  bankruptcy  jurisdiction  to  them  would, 
to  a  large  extent,  have  unsettled  both  the  rules  of  law  and 
practice.     Congress  seems  to  have  hesitated  to  do  this. 

A  corporation  which  has  committed  an  act  of  bankruptcy^ 
although  it  has  been  dissolved  before  the  filing  of  the  petition, 
should  nevertheless  be  adjudicated  a  bankrupt  in  order  that 
preferences  made  unlawful  by  the  bankrupt  act  may  be  set 
aside.''" 


127  Fed.  Rep.  139;  In  re  Cameron  June  28,  1898,  vol.  31,  Cong.  Rec- 

etc.  Ins.  Co.,  96  Fed.  Rep.  756,  2  ord,  p.  7205. 

Am.    B.    R.    372.  "Scheurerv.  Smith,  etc.,  Co.  (C. 

"s  See  paragraph  XII  of  the  state-  C.  A.,  5th  Cir.),  112  Fed.  Rep.  407, 

merit   of   the    conference   committee  7  Am.  B.  R.  384. 
to   the    House    of    Representatives, 


152  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


CHAPTER  VIIi; 


ACTS   OF    BANKRUPTCY. 


§  49.     Who  may  commit  an  act  of  bankruptcy. 

To  support  an  adjudication  of  bankruptcy  the  debtor  must 
have  committed  an  act  of  bankruptcy  within  four  months  be- 
fore the  filing  of  the  petition.^  Any  person  who  may  be  ad- 
judged a  bankrupt  may  commit  an  act  of  bankruptcy.  But 
the  act  must  be  committed  by  the  person  himself,  or  at  least 
with  his  knowledge  and  consent.  It  is  clear  that  a  person 
cannot  commit  an  act  of  bankruptcy  by  the  conduct  of  his 
agent  without  his  knowledge  or  consent." 

To  support  an  adjudication  of  bankruptcy  against  a  part- 
nership it  seems  that  formerly  there  must  have  been  separate 
acts  of  bankruptcy  by  each  partner.^  The  present  act  pro- 
vides that  the  court  of  bankruptcy  which  has  jurisdiction  of 
one  of  the  partners  may  have  jurisdiction  of  all  the  partners 
and  of  the  administration  oi  the  partnership  and  individual 
property.*  Under  the  present  act  a  partnership  has  been  ad- 
judged bankrupt  upon  a  petition  charging  an  act  of  bankruptcy 
by  one  or  more  (but  less  than  all)  of  the  partners,  where  such 


1 B.  A.   1898,  Sec.  3&.  act    of   bankruptcy   by   three   part- 

2  Cotton  V.  James,  M.  &  M.  273 ;  ners  of  a  banking  concern,  where 
Ex  parte  Blain,  12  Chan.  Div.  522.  one   of   them,   who    resided    at    the 

3  Allen  V.  Hartley,  4  Doug.  20 ;  In  place  where  the  banking-house  was, 
re  Redmond,  No.  11632,  Fed.  Cas.,  and  was  the  only  partner  who  trans- 
s.  c.  9  N.  B.  R.  408,  and  cases  cited  acted  business,  the  other  two  resid- 
in  opinion.  In  re  Weaver,  No.  17307,  ing  at  a  distance  from  it,  absented 
Fed.  Cas.,  s.  c.  9  N.  B.  R.  132;  himself  from  the  banking-house,  shut 
In  re  Waite,  No.  17044,  Fed.  Cas.,  it  up  and  stopped  payment.  Mills  v. 
s  c.  I  Low.  207;  In  re  Cook,  No.  Bennett,  2  M.  &  S.  556;  s.  c.  2  Rose, 
3150,  Fed.  Cas.,  s.  c.  3  Biss.  122.  269. 

It   was   held   not  evidence  of   an  *  B.  A.  1898,  Sec.  %c. 


ACTS    OF    BANKRUPTCY.  153 

act  was  within  the  scope  of  the  partnership  business  so  as  to 
constitute  in  fact  an  act  of  the  firm.^  The  sale  by  one  member 
of  an  insolvent  firm  of  his  interest  to  his  partner  is  an  act 
of  bankruptcy,  and  the  court  will  set  it  aside  as  fraudulent  and 
proceed  to  distribute  the  property  as  firm  property.^ 

§  50.     What  are  acts  of  bankruptcy? 

The  bankrupt  statute,  as  amended  Feb.  5,  1903,  enumerates 
five  acts  of  bankruptcy  relating  to  the  disposition  of  the  debt- 
or's property  and  to  his  circumstances  and  credit.  Acts  of 
bankruptcy  under  the  statute  ""*  by  a  person  "  consist  of  his 
having 

First,   "  conveyed,  transferred,   concealed,   or  removed,   or 
permitted  to  be  concealed  or  removed,  any  part  of  his  property , 
with  intent  to  hinder,  delay,  or  defraud  his  creditors,  or  any 
of  them ;  or 

Second,  "  transferred,  while  insolvent,  any  portion  of  his 
property  to  one  or  more  of  his  creditors  with  intent  to  prefer 
such  creditors  over  his  other  creditors ;  or 

Third,  "  suffered  or  permitted,  while  insolvent,  any  cred- 
itor to  obtain  a  preference  through  legal  proceedings,  and  not 
having  at  least  five  days  before  a  sale  or  final  disposition  of 
any  property  affected  by  such  preference  vacated  or  discharged 
such  preference;  or 

Fourth,  "  made  a  general  assignment  for  the  benefit  of  his 
creditors,  or,  being  insolvent,  applied  for  a  receiver  or  trustee 
for  his  property  or  because  of  insolvency  a  receiver  or  trustee 


f* /m  rr  Kersten,  no  ."ed.  Rep.  929,  In  re  Empire  Metallic  Bedstead 
6  Am.  B.  R.  516;  In  re  Grant,  106  Co.,  98  Fed.  Rep.  981  ,  3  Am.  B.  R. 
Fed.  Rep.  496;  In  re  Shapiro,  106  575,  2  N.  B.  N.  304.  The  circuit 
Fed.  Rep.  495;  In  re  Duguid,  100  court  of  appeals  for  the  second  cir- 
Fed.  Rep.  274,  3  Am.  B.  R.  794.  cuit,  said :  "  When  acts  of  bank- 
See  also  Sec.  97,  post.  ruptcy  are  classified,  as  they  are  in 

« In    re   Waite,    No.    17044,    Fed.  the    statute   of    1898,    it   is    not   the 

Cas.,  s.  c,  I  Low.  207 ;  In  re  Cook,  province  of  a  court  to  enlarge  the 

No.   3150,    Fed.    Cas.,   3    Biss.    122;  classification    because    the    omitted 

In  >'<' 'Shapiro,  106  Fed.  Rep.  495.  class  seems  to  partake  of  the  sin  of 

«*  B.  A.  1898,  Sec.  3a,  and  32  Stat.  the  named  class." 
at  L.  797. 


154  I-^^V    -^^"D    PROCEEDINGS    IN    BANKRUPTCY. 

has  been  put  in  charge  of  his  property  under  the  laws  of  a 
state  ,  of  a  territory,  or  of  the  United  States ;  or 

Fifth,  "  admitted  in  writing  his  inabihty  to  pay  his  debts 
and  his  wilHngness  to  be  adjudged  a  bankrupt  on  that 
ground." 

It  may  be  observed  that  under  the  former  bankrupt  statutes 
there  were  acts  of  bankruptcy  relating  to  the  person  of  the 
debtor.  Thus  it  constituted  an  act  of  bankruptcy  to  depart  or 
be  absent  from  the  state,  district  or  territory  of  which  the 
debtor  was  an  inhabitant,  with  intent  to  defraud  his  cred- 
itors,^ or  to  conceal  himself  to  avoid  service  of  legal  process.'^ 
There  is  no  such  act  of  bankruptcy  under  the  present  statute. 

In  case  a  debtor  absconds  or  conceals  himself  to  avoid  the 
service  of  process  and  hinder,  delay  or  defraud  his  creditors  by 
so  doing,  the  remedy  under  the  present  act  is  to  commence  a 
suit  against  his  property.  Under  the  laws  of  the  several  states 
this  is  a  ground  for  attaching  the  property  of  the  debtor,  which 
may  be  sold  to  pay  the  debt.  Hence  a  creditor  may  begin  legal 
proceedings  under  the  state  law.  In  case  the  debtor  is  solvent, 
creditors  will  secure  their  debts  under  such  proceedings  with- 
out resorting  to  bankruptcy.  In  case  the  property  is  insuffi- 
cient to  cover  all  claims  made  and  satisfy  all  attachments  issued, 
or  one  creditor  is  gaining  a  preference  over  another  by  such 
proceedings,  if  such  attachments,  or  any  one  of  them,  are  not 
released  five  days  before  the  sale  of  the  property  attached,  an 
act  of  bankruptcy  is  committed.  The  creditors  may  file  a 
petition  to  have  the  debtor  adjudged  a  bankrupt.  All  attach- 
ments so  levied,  or  liens  of  any  nature  gained  by  legal  pro- 
ceedings within  four  months  before  the  filing  of  the  petition, 
are  null  and  void.^*  Thus  creditors  of  every  degree  will  come 
in  equally  for  proportionate  shares  of  the  bankrupt's  estate. 
If,  however,  an  insolvent  debtor  absconds  and  takes  property 
with  him  he  commits  an  act  of  bankruptcy,  as  he  conceals  and 
removes  his  property.^ 


^  For    acts    of    bankruptcy    under  the  act  of  1867,  see  R.  S.  Sac.  5021. 

the  acts  of   1800  and   1841   see   his-  ''*  B.  A.  1898,  Sec.  67/. 

torical  sketch,  pages  7  and   10,  ante.  ^  In  re  Filer.   108  Fed.  Rep.  209, 

For  the  acts   of  bankruptcy  under  5   Am.   B.   R.  332. 


ACTS    OF    BANKRUPTCY.  155 

If  a  debtor  has  committed  an  act  of  bankruptcy  he  cannot 
avoid  the  consequences  of  it  by  a  subsequent  rescission  or 
undoing  thereof.^*  A  creditor  cannot  complain  of  an  act  com- 
mitted before  he  was  a  creditor.® 

^  50a.  Insolvency  as  an  element  of  an  act  of  bankruptcy. 

It  should  be  observed  that  insolvency  of  the  debtor  is  an 
essential  element  of  some  acts  of  bankruptcy  and  is  not  a  re- 
quisite element  of  other  acts  of  bankruptcy. 

It  is  not  necessary  that  a  person  who  transfers,  conveys, 
etc.,  property  should  be  insolvent  at  the  time  to  constitute  an 
act  of  bankruptcy  under  the  first  clause.  He  must  be  insolvent 
at  the  time  the  petition  is  filed.  Actual  solvency  at  the  time 
of  filing  the  petition  is  a  complete  defense  to  a  petition  charg- 
ing an  act  of  bankruptcy  under  the  first  clause  and  the  burden 
of  proving  his  solvency  is  on  the  alleged  bankrupt.''* 

A  person  cannot  commit  an  act  of  bankruptcy  under  the  sec- 
ond and  third  clauses  while  he  is  solvent.  He  must  be  insol- 
vent at  the  time  of  the  transfer  or  of  permitting  a  preference 
through  legal  proceedings.  If  the  debtor  takes  issue  on  the 
question  of  his  solvency  at  that  time,  the  burden  of  proving 
insolvency  is  on  the  petitioning  creditors,  except  in  case  of  his 
actual  failure  to  attend  with  his  books,  papers  and  accounts 
and  submit  to  an  examination,  as  provided  in  Sec.  30^,  in  which 
case  the  burden  of  proving  his  solvency  rests  upon  the  debtor. ^^ 
Under  Sec.  3a,  clauses  2  and  3,  the  solvency  of  the  debtor  at 
the  time  the  petition  in  bankruptcy  is  filed  is  immaterial.'"* 

Under  clauses  4  and  5  as  originally  enacted  the  solvency  or 
insolvency  of  the  debtor  either  at  the  time  of  committing  the 
act  of  bankruptcy  or  at  the  time  of  filing  the  petition  is  imma- 
terial.'^     By  the  amendment  of  1903  '"  it  is  provided  that  in 

"♦/m    re    Ryan,    No.    12183,    Fed.  v.  Lea,  174  U.  S.  590.  2  Am.  B.  R. 

Cas.,  s.  c.  2  Saw.  411.  463;    Elliott    v.    Toeppner,    187    U. 

» Beers   v.    Hanlin,  3    Am.    B.   R.  S.   327. 

745,  99  Fed.  Rep.  69s ;  /«  r<?  Brinck-  10*  West    Co.    v.    Lea,    174  U.    S. 

mann,  103  Fed.  Rep.  65.  590,  2  Am.  B.  R.  463. 

»*B.    A.    1898,    Sec.    :ic.      In    re  1^  West    Co.    v.    Lea,    174   U.    S. 

Schenkein,  113  Fed.  Rep.  421  ,  7  Am.  590,  2  Am.  B.  R.  463- 

B.  R.  162.  1232  Stat.  at,L.  797- 

10  B.  A.  1898,  Sec.  ?,d.    West  Co. 


156  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

the  case  a  receiver  or  trustee  has  been  appointed  to  take  charge 
of  the  property  of  a  person,  such  person  must  be  insolvent  at 
the  time  he  applied  for  the  receiver  or  when  the  appointment 
was  made  upon  the  application  of  another  then  at  the  time  the 
receiver  or  trustee  took  charge  of  his  property."  Insolvency 
of  the  debtor  at  the  time  the  petition  in  bankruptcy  is  filed  is 
immaterial." 

A  person  is  deemed  insolvent  whenever  the  aggregate  of  his 
property  exclusive  of  any  property  which  may  be  conveyed, 
transferred,  concealed,  or  removed,  or  permitted  to  be  concealed 
or  removed,  with  intent  to  defraud,  hinder  or  delay  his  cred- 
itors, shall  not,  at  a  fair  valuation,  be  sufficient  in  amount  to 
pay  his  debts. ^® 

In  determining  whether  a  person  is  solvent  or  insolvent  at  a 
particular  time  the  value  of  the  assets  at  that  time  should  be 
taken  at  a  fair  valuation.^"  A  fair  valuation  means  the  actual 
value  —  its  real  or  market  value  —  and  not  the  face  value  of 
commercial  paper."  It  is  what  property  would  sell  for  in  the 
regular  course  of  business,  but  not  what  the  property  would 
sell  for  at  a  forced  sale.^^  Where  a  levy  on  the  property  of  a 
debtor  depreciates  its  value  so  that  the  debtor's  assets  are  then 
less  than  his  liabilities,  he  is  insolvent  within  the  meaning  of 
the  statute,  although  solvent  before  the  levy.^® 

In  computing  the  assets  of  the  debtor  to  determine  his  sol- 
vency or  insolvency  all  his  property  which  has  value  should  be 
included.  It  has  been  held  that  in  determining  the  question 
of  solvency  there  should  be  included  property  exempt  under  the 
state  law,^''  and  property  transferred  in  payment  of  or  as  se- 
curity for  a  just  debt  irrespective  of  whether  it  constitutes  a 


13  B.   A.   1898,   Sec.   3a,  cl.  4,   as  109   Fed.    Rep.   790,   6  Am.   B.    R. 

amended   Feb.  5,   1903;   32  Stat,  at  300. 

L    797.  ^'^  Duncan    v.    Landis    (C.    C.    A. 

"West    Co.    V.    Lea,    174    U.    S.  3d  Cir.),  106  Fed.  Rep.  839.  5  Am 

590,  2  Am.  B.  R.  463-  B.  R.  649. 

15  B.  A.  1898,  Sec.  I,  cl.  15.  1**  Chicago,   etc.,   Co.   v.   Roebling, 

i«/m    re    Coddington.     118    Fed.  107  Fed.  Rep.  71,  5  Am.  B.  R.  368. 

Rep.  281 ,  9  Am.  B.  R.  243.  20  /„    ^e   Baumann,  96  Fed.    Rep 

"7m  re  Bloch  (C.  C.  A.  2d  Cir.),  946,  3  Am.  B.  R.  196. 


ACTS    OF    BANKRUPTCY.  157 

preference  or  not.-'  But  where  property  is  transferred  in  fraud 
of  creditors  the  statute  contemplates  that  the  bankrupt  shall 
not  have  the  benefit  of  its  valuation  in  determining  whether  he 
is  solvent."  Presumptive  profits  on  goods  which  have  been 
ordered  but  not  received  are  not  considered  as  assets.-^ 

In  determining  the  solvency  or  insolvency  of  a  partnership 
it  must  appear  that  not  only  the  firm  is  insolvent  but  that  each 
partner  is  individually  insolvent.  ■* 

The  statute  provides  that  "  a  person  against  whom  an  in- 
voluntary petition  has  been  filed  shall  be  entitled  to  have  a  trial 
by  jury,  in  respect  to  the  question  of  his  insolvency,  except  as 
herein  otherwise  provided,  and  any  act  of  bankruptcy  alleged 
in  such  petition  to  have  been  committed,  upon  filing  a  written 
application  therefor  at  or  before  the  time  within  which  an  an- 
swer may  be  filed.  If  such  application  is  not  filed  within  such 
time,  a  trial  by  jury  shall  be  deemed  to  have  been  waived."-'^ 

"  If  a  jury  is  not  in  attendance  upon  the  court,  one  may  be 
specially  summoned  for  the  trial,  or  the  case  may  be  postponed, 
or,  if  the  case  is  pending  in  one  of  the  district  courts  within 
the  jurisdiction  of  a  circuit  court  of  the  United  States,  it  may 
be  certified  for  trial  to  the  circuit  court  sitting  at  the  same 
place,  or  by  consent  of  parties  when  sitting  at  any  other  place 
in  the  same  district,  if  such  circuit  court  has  or  is  to  have  a  jury 
first  in  attendance."  '■■' 

This  right  of  jury  trial  is  confined  to  the  debtor.  Creditors 
are  not  entitled  to  demand  a  jury  trial  on  the  question  of  the 
bankrupt's  solvency,"*'  nor  of  the  allowance  of  their  claims."'^ 
The  right  to  a  trial  by  jury  on  written  application  of  the  alleged 
bankrupt  is  absolute  and  cannot  be  withheld  at  the  discretion 


21 /m  re   Doscher,    120   Fed.    Rep.  R.  474:  Davis  v.  Stevens,  104  Fed. 

408,  9  Am.  B.  R.  547.  Rep.  235 .  4  Am.  B.  R.  763 :  In  re 

22  In  re   Doscher,   120   Fed.    Rep.  Blair,  99  Fed.  Rep.  76 .  3  Am.  B.  R. 

408,  9  Am.  B.  R.  547.     See  Lanning  588.     See  also  In  re  Miller,  104  Fed. 

Boiler  and   Engine  Co.  v.   Rycrson  Rep.  764,  5  Am.  B.  R.  140. 

(C.  C.  A.  6th  Cir.),  126  Fed.  Rep.  — .  25  b.  A.  1898,  Sec.  19a  and  h.     See 

^^  In  re  Bloch  (C.  C.  A.  2d  Cir.),  also  R.   S.  Sec.  566. 

109   Fed.    Rep.    790.   6   Am.    B.    R.  2b /„  re  Herzikopf  (C.  C  A.  9th 

300.  Cir.).  121   Fed.  Rep.  544. 

2*Vaccaro  v.  Bank  (C.  C.  A.  6th  27/,,  y^  Christensen,  loi  Fed.  Rep. 

Cir.),  103  Fed.  Rep.  436.  4  Am.  B.  243.  4  Am.  B.  k.  99. 


158  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

of  the  cotirt.-^  In  that  respect  it  differs  from  the  trial  of  an 
issue  out  of  chancery,  which  the  court  of  equity  is  not  bound 
to  g-rant,  nor  bound  by  the  verdict  if  such  trial  be  granted. 
The  court  cannot,  as  the  chancellor  may,  enter  judgment  con- 
trary to  the  verdict,  but  the  verdict  may  be  set  aside  or  the 
judg-ment  may  be  reversed  for  error  of  law  as  in  common  law 
cases. -^^  The  judge  and  not  the  referee  should  preside  at  a 
jury  trial. 

The  books  of  a  bankrupt  are  evidence  on  the  question  of  his 
insolvency  within  four  months  of  the  date  of  filing  the  peti- 
tion, but  are  not  conclusive  on  this  subject."^  The  schedules 
and  the  inventories  and  appraisements  are  also  evidence  upon 
the  same  question.^''  Actual  sales  of  property  by  a  receiver  is 
evidence  of  the  market  value  of  the  property.^^  Giving  a  post- 
dated check  or  note  is  not  evidence  of  insolvency.^^ 

The  adjudication  of  bankruptcy  raises  no  presumption  of 
insolvency  at  a  previous  date.^^  A  debtor  is  presumed  to  know 
his  financial  condition  and  he  will  be  presumed  to  intend  to 
prefer  if  in  effect  he  was  insolvent  at  the  time  he  created  the 
preference,  but  he  may  rebut  this  presumption  with  evidence.^* 

Where  a  referee  has  twice  made  a  report  on  the  solvency  of 
the  debtor  the  court  will  refuse  to  disturb  his  decision. ^^  The 
judgment  of  a  court  on  a  jury  trial  may  be  reviewed  in  a  cir- 
cuit court  of  appeals  on  writ  of  error,^** 


28  Elliott  V.  Toeppner,   187  U.   S.  Fed.   Rep.  812,   3  Am.   B.   R.   123; 

327,  9  Am.  B.  R.  50.  In  re  Chappell,  113  Fed.  Rep.  545, 

29 /m  re  Docker,  Foster  &  Co.,  123  7  Am.  B.  R.  608. 

Fed.  Rep.  190;  10  Am.  B.  R.  — .  ^"^  In    re    Gilbert,    112    Fed.    Rep. 

30 /m    re    Docker-Foster    Co.,    123  951,  8  Am..  B.  R.  loi. 

Fed.  Rep.  190,  10  Am.  B.  R.  — .  ^^  In  re  Rome   Planing  Mills,  99 

31 /m  re  Bloch  (C.  C.  A.  2d  Cir.),  Fed.  Rep.  937,  3  Am.  B.  R.  766. 

109   Fed.   Rep.    790,   6   Am.    B.    R.  sg  Elliott  v.  Toeppner,   187  U.   S. 

300.     But  see  Duncan  v.  Landis  (C.  327,  9  Am.    B.    R.   50;    Duncan   v. 

C.  A.  3d  Cir.),  106  Fed.  Rep.  839,  Landis  (C.  C.  A.  3d  Cir.),  106  Fed. 

5  Am.  B.  R.  649.  Rep.  839,   5   Am.    B.    R.   649;    Ins. 

"^  In  re  Chappell.    113  Fed.   Rep.  Co.  v.  Comstock,   16  Wall.  258. 
545 ,  7  Am.  B.  R.  608. 

33 /„  Yg  Rome  Planing  Mills,  96 


ACTS    OF    BANKRUPTCY.  159 

^51.     First:    Fraudulent  transfers. 

The  first  act  of  bankruptcy  mentioned  consists  of  the  debtor 
having  conveyed,  transferred,  concealed  or  removed,  or  per- 
mitted to  be  concealed  or  removed,  any  part  of  his  property, 
Avith  intent  to  hinder,  delay  or  defraud  his  creditors,  or  any  of 
them.^^  A  conveyance  or  transfer  made  with  intent  to  hinder, 
delay  or  defraud  creditors,  or  any  of  them,  otherwise  unob- 
jectionable, is  made  fraudulent  and  void  by  the  bankrupt  act.^^ 
What  are  fraudulent  conveyances  is  considered  in  another 
place.^'*  The  making  of  a  transfer  or  conveyance  of  property, 
with  intent  to  hinder,  delay  or  defraud  creditors,  or  any  of 
them,  is  made  by  this  provision  an  act  of  bankruptcy.'**'  It  has 
been  held  that  this  clause  of  the  act  applies  only  to  transfers 
which  are  fraudulent  at  common  law.*^ 

A  transfer  to  a  bojia  fide  purchaser  for  a  present  fair  consid- 
eration is  not  ordinarily  such  a  transfer  as  to  make  the  sale 
an  act  of  bankruptcy.''"  But  it  may  be  conceived  that  if  the 
sale  were  made  with  intent  on  the  part  of  the  debtor  to  hinder, 
delay  or  defraud  his  creditors  it  might  be  an  act  of  bankruptcy, 
although  the  sale  could  not  be  set  aside  and  the  bojia  fide  pur- 
chaser would  be  protected.'*"*  It  has  been  held  an  act  of  bank- 
ruptcy where  an  insolvent  debtor  conveyed  all  his  property  to 
a  trustee  with  directions  as  to  the  payment  to  his  creditors  with- 
out preference  and  the  deed  contained  a  condition  of  de- 
feasance and  equity  reserved  in  the  property  to  the  grantor 
after  the  satisfaction  of  the  claims  of  the  beneficiaries,  in  that 
such  transfer  was  made  to  hinder,  delay  and  defraud  his  cred- 
itors and  not  a  transfer  to  prefer  creditors.*^     A  voluntary  pro- 


^'^  B.  A.  1898,  Sec.  sa,  clause  i.  s.  c.  8  Ben.  233;  In  re  Pusey,  No. 

3«  B.  A.  1898,  Sees.  67e  and  60.  11478  Fed.  Cas.,  s.  c.  7  B.  R.  45. 

^^  Sec.  194,  post.  42*  See    Githens    v.    Shiffler,    112 

*<*  B.  A.  1898,  Sec.  3a.  Fed.    Rep.   505,  7   Am.   B.   R.  453 ; 

''^Githens    v.    Shiffler,    112    Fed.  Boyd  v.  Lemon  &  Gale  Co.   (C.  C. 

Rep.  505,  7  Am.  B.  R.  453.     Lansing  A.  5th  Cir.),  114  Fed.  Rep.  647,  8 

Engine  etc.  Co.  v.  Ryerson    (C.  C.  Am.  B.  R.  81  ;  In  re  Franklin,  No. 

A.  6th   Cir.),   126  Fed.   Rep.  — ,   11  5053  Fed.  Cas.,  s.  c.  8  Ben.  233. 

Am.    B.    R.    — .  ^^  Rumsey  &  Sikcmicr  v.  Novelty 

''-Tiffany  v.  Lucas,  15  'Wall.  421;  and    Machine    Mfg.    Co.,    99    Fed. 

Stewart  v.  Piatt,  loi  U.  S.  731  ;  In  Rep.  699,  3  Am.  B.  R.  704,  2  N.  B. 

re    Franklin,    No.    5053    Fed.    Cas,,  N.    128. 


l6o  LAW    AND    PROCEEDINGS    IN    BANKRII'TCY. 

curing  of  the  appointment  of  a  receiver  in  proceedings  for  the 
dissokition  of  an  insolvent  corporation  has  been  held  not  to 
be  a  transfer  with  intent  to  hinder,  delay,  etc.**  But  under  the 
amendment  to  3a,  cl.  4  this  is  made  an  act  of  bankruptcy.  It  is 
not  an  act  of  bankruptcy  to  transfer  property  where  the  only 
creditor  is  one  holding  an  unliquidated  claim  for  damages  for 
a  tort.*^  It  should  be  borne  in  mind  that  it  is  the  fraudulent 
intent  of  the  debtor  alone  that  determines  whether  the  act 
complained  of  is  an  act  of  bankruptcy  or  not.*"  It  is  imma- 
terial whether  the  purchaser  acts  in  good  faith  or  not. 

In  addition  to  making  fraudulent  transfers,  the  concealing 
or  removing  of  property  with  the  same  intent  and  purpose 
constitutes  an  act  of  bankruptcy.*"  It  seems  that  it  is  not 
necessary  to  physically  remove  or  conceal  the  property,  but 
that  the  concealment  of  the  actual  title  to  the  property  by 
fictitious  legal  proceedings  or  otherwise  is  considered  a  con- 
cealment or  removal  of  property  within  this  provision.*^  It  is 
not  concealing  property  within  the  meaning  of  this  provision 
not  to  disclose  property  which  is  not  properly  assets  of  the 
bankrupt.*** 

Actual  solvency  at  the  time  of  filing  the  petition  is  a  com- 


■**  In    re   Harper   Bros.,    100   Fed.  *''  Anonymous,  No.  466  Fed.  Cas., 

Rep.  266.  3  Am.  B.  R.  804,  2  N.  B.  s.  c.   i    Pac.  Law.  Rep.   173;  Liver- 

N.  605 ;  In  re  Baker-Ricketson  Co.,  more  v.  Bagley,  3  Mass.  487 ;  Fox 

97  Fed.  Rep.  489 ,  4  Am.  B.  R.  605 ;  v     Eckstein,    5009    Fed.    Cas.,    s.    c. 

Vacarro  v.  Security  Bank  (C.  C.  A.  4  N.  B.  R.  373;  In  re  Filer,  108  Fed. 

6th  Cir.),  103  Fed.  Rep.  436,  4  Am.  Rep.  209,  5   Am.   B.   R.  2>32;   Citi- 

B.  R.  474,  2  N.   B.  N.   103;  In  re  zens  Nat.  Bank  v.  De  Pauw  Co.  (C. 

H.   Zeltner   Brewing  Co.,   117  Fed.  C.  A.  7th  Cir.),  105  Fed.  Rep.  926; 

Rep.  799.  In  re  Shapiro,   106  Fed.   Rep.  495 , 

■*s  Beers  v.  Hanlin,  99  Fed.  Rep.  3  N.  B.  N.  385. 

695 ,  3  Am.  B.  R.  745.  *8  lyi  yg  Hussman,  No.  6951   Fed. 

■*6  In  re  McKibben,  No.  8859  Fed.  Cas.,   s.   c.   2   N.   B.  R.   437 ;  In  re 

Cas.,  s.   c.    12   N.   B.   R.  97 ;  In  re  Williams,  No.  17703  Fed.  Cas.,  s.  c. 

Drummond,  No.  4093  Fed.  Cas.,  s.  c.  3  N.  B.  R.  286 ;  O'Neil  v.  Glover,  5 

I  N.  B.  R.  231,  the  court  said  Drum-  Gray  159;  Anonymous,  No.  466  Fed. 

mond  positively  swears  that  he  had  Cas.,  s.  c.   i   Pac.  Law.   Rep.   173. 

nc  such  intent.     And  there  is  noth-  "  Conceal  "    shall    include    secrete, 

mg   m  the  evidence  that  leads   me  falsify    and    mutilate ;    B.    A.    1898, 

to  conclude  that  he  swears  falsely.  Sec.  i,  clause  22. 

See   also   ?w    re   Franklin.    No.   5053  *^ /m  re  Scott,  11  Fed.  Rep.  133. 
Fed.  Cas.,  s.  c.  8  Ben.  2t,2,- 


ACTS    OF    BANKRUPTCY.  l6l 

plete  defense  to  proceedings  instituted  under  this  clause  and 
the  burden  of  proving  solvency  is  on  the  alleged  bankrupt.^" 
Insolvency  at  the  time  of  the  conveyance,  transfer,  etc.,  is  not 
essential  to  constitute  an  act  of  bankruptcy  under  this  clause. 


§  52.     Second :    Preferences  created  by  the  debtor. 

An  act  of  bankruptcy  by  a  person  may  consist  of  his  having 
transferred,  while  insolvent,  any  portion  of  his  property  to  one 
or  more  of  his  creditors,  with  intent  to  prefer  such  creditors 
over  his  other  creditors.^^  To  constitute  an  act  of  bankruptcy 
within  this  provision  three  things  must  concur :  " 

First,  The  debtor  must  have  transferred  property  of  his  own 
to  a  creditor.^^*  By  transfer  is  included  the  sale  and  every 
other  and  different  mode  of  disposing  of  or  parting  with  prop- 
erty, or  the  possession  of  property,  absolutely  or  conditionally, 
as  a  payment,  pledge,  mortgage,  gift  or  security.^^ 

Second,  The  debtor  must  have  been  insolvent  at  the  time  of 
the  transfer.  A  person  is  deemed  insolvent  whenever  the  ag- 
gregate of  his  property,  exclusive  of  any  property  which  he 
may  have  conveyed,  transferred,  concealed  or  removed,  or  per- 
mitted to  be  concealed  or  removed,  with  intent  to  defraud,  hin- 
der or  delay  his  creditors,  shall  not,  at  a  fair  valuation,  be  suffi- 
cient in  amount  to  pay  his  debts." 

Third,  The  debtor  must  have  intended  to  prefer  such  cred- 
itors over  his  other  creditors. ^^ 

What  constitutes  a  fraudulent  preference  under  the  bank- 

'•"  B.  A.   1898,   Sec.  2c,  and  In   re  ond.  The   debtor's    intent   to   prefer 

Schenkein,    113    Fed.    Rep.    421.    7  such  creditor.  Third.  The  insolvency 

Am.  B.  R.  162;  In  re  We.st   (C.  C.  of   the    debtor    at    the   date    of   the 

A.   2d   Cir.),    108   Fed.   Rep.   940,   5  transfer. 

Am.  B.  R.  734.  5:i*/„  ,,^  Foster.  11  Am.  B.  R.  131. 

f''  B.  A.  i8g8.  Sec.  3,  clause  2.  &»  B.  A.  1898.  Sec.  i,  clause  25. 

^2/«  re  Rome   Planing   Mill   Co.,  s*  B.    A.    1898.    Sec.    i,   clause    15. 

96  Fed.  Rep.  812,  3  Am.  B.  R.   123,  See  Sec.  50a.  ante. 

2  N.   B.  N.  531,  Judge  Coxe  said:  •'•.-./„  re  Ewing  (C.  C.  .'\.  2d  Cir.), 

"In    order    to    succeed    under    this  115  Fed.  Rep.  707.  8  Am.  B.  R.  269; 

subdivision     the     petitioners     mu.st  /»  rr  Gilbert.   112  Fed.  Rep.  951,  8 

piovc:     First:     A    transfer    of    the  Am.   B.  R.  loi  :  In  re  Bloch   (C.  C. 

debtor's  property  to  a  creditor.   Sec-  A.  2d  Cir.).   109  Fed.   Rep.  790,  6 

Am.  B.  R.  300. 


1 62 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


rupt  act,  and  when  it  may  be  avoided,  is  defined  by  the  stat- 
ute,°®  and  is  the  subject  of  consideration  elsewhere.^^  The 
present  provision  makes  fraudulent  preferences  as  such  acts  of 
bankruptcy. 

It  should  be  observed  that  giving  a  preference  may  be  an 
act  of  bankruptcy,  although  the  trustee  may  not  be  able  to 
avoid  the  preference.^**  The  debtor  may  intend  to  prefer  the 
creditor,  although  no  fraudulent  intent  is  known  to  or  par- 
ticipated in  by  the  creditor.  The  statute  expressly  provides 
that  the  trustee  may  avoid  a  preference  only  when  the  person 
to  be  benefited  "  shall  have  had  reasonable  cause  to  believe  that 
it  was  intended  thereby  to  give  a  preference."  ^^  But  the  in- 
tent of  the  debtor  only  is  to  be  considered  in  determining 
whether  he  has  committed  an  act  of  bankruptcy  within  this 
provision.  His  intent  is  to  be  presumed  from  the  nature  of 
the  transaction  and  his  acts  in  connection  therewith.'^'*  If  he 
has  knowledge  of  his  insolvency  such  an  intent  is  conclusively 
presumed.®^ 

Thus  it  has  been  held  sufficient  to  constitute  an  act  of  bank- 
ruptcy for  a  person  to  transfer  all  of  his  property  to  a  part  of 


56  B.  A.  1898,  Sec.  60. 

5T  Preferences,  Chap.  XVIII. 

58  j^  yg  Drummond,  No.  4093  Fed. 
Cas.,  s.  c.  I  N.  B.  R.  231. 

5»  B.  A.  1898,  Sec.  60. 

«o  Johnson  v.  Wald  (C.  C.  A.  5th 
Cir.),  93  Fed.  Rep.  640,  2  Am.  B. 
R.  84;  In  re  McGee,  105  Fed.  Rep. 
895,  5  Am.  B.  R.  262. 

In  Toof  V.  Martin,  13  Wall.  48, 
Mr.  Justice  Field  said :  "  It  is  a 
general  principle  that  every  one 
must  be  presumed  to  intend  the 
necessary  consequences  of  his  acts. 
The  transfer  in  any  case,  by  a 
debtor,  of  a  large  portion  of  his 
property,  while  he  is  insolvent,  to 
one  creditor,  without  making  provi- 
sion for  an  equal  distribution  of  its 
proceeds  to  all  his  creditors,  neces- 
sarily   operates    as    a    preference    to 


him,  and  must  be  taken  as  conclu- 
sive evidence  that  a  preference  was 
intended,  unless  the  debtor  can 
show  that  he  was  at  the  time  ig- 
norant of  his  insolvency,  and  that 
his  affairs  were  such  that  he  could 
reasonably  expect  to  pay  all  his 
debts.  The  burden  of  proof  is 
upon  him  in  such  case,  and  not 
upon  the  assignee  or  contestant  in 
bankruptcy." 

See  also  Miller  v.  Keys,  No.  9578 
Fed.  Cas.,  s.  c.  3  N.  B.  R.  224 ;  In  re 
Oregon  Bulletin  Print,  and  Pub. 
Co.,  No.  10559  Fed.  Cas.,  s.  c.  13 
N.  B.  R.  503. 

^^  In  re  Wright  Lumber  Co.,  114 
Fed.  Rep.  ion  ,  8  Am.  B.  R.  345; 
h:  re  Gilbert.  112  Fed.  Rep.  951,  8 
Am.   B.  R.   loi. 


ACTS    OF    BANKRUPTCY. 


163 


his  creditors/"  or  to  his  wife,^^  or  to  mortgage  all  of  his  prop- 
erty to  a  creditor,"*  or  to  effect  a  composition  with  all  of  his 
creditors  but  one  and  pay  him  in  full,"^  or  to  pay  any  creditor 
in  full  while  insolvent,''*'  or  to  pay  wages,*'^  or  to  pay  a  private 
debt  out  of  partnership  property,'''^  or  to  transfer  a  note  to  a 
creditor  as  security  for  a  preexisting  debt,****  or  to  transfer 
property  for  present  and  future  advances,''"  or  to  pay  an  over- 
draft on  a  bank,^^  or  to  sell  one's  property  to  a  person  not  a 
creditor  and  apply  the  proceeds  in  full  payment  of  some  cred- 
itors leaving  others  unpaid/^ 

On  the  other  hand,  it  has  been  held  not  to  constitute  an  act 
of  bankruptcy  where  a  payment  is  made  under  the  belief  that 
the  debtor  is  solvent/^  or  to  make  a  change  of  securities/*  or 


62  Johnson  v.  Wald  (C  C.  A.  5th 
Cir.),  93  Fed.  Rep.  640,  2  Am.  B. 
R.  84;  Goldman  v.  Smith,  93  Fed. 
Rep.  182 ,  I  Am.  B.  R.  266 ;  In  re 
Grant,  106  Fed.  Rep.  496 ;  In  re 
Dnimmond,  No.  4094  Fed.  Gas.,  s.  c. 
4  Biss.  149 ;  /;;  re  House,  No.  6735 
Fed.  Gas.,  s.  c.  i  N.  Y.  Leg.  Obs. 
348;  In  re  Foster,  No.  4964  Fed. 
Gas.,  s.  c.  18  N.  B.  R.  64. 

"^  In  re  Alexander,  No.  161  Fed. 
Gas.,  s.  c.  I  Low.  470. 

®*/n  re  Wright  Lumber  Go.,  114 
Fed.  Rep.  loi  i  ,  8  Am.  B.  R.  345 ; 
Baldwin  v.  Rosseau,  No.  803  Fed. 
Gas.,  s.  c.  I  N.  Y.  Leg.  Obs.  391  ; 
/»,  re  Waite,  No.  17044  Fed.  Gas., 
s.  c.  I  Low.  207 ;  In  re  Dunham, 
No.  4143  Fed.  Gas.,  s.  c.  2  Ben.  488; 
In  re  Rogers,  No.  12002  Fed.  Gas., 
s.  c.  2  N.  B.  R.  397. 

®^  Gurran  v.  Hunger,  No.  3487 
Fed.  Gas.,  s.  c.  6  N.  B.  R.  t,^. 

"« In  re  Oregon  Bulletin  Printing 
and  Publishing  Go.,  No.  10559  Fed. 
Gas.,  s.  c.  13  N.  B.  R.  503;  Silver- 
man's case.  No.  12855  Fed.  Gas., 
s.  c.  I  Saw.  410;  In  re  Dibblee, 
No.  3884  Fed.  Gas.,  s.  c.  3  Ben.  283 ; 


s.  c.  Subnom.  Glark  v.  Iselin,  21 
Wall.  360. 

'^'^  Kenyon  v.  Fenton,  6  N.  B.  R. 
238.  Note  to  case  No.  17780  Fed. 
Gas. 

^^  In  re  Grant,  106  Fed.  Rep.  496; 
In  re  Mattot,  No.  9282  Fed.  Gas., 
s.  c.  16  N.  B.  R.  485. 

^^  Ex  parte  Shouse,  No.  12815 
Fed.  Gas.,  s.  c.  Grabbe  482. 

"'^  Ex  parte  Potts,  No.  11344  Fed. 
Gas.,  s.  c.  Grabbe  469. 

'''^  Payne  v.  Soloman,  No.  10856 
Fed.  Gas.,  s.  c.  14  N.  B.  R.  162. 

''^ 2  Boyd  V.  Lemon  &  Gale  Go.  (G. 
G.  A.  5th  Gir.),  114  Fed.  Rep. 
647,  8  Am.  B.  R.  81.  See  also  Gith- 
ens  V.  Shiffler,  112  Fed.  Rep.  505,  7 
Am.  B.  R.  453. 

"/w  re  Bloch  (G.  G.  A.  2d  Gir.), 
109  Fed.  Rep.  790,  6  Am.  B.  R. 
300;  Morgan  v.  Mastick,  No.  9803 
Fed.  Gas.,  s.  c.  2  N.  B.  R.  521  ;  In  re 
Munn,  No.  9925  Fed.  Gas.,  s.  c.  3 
Biss.  442. 

^*  Glark  v.  Iselin,  21  Wall.  360; 
/;•  re  Weaver,  No.  17307  Fed.  Gas., 
s  c.  9  N.  B.  R.  132;  In  re  Union 
Pac.  R.  Go.,  No.  14376  Fed.  Gas., 
s.  c.  10  N.  B.  R.  178. 


164  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

the  payment  of  unearned  premiums  on  policies  of  insurance/'* 
or  an  executory  agreement  by  a  railway  company  to  transfer 
certificates  of  stock  to  a  creditor,^"  or  to  pay  a  j^ercentage  on 
claims  of  a  part  of  his  creditors  when  the  others  will  receive 
the  same  percentage,"  or  the  return  of  a  piano  ordered  for  a 
customer  who  refused  to  receive  it,^^  or  the  payment  of  rent 
to  preserve  a  valuable  lease.'^ 

§  53.     Third :    Preferences  created  by  legal  proceedings. 

An  act  of  bankruptcy  by  a  person  may  consist  of  his  having 
suffered  or  permitted,  while  insolvent,  any  creditor  to  obtain 
a  preference  through  legal  proceedings,  and  not  having  at  least 
five  days  before  a  sale  or  final  disposition  of  any  property  af- 
fected by  such  preference  vacated  or  discharged  such  prefer- 
ence.^" 

Two  elements  are  necessary  to  constitute  an  act  of  bank- 
ruptcy under  this  provision.^^  First,  the  debtor  must  have 
been  insolvent  at  the  time  the  preference  was  created,  and, 
second,  he  must  have  suffered  or  permitted  it  without  having 
vacated  or  discharged  it  within  five  days  before  the  sale  or  dis- 
position of  the  property. 

No  intent  on  the  part  of  the  debtor  to  create  a  preference  is 
required, ^^  as  there  was  under  the  act  of  1867,^^  which  provided 

^5  Knickerbocker      v.      Comstock,  Judge    Brown    said :     "  Payment   of 

No.  7879  Fed.  Cas.,  s.  c.  9  N.  B.  R.  rent  by  an   insolvent  is  not  neces- 

484.  sarily  a  preference.     But  when  it  is 

■^^  Winter    v.    Railway    Co.,    No.  done  as  a  means  and  for  the  pur- 

17890  Fed.  Cas.,  s.  c.  2  Dill.  487.  pose   of  carrying  on  a  business   in 

■^■^  In  re  Hapgood,  No.  6044  Fed.  fraud  of  creditors  it  should  be  so 

Cas.,    s.    c.    2    Low.    200 ;    Jones    v.  regarded,"    and    held    it    an    act   of 

Sleeper,  No.  7496  Fed.  Cas.,  s.  c.  2  bankruptcy  in  that  case. 

N.  Y.  Leg.  Obs.  131.  »»  B.  A.  1898,  Sec.  3,  clause  3-    /« 

^^  Doan  V.  Compton,  No.  3940  Fed.  re  Reichman,  91  Fed.  Rep.  624 ;  Fn 

Cas.,  s.  c.  2  N.  B.  R.  607.  rt  Elmira  Steel  Co.,  ^109  Fed.  Rep. 

7»  hi    re    Pearson,    95    Fed.    Rep.  456 ,  5  Am.  B.  R.  484! 

425 ,    2    Am.    B.     R.    482 ;    In    re  ^^  In   re   Rome    Planing   Mill,   96 

Merchants  Insurance  Co.,  No.  9441  Fed.  Rep.  812,  3  Am.  B,  R.  123,  2 

Fed.  Cas.,  s.  c.  3  Biss.  162;  Contra,  N.  B.  N.  531. 

Smith    V.    Teutonia    Ins.    Co.,    No.  «2  r    5.   Sec.  5021,  par.  7th,  em- 

131 15   Fed.   Cas.,  s.   c.  6  Am.   Law  bracing  a  part  of  Sec.  39  of  the  act 

Rev.  584.  of    March    2,    1867,    14    Stat,    at   L. 

In  re  Lange,  97  Fed.  Rep.  197,  2  536,  as  amended  June  22,   1874,   18 

N.    B.    N.    85,    3    Am.    B.    R.    231,  Stat,  at  L.  180. 


ACTS    OF    BANKRUPTCY.  165 

that  a  person  commits  an  act  of  bankruptcy  who  "  procures  or 
suffers  his  property  to  be  taken  on  legal  process,  with  intent 
to  give  a  preference  to  one  or  more  of  his  creditors." 

An  act  of  bankruptcy  under  this  clause  ordinarily  cannot 
be  completed  until  within  five  days  before  the  sale  or  final  dis- 
position of  the  property  taken  on  legal  process,  for  the  debtor 
may  at  any  time  prior  to  that  date  vacate  or  discharge  the 
preference.  Non  constat  he  will  do  so.  In  such  case  no  act  of 
bankruptcy  is  committed.  But  when  the  insolvent  puts  it 
out  of  his  power  to  vacate  the  preference  he  then  commits  an 
act  of  bankruptcy.^^ 

Insolvency  of  the  Debtor. —  The  debtor  must  have  been 
insolvent  at  the  time  the  preference  was  created  by  the  legal 
proceedings.  A  person  is  deemed  insolvent  whenever  the  ag- 
gregate of  his  property,  exclusive  of  any  property  which  he 
may  have  conveyed,  transferred,  concealed  or  removed,  or  per- 
mitted to  be  concealed  or  removed,  with  intent  to  defraud,  hin- 
der or  delay  his  creditors,  shall  not,  at  a  fair  valuation,  be 
sufficient  in  amount  to  pay  his  debts.** 

It  is  not  an  act  of  bankruptcy  for  a  solvent  'debtor  to  suffer 
or  permit  an  execution,  levy  and  sale  of  his  property  under 
legal  proceedings.  Where  a  judgment  is  obtained  against  a 
person  while  he  is  solvent  it  has  been  held  that  an  execution 
may  be  subsequently  issued  when  the  person  is  insolvent.*'' 
The  preference  is  obtained  when  the  lien  of  judgment  attaches, 
not  when  execution  is  issued.*'*'  Where  a  levy  on  property  of 
the  debtor  depreciates  its  value  so  that  his  assets  are  then  less 
than  his  liabilities  he  is  insolvent  within  the  meaning  of  the 
statute." 

"  Suffered  or  Permitted,"  etc. —  By  the  phrase  "  suf- 
fered or  permitted  "  congress  manifestly  intended  that  a  prefer- 
ence might  be  created  by  legal  proceedings  sufficient  to  consti- 


8'Scheuer  v.  Smith  &  Montgom-  ««  Owen  v.  Brown   (C.  C,  A.  8th 

ery,  etc.,  Co.  (C.  C.  A.  2d  Cir.),  112  Cir),  120  Fed.  Rep.  812,  9  Am.  B. 

Fed.  Rep.  407,  7  Am.  B.  R.  384.  R.  717. 

«*B.   A.    1898,    Sec.    I,  clause    15.  "Chicago,  etc.,   Co.   v.   Roebling, 

As  to  solvency,   see   Sec.   50a,  ante.  107  Fed.  Rep.  71  ,  5  Am,  B.  R.  368. 

*^^  Field  V.  Baker,   No.  4762  Fed. 
Cas.,  s.  c.   12  Rlatch.  438 


I  Ob  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

tute  an  act  of  bankruptcy,  although  the  debtor  did  nothing 
tending  to  aid  in  procuring  the  preference  or  to  show  an  af- 
nrmative  desire,  and  although  he  resisted  the  obtaining  of  the 
jncference.  This  construction  has  been  placed  upon  this 
l)hrase  by  the  supreme  court.** 

If  a  preference  is  created  by  the  legal  proceedings  within  the 
meaning  of  section  60  of  the  act,  such  preference  may  be  set 
aside.  If  no  preference  within  the  meaning  of  this  section  is 
created,  the  proceedings  will  be  valid  and  the  creditor  pro- 
tected. But  whether  it  is  a  valid  preference  under  that  section 
has  nothing  to  do  with  determining  whether  an  act  of  bank- 
ruptcy has  been  committed  or  not. 

Legal  Proceedings. —  The  phrase  legal  proceedings,  as 
used  in  the  bankrupt  law,  undoubtedly  refers  to  any  proceed- 
ings had  in  a  court  of  justice,  either  state  or  federal.  It  is 
equivalent  to  the  words  "  legal  process  "  used  in  the  act  of 
1867  ^^  as  construed  by  the  courts.®*'  It  is  not  confined  to  any 
particular  form  of  writ,  execution  or  attachment.  It  is  rather 
a  writ,  mandate  or  order  of  the  court  taking  hold  of  the  prop- 
erty and  withdrawing  it  from  the  possession  and  control  of  the 
debtor  and  from  the  ordinary  reach  of  creditors  for  the  pay- 
ment of  what  is  due  to  them.  Each  and  any  such  proceeding 
is  within  the  intent  and  true  meaning  of  the  term  "  legal  pro- 
ceedings "  as  used  in  this  provision."^  Thus  it  may  be  by  an 
attachment  proceeding,""  or  by  an  execution  upon  judgment,** 


88  Wilson    V.    Nelson,    183    U.    S.  In    re    New    Amsterdam    Fire    Ins. 
1 191,    7    Am.    B.    R.    124.     See    also  Co.,    No.    10140    Fed.    Cas.,    s.   c.   6 

Bradley   Timber   Co.   v.   White    (C.  Ben.  368;  In  re  Bininger,  No.  1420 

C.  A.  5th  Cir.),  121  Fed.  Rep.  779,  Fed.  Cas.,  s.  c.  7  Blatch.  270;  In  re 

10  Am.  B.  R.  329,  affirming  119  Fed.  Washington    Marine    Ins.    Co.,    No. 

Rep.  989,  9  Am.  B.  R.  441 ;  Parmen-  17246  Fed.  Cas.,  s.  c.  2  Ben.  292. 

ter  Mfg.  Co.  v.  Stoever    (C.  C.  A.  "^ /n   re   Rome   Planing   Mill,   96 

ist  Cir.),  97  Fed.  Rep.  330,  3  Am.  Fed.  Rep.  812,  3  Am.  B.  R.  123,  2 

B.  R.  220;  In  re  Reichman,  91  Fed.  N.  B.  N.  531. 

Rep.  624,    I   Am.   B.   R.   17;   In   re  "2  pgrmenter  Mfg.  Co.  v.  Stoever 

Moyer,  93  Fed.  Rep.  188,  i  Am.  B.  (C.   C.   A.    ist   Cir.),  97  Fed.  Rep. 

R-  577 ;  In  re  Thomas,  103  Fed.  Rep.  330 ,  3  Am.  B.  R.  220 ;  2  N.  B.  N. 

272,  4  Am.  B.  R.  571.  134;  In  re  Reichman,  91   Fed.  Rep. 

89  R.  S.  Sec.  5021.  624,  I  Am.  B.  R.  17;  In  re  Harper, 
80  In  re  Merchants'  Insurance  Co.,  105  Fed.  Rep.  900. 

No.  9441  Fed.  C^s.,  s.  c.  3  Biss.  162 ;  ^^  /„  yg   Ferguson,  95    Fed.   Rep. 


ACTS    OF    BANKRUPTCY.  I67 

or  by  levying  execution  on  judgment  upon  a  note  containing 
a  warrant  of  attorney  to  confess  judgment."*  It  does  not, 
however,  include  a  levy  upon  a  judgment  of  foreclosure  of  a 
lien  which  affects  only  the  property  bound  by  the  lien,''^  nor 
proceedings  under  a  state  statute  for  the  dissolution  of  a  cor- 
poration or  partnership  and  the  appointment  of  a  receiver  to 
wind  up  its  affairs  and  distribute  its  assets.*"'  It  will  be  ob- 
served in  these  last  two  proceedings  no  preference  is  given  to 
any  one  creditor  over  the  others.  If  such  proceedings  should 
create  a  preference  an  act  of  bankruptcy  is  committed.''' 

The  preference  must  have  been  acquired  within  four 
months.^*  The  four  months'  period  begins  to  run  from  the 
date  connected  with  the  proceedings  after  judgment  and  not 
from  judgment.'''* 

§  54.     Fourth :    Assignments  for  the  benefit  of  creditors  and 
receiverships. 

An  act  of  bankruptcy  by  a  person  may  consist  of  his  having 
made  a  general  assignment  for  the  benefit  of  creditors, ^""^  or 
being  insolvent,  applied  for  a  receiver  or  trustee  for  his  prop- 


429 ,  2  Am.  B.  R.  586 ;  In  re  Storm,  ruptcy    mider    Sec.     30,    cl.    4.     32 

103    Fed.    Rep.   618,    4   Am.    B.    R.  Stat,  at  L.  797. 

601.  ^' In   re    Kersten,    no   Fed.    Rep. 

^*  In  re  Moyer,  93  Fed.  Rep.  188,  929,  6  Am.  B.  R.  516. 

I    Am.    B.   R.   577.     But   see   In   re  '^^  In   re   Ferguson,  95   Fed.   Rep. 

Nelson,   i    Am.   B.   R.   63 ,  98   Fed.  429 ,   2  Am.   B.   R.  586 ;   Parmenter 

Rep.  76;  Wilson  v.  Nelson,  183  U.  Mfg.  Co.  v.  Stoever   (C.  C.  A.   ist 

S.    191.  Cin),  97  Fed.  Rep.  330;  3  Am.  B.  R. 

•'•'• /n   re   Chapman,  99   Fed.    Rep.  220;    Owen    v.    Brown    (C.    C.    A. 

395,    3    Am.    B.    R.   607;    Owen    v.  8th  Cir.),  120  Fed.  Rep.  812;  9  Am. 

Brown  (C.  C.  A.  8th  Cir.),  120  Fed.  B.   R.  717;   Bradley  Timber  Co.  v. 

Rep.  812.  9  Am.  B.  R.  717.  White  (C.  C.  A.  5th  Cir.).  121  Fed. 

»" /n  re  Empire  Metallic  Bedstead  Rep.    779;    Wilson    v.    Nelson,    183 

Co.  (C.  C.  A.  2d  Cir.),  98  Fed.  Rep.  U.  S.  191. 

981  ,  3  Am.  B.  R.  575 ,  2  N.  B.  N.  ^^  Parmenter  Mfg.  Co.  v.  Stoever 

304;  In  re  Harper  Bros.,  100  Fed.  (C.   C.   A.    ist  Cir.),  97  Fed.   Rep. 

Rep.  266 ,  2  N.  B.  N.  605 ,  3  Am.  330 ,  3  Am.  B.  R.  220. 

B.    R.    804;    Vaccarro    v.    Security  i""  B.    A.    1898,    Sec.   3,   cl.   4,   as 

Bank  (C.  C.  A.  6th  Cir.),  103  Fed.  amended   Feb.   5,   1903;  32  Stat,  at 

Rep.  436,  2  N.  B.  N.  1037,  4  Am.  L.  797;  West  Co.  v.  Lea,  174  U.  S. 

B.    R.    474.     Receivership    proceed-  590 ;   In  re  Gutwillig,  90  Fed.  Rep. 

ings  are  now  made  an  act  of  bank-  475,   s.  c.   92   Fed.   Rep.  2)2>7- 


l68  I-AW    AM>    rKOCIiEDINGS    IN    BANKRUPTCY. 

erty,  or  because  of  insohencv  the  receiver  or  trustee  has  been 
placed  in  chart^e  o\  his  ])ropertv  under  the  laws  of  a  state,  of  a 
territory,  or  of  the  United  States.^*^^ 

The  appointment  of  a  receiver  was  not  an  act  of  bankruptcy 
prior  to  the  amendment  of  1903, ^"'^  but  was  made  so  by  the 
amendment.  Where  a  receiver  was  placed  in  charge  of  the 
debtor's  property  before  the  amendment  it  was  held  not  to  con- 
stitute an  act  of  bankruptcy  to  continue  him  in  charge  after 
Feb.  5.  1903.^""'' 

Whether  an  assignment  for  the  equal  benefit  of  all  creditors 
constituted  in  itself  an  act  of  bankruptcy  under  the  act  of  1867 
was  the  cause  of  much  discussion.  There  is  great  conflict  in 
the  reported  opinions  of  the  district  and  circuit  courts  on  this 
subject.  Some  of  them  held  that  it  was  a  transfer  with  intent 
to  hinder,  delay  or  defraud  creditors.  Others  held  otherwise. 
Undoubtedly  such  an  assignment  was  made  an  act  of  bank- 
ruptcy in  the  present  statute  for  the  purpose  of  definitely  set- 
tling the  question. 

Such  assignments  are  not  in  themselves  objectionable,  and 
can  be  set  aside  only  when  they  fall  within  the  provisions  of 
the  act.^"*  Whether  fraudulent  under  the  act  or  not,  it  is  in 
itself  an  act  of  bankruptcy  which  will  support  an  adjudica- 
tion, and  this  is  true  whether  ths  assignor  is  solvent  or  insol- 
vent.^'*^    An  assignment  which  is  void  under  the  state  law  so 


^01  B.   A.    1898,   Sec.  3a,  cl.  4,  as  R.  605 ;  In  re  Harper  Bros.,  100  Fed. 

amended  Feb.  5,  1903 ,  32  Stat,  at  L.  Rep.  266 ,  3  Am.  B.  R.  804. 

797.  ^"^  Seaboard  Steel  Casting  Co.  v. 

102 /„    re   Burrell    (C.    C.    A.    2d  Trigg,  124  Fed.  Rep.  75. 

Cir.),   123   Fed.  Rep.  414;  affirming  ^"*  See    Fraudulent    Conveyances, 

In   re  Varick   Bank,   iig   Fed.   Rep.  Chap.  XVII;  Mayer  v.  Hellman,  91 

991;  /«  re  Wilmington  Hosiery  Co.,  U.  S.  496;  Randolph  v.  Scrugg,  190 

120    Fed,    Rep.    180.   9   Am.    B.    R.  U.  S.  533,  10  Am.   B.  R.   i. 

581;    In   re   Gilbert,    112   Fed.    Rep.  i*""' West    Co.    v.    Lea,    174    U.    S. 

951  .  8  Am.  B.  R.   loi  :  Vaccaro  v.  590,  2  Am.  B.  R.  463 ;  Day  v.  Beck 

Security  Bank   (C.  C  A.  6th  Cir.),  &  Gregg  Hardw.  Co.   (C.  C.  A.  5th 

103    Fed.    Rep.   436,    4   Am.    B.    R.  Cir.),  114  Fed.  Rep.  834,  8  Am.  B. 

474;  In  re  Empire,  etc.,  Co.   (C.  C.  R.  175;  Green  River  Bank  v.  Craig, 

A.   2d   Cir.),  98   Fed.    Rep.   981  .   3  no  Fed.  Rep.  137.  6  Am.  B.  R.  381. 

Am.  B.  R.  575  ;  In  re  Baker-Ricket-  See  also   Randolph  v.   Scruggs,   190 

son  Co.,  97  Fed.  Rep.  489,  4  Am.  B.  U.  S.  533,  10  Am.  B.  R.  i. 


ACTS    OF    BANKRUPTCY.  169 

that  it  cannot  be  enforced  is  an  act  of  bankruptcy/""  So  also 
a  deed  of  assignment  which  is  defectively  executed  may  con- 
stitute an  act  of  bankruptcy/"  It  has  been  held  that  a  deed 
of  assignment  which  is  not  stamped  in  accordance  with  the 
revenue  law  cannot  be  offered  in  evidence."^  It  has  been  held 
that  a  confession  of  judgment  by  a  debtor  to  a  trustee  for  all 
his  creditors  amounts  to  a  general  assignment  for  the  benefit 
of  creditors,  under  the  law  of  Pennsylvania,  and  constitutes  an 
act  of  bankruptcy/*'^ 

§  55.     Fifth :    Voluntary  petition. 

An  act  of  bankruptcy  by  a  person  may  consist  of  his  having 
admitted  in  writing  his  inability  to  pay  his  debts  and  his  will- 
ingness to  be  adjudged  a  bankrupt  on  that  ground/^" 

This  is  the  act  of  bankruptcy  upon  which  an  adjudication  in 
voluntary  bankruptcy  is  founded.  It  is  not  necessary  that  the 
petition  be  filed  in  court.  All  that  is  required  is  that  it  be  writ- 
ten and  signed  by  the  bankrupt.  The  admission  in  a  letter  by 
a  debtor  that  he  cannot  pay  his  debts  and  is  willing  to  be  de- 
clared a  bankrupt  would  undoubtedly  be  sufficient  to  constitute 
an  act  of  bankruptcy  under  this  provision.  Whether  a  debtor 
can  make  a  legal  contract  not  to  make  such  a  declaration  in 
writing  may  be  doubted.^^^  In  cases  of  involuntary  proceed- 
ings under  this  section  the  actual  solvency  oi  the  defendant  is 
no  defense.^^" 

A  corporation  can  be  adjudged  a  bankrupt  upon  a  petition 
filed  by  its  creditors,  and  founded  upon  an  admission  in  writ- 
ing to  creditors  of  its  insolvency  and  willingness  to  be  ad- 
judged a  bankrupt."^     This  cannot  be.  done  where  the  admis- 


1""  In   re    Mendelsohn,    No.   9420  1^"  B.  .A^.  1898,  Sec.  3,  clause  5 :  In 

Fed.  Cas.,  s.  c.  3  Saw.  342.  re    Kersten,    no    Fed.    Rep.    929,   6 

'"^  In  re  Lawrence,  No.  8133  Fed.  .\ni.  B.  R.  516. 

Cas.,  s.  c.  10  Ben.  4.     But  see  Dut-  ^^^  See  Hill  v.   Cowery,  25  L.  J. 

ton  V.  Morrison,  17  Ves.  193.  Fx.  285. 

'"^/h  re  Dunham,  No.  4143  Fed.  "-/;i  re  C.   Moench  &  Sons  Co.. 

Cas..    s.    c.    2    Ben.    488.     But    see  123   Fed.   Rep.  963 .   —  Am.   B.    R. 

Ponsford  v.  Walton.  3  L.  J.  C.  P.  — :    West    Co.    v.    Lea,    174    U.    S. 

Cas.  167.  590. 

109 /n    re    Green.    106    Fed.    Rep.  "■'' /;i  re  C.   Moench  &  Sons  Co., 

313.   5   Am.   B.   R.  848.  123  Fed.  Rep.  965,  —  \m.  BR.—: 


170  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY, 

sion  is  made  by  the  directors,  who,  by  the  state  corporation 
laws,  have  no  authority  to  make  such  an  admission.^^*  Such  a 
statement  cannot  be  made  after  the  petition  is  filed."^  The 
petition  will  not  be  heard  until  the  other  creditors  have  been 
notified, ^^'"'  and  if  there  is  such  collusion  as  to  amount  to  a 
fraud  on  the  act  it  will  be  denied."^ 


§  56.     Computing  time. 

Proceedings  must  be  instituted  within  four  months  after  an 
act  of  bankruptcy  is  committed."^ 

Such  time  does  not  expire  until  four  months  after  the  date 
of  the  recording  or  registering  of  the  transfer  or  assignment 
when  the  act  consists  in  having  made  a  transfer  of  any  of  his 
property  with  intent  to  hinder,  delay  or  defraud  his  creditors, 
or  for  the  purpose  of  giving  a  preference,  or  a  general  assign- 
ment for  the  benefit  of  his  creditors,  if  by  law  such  recording 
or  registering  is  required  or  permitted,  or,  if  it  is  not,  from 
the  date  when  the  beneficiary  takes  notorious,  exclusive  or 
continuous  possession  of  the  property,  unless  the  petitioning 
creditors  have  received  actual  notice  of  such  transfer  or  as- 
signment.^^® 

Where  the  act  of  bankruptcy  is  a  preference  acquired  by 
legal  proceedings  the  four  months'  period  begins  to  run  from 
the  date  the  lien  is  acquired  and  not  from  the  judgment  or 
execution.^^** 


In    re    Mutual    Mercantile    Agency,  113    Fed.    Rep.   998,    7   Am.    B.    R. 

Ill    Fed.    Rep.    152,   6   Am.    B.    R.  704. 

607;  In  re  Kelly  Dry  Goods  Co.,  102  "s  B.  A.  1898,  Sec.  zb. 

Fed.  Rep.   747,   4  Am.   B.   R.   528;  ^^^  B.  A.  1898,  Sec.  3b.    See  Blen- 

In    re    Marine    Machine    and    Con-  nerhassett    v.    Sherman,    105    U.    S. 

veying    Co.,    91    Fed.    Rep.    630,    i  100.     But   see  Wood  v.   Owings,    i 

Am.   B.   R.  421;   In  re  Peter   Paul  Cranch  239;  Gibson  v.  Warden,  14 

Book  Co.,  104  Fed.  Rep.  786.  Wall.    244;    In    re    Mingo    Valley 

11* /n   re    Bates   Machine   Co.,   91  Creamery  Ass.,  100  Fed.  Rep.  282. 

Fed.  Rep.  625,  i  Am.  B.  R.  129.  i^o  Parmenter  Mfg.  Co.  v.  Stoever 

ii5/«  re  Baker-Ricketson  Co.,  97  (C.   C.   A.    ist  Cir.),  97  Fed.   Rep. 

Fed.  Rep.  489,  4  Am.  B.  R.  605.  330,  3  Am.  B.  R.  220,  2  N.  B.  N. 

116/^  rr  Humbert,   100  Fed.  Rep.  174;    Owen    v.    Brown     (C.    C.    A. 

439,  4  Am.  B.  R.  76.  8th  Cir.).  120  Fed.  Rep.  812,  9  Am 

117/^  re  Independent  Thread  Co.,  B.  R.  717. 


ACTS    OF    BANKRUPTCY.  I/I 

In  computing  the  four  months  the  first  day  is  excluded  and 
the  last  included,  unless  the  last  day  falls  on  a  Sunday  or 
holiday,  in  which  event  the  day  last  included  shall  be  the  next 
day  thereafter  which  is  not  a  Sunday  or  a  legal  holiday.'"^ 
Holidays  are  defined  by  the  act  to  include  Christmas,  the 
fourth  of  July,  the  twenty-second  of  February,  and  any  day 
appointed  by  the  president  of  the  United  States  or  the  congress 
of  the  United  States  as  a  holiday  or  as  a  day  of  public  fasting 
or  thanksgiving/'^ 

121  B.  A.  1898,  Sec.  31 ;  Dutcher  v.  No.  8056  Fed.  Cas.,  s.  c.  2  N.  B.  R. 
Wright,  94  U.  S.  553;  ^»  ^^  Lang,      480. 

122  B.  A.  1898,  Sec.  I,  clause  14. 


172  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


CHAPTER  IX. 

PROCEEDINGS    IN    VOLUNTARY    BANKRUPTCY. 

§  57-     Who  may  file  a  voluntary  petition. 

The  statute  declares  that  any  qualified  person  may  file  a 
petition  to  be  adjudged  a  voluntary  bankrupt.^  Any  person 
who  owes  debts,  except  a  corporation,  is  entitled  to  the  benefits 
of  the  statute  as  a  voluntary  bankrupt.^  A  person  is  defined 
by  the  act  itself  to  include  partnerships  and  women.^  It  would 
therefore  appear  that  any  natural  person  or  association  of  per- 
sons, not  incorporated,  irrespective  of  trade,  business  or  pro- 
fession, may  file  a  petition  to  be  adjudged  a  voluntary  bank- 
rupt.* 

A  person,  however,  who  wishes  to  file  a  petition  must  have 
certain  qualifications  before  he  can  do  so.  He  must  owe  debts, 
but  no  Hmit  is  fixed  to  the  amount  of  the  debt.^  He  must  also 
have  had  his  principal  place  of  business,  resided  or  had  his 
domicile  within. the  United  States  for  the  period  of  six  months, 
or  the  greater  portion  thereof,  or  if  he  has  not  had  his  princi- 
pal place  of  business,  resided  or  had  his  domicile  within  the 
United  States,  he  must  have  had  property  within  the  jurisdic- 

1 B.  A.   1898,  Sec.  59a.     Compare  ment     from     which    the    petitioner 

R.  S.  Sec.  5014.  would    not    be    released    by   a    dis- 

2  B.   A.    1898,    Sec.   4.     See    Who  charge, 
may   be   voluntary    bankrupts,    Sec.  ^  B.  A.  1898,  Sec.  i,  clause  19. 

41,    ante.    As    to    corporations,    see  •♦  As  to  the  right  of  an  alien,  an 

Sec.  48,  ante.  infant,    a    lunatic    and    a    married 

In  re  Maples,  105  Fed.  Rep.  919,  woman   to   be  adjudged  bankrupts, 

the  court  held  that  it  had  no  juris-  see  Sees.  44  to  47,  ante. 
diction   of  a    petition    in    voluntary  ^  B.  A.    1898,   Sec.  4.     Under  the 

bankruptcy     which      schedules     no  act  of  1867,  R.  S.  Sec.  5014,  a  per- 

property  except   such  as   is   exempt  .^on    was    required    to    owe    debts, 

under    the    laws    of   the    state,    and  provable    in    bankruptcy,    exceeding 

but  a  single  debt,  which  is  a  judg-  the  sum  of  $300. 


PROCEEDINGS    IK     NOLUNTARV     BANKRUPTCY.  1 73 

tion  of  a  court  of  bankruptcy,  or  nave  oeen  adjudged  a  bank- 
rupt by  a  court  of  competent  jurisdiction  without  the  United 
States  and  have  property  within  jurisdiction  of  a  court  of 
bankruptcy."  A  state  court  has  no  power  to  enjoin  a  debtor 
from  applying  to  a  court  of  bankruptcy  to  be  adjudged  a  vol- 
untary bankrupt,  and  to  obtain  the  benefit  of  the  statute.^ 

There  was  a  difference  of  opinion  under  the  former  bankrupt 
acts  with  reference  to  the  right  of  a  person  to  file  a  voluntary 
petition  after  an  involuntary  petition  had  been  filed  against  him. 
It  was  held  that  the  pendency  of  a  creditors'  petition,  on  which 
no  decree  of  bankruptcy  had  been  granted,  was  not  a  bar  to 
the  right  of  voluntary  petition.*  It  was  also  held  that  in  such 
cases  the  voluntary  petition  was  nugatory  and  void,  and  would 
be  set  aside  on  motion.^  Under  the  present  act  where  a  volun- 
tary petition  is  filed  after  involuntary  proceedings  are  begun 
it  should  not  in  all  cases  be  either  granted  or  stayed  until  the 
involuntary  proceedings  are  disjxjsed  of.  but  notice  should  be 
given  to  the  creditors  who  filed  the  involuntary  petition  and 
such  action  taken  as  is  for  the  best  interest  of  the  estate.^**  If 
the  voluntary  proceedings  are  not  stayed  the  rights  of  the  cred- 
itors should  be  protected.^ ^  The  court  may  consolidate  the 
two  proceedings.^^  The  statute  does  not  forbid  a  debtor  who 
has  made  an  assignment  for  the  Ijenefit  of  his  creditors  in  the 
state  court  to  subsequently  file  a  petition  to  be  adjudged  a 
voluntary  bankrupt.^**     If  one  petition  has  been  filed  and  pro- 


"  B.  A.  1898,  Sec.  2,  clause  i.     See  -j--/  ,  7  Am.  R.  R.  5.32;  In  re  Waxel- 

Sec.  58,  post.  baum,  98  Fed.   Rep.  589 .  3  Am.   B. 

'  Fillingin    v.   Thornton,    49    Ga.  R    392;  In  re  Stegar,  113  Fed.  Rep. 

384.  978 ,  7  Am.  B.  R.  665. 

*/m  re  Flanagan,    No.  4850  Fed.  11 /«  re  Stegar.  113  Fed.  Rep.  978, 

Cas.,  s.  c.  5  Saw.  312;  In  re  Can-  7  Am.  B.   R.  665. 
field,    No.    2380    Fed.    Cas.,   s.    c.    5  '^- In  re  Knight,  125  Fed.  Rep.  35 

Law  Rep.  415.  at  yj- 

The  same  rule  was  recognized  in  12*  fj^j.,  y^,^^  Aowt  in  re  Dunbar, 
re  Davidson,  No.  3599  Fed.  Cas.,  in  the  district  court  for  the  southern 
s.  c.  4  Ben.  10.  although  the  question  district  of  Ohio,  1899  (not  report- 
does  not  seem  to  have  been  raised  in  ed).  Tb.:  question  of  his  right  to 
that  care.  do    so    was    not    raised.     Both    the 

•*  /«    re   Stewart,    No.    T34TQ    Fed.  court   and    counsel    appear    to    have 

Cas.,  s.  c.  3  N.  B.  R.  108.  assumed  that  such  a  right  existed. 

^"/n    re    Dwyer,    112    Fed.    Rep 


174  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

ceedings  had  thereon,  ana  the  petitioner  subsequently  becomes 
insolvent,  he  may  file  a  second  petition,"  irrespective  of  whether 
he  obtained  or  was  refused  a  discharge  in  the  former  proceed- 
ings. Whether  he  is  entitled  -to  a  discharge  upon  the  second 
petition  may  be  affected  by  his  former  acts. 

§  58.     In  what  court  the  petition  is  to  be  filed. 

The  debtor  may  file  his  petition  in  the  court  of  bankruptcy 
for  the  district  in  which  he  has  had  his  principal  place  of 
business,  resided  or  had  his  domicile  for  the  greater  portion  of 
the  preceding  six  months.^* 

Where  the  debtor  has  had  his  domicile,  resided  and  had  his 
principal  place  of  business  in  the  same  district  there  is  but  one 
court  in  which  he  can  file  his  application.  Where  he  has  re- 
sided or  had  his  domicile  in  one  district  and  his  principal  place 
of  business  in  another  he  has  an  election,  and  may  make  his 
application  in  either  district.  If  it  is  conceived  that  a  debtor 
may  have  a  domicile  in  one  district  and  reside  in  another,^^  he 
may  have  an  election  of  three  districts  within  which  to  insti- 


"  In    re    Drisko,    No.    4090    Fed.  he  did  have  a  definite  intention  to 

Cas.,    s.    c.    2   Low.    430 ;    Fisher    v.  return  to  this  state.  The  order  made 

Currier,  7  Met.    (Mass.)   424.  by  the  referee  that  the  petition   be 

See  also   R.   S.   Sec.   51 16,   which  dismissed  will  be  vacated,  and  the 

t)rovided  that  under  the  act  of  1867  case     will     proceed     in    the     usual 

a   second    discharge   should    not   be  course." 

granted  a  bankrupt  unless  his  estate  Consult  in  re  Watson,  No.   17272 

should  be  sufficient  to  pay  70  per-  Fed.  Cas.,  s.  c.  4  N.  B.  R.  613 ;  In  re 

centum,  or  three  fourths  of  his  cred-  Walker,   No.   17061   Fed.  Cas.,  s.  c. 

itors  consented  to  it.     No  such  pro-  i    Low.    237 ;    In   re    Kinsman,    No. 

vision    is    contained    in    the   present  7^2,^  Fed.   Cas.,  s.  c.   i   N.   Y.   Leg. 

act.  Obs.  309 ;  Stiles  v.  Lay,  9  Ala.  795 ; 

1*  B.  A.  1898,  Sec.  2.  Penfield  v.  C.  &  O.  R.  Co.,  29  Fed. 

15 /n   re   Williams,   99   Fed.    Rep.  Rep.   494:    Chambers   v.    Prince,   75 

544,     3     Am.      B.      R.     677;     the  Fed.    Rep.    176;    Krone   v.    Cooper, 

bankrupt    had    resided    abroad    for  43   Ark.   547;   Tipton  v.   Tipton,  87 

many  years.     Judge  Hanfords  said :  Ky.  243 ;  Rhodes  v.  Farish,  16  Mo. 

"  Under  the   law,   as   I    find   it   de-  App.  434 ;  Tazewell  County  v.  Da- 

clared  by  the  highest  court  of  this  venport,  40  111.  I97 ;  Dorsey  v.  Kyle, 

country,     the     petitioner     did     not  2,^  Md.   512;   Wheeler  v.   Cobb,  75 

change  his   domicile  when  he  went  N.   C.  21. 

to    British    Columbia    in    1893,    nor  As  to  what  is  a  domicile,  see  Sec. 

afterwards,  because  he  did  not  have  177,  "  Domicile  of  Bankrupt,"  post. 
the   intention   to   remain   there,   and 


PROCEEDINGS    IN     VOLUNTARY    BANKRUPTCY,  I75 

tute  voluntary  proceedings,  namely,  the  district  of  his  resi- 
dence, the  district  of  his  domicile  or  the  district  in  which  he 
has  had  his  principal  place  of  business. 

Where  a  debtor  has  several  places  of  business  in  different 
districts  he  must  file  his  petition  in  the  district  in  which  he 
has  his  principal  place  of  business.  This  limits  his  right  to 
file  a  petition  on  this  ground  of  jurisdiction  to  one  district. 
The  phrase  "  principal  place  of  business  "  implies  that  the 
debtor  is  carrying  on  what  is  commonly  known  as  business, 
as  distinguished  from  other  vocations  or  employment.  He 
must  provide  the  money  that  is  needed  or  have  an  interest  in 
the  business  by  contributing  his  labor,  or,  if  the  capital  is 
borrowed,  the  business  must  be  done  in  the  debtor's  name. 
Thus  it  may  be  doubted  if  a  debtor  is  entitled  to  claim  a  place 
of  business  where  he  merely  superintends  the  business  of  an- 
other or  is  employed  as  a  clerk,^"  or  where  he  is  engaged  in 
winding  up  the  affairs  of  an  insolvent  concern  to  which  he 
belonged, ^^  or  where  he  is  engaged  in  any  vocation  not  properly 
included  in  the  word  business.  Where  the  bankrupt  claims  to 
have  changed  his  place  of  business  a  short  time  before  filing 
a  voluntary  petition  the  burden  is  on  him  to  prove  it.^* 

The  time  during  which  the  debtor  has  had  his  principal 
place  of  business,  resided  or  had  his  domicile  in  the  district 
must  also  be  considered.  Where  he  has  had  his  principal 
place  of  business,  resided  or  had  his  domicile  within  the  dis- 
trict during  the  whole  period  of  the  six  months  immediately 
preceding  his  application  no  question  can  arise.  Where  he 
has  had  his  principal  place  of  business,  resided  or  had  his  domi- 
cile (according  to  the  ground  of  jurisdiction  on  which  he 
claims)  in  different  districts  during  such  six  months,  then  the 
petition  must  be  filed  in  the  district  in  which  he  has  had  his 
principal  place  of  business,  resided  or  had  his  domicile  for  the 
greater  portion  of  six  months,  or  for  more  than  three  months. 


^^  In  re  Brice,  93  Fed.  Rep.  942,  ^^ /n  re  Little,  No.  8391  Fed.  Cas., 

2  Am.  B.  R.  197;  In  re  Magie,  No.  s.  c.  3  Ben.  25. 

8951    Fed.    Cas.,   s.    c.    2    Ben.   369;  ^^  In  re  Waxclbaum,  2  N.   B.  N. 

In  re  Kinsman,  No.  7832  Fed.  Cas.,  103 ,  3  Am.  B.  R.  267 ,  97  Fed.  Rep. 

s.  c.  I  N.  Y.  Leg.  Obs.  309.  562. 


1/6  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

If  he  has  not  had  a  principal  place  of  business,  resided  or  had 
a  domicile  for  more  than  three  months  in  any  district,  he  is  not 
ordinarily  entitled  to  file  a  petition  1o  be  adjudged  a  voluntary 
bankrupt. 

In  case  the  debtor  has  not  had  a  principal  place  of  business, 
resided  or  had  a  domicile  within  the  United  States,  but  is 
entitled  to  the  benefits  of  the  statute  under  section  2,  he  must 
file  his  petition  in  the  district  within  which  he  has  property. 
If  he  has  property  in  more  than  one  district,  he  may  elect  in 
which  of  such  districts  to  institute  proceedings  in  voluntary 
bankruptcy. 

The  questions  relating  to  who  may  file  a  voluntary  petition 
and  in  what  court  he  is  entitled  to  make  his  application  to  be 
adjudged  a  voluntary  bankrupt  are  jurisdictional.  If  the 
court  does  not  obtain  jurisdiction  over  the  person  of  the  debtor 
in  the  manner  prescribed  by  the  statute  the  proceedings  are 
void.  A  creditor  may  have  such  proceedings  discontinued  at 
any  time  upon  petition  filed  for  that  purpose,^**  or  may  defeat 
an  application  for  discharge  by  showing  that  court  has  no 
jurisdiction  of  the  case.""  If  the  petition  shows  jurisdiction, 
creditors  will  be  held  to  waive  this  objection  unless  it  is  taken 
promptly.^^ 

When  proceedings  have  been  commenced  by  a  debtor  in  one 
district  he  is  not  entitled  to  institute  similar  proceedings  in 
other  districts.  The  jurisdiction  is  exclusive  in  the  court 
where  it  first  attaches."^ 

§  59.     The  petition. 

The  application  for  the  benefit  of  the  bankrupt  statute  is 
made  by  petition.-^     A  schedule  of  the  debtor's  property,  list 

i»  In  re  Waxelbaum,  98  Fed.  Rep.  No.  8391  Fed.  Cas.,  s.  c.  3  Ben.  25 ; 

589,  3  Am.  B.  R.  392,  2  N.  B.  N.  Jobbins  v.  Montague,  No.  7330  Fed. 

228 ;  s.  c.  97   Fed.   Rep.  562 ;  In  re  Cas.,  s.  c.  6  N.  B.  R.  509 ;  Stiles  v. 

Brice,  93  Fed.  Rep.  942,  2  Am.  B.  Lay,  9  Ala.  795. 

R,  197 ;  In  re  Mason,  99  Fed.  Rep.  21  /„  y^  Mason,  99  Fed.  Rep.  256 , 

256,  2  N.  B.  N.  425,  3  Am.  B.  R.  2  N.  B.  N.  425.  3  Am.  B.  R.  599. 

599;    In    re   Goodfellow,    No.    5536  Consult  Allen  v.  Thompson,  10  Fed. 

Fed.  Cas.,  s.  c.   i   Low.  510;  In  re  Rep.  116. 

Walker,    No.    17061     Fed.    Cas.,    i  22  £^  parte  Hall,   No.   5919   Fed. 

Low.  22,'].  Cas.,  s.  c.  5  Law  Rep.  269. 

20  In    re    Penn,    No.    10926    Fed.  23  g    a.    1898,    Sec.    59a.     Official 

Cas.,  s.   c.   4   Ben.  99;  In  re  Little,  Form  No.   i,  Form  No.  i.  post. 


PROCEEDINGS    IN     VOLUNTARY    BANKRUPTCY.  1 77 

of  his  creditors  and  claim  for  exemptions  are  required  to  be 
filed  with  the  petition."* 

The  petition  should  be  entitled  in  the  court  for  the  proper 
district.  It  is  regularly  addressed  to  the  judge  of  the  district 
by  name,  as  "  To  the  Hon.  A.  B.,  judge  of  the  district  court 
of  the  United  States  for  the district  of ." 

The  petition  should  set  forth  the  petitioner's  name  in  full 
and  his  place  of  residence.  It  should  allege  that  he  has  had 
his  principal  place  of  business,  resided  or  had  his  domicile  (as 
may  be)  within  the  district  for  the  preceding  six  months  or 
the  greater  portion  thereof.  This  averment  is  jurisdictional 
and  necessary.  It  should  also  aver  that  he  is  unable  to  pay  all 
of  his  debts;  that  he  is  willing  to  be  adjudged  a  bankrupt,  to 
surrender  all  his  estate  and  effects  for  the  benefit  of  his  cred- 
itors, and  desires  to  obtain  the  benefit  of  the  statute. 

The  petition  should  be  signed  by  the  petitioner  and  be  veri- 
fied under  oath,-^  which  includes  an  affirmation."®  The  oath 
or  affirmation  may  be  administered  by  a  referee,  an  officer 
authorized  to  administer  oaths  in  proceedings  before  the 
courts  of  the  United  States  or  under  the  laws  of  the  state 
where  the  same  are  to  be  taken,  or  a  diplomatic  or  consular 
officer  of  the  United  States  in  any  foreign  country.-'^ 

The  supreme  court  has  provided  a  form  for  petitions  which 
should  be  observed  and  used  with  such  alterations  as  may  be 
necessary  to  suit  the  circumstances  of  any  particular  case."** 
Printed  blanks  may  usually  be  had  from  dealers  in  law  sta- 
tionery. ;\11  the  petitions  and  schedules  filed  therewith  must 
be  printed  or  written  out  plainly  without  abbreviation  or  inter- 
lineation, except  where  an  abbreviation  or  interlineation  may 


2*  B.  A.  1898,  Sec.  7,  clause  8.  28  g    a.    1898,   Sec.    i,  clause   17, 

See    also    "  Schedules,"    Sec.    60,  and   Sec.  2oh. 

post.  27  B.  A.  1898,  Sec.  20.     The  veri- 

2"  B.   A.    1898,    Sec.    i8r.     Oflficia]  fication  may  be  taken  before  the  at- 

Form    No.    1,    Form    No.    i,    fyost.  torney   for  the   bankrupt   as   notary 

In  re  Nelson,  98  Fed.  Rep.  76 ;  Lei-  public.     In   re   Kindt.  98   Fed.   Rep. 

digh  Carriage  Co.  v.  Stengel  (C.  C.  403.  3  Am.  B.  R.  443. 

A.  6th   Cir.),  95   Fed.   Rep.  637,   2  28  Gen.  Ord.  38.  See  Official  Form 

Am.  B.  R.  383,  I  N.  B.  N.  387.  No.   i.   Form  No.   i,  post. 


170  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

be  for  the  purpose  of  reference.'^  Under  the  act  of  1867  it 
was  held  that  dots  could  not  be  used  to  indicate  anything 
which  was  necessary  to  be  stated.'^'' 

The  petition  should  be  endorsed  with  the  style  of  the  court,i 
the  name  of  the  petitioner,  and  a  brief  statement  of  the  char- 
acter of  the  petition,  as  "  Debtor's  petition." 

§  60.     Schedules. 

It  is  the  duty  of  the  bankrupt  to  prepare,  make  oath  to  and 
file  in  court  a  schedule  of  his  property,  showing  the  amount 
and  kind  of  property,  the  location  thereof,  its  money  value  in 
detail  and  a  list  of  his  creditors,  showing  their  residences,  if 
known,  if  unknown,  that  fact  to  be  stated,  the  amounts  due 
each  of  them,  the  consideration  thereof,  the  security  held  by 
them,  if  any,  and  a  claim  for  such  exemptions  as  he  may  be 
entitled  to.^^  The  object  of  such  schedule  is  to  show  the  true 
condition  of  the  bankrupt's  affairs  as  clearly  and  lucidly  as 
possible.  Each  debtor  should  prepare  his  schedule  with  this 
end  in  view.  A  voluntary  bankrupt  must  file  a  schedule  of 
this  nature  with  his  petition,^"  and  an  involuntary  bankrupt 
must  file  such  a  schedule  within  ten  days  after  the  adjudica- 
tion, unless  further  time  is  granted  by  the  court.^^  The  sched- 
ule in  either  case  must  be  filed  in  triplicate,  one  copy  for  the 
clerk,  one  for  the  referee  and  one  for  the  trustee.^^ 

The  supreme  court  of  the  United  States  has  provided  forms 
of  schedules  which  should  be  observed  and  used  with  such 
alterations  as  may  be  necessary  to  suit  the  circumstances  of 
each  particular  case.^^     The  same  form  of  schedule  is  used  in 


2"  Gen.    Ord.    5.     See   also   In   re  ered    unless    they    are    on   the    pre- 

Malcolm,  No.  8986  Fed.  Cas.,  s.  c.  scribed  printed   forms.     Written   or 

4   Law    Rep.    488;    Anon.    No.    458  typewritten  petitions  and  schedules 

Fed.  Cas.,  s.  c.  i  N.  B.  R.  216.  will  be  returned  to  parties  without 

In   Mahoney   v.    Ward,    100   Fed.  action." 

Rep.  278 ,  3  Am.  B.  R.  770,  Judge  ^^  In  re  Orne,  No.  10582  Fed.  Cas., 

Purnell     said :     "  Several     proceed-  s.  c.  i  Ben.  420. 

ings    of   late   have    made   necessary  ^^  B.  A.  1898,  Sec.  7,  clause  8. 

the  adoption  of  a  rule,  which  will  '^^  b.  A.  1898,  Sec.  7,  clause  8. 

be  enforced,  that  petitions  in  bank-  •''^  Gen.  Ord.  38.     Official  Form  I, 

ruptcy  will  not  be  filed  or  consid-  schedules  A  and  B :  see  Forms  Nos. 


PROCEEDINGS    IN     VOLUNTARY    BANKRUPTCY.  1 79 

voluntary  and  involuntary  proceedings,  and  in  proceedings  to 
have  a  partnership  declared  bankrupt.^* 

The  schedule  required  by  the  statute  to  be  filed  in  court 
and  the  form  provided  by  the  supreme  court  are  divided  into 
two  general  parts.  The  first  part,  schedule  A,  is  a  list  of 
creditors  of  the  bankrupt,  with  the  amount  due  each  of  them. 
The  second  part,  schedule  B,  is  a  statement  of  all  the  property 
of  the  bankrupt.  Each  part  is  divided  into  separate  classes, 
as  set  forth  below.  Each  class  is  stated  in  detail  in  a  separate 
paper  prepared  for  that  purpose.  In  classifying  the  creditors 
and  the  property  the  notes  and  instructions  placed  on  each 
division  of  the  forms  should  be  carefully  noted.  All  the  sepa- 
rate forms  prepared  by  the  supreme  court  should  be  used  in 
each  case.  If  a  debtor  has  no  creditor  or  no  property  properly 
classified  in  a  particular  form  he  should  so  state  the  fact  in 
that  form ;  but  he  should  not  omit  the  form  for  the  reason  that 
he  has  no  creditor  or  property  properly  classified  under  that 
head.  Each  sheet  or  form  should  be  signed  by  the  debtor. 
At  the  end  of  schedule  A  and  again  at  the  end  of  schedule  B 
the  debtor  must  make  oath  in  the  form  prescribed.  When  tlie 
parts  of  the  schedule  are  completed  they  should  be  fastened 
neatly  and  firmly  together  and  filed  as  one  paper.  This  is 
"  the  schedule "  of  the  statute.  It  consists  of  schedule  A, 
schedule  B  and  a  summary  of  debts  and  assets  taken  from  the 
statements  of  the  debtor  in  these  two  parts  of  his  schedule. 

One  copy  of  the  schedule  is  referred  to  the  referee  as  soon 
as  may  be  after  it  is  filed.  It  is  the  duty  of  the  referee  to 
examine  all  schedules  of  property  and  lists  of  creditors  filed 
by  bankrupts  and  cause  such  as  are  incomplete  or  defective 
to  be  amended."''^  The  referee's  finding  is  not  conclusive  so 
as  to  preclude  inquiry  at  the  proper  time  and  in  a  proper  man- 
ner as  to  the  sufficiency  of  the  schedule.^^ 


2  and  3,  post.     Mahoney  v.  Ward,  end  of  Official  Forms  Nos.  2  and  3. 

100  Fed.  Rep.  278,  3  Am.  B.  R.  770.  See  Forms  Nos.  2,  3,  4  and  5,  post. 

See  also  in  re  Sallee,   No.   12256  ^^  B.  A.  1898,  Sec.  39,  clause  2. 

Fed.  Cas.,  s.  c.  2  N.  B.  R.  228.  ^6  /„  re  Hill.  No.  6481  Fed.  Cas., 

^*  Consult    Official    Form    No.    i,  s.  c.  I  Ben.  321. 
schedules  A  and  B.  and  note  at  the 


l8o  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

Schedule  A.  A  Statement  of  all  Debts  of  Bank- 
rupt.— Schedule  A  consists  of  five  separate  divisions  by 
means  of  which  the  creditors  are  divided  into  as  many  distinct 
classes.  The  first  division  is  a  list  of  all  creditors  who  are  to 
be  paid  in  full,  or  to  whom  priority  is  secured  by  law.  The 
second  division  is  a  list  of  creditors  holding  securities.  The 
tJiird  division  is  a  list  of  creditors  whose  claims  are  unsecured. 
The  fourth  division  is  a  statement  of  the  debtor's  liabilities  on 
notes  or  bills  discounted,  which  ought  to  be  paid  by  the  draw- 
ers, makers,  acceptors  or  endorsers.  The  fiftJi  division  is  a 
statement  of  the  bankrupt's  liability  on  accommodation  paper. 
In  classifying  the  debts  the  notes  and  instructions  placed  on 
each  division  of  the  forms  should  be  carefully  noted. 

In  schedule  A  the  debtor  should  set  forth  a  full  and  true 
list  of  his  creditors,  showing  their  residences  if  known,  if 
unknown,  that  fact  should  be  stated,  the  amount  due  each  of 
them,  the  consideration  therefor,  and  the  security  held  by 
them,  if  any."  The  statement  of  the  debts  should  be  full  and 
accurate  as  the  debtor  may  not  otherwise  be  able  to  obtain  a 
discharge.^*  It  is  better  practice  to  include  debts,  although 
barred  by  the  statute  of  limitations.^"  The  amount  and  date 
of  the  debt  is  sufficient  without  the  computation  of  interest, 
for  the  exact  amount  can  be  ascertained  at  any  stage  of  the 
proceedings.^*'  Where  a  note  has  been  given  or  judgment 
rendered  on  the  note,  or  in  case  there  is  a  person  jointly  liable 
for  the  debt,  this  fact  should  be  stated."'  Where  the  creditor 
is  a  copartnership  the  name  of  the  firm  and  not  of  the  indi- 
vidual partners  is  proper.*'     Where  the  debt  is  due  a  news- 


a^B.    A.    1898,    Sec.    7,   clause  8;  No.  11589  Fed.  Cas.,  s.  c.  2  Ben.  33 ; 

Official   Form   No.    i,   Schedule  A;  In  re  Cushman,  No.  3512  Fed.  Cas., 

see  Form  No.  2,  post.  s.    c.    7    Ben.    482 ;    In    re   Harddin, 

38  In   re    Kallish,    No.    7599    Fed.  No.  6048  Fed.  Cas.,  s.  c.  i  N.  B.  R. 

Cas.,  s.  c.  Deady  575;  In  re  Whet-  395- 

more,    No.    17508    Fed.    Cas.,    s.    c.  *»  In  re  Hill,  No.  6481  Fed.  Cas., 

Deady    585 ;    In    re    Redfield,    No.  s.  c.  i  Ben.  321. 

1 1624  Fed.  Cas.,  s.  c.  2  Ben.  71 ;  In  •*!  In  re  Orne,  No.  10582  Fed.  Cas., 

re    Cushman,    No.    3512    Fed.    Cas.,  s.  c.  i   Ben.  420. 

s.  c.  7  Ben.  482.  *2  Anon.,  457  Fed.  Cas.,  s.  c.  i  N. 


39 /m  re  Kingsley,  No.  7819  Fed.      B.  R.   122. 
Cas.,  s.  c.  I   Low.  216 ;  In  re  Ray, 


PROCEEDINGS     IN     VOLUNTARY     BANKRUPTCY.  l8l 

paper  the  names  of  the  proprietors  should  be  given  and  not 
the  name  of  the  newspaper  only.*^ 

Schedule  B.  Statement  of  all  Property  of  Bank- 
rupt.— Schedule  B  consists  of  six  separate  divisions.  The 
first  division  is  a  statement  of  all  the  real  estate  of  the  bank- 
rupt, together  wth  its  location,  description,  encumbrances  and 
value.**  The  second  division  is  an  itemized  statement  of  the 
personal  property  of  the  bankrupt,  together  with  the  value 
thereof.*^  The  third  division  is  a  statement  of  all  choses  in 
action  in  which  the  bankrupt  has  an  interest.  The  fourth 
division  is  a  statement  of  all  property  in  reversion,  remainder 
or  expectancy,  including  property  held  in  trust  for  the  debtor 
or  subject  to  any  power  or  rights  to  dispose  of  or  charge  it. 
In  this  form  is  included  also  property  theretofore  conveyed 
for  the  benefit  of  creditors  and  money  paid  counsel  for  serv- 
ices rendered  or  to  be  rendered  in  bankruptcy.  The  fifth  divi- 
sion •  is  a  particular  statement  of  the  property  claimed  as 
exempted  from  the  operation  of  the  acts  of  congress  relating 
to  bankruptcy,  giving  each  item  of  property  and  its  valuation, 
and  if  any  portion  of  it  is  real  estate,  its  location,  description 
and  present  use  should  be  stated.*''  The  sixth  division  is  a 
complete  list  of  all  books,  papers,  deeds,  rights,  etc.,  relating  to 
the  business  dealings,  estate  and  effects  of  the  bankrupt. 

The  object  of  schedule  B  is  to  set  forth  a  complete  state- 
ment of  all  the  property  of  the  debtor,  including  such  property 
as  he  claims  to  be  exempted  under  the  laws  of  the  state  of 
his    domicile.     All    his    property    not    exempted    by    statute 


•♦•''  Anon.,  462  Fed.  Cas.,  s.  c.  2  N.  No.    8g86    Fed.    Cas.,    s.    c.    4    Law 

B.  R.    141.  Rep.  488. 

**  The  name  of  the  town,  county  An   intere.st   in   the  net   profits  of 

and  state  and  the  grantor  were  held  a   husiness  as  additional   compcnsa- 

sufficicntly    accurate    in    re    Dodge,  tion  need   not  he   scheduled.     In  re 

No.  3946a  Fed.  Cas.,  but  a  descrip-  Brown,   No.   1978  Fed.  Cas.,  s.  c.   5 

tion  as  "an  interest  in  half  a  lot  in  Law  Rep.  121. 

Buffalo,"  is  not,  in  re  Frisbee,  No.  •**'•  As  to  what  property  is  exempt- 

5130   Fed.    Cas.,   s.   c.    4   Law   Rep.  ed  by  the  laws  of  the  several  states, 

48,3.  see  Exemptions,  Chap.  XVIL 

*^  See  in   re   Hill,    No.   6481    Fed.  Military      uniforms,      arms      and 

Cas.,  s.  c.  I  Ben.  321  ;  In  re  Malcom,  equipments  are  exempted  by  R.   S. 

Sec.   1628. 


1 82  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

passes  to  the  trustee  for  the  benefit  of  his  creditors.*^  All 
such  property  must  be  set  forth  in  the  schedule.  It  is  not 
necessary  to  repeat  at  length  what  property  so  passes  to  the 
trustee,  for  this  is  the  subject  of  a  separate  chapter/* 


§  6 1.     Of  filing  the  petition  and  schedules. 

The  petition  and  schedule  must  be  filed  in  the  office  of  the 
clerk  of  a  court  of  bankruptcy,  and  not  with  a  referee  or 
judge.*' 

The  statute  provides  that  the  petition  shall  be  in  duplicate, 
one  copy  for  the  clerk  and  one  for  service  on  the  bankrupt.^" 
In  voluntary  bankruptcy  it  would  seem  that  one  copy  of  the 
petition  is  all  that  is  required.  It  is  not  necessary  to  serve  on 
the  bankrupt  a  copy  of  his  own  petition.  Three  copies  of  the 
schedule  are  required  to  be  filed,  one  copy  for  the  clerk,  one 
for  the  referee,  and  one  for  the  trustee.^^ 

As  soon  as  the  petition  and  schedules  are  deposited  with 
the  clerk,  he  endorses  on  each  paper  the  day  and  hour  of 
filing.^"  He  thereupon  enters  the  case  upon  a  docket  which  is 
kept  for  that  purpose,  together  with  a  memorandum  of  the 
filing  of  the  petition.^^  The  cases  are  entered  and  numbered  in 
the  order  in  which  they  are  commenced.^^  He  also  makes  a 
similar  endorsement  upon  any  subsequent  paper  filed  with 
him,  except  such  papers  as  have  been  previously  filed  with 
the  referee."  The  papers  in  each  case  should  be  kept  in  a  file 
by  themselves. 

At  the  time  of  filing  the  petition  the  petitioner  must  deposit 
$30  with  the  clerk  as  costs  in  the  case.  Of  this  amount  the 
clerk  is  to  receive  $10,  the  referee  $15,  and  the  trustee  $5. 
Where  a  partnership  files  a  voluntary  petition,  in  which  the 
individual  partners  join,  it  is  a  single  proceeding  and  only  one 


*''  B.  A.  1898,  Sec.  70.  This   is  conclusive  of  the  partic- 

*^  Chap.  XVI.  ular  time  at  which  the  papers  were 

*^  See  hi  re  Sykes,  106  Fed.  Rep.      filed.     Ala.   &   C.   R.   Co.   v.   Jones, 

669.  No.  127  Fed.  Cas.,  s.  c.  7  N.  B.  R. 

50  B.  A.  1898,  Sec.  59c.  145. 

51  B.  A.  1898.  Sec.  7,  clause  8.  ^.-s  Gen.  Ord.  i. 

^2  Gen.  Ord.  2.  ^4  Qgn    Ords.  i  and  2. 


PROCEEDINGS    IN    VOLUNTARY    BANKRUPTCY.  I83 

deposit  fee  of  thirty  dollars  is  required.^^  Before  incurring 
any  expense  in  publishing  or  mailing  notices,  or  in  traveling, 
or  in  procuring  the  attendance  of  witnesses,  or  in  perpetuating 
testimony,  the  clerk,  marshal  or  referee  may  require,  from 
bankrupt  or  other  person  in  whose  behalf  the  duty  is  to  be 
kperformed,  indemnity  for  such  expense.^"  Money  advanced 
for  this  purpose  by  the  bankrupt  or  other  person  shall  be  re- 
paid him  out  of  the  estate  as  part  of  the  cost  of  administering 
the  same.^*^ 

No  deposit  is  required  upon  the  filing  of  a  petition  by  a 
voluntary  bankrupt  which  is  accompanied  by  an  affidavit  stat- 
ing that  the  petitioner  is  without,  and  can  not  obtain,  money 
with  which  to  pay  such  fees."  In  such  cases  the  bankrupt  is- 
permitted  to  proceed  in  forma  pauperis.  But  the  judge,  at 
any  time  during  the  pendency  of  the  proceedings  in  bankruptcy, 
may  order  the  regular  fees  to  be  paid  out  of  the  estate;  or 
may,  after  notice  to  the  bankrupt  and  satisfactory  proof  that 
he  then  has  or  can  obtain  the  money  with  which  to  pay  those 
fees,  order  him  to  pay  them  within  a  time  specified,  and  if  he 
fails  to  do  so,  may  order  his  petition  to  be  dismissed.^* 

The  practice  with  reference  to  procedure  in  forma  pauperis 
is  not  uniform  in  the  several  districts.  In  some  districts  rules 
have  been  promulgated  by  the  court.  It  has  been  held  that  a 
petitioner  receiving  thirty  dollars  per  month  was  not  entitled 
to  proceed  as  a  poor  person.^^  A  voluntary  bankrupt  is  not 
required  to  make  a  deposit  of  his  filing  fee  out  of  his  exempt 
property  and  is  not  required  to  solicit  gifts  or  loans  from  his 
friends  for  that  purpose.''*'  A  bankrupt  proceeding  as  a  poor 
person  is  required  in  one  district,  at  least,  to  make  the  deposit 
before  he  receives  his  discharge  or  show  that  "  by  reason  of  ill- 


^'^  In  re  Gay,  98  Fed.  Rep.  870,  3  ^^s  Gen.  Orel.  35- 

Am.  B.  R.  529 ;  In  re  Langslow,  98  ^^  In  re  Collier,  93  Fed.  Rep.  191 , 

Fed.  Rep.  869,  3  Am.  B.  R.  529"  /  i  Am.  B.  R.  182. 

but  see  In  re  Barden,  loi  Fed.  Rep.  «"  Sellers   v.    Bell    (C.   C.   A.   5th 

553,  4  Am.  B.  R.  31.  Cir.),  94  Fed.  Rep.  801,  2  Am.  B.  R. 

CB  Qen.  Ord.  10.  529.     But  see  In  re  Levy,  loi  Fed. 

"  B.   A.   1898,   Sec.  51,  clause  2;  Rep.  247,  4  Am.  B.  R.  108. 
In  re  Levy,   loi    Fed.  Rep.  247 ,   4 
Am.  B.  R.  108. 


184  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY 

health  or  circumstances  of  peciihar  misfortune  he  is  a  worthy 
object  of  charity.''"  The  statutory  affidavit  is  prima  facie 
evidence  of  the  bankrupt's  inabihty  to  make  the  deposit.**"  This 
may  be  contested  and  the  bankrupt  examined  with  reference 
to  his  individual  means,  earnings  and  circumstances. 

The  petition  may  be  filed  by  the  bankrupt  in  person  in  his 
own  behalf,  or  he  may  appear  and  conduct  the  proceedings 
by  attorney,  who  must  be  an  attorney  or  counselor  authorized 
to  practice  in  the  circuit  or  district  court. '"'^  The  name  of  the 
attorney  or  counselor,  with  his  place  of  business  should  be 
entered  upon  the  docket  with  the  date  of  the  entry."^ 


§  62.     The  order  of  adjudication  and  reference. 

The  judge  of  the  court  of  bankruptcy  regularly  hears  a  vol- 
untary petition  and  makes  the  adjudication  or  dismisses  the 
petition.''*  No  answer  by  the  creditors  will  be  permitted."" 
Where  one  partner  files  a  voluntary  petition  to  have  the  part- 
nership adjudged  a  bankrupt,  another  partner  can  resist  it  the 
same  as  if  it  were  involuntary,'"'  but  a  creditor  can  not." 

When  the  petition  does  not  show  jurisdiction,  or  is  not  reg- 
ularly filed,  or  is  materially  defective  the  court  may  dismiss  it 
or  permit  an  amendment  thereto."^  No  notice  is  required  to 
creditors  before  making  the  order  adjudicating  the  petitioner 
a  bankrupt.  It  is  an  ex  parte  proceeding.  This  order  is 
merely  a  judicial  finding  that  the  petitioner  has  become  a 


61 /m  re  Fees  Payable  by  Volun-  It    has    been    held    that    where    a 

tary    Bankrupt,   90    Fed.    Rep.    120.  person   manifestly    able   to   pay   his 

But  see  In  re    Plimpton,    103   Fed.  debts,   files   a   voluntary   petition    in 

Rep.  775,  4  Am.  B.  R.  614.  order     to     embarrass     a     particular 

62 /m  re  Levy,  lOi  Fed.  Rep.  247,  creditor,  and  adjudication  on  such  a 

4  Am.  B.  R.   108.  petition    may    be    set    aside    by    the 

"3  Gen.  Ord.  4.  creditor  as  being  a  fraud  on  the  act. 

«4B.    A.    1898,    Sec.    \^g;   Official  In    re  Carleton,   115   Fed.   Rep.   246 

Forms  Nos.  11  and  12,  Forms  Nos.  at  250,  8  Am.  B.  R.  270  at  274. 

28  and  29,  post.  ««  Gen.    Ord.   8;    In   re   Carleton. 

65 /m  re  Jehu,  94  Fed.  Rep.  638,  2  115    Fed.    Rep.    246,    8    Am.    B.    R. 

Am.  B.  R.  498;   In  re  Ives    (C.   C.  270. 

A.  6th  Cir.),  113  Fed.  Rep.  911,  7  "^ /w  re   Carleton,   115   Fed.   Rep. 

Am.  B.  R.  692;  In  re  Carleton,  115  246,  8  Am.  B.  R.  270. 

Fed.  Rep.  246,  8  Am.  B.  R.  270.  "^  Gen.  Ord.  11. 


PROCEEDINGS    IN     VOLUNTARY    BANKRUPTCY.  1 85 

bankrupt;  that  is,  that  he  has  previously  committed  an  act 
of  bankruptcy.  The  filing  of  the  petition  by  a  debtor  is  such 
an  act  of  bankruptcy.®^  The  order  of  adjudication,  unless  set 
aside  by  a  judge  or  by  an  appellate  court  is  conclusive  upon  the 
insolvency  of  the  debtor,  his  willingness  to  surrender  his  prop- 
erty and  his  desire  to  take  the  benefit  of  the  statute.""  But  it 
may  be  contested  upon  any  other  fact  which  goes  to  defeat  the 
jurisdiction  of  the  court. "^ 

At  the  time  of  making  the  order  adjudging  the  petitioner 
a  bankrupt  the  court  regularly  refers^"  the  case  for  subsequent 
proceedings  to  a  referee  within  the  county  of  which  the  debtor 
is  a  resident.  He  may  refer  the  case  to  any  referee  within  the 
territorial  jurisdiction  of  the  court,  if  the  convenience  of  par- 
ties in  interest  will  be  served  thereby,  or  for  cause,  or  if  the 
bankrupt  does  not  do  business,  reside  or  have  his  domicile  in 
the  district." 

All  the  proceedings  thereafter,  except  such  as  are  required 
by  the  statute  or  by  the  general  orders  to  be  had  before  the 
judge,  are  had  before  the  referee.^^ 

Applications  for  a  discharge,  or  for  the  approval  of  a  com- 
position, or  for  an  injunction  to  stay  proceedings  of  a  court  or 
officer  of  the  United  States  or  of  a  state,  must  be  heard  and 
decided  by  the  judge.  But  he  may  refer  such  an  application, 
or  any  specified  issue  arising  thereon,  to  the  referee  to  ascer- 
tain and  report  the  facts. "'^ 

The  order  referring  a  case  to  a  referee  should  name  a  day 
upon  which  the  bankrupt  shall  attend  before  the  referee;  and 
from  that  day  the  bankrupt  is  subject  to  the  orders  of  the 
court  in  matters  relating  to  his  bankruptcy,  and  may  recei\e 


8"  B.  A.  1898,  Sec.  3,  clause  5.  Am.    B.    R.    267.     See   In   re   Ives 

7»/n   re    Fowler,    No.    4998    Fed.  (C.  C.  A.  6th  Cir.),  113  Fed.  Rep. 

Cas.,  s.  c.  I  Low.  161.  911,  7  Am.  B.  R.  692. 
"  In  re  Goodfellow,  No.  5536  Fed.  '^^  Official  Form  No.  14,  Form  No. 

Cas.,  s.  c.  I  Low.  510;  In  re  Yates,  31.  Z'^-^^- 

114  Fed.  Rep.  365,  8  Am.  B.  R.  69;  '''  B.  A.  1898,  Sec.  22. 

In  re   Scott,   in    Fed.   Rep.    144,   7  ^*  Gen.  Ord.  12.     Gen.  Ord.  27. 

Am.  B.  R.  39;  In  re  Mason,  99  Fed.  "Gen.  Ord.  12.     B.  A.  1898,  Sec. 

Rep.  256.  3   Am.  B.  R.  599;  In  re  38,  clause  4,  and  Sec.  41. 


Waxclbaum,    97    Fed.    Rep.    562,    3 


l86  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

from  the  referee  a  protection  against  arrest,  to  continue  until 
the  final  adjudication  on  his  application  for  a  discharge,  unless 
suspended  or  vacated  by  order  of  the  court.  A  copy  of  the 
order  must  forthwith  be  sent  by  mail  to  the  referee,  or  be 
delivered  to  him  personally  by  the  clerk  or  other  officer  of 
the  court.'''  The  time  when  and  the  place  where  the  referee 
shall  act  upon  the  matters  arising  under  the  several  cases 
referred  to  him  shall  be  fixed  by  special  order  of  the  judge, 
or  by  the  referee,  and  at  such  times  and  places  the  referee  may 
perform  the  duties  which  he  is  empowered  by  the  act  to  per- 
form.'^*' 

If  the  judge  is  absent  from  the  district,  or  the  division  of 
the  district,  in  which  the  petition  is  filed  at  the  time  of  the 
iilinsr,  the  clerk  forthwith  refers  the  case  to  the  referee.'^  In 
such  cases  the  referee  is  authorized  to  consider  the  petition 
and  make  the  adjudication  or  dismiss  the  petition"  with  the 
same  effect  as  if  it  has  been  made  by  the  judge.  The  referee 
is  not  authorized  to  make  an  adjudication  in  other  cases. 

§  63.     Amendments  to  petition  and  schedules. 

The  petitioner  may  conclude  after  his  petition  and  schedules 
have  been  filed  that  they  are  defective,  or  may  find  that  he 
has  omitted  something  by  mistake  or  inadvertence.  In  such 
case  he  may  apply  to  the  court  for  leave  to  amend.  The  court 
is  expressly  authorized  to  allow  amendments  to  the  petition 
and  schedules  upon  the  application  of  the  petitioner.'^^ 

In  his  application  for  leave  to  amend  the  petitioner  must 
state  the  cause  of  error  in  the  paper  originally  filed.^**  The 
application  may  be  by  motion  or  petition.  It  should  be  ac- 
companied with  a  copy  of  the  amendment  or  amendments  to 
be  made.  These  amendments  should  be  printed  or  written, 
signed  and  verified  like  original  petitions  and  schedules.^" 
The  verification  should  be  according  to  the  circumstances  of 
the  amendment.  The  form  will  not  be  precisely  the  same  as 
an  oath  to  an  original  petition.     If  the  amendments  are  made 


'8  Gen.  Ord.  12.  ''^  B.  A.  1898,  Sec.  38,  clause  i. 

"B.   A.    1898,    Sec.    iSg.     Official  "^s  Gen.  Ord.  11. 

Form  No.  15,  Form  No.  32,  post.  so  Gen.  Ord.  11. 


PROCEEDINGS    IN    VOLUNTARY    BANKRUPTCY  187 

to  separate  schedules,  the  same  must  be  made  separately  with 
proper  references."''  The  amendment  should  state  no  more  of 
the  original  paper  than  may  be  necessary  to  introduce  and  to 
make  intelligible  the  new  matter,  which  should  alone  consti- 
tute the  chief  subject  of  the  amendment.  The  proceeding  is 
ex  parte,  and  no  notice  need  be  given  to  creditors,  nor  has* 
any  creditor  the  right  to  oppose  it.®^  The  granting  or  refus- 
ing to  grant  leave  to  amend  the  petition  or  schedules  rests  in 
the  sound  discretion  of  the  court.  It  is  not  a  matter  of  right. 
The  courts  are  liberal  in  allowing  amendments  so  long  as  the 
ends  of  justice  are  not  sacrificed. 

Where  the  petition  is  referred  to  a  referee  to  make  the  adju- 
dication he  may  allow  amendments  to  the  petition.  He  is 
expressly  authorized,  and  it  is  his  duty,  to  examine  all 
schedules  of  property  and  lists  of  creditors  filed  by  bankrupts, 
and  to  cause  such  as  are  incomplete  or  defective  to  be 
amended. ^^  The  referee  may  also  refuse  to  allow  an  amend- 
ment. Whether  he  grants  or  refuses  to  permit  an  amendment 
to  be  made,  the  question  is  subject  to  be  reviewed  by  the 
judge.«' 


§  64.Voluntarily  dismissing  a  petition. 

After  a  voluntary  petition  has  been  filed  in  court  it  can  not 
be  dismissed  by  the  petitioner  or  petitioners  for  want  of  pros- 
ecution, or  by  the  consent  of  parties  until  after  notice  to  cred- 
itors.^* The  rule  under  the  former  acts  seems  to  have  been 
otherwise.*''  A  voluntary  bankrupt  has  been  permitted  to 
withdraw    his   petition  on   motion,    where   no    creditors   had 


*»Gen.  Orel.  ir.  s^  gee  In   re   Randall,   No.    11550 

81 /m    re   Watts,    No.    17293    Fed.  Fed.    Cas.,    s.   c.   5    Law    Rep.    115; 

Cas.,  s.  c.  3  Ben.  166;  In  re  Heller,  In   re   Harris,   No.   61 10   Fed.   Cas., 

41   Howard  Prac.  213.  s.  c.  3  N.  Y.  Leg.  Obs.  152;  Dud- 

S2  B.  A.  1898,  Sec.  39,  clause  2;  In  ley's  case.  No.  41 14  Fed.  Cas.,  s.  c. 

re  Brumelkamp,  95  Fed.  Rep.  814,  i  Pa.  Law  Jour.  302 ;  Ex  parte  Ben- 

2  Am.  B.  R.  318.  nett,  No.  1309  Fed.  Cas.,  s.  c.  i  Pa. 

83  Gen.  Ord.  2?.  Law  Jour.  145 ;  In  re  Gile,  No.  5423 

8*  B.  A.  1898,  Sec.  59g.  Fed.  Cas.,  s.  c.  5  Law  Rep.  224. 


l88  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

proved  claims  or  objected  thereto/"  Subsequent  creditors,  who 
have  liens  on  after  acquired  property,  can  not  be  heard  to 
object  to  such  a  dismissal.*"  It  has  been  held  that  where  a 
voluntary  partnership  petition  has  been  filed  by  the  firm  and 
subsequently  withdrawn  in  part  and  a  new  petition  made  in- 
cluding the  individual  schedules  of  the  partners,  the  date  of  the 
filing  was  the  date  the  later  or  amended  petition  was  filed.*^ 

§  65.     Proceedings  subsequent  to  the  adjudication. 

Proceedings  in  voluntary  bankruptcy  subsequent  to  the 
order  of  adjudication  and  reference  are  not  essentially  dififer- 
ent  from  the  proceedings  had  upon  an  involuntary  petition, 
or  a  petition  for  the  purpose  of  having  a  partnership,  or  the 
members  thereof,  adjudged  bankrupts.  The  examination  of 
the  bankrupt,  the  first  creditors'  meeting,  the  election  of  a 
trustee,  the  collection  of  the  assets  of  the  bankrupt,  the  dis- 
tribution of  the  estate  and  other  matters  pertaining  to  the 
proper  administration  of  the  estate  will  be  considered  hereafter 
under  appropriate  heads. 

^'^  In  re   Hebbart,  .104   Fed.    Rep.  *^  In  re  Washburn,  99  Fed.  Rep. 

322;   but   see  In   re   Salaberry,    107      84,  3  Am.  B.  R.  585. 
Fed.  Rep.  95. 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY.  189 


CHAPTER   X. 

PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY. 

§  66.     Who  may  institute  involuntary  proceedings. 

Proceedings  in  involuntary  bankruptcy  are  instituted  by  a 
creditor  or  creditors  filing-  a  petition,  praying  that  the  debtor 
may  be  declared  a  bankrupt,  and  that  his  property  may  be 
distributed  according  to  law.  By  creditor  is  meant  anyone 
who  owns  a  demand  or  claim  provable  in  bankruptcy,  and 
may  include  his  duly  authorized  agent,  attorney  or  proxy.^ 

The  wife  of  the  alleged  bankrupt  may  file  a  petition  against 
her  husband  w^here  there  are  less  than  twelve  creditors.^  Firm 
creditors  have  been  held  entitled  as  such  to  join  in  a  petition 
against  an  individual  member  of  the  firm^ ;  but  a  person  who 
owns  an  unliquidated  demand  against  an  insolvent  debtor  is 
not  a  creditor  who  can  file  a  petition.*  The  reason  for  this  is 
that  a  petitioning  creditor  must  be  the  owner  of  a  provable 
debt  and  Sec.  63^  of  the  Bankrupt  Act  provides  that  an  un- 
liquidated claim  must  be  liquidated  before  it  becomes  prov- 
able. The  owner  of  an  unliquidated  claim  arising  in  tort  can 
not  be  a  petitioning  creditor  for  the  additional  reason  that  a 
claim  for  damages  in  tort  does  not  constitute  a  debt  and  there- 
fore is  not  a  provable  claim. ^  It  was  held  that  a  creditor  who 
had  received  a  preference  or  who  had  levied  an  attachment 

^  B.  A.  1898,  Sec.  I,  clause  9.  and  In  re  Grant  Shoe  Co.,  125  Fed. 

^  In  re  Novak,  loi  Fed.  Rep.  800,  Rep.   576,   in  which   cases  the  court 

4   Am.   B.    R.   811.  seems  to  have  overlooked  the  word 

^  In  re  Mcrcur,  95  Fed.  Rep.  634 ,  "  thereafter  "    in     Sec.    63b    of    the 

2  Am.  B.  R.  626.  bankrupt  act. 

*  In  re  Big  Meadows  Gas  Co.,  113  ^  In  re  Brinckmann,  103  Fed.  Rep. 

Fed.   Rep.  974 ,   7  Am.   B.   R.  697 ;  65  .  4  Am.  B.  R.  551  ;  Beers  v.  Han- 

but  see  In  re  Manhattan  Ice  Co.,  114  lin,  99  Fed.  Rep.  695,  3  Am.  B.  R. 

Fed.    Rep.    399,    7    Am.   B.    R.   408,  745;  In  re  Morales,   105  Fed.   Rep. 

affirmed  by  C.  C.  A.  2d  Cir.  in  116  761,   5   Am.   B.   R.  425. 
Fed    Rep.  604,  8  Am.    B.   R.   569; 


190  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

Avithin  four  months  could  not  join  in  filing  the  petition/'  but  it 
would  seem  to  be  the  better  view  that  he  may  be  a  petitioning 
creditor."  The  courts  hold  that  such  a  preference  must  be 
surrendered  before  there  will  be  an  adjudication/ 

A  petition  in  involuntary  bankruptcy  is  regularly  filed  by 
three  or  more  creditors  who  have  provable  claims  against  any 
person  (including  a  corporation,  partnership  or  a  woman*) 
which  amount  in  the  aggregate,  in  excess  of  the  value  of 
securities  held  by  them,  if  any,  to  five  hundred  dollars  or 
over."  In  case  all  of  the  creditors  of  such  person,  corporation 
or  partnership  are  less  than  twelve  in  number,  then  one  of 
such  creditors  whose  unsecured  claim  equals  five  hundred 
dollars  may  file  a  petition  to  have  him  adjudged  a  bankrupt.^** 
Where  there  are  more  than  twelve  creditors  three  must  join 
in  filing  the  petition  although  most  of  the  twelve  are  creditors 
for  nominal  sums  only  and  are  induced  not  to  join  in  the 
petition  by  the  solicitation  of  the  bankrupt." 

In  computing  the  number  of  creditors  of  a  bankrupt  for 
the  purpose  of  determining  how  many  creditors  must  join  in 
the  petition,  only  the  general  or  unsecured  creditors  are 
counted.  Creditors  holding  claims  which  are  secured  or  have 
priority  are  not  counted  in  computing  the  number  of  creditors 
or  the  amount  of  their  claims,  unless  the  amount  of  such 
claims  exceed  the  values  of  such  securities  or  priorities,  and 
then  only  for  such  excess.^"  Where  a  creditor  has  security  or 
has  received  a  preference  he  may  make  a  voluntary  surrender 
of  it  and  prosecute  a  petition  on  the  original  debt.^^ 

It  has  been  held  that  creditors  who  have  assented  to  a 
general  assignment  made  by  their  debtor,  and  who  therefore 
can  not  join  in  a  petition  in  bankruptcy  against  him,  are  not 

6  In   re   Rogers    Milling  Co.,    102  »  B.  A.  1898,  Sec.  sgb. 

Fed.   Rep.  687,  4  Am.   B.   R.  540;  i"  B.  A.  1898,  Sec.  59^. 

In  re  Burlington  Malting  Co.,   109  '^^  In    re    Brown,    in    Fed.    Rep. 

Fed.  Rep.  777,  6  Am.  B.  R.  369;  In  979,  7  Am.  B.  R.  102:  but  see  Gage 

re  Schenkein,  113  Fed.  Rep.  421  ,  7  &  Co.  v.  Bell,  124  Fed.  Rep.  371. 

Am.  B.  R.  162.  i-B.  A.  1898,  Sec.  56b,  and  Sec. 

■^  In   re  Homstein,  122  Fed.  Rep.  59^. 

266;   In   re  Gillette,   104  Fed.   Rep.  "  b.    A.    1898,    Sec.    59^;    In    re 

769,  5  Am.  B.  R.  119;  In  re  Miller,  Marcer,    No.   9060   Fed.   Cas.,   s.    c. 

104   Fed.    Rep.    764,    5   Am.    B.    R.  6  M.   B.   R.  351;  In   re  Hunt,   No. 

140.  6882  Fed.  Cas.,  s.  c.  5  N.  B.  R.  433- 

8  B.  A.  1898,  Sec.  I,  clause  19. 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY. 


191 


to  be  counted,  in  determining  the  number  of  his  creditors,  and, 
if  the  creditors  who  have  not  assented  are  less  than  12  in 
number,  one  of  such  creditors  may  file  the  petition. ^^* 

Creditors  may  be  estopped  by  their  own  consent  to  an  act 
from  alleging  it  against  their  debtor  as  proof  of  an  act  of 
bankruptcy.  A  creditor,  who  assents  to  the  making  of  an 
assignment  or  other  conveyance,  which,  but  for  such  consent, 
would  be  an  act  of  bankruptcy,  can  not  allege  the  same  against 
his  debtor  to  procure  an  adjudication.  The  ground  of  the 
rule  is,  that  to  allow  him  to  do  so  would  be  inconsistent  with 
good  faith  and  fair  dealing,  encourage  deceit  and  put  it  within 
the  power  of  creditors  to  entrap  the  debtor  by  inducing  him 
to  commit  acts  apparently  fraudulent  as  to  them,  which  they 
intend  afterwards  to  repudiate  to  his  disadvantage.  A  person 
will  not  therefore  be  allowed  to  complain  of  an  act  of  bank- 
ruptcy where  he  induced  the  act,  or  after  its  commission  has 
so  acted  wath  regard  to  it  that  others  have  the  right  to  act  on 
the  faith  of  its  validity  so  far  as  his  subsequent  conduct  can 
effect  it.^*     The  mere  fact  of  proving  a  claim  in  a  state  assign- 


13*  In  re  Miner,  104  Fed.  Rep. 
520;  4  Am.  B.  R.  710;  2  N.  B.  N. 

1073- 

i*  Simonson  v.  Sinsheimer  (C.  C. 
A.  6th  Cir.),  95  Fed.  Rep.  948;  In 
re  Romanow,  92  Fed.  Rep.  510,  i 
Am.  B.  R.  461;  In  re  Miner,  104 
Fed.  Rep.  520,  4  Am.  B.  R.  710;  2 
N.  B.  N.  1073 ;  Durham  Paper  Co. 
V.  Seaboard  Knitting  Mills,  121  Fed. 
Rep.   179,   ID  Am.   B.  R.  29. 

In  Simonson  v.  Sinsheimer,  su- 
pra, after  reviewing  the  cases,  the 
court  said :  "  Coming  to  apply  our 
conclusions  to  the  case  at  bar,  we 
cannot  doubt  that  the  answer  ten- 
dered made  a  case  of  estoppel 
against  the  petitioners.  They  are 
alleged  to  have  become  parties  to 
the  assignment  proceedings,  to  have 
filed  their  claims  under  the  assign- 
ment, to  have  requested  a  reference 
to  pass  upon  the  claims,  the  ac- 
counts of  the  assignee,  and  the 
questions  of  distribution.  They 
waited    three    months    and    a    half 


before  filing  their  petition.  By  their 
acquiescence  they  certainly  induced 
the  assignors,  the  assignee,  and  the 
purchasers  of  the  assets  from'  the 
assignee  to  believe  that  they  would 
not  seek  to  set  aside  the  assign- 
ment." 

The  case  was  reversed  and  re- 
manded to  the  district  court,  where 
answer  was  filed  and  evidence 
taken.  The  court  held  that  the  evi- 
dence did  not  establish  an  estoppel 
and  adjudged  the  respondents  to 
be  bankrupts  (96  Fed.  Rep.  579). 
This  decree  was  affirmed  on  appeal 
by  the  circuit  court  of  appeals  for 
the  sixth  circuit  (100  Fed.  Rep. 
426,  3  Am.  B.  R.  824). 

See  also  on  question  of  estoppel 
of  petitioning  creditors  Leidigh  Car- 
riage Co.  v.  Stengel  (C.  C.  A.  6th 
Cir.),  95  Fed.  Rep.  637,  2  Am.  B. 
R  383,  I  N.  B.  N.  387:  In  re 
Curtis  (C.  C.  A.  7th  Cir.),  94  Fed. 
Rep.  630,  2  Am.  B.  R.  226;  af- 
firming  91    Fed.    Rep.    739;    In    re 


192  LAW    r\Nn    PROCEEDINGS    IN    BANKRUPTCY. 

ment  proceedings  is  not  of  itself  sufficient  to  estop  a  creditor 
from  maintaining  a  petition  against  the  debtor,^^  nor  will  the 
acceptance  of  the  position  of  assignee  by  a  person  who  is 
secretary  of  a  corporation  estop  the  corporation."  There  is 
an  exception  where  the  act  of  bankruptcy  committed  is  that 
covered  by  Sec.  3  a,  cl.  5  of  the  Bankrupt  Act.  In  such  a  case 
the  creditor  is  not  trying  to  repudiate  or  set  aside  the  act  done 
and  therefore  is  not  estopped  though  it  was  done  at  his  solici- 
tation.^^ 

Creditors  who  were  employed  by  the  debtor  at  the  time  of 
the  filing  of  the  petition,  or  are  related  to  him  by  consan- 
guinity or  affinity  within  the  third  degree,  as  determined  by 
the  common  law,  and  have  not  joined  in  the  petition,  are  not 
to  be  counted. ^^  Every  generation  in  lineal  consanguinity 
constitutes  a  different  degree,  reckoning  either  upwards  or 
downwards.  The  method  of  computing  the  degree  of  col- 
lateral relationship  at  common  law,  in  the  words  of  Mr.  Jus- 
tice Blackstone,  is  as  follows :  "  We  begin  at  the  common 
ancestor  and  run  downwards,  and  in  whatever  degree  the  two 
persons,  or  the  most  remote  of  them,  is  distant  from  the  com- 
mon ancestor,  that  is  the  degree  in  which  they  are  related  to 
each  other."^^ 

In  order  to  institute  proceedings  in  involuntary  bankruptcy 
a  petitioning  creditor  or  creditors  must  have  claims  against 
the  debtor,  first,  which  are  provable  against  his  estate  and 
unsecured,  and,  second,  they  must  amount  in  the  aggregate  to 
five  hundred  dollars  or  over.  When  the  proceedings  are 
against  a  partnership  these  debts  clearly  must  be  partnership 
debts.  Under  all  circumstances  the  debts  must  be  provable 
against  the  estate  of  the  bankrupt. 

C.    Moench   &   Sons   Co.,    123    Fed.  387 ;  /m  r^  Curtis  (C.  C.  A.  7th  Cir.), 

Rep.  965.  9A  Fed.  Rep.  63b,  2  Am.  B.  R.  226. 

In   re   Williams,    No.    17706   Fed.  ^'^  /"    re   Winston,   122   Fed.   Rep. 

Cas.,  s.  c.   14  N.  B.  R.  132;  In  re  187. 

Massachusetts  Brick  Co.,   No.  9259  ^^  In  re  C.  Moench  &  Sons  Co., 

Fed.  Cas.,  s.  c.  2  Low.  58;  Perry  v.  123  Fed.  Rep.  965. 

Langley.  No.   11006  Fed.  Cas.,  s.  c.  ^^  B.  A.  1898,  Sec.  59^. 

I  N.  B.  R.  559.  ^^2    Black.    Com.    206;    Coke    on 

15  Leidigh  Carriage  Co.  v.  Stengel  Litt.  23 :  3  Washburn  on  Real  Prop- 

rC.   C.  A.  6th  Cir.),  95  Fed.  Rep.  erty,  star  p.  406;  McDowell  v.  Ad- 

637 ,  2  Am.  B.  R.  383 ,  I  N.  B.  N.  drms,  45  Penn.  St.  432. 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY.  I93 

The  Statute  declares-*'  that  "  debts  of  the  bankrupt  may  be 
proved  and  allowed  against  his  estate  which  are 

''First,  a  fixed  liability,  as  evidenced  by  a  judgment  or  an 
instrument  in  writing,  absolutely  owing  at  the  time  of  the 
filing  of  the  petition  against  him,  whether  then  payable  or  not, 
with  any  interest  thereon  which  would  have  been  recoverable 
at  that  date  or  with  a  rebate  of  interest  upon  such  as  were 
not  then  payable  and  did  not  bear  interest ; 

''Second,  due  as  costs  taxable  against  an  involuntary  bank- 
rupt who  was  at  the  time  of  the  filing  of  the  petition  against 
him  plaintiff  in  a  cause  of  action  which  would  pass  to  the 
trustee  and  which  the  trustee  declines  to  prosecute  after 
notice ; 

''Third,  founded  upon  a  claim  lor  taxable  costs  incurred 
in  good  faith  by  a  creditor  before  the  filing  of  the  petition  in 
an  action  to  recover  a  provable  debt; 

"  FourtJi,  founded  upon  an  open  account,  or  upon  a  con- 
tract express  or  implied ;  and 

"  Fifth,  founded  upon  provable  debts  reduced  to  judgments 
after  the  filing  of  the  petition  and  before  the  consideration  of 
the  bankrupt's  application  for  a  discharge,  less  costs  incurred 
and  interests  accrued  after  the  filing  of  the  petition  and  up  to 
the  time  of  the  entry  of  such  judgments. 

"  Unliquidated  claims  against  the  bankrupt  may,  pursuant 
to  application  to  the  court,  be  liquidated  in  such  manner  as 
it  shall  direct,  and  may  thereafter  be  proved  and  allowed 
against  his  estate." 

What  debts  are  provable  under  this  section  is  treated  at 
length  in  another  place,  to  which  the  reader  is  referred."^  If 
the  debt  or  debts  are  provable  against  the  estate  of  the  bank- 
rupt and  unsecured,  the  creditor  is  entitled  to  join  in  the 
petition  to  have  the  debtor  declared  a  bankrupt  and  his  prop- 
erty distributed  according  to  law. 

The  amount  of  the  claims  of  the  petitioning  creditors  must 
amount  in  the  aggregate  to  five  hundred  dollars  or  over.^^ 
Interest  may  be  added  in  computing  any  of  these  amounts.^* 
The  creditor  may  purchase  claims  against  the  debtor  in  good 

=«  B.  A.  1898,  Sec.  63.  "  B.  A.  1898,  Sec.  59Z7. 

21  Provable  Debts,  Chap.  XIII.  2^  sioan  v.  Lewis,  22  Wall.  150. 


194  l-^^W    AND    PROCEEDINGS    IN    BANKRUPTCY. 

faith  for  the  purpose  of  enabling  him  to  unite  in  the  petition."* 
Creditors  who  have  been  paid  by  another  creditor  for  the 
purpose  of  inducing  them  to  join  in  the  petition  and  who  no 
longer  have  any  interest  will  not  be  allowed  to  join  in  the 
petition.-^  The  amount  at  which  the  claim  of  the  secured 
creditor  is  to  be  reckoned  is  for  the  amount  the  claim  exceeds 
the  value  of  the  security  or  priority.^** 

§  67.     Against  whom  a  petition  may  be  filed. 

To  warrant  or  justify  the  institution  of  involuntary  pro- 
ceedings against  a  debtor,  individual,  corporation  or  partner- 
ship, two  things  must  concur  with  reference  to  such  debtor: 
First,  such  debtor  must  be  one  who  may  be  adjudged  an  invol- 
untary bankrupt  and  be  subject  to  the  provisions  and  entitled 
to  the  benefits  of  the  statute ;  second,  he  must  have  committed 
an  act  of  bankruptcy  within  four  months  prior  to  the  filing  of 
the  petition.  If  the  act  of  bankruptcy  alleged  is  that  set  forth 
in  Sec.  3a  cl.  i  of  the  bankrupt  act  he  must  be  insolvent  at 
the  time  of  filing  the  petition.^^ 

The  Debtor  must  be  one  who  may  be  Adjudged  an 
Involuntary  Bankrupt. — It  is  evident  that  unless  the 
debtor  may  be  adjudged  a  bankrupt  and  his  property  distrib- 
uted in  accordance  with  the  bankrupt  statute  the  proceeding 
against  him  would  be  futile. 

The  statute  declares  that  "  any  natural  person,  except  a 
wage-earner  or  a  person  engaged  chiefly  in  farming  or  the 
tillage  of  the  soil,  any  unincorporated  company,  and  any  cor- 
poration engaged  principally  in  manufacturing,  trading,' 
printing,  publishing,  mining,  or  mercantile  pursuits,  owing 
debts  to  the  amount  of  one  thousand  dollars  or  over,  may  be 
adjudged  an  involuntary  bankrupt  upon  default  or  an  impar- 
tial trial,  and  shall  be  subject  to  the  provisions  and  entitled  to 
the  benefits  of  this  act.  Private  bankers,  but  not  national 
banks  or  banks  incorporated  under  state  or  territorial  laws, 
may  be  adjudged  involuntary  bankrupts.""^ 

The  actual  owner  is  subject  to  be  adjudged  a  bankrupt  and 

24  In  re  Woodford,  No.  17972  Fed.       109  Fed.  Rep.  'j'j'] ,  .6  Am.  B.  R.  369. 
Cas.,  s.  c.   I  Cin.  Law  Bui.  37 ;  Ex  26  b.  A.  1898,  Sec.  56^. 

parte  Shouse,  No.   12815  Fed.  Cas.,  27  g    a.  1898,  Sec.  3c. 

s.  c.  Crabbe  482.  2s  b.  A.   1898,  Sec.  4 .  32  Stat,  at 

25  In  re   Burlington   Malting  Co.,      L.  797.     For  a  further  consideration 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY.  1 95 

it  is  not  necessary  to  join  with  him  a  person  who  has  loaned 
him  the  capital  with  which  to  do  business."^  Although  a  cor- 
poration has  been  dissolved  by  receivership  proceedings  it  may 
be  adjudged  a  bankrupt  in  order  that  preferences  made  fraud- 
ulent by  the  bankrupt  act  may  be  set  aside.^° 

Acts  of  Bankruptcy. — A  petition  can  not  be  filed  against 
a  debtor  until  he  has  done  or  allowed  to  be  done  somethine 
which  the  statute  defines  to  be  an  act  of  bankruptcy.  The 
act  of  bankruptcy  must  have  been  committed  within  four 
months  prior  to  the  filing  of  the  petition.^^ 

The  statute  declares  that  "  acts  of  bankruptcy  by  a  person 
shall  consist  of  his  having  (i)  conveyed,  transferred,  con- 
cealed, or  removed,  or  permitted  to  be  concealed  or  removed, 
any  part  of  his  property  with  intent  to  hinder,  delay,  or  de- 
fraud his  creditors,  or  any  of  them;  or  (2)  transferred,  while 
insolvent,  any  portion  of  his  property  to  one  or  more  of  his 
creditors  with  intent  to  prefer  such  creditors  over  his  other 
creditors;  or  (3)  suffered  or  permitted,  while  insolvent,  any 
creditor  to  obtain  a  preference  through  legal  proceedings,  and 
not  having  at  least  five  days  before  a  sale  or  final  disposition 
of  any  property  affected  by  such  preference  vacated  or  dis- 
charged such  preference;  or  (4)  made  a  general  assignment 
for  the  benefit  of  his  creditors,  or,  being  insolvent,  applied  for 
a  receiver  or  trustee  for  his  property  or  because  of  insolvency 
a  receiver  or  trustee  has  been  put  in  charge  of  his  property 
under  the  laws  of  a  state,  of  a  territory,  or  of  the  United 
States;  or  (5)  admitted  in  writing  his  inability  to  pay  his 
debts  and  his  willingness  to  be  adjudged  a  bankrupt  on  that 
ground. "•''- 

These  are  the  only  acts  committed  by  a  debtor  which  are 
acts  of  bankruptcy.  Unless  the  acts  complained  of  by  the 
creditor  or  creditors  comes  within  this  enumeration  it  is  not 
an  act  of  bankruptcy,  and  can  not  be  made  a  ground  for  insti- 


of    who    may    be    adjudged    bank-  Co.    (C.  C.  A.  5th   Cir.),   112  Fed. 

rupts,  see  Chap.  VII.  Rep.  407 ,  7  Am.  B.  R.  384. 

-"  In    re    Kcnney,    97    Fed.    Rep.  "i  B.  A.  1898,  Sec.  zh. 

554 ,  2  N.  B.  N.  140 ,  3  Am.  B.  R.  32  g   a.  1898,  Sec.  za,  32  Stat,  at 

353-  L.  797.     For  a  further  consideration 

■■'"  Scheucr    v.    Montgomery,    etc.,  of   what    constitutes   acts    of  bank- 
ruptcy, see  Chap.  VTII. 


196  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

tilting-  involuntary  proceedings.  Where,  nowever.  the  act  is 
one  of  those  named  in  the  statute,  and  the  debtor  subject  to 
be  adjudged  a  bankrupt,  then  one  creditor,  if  the  creditors 
are  less  than  twelve  in  number,  otherwise  three  or  more  cred- 
itors, may  apply  to  have  him  declared  a  bankrupt,  provided  the 
application  is  made  within  four  months  after  the  commission 
of  the  act  of  bankruptcy,  and  such  creditor  or  creditors  have 
provable  claims  amounting  to  five  hundred  dollars. 

Insolvency  at  the  Time  of  Filing  the  Petition. — The 
statute  provides  that  a  petition  may  be  filed  against  a  person 
who  is  insolvent.^^  In  construing  this  clause  the  supreme 
court  has  held  that  solvency  at  the  time  the  petition  was  filed 
is  a  defense  only  when  an  act  of  bankruptcy  under  cl.  i  of 
Sec.  3a  is  charged  in  the  petition.^*  Though  the  rules  and 
forms  in  bankruptcy  provide  for  an  issue  as  to  solvency  in 
cases  of  involuntary  bankruptcy  such  an  issue  becomes  super- 
fluous where  other  acts  of  bankruptcy  are  charged.^'*  Where 
the  issue  is  material  the  bankrupt  is  entitled  to  have  a  trial 
by  jury  in  respect  to  the  question  of  his  insolvency  upon  filing 
a  written  application  therefor  at  or  before  the  time  within 
which  an  answer  may  be  filed. ^^  If  such  application  is  not 
filed  within  such  time  a  trial  by  jury  is  deemed  to  be  waived."''^ 
In  such  case  the  question  is  tried  before  the  court  without 
a  jury. 

Under  the  present  statute  a  person  is  deemed  insolvent 
whenever  the  aggregate  of  his  property,  exclusive  of  any 
property  which  he  may  have  conveyed,  transferred,  concealed 
or  removed,  or  permitted  to  be  concealed  or  removed,  with 
intent  to  defraud,  hinder  or  delay  his  creditors,  shall  not',  at  a 
fair  valuation,  be  sufficient  in  amount  to  pay  his  debts.^" 

It  should  be  observed  that  the  term  insolvent,  as  used  in 
the  present  act,  has  quite  a  different  meaning  from  the  same 
term  as  used  in  the  former  acts.  Under  the  act  of  1867  the 
term  insolvency  was  held  not  to  mean  the  absolute  inability  to 

33  B.  A.  1898,  Sec.  3b.  ^^B.   A.   1898,   Sec.   19;   Bray  v. 

3*  West  V.  Lea,  174  U.  S.  590,  2  Cobb,  91  Fed.  Rep.  102,  i  Am.  B.  R. 

Am.   B.    R.   463.     See   also   Day   v.  153.     See   also   Elliot   v.   Toeppner, 

Hardware  Co.   (C.  C.  A.  5th  Cir.),  187  U.  S.  32?- 

114   Fed.   Rep.   834,   8  Am.   B.   R.  see.  A.    1898,  Sec.   i,  clause  IS- 

175.  See    Sec.   50a,  ante. 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY.  1 97 

pay  one's  debts  at  a  future  time  upon  a  settlement  or  winding 
up  of  all  the  debtor's  concerns ;  but  a  trader  was  held  to  be 
insolvent  when  he  was  not  in  a  condition  to  pay  his  debts  in 
the  ordinary  course  of  business,  as  persons  carrying  on  trade 
usually  do.^^ 

§  68.     In  what  court  an  involuntary  petition  is  filed. 

The  court  in  which  involuntary  proceedings  may  be  insti- 
tuted depends  upon  where  the  debtor  has  had  his  domicile, 
resided  or  had  his  principal  place  of  business  for  the  greater 
portion  of  the  preceding  six  months,^^  irrespective  of  the  resi- 
dence of  the  creditors.  A  creditors'  petition  must  be  filed  in 
a  court  of  bankruptcy  in  which  the  debtor  could  have  filed  a 
voluntary  petition.  The  remarks  that  have  already  been  made 
in  regard  to  the  court  in  which  a  voluntary  petition  may  be 
filed  apply  equally  to  where  proceedings  in  involuntary  bank- 
ruptcy may  be  instituted.^" 

It  is  obvious  that  involuntary  petitions  may  be  filed  against 
the  same  debtor  in  two  or  more  districts ;  or  that  two  or  more 
petitions  may  be  filed  against  the  same  debtor  by  different 
creditors  in  the  same  district.  The  order  of  proceedings  in 
such  cases  is  regulated  by  the  general  orders.^" 

""Wager  v.   Hall,   i6  Wall.   599;  that  its  principal  office  shall  be  at  a 

Toof  V.  Martin,  13  Wall.  40 ;  Saw-  place  named  in  such  state, 

yer  v.  Turpin,  91  U.  S.  114;  Wilson  In   re  Marine  Machine  and   Con- 

V.  City  Bank,  17  Wall.  473.  veyor  Co.,  91  Fed.  Rep.  630,  a  Rhode 

"'^  B.  A.  1898,  Sec.  2,  clause  i  ;  In  Island  corporation,   had   shut   down 

re    Plotke    (C.    C.    A.    7th    Cir.),    5  its  manufacturing  works  at  Warren, 

Am.  B.  R.  171,   104  Fed.  Rep.  964;  '  R.  I.,  five  months  before  a  petition 

/»  re  Filer,  5  Am.  B.  R.  332 ;  In  re  in   bankruptcy  was  filed  against  it, 

Mackey,  no  Fed.  Rep.  355,  6  Am.  but    maintained    its    office    for    the 

B    R.  577.  transaction    of    its     executive    and 

In  Dressel  y.  North  State  Lumber  banking  business  in  New  York  city, 

Co.,  107  Fed.  Rep.  255,  it  was  held  it    was   held   that    the   petition    was 

that  a  district  court  has  jurisdiction  rightly  filed  in  the  southern  district 

of       proceedings       in       bankruptcy  of   New   York  as  being  the   princi- 

against  a  corporation  which  carries  pal  place  of  business  of  the  corpora- 

or   the   business   for   which   it   was  tion  during  the  greater  part  of  the 

incorporated    and    has    its    property  preceding  six  months, 

and   assets   entirely   within   the   dis-  ■"■"  See  Sec.  58,  ante. 

trict,    notwithstanding    its    incorpo-  *"  Gen.  Ords.  6  and  7.     See  Sees, 

ration  in  another  state,  and  a  pro-  84  and  85,  post. 
vision  in   its  articles  of  association 


198  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

§  69.     The  petition. 

The  application  to  have  a  debtor  adjudged  a  bankrupt  and 
his  property  distributed  according  to  the  bankrupt  law  is 
made  by  petition.  The  supreme  court  of  the  United  States 
has  prescribed  forms  which  should  be  observed  and  used  with 
such  alterations  as  may  be  necessary  to  suit  the  circumstances 
in  any  particular  case.*^  The  petition  must  be  printed  or 
written  out  plainly,  without  abbreviations  or  interlineations, 
except  where  such  abbreviations  or  interlineations  may  be  for 
the  purpose  of  reference.*"  It  should  be  prepared  in  duplicate, 
one  copy  for  the  clerk  and  one  for  service  upon  the  bankrupt.*' 

The  petition  should  be  entitled  in  the  proper  court  of  bank- 
ruptcy. The  caption  is  regularly  A.  B.,  C.  D.  and  E.  F., 
petitioners,  v.  X.  Y.,  respondent.  Although  the  title  of  the 
court  and  the  style  of  the  case  are  not  required  to  be  stated 
in  a  caption,  and  in  many  of  the  early  cases  were  never  put 
in  the  petition,  it  is  more  convenient  for  reference,  and  is  now 
frequently  inserted  by  the  best  pleaders.  The  petition  is 
addressed  to  the  judge  of  the  court  in  which  it  is  to  be  filed," 
as  to  the  Honorable  S.  R.,  judge  of  the  district  court  of  the 
United  States  for  the  district  of . 

The  petition  should  state  the  names  and  residences  of  both 
the  petitioning  creditors  and  the  debtor.  It  should  contain 
a  sufficient  description  of  the  debtor  to  show  that  he  is  subject 
to  be  adjudged  an  involuntary  bankrupt,  and  should  charge 
his  insolvency  at  the  time  of  filing  the  petition."^  A  petition 
against  a  corporation  must  state  that  it  is  sucli  a  corporation 
as  may  be  adjudged  a  bankrupt*"  and  a  petition  against  an 
individual  that  he  is  not  a  wage  earner  or  a  person  engaged 

"Gen.    Ord.    38;    Official    Form  District  Judge."     It  was   held  that 

No.    3,    Form    No.    5,    post;    Gage  the    name    of    the    judge    must    be 

&  Co.  V.  Bell,  124  Fed.  Rep.  371.  given    correctly    if    at    all;    that    it 

*-  Gen.  Ord.  5  ;  Mahoney  v.  Ward,  cannot  be   stricken   out   as   surplus- 

100  Fed.  Rep.  278 ,  2  N.  B.  N.  538.  age,  and  consequently  permission  to 

See  also  criticism  of  Judge  Wool-  file  was  denied, 

son,  I   N.  B.  N.  239;  West  Co.  v.  *^  B.  A.  1898,  Sec.  3b;  In  re  Tay- 

Lea,   I   N.   B.   N.  410.  lor    (C.   C.   A.   7th   Cir.),   102  Fed. 

43  B.  A.  1898,  Sec.  59r.  Rep.  728.  4  Am.  B.  R.  515  ,  2  N.  B. 

4*  In  Anon.,  No.  459  Fed.  Cas.,  s.  N.  929.     See  West  Co.  v.  Lea,  i74 

c    I  N.  B.  R.  216,  leave  was  asked  U.  S.  590,  2  Am.  B.  R.  463- 

to   present    an    involuntary   petition  ^6  7^  ^^  Elmira  Steel  Co.,  109  Fed. 

addressed  to  "Hon.  Nye  K.  Hale,  Rep.  456,  5  Am.  B.  R.  484. 


PROCEEDINGS    IX    INVOLUNTARY    BANKRUPTCY.  1 99 

chiefly  in  farming  or  the  tihage  of  the  soil.'*'  If  such  allega- 
tion is  omitted  and  the  defendant  answers  on  the  merits  the 
defect  is  waived.*^  The  defect  may  be  cured  by  amendment.^'* 
It  should  set  forth  all  the  matters  that  are  requisite  to  give 
jurisdiction  to  the  court  over  the  particular  case.  It  should 
show  that  the  debtor  had  had  his  principal  place  of  business, 
resided  or  had  his  domicile  within  the  territorial  jurisdiction 
of  the  court  for  the  greater  portion  of  the  preceding  six 
months. ^°  If  he  has  not  had  a  principal  place  of  business, 
resided  or  had  a  domicile  within  the  United  States,  it  must 
show  that  he  has  property  within  the  jurisdiction  of  the 
court. ^^  If  one  creditor  only  petitions,  it  must  be  averred 
that  all  the  creditors  of  the  bankrupt  are  less  than  twelve  in 
number.^-  The  petition  must  also  allege  that  the  debtor  owes 
debts  to  the  amount  of  one  thousand  dollars. ^^ 

The  petition  must  set  forth  and  describe  the  claim  or  claims 
of  the  petitioning  creditor  or  creditors  sufficiently  to  show  that 
they  are  provable  claims  and  amount  in  the  aggregate  to  five 
hundred  dollars  or  over.^"'  Ordinarily  where  the  debt  is 
founded  upon  a  written  instrument,  as  a  note,  bond,  contract, 
etc.,  the  paper  is  annexed  to  the  petition  as  an  exhibit,  and 
proper  reference  to  it  is  made  in  that  part  of  the  petition  which 
is  designed  to  describe  the  debt  or  claim.  Where  several 
claims  or  debts  are  stated  in  the  petition  each  debt  should  be 
set  forth  in  a  separate  paragraph,  with  sufficient  particularity 
to  show  that  it  is  a  provable  claim. 

The  i)etition  should  contain  an  allegation  that  the  act  of 
bankruptcy  ( setting  forth  in  detail  the  act  of  the  debtor  which 
is  relied  upon  as  an  act  of  bankruptcy)  was  committed  w-ithin 
the  period  of  four  months  prior  to  the  filing  of  the  petition. 

*Un    re   Taylor    (C.    C.    A.    7th  ^-B.    A.    1898,    Sec.    59d;    In   re 

Cir.),  102  Fed.  Rep.  728,  4  Am.  B.  Miner,   104  Fed.  Rep.  520,  2  N.  B. 

R.  515;  In  re  Bellah,  116  Fed.  Rep.  N.    1073,  4  Am.   B.   R.  710;  In  re 

69,  8  Am.  B.  R.  310.  Novak,  loi  Fed.  Rep.  800,  4  Am.  B. 

♦'Green  River  Bank  v.  Craig,  no  R.   811. 

Fed.  Rep.  137,  6  Am.  B.  R.  381.  '^•'' B.  A.  1898,  Sec.  4b. 

<»  Beach    v.    Macon    Grocery    Co.  ^*  B.    A.    1898,    Sec.    sgb;    In   re 

(C.  C.  A.  5th  Cir.),  120  Fed.  Rep.  Western  Sav.  &  T.  Co.,  No.   17442 

736.  Fed.  Cas.,  s.  c.  4  Saw.  490;  In   re 

'"'  B.  A.  1898,  Sec.  2,  clause  i.  Hadley.  No.  5894  Fed.  Cas.,  s.  c.  12 

61  B.  A.  1898,  Sec.  2,  clause  i.  N    B.  R.  366. 


200  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

The  allegation  in  regard  to  the  act  of  bankrui)tcy  must  be 
positive,  full  and  unqualified.^^  Evidence  of  acts  not  set  up 
in  the  petition  will  not  be  received  or  considered.^''  Where 
the  petition  is  filecl  against  a  partnership  the  allegation  should 
set  forth  an  act  of  bankruptcy  on  the  part  of  the  firm.  It  has 
been  held  that  an  averment  of  an  act  of  bankruptcy  upon  the 
part  of  one  of  the  members  of  the  firm  is  insufficient."  Sev- 
eral acts  of  bankruptcy  may  be  charged  in  the  same  petition. 
When  this  is  done  they  should  be  alleged  conjunctively.^"*  In 
such  case  it  is  enough  if  either  of  them  is  satisfactorily 
proven. '^^ 

The  petition  should  not  include  an  application  for  a  warrant 
to  seize  property.  If  it  does  the  petition  is  bad  for  multi- 
fariousness.^" 

The  petition  should  conclude  with  a  prayer  that  service  of 
the  petition  with  a  subpcena  may  be  made  upon  the  debtor 
(naming  him)  as  provided  in  the  acts  of  congress  relating  to 
bankruptcy,  and  that  he  should  be  adjudged  by  the  court  to 
be  a  bankrupt  within  the  purview  of  said  acts.*'" 

The  petition  should  be  signed  by  the  petitioning  creditor  or 
creditors,  or  their  attorney  or  agent.**^  It  must  be  verified  as 
to  matters  of  fact  by  an  affidavit  under  oath.®^     Neither  the 

^^  In  re  Muller,  No.  9912  Fed.  779;  see  also  In  re  Sears  (C.  C.  A. 
Cas.,  s.  c.  Deady  513;  Orem  v.  Har-  2d  Cir.),  117  Fed.  Rep.  294,  8  Am. 
ley,  No.  10567  Fed.  Cas.,  s.  c.  3  N.  B  R.  713;  In  re  Lange,  97  Fed.  Rep. 
B.  R.  263 ;  In  re  Nelson,  98  Fed.  197,  3  Am.  B.  R.  231 ;  In  re  Drum- 
Rep.  76 ;  In  re  Cliffe,  2  Am.  B.  R.  raond.  No.  4093  Fed.  Cas.,  s.  c.  i 
317,  94  Fed.  Rep.  354;  In  re  Ewing  N.  B.  R.  231  ;  In  re  McKibben,  No. 
(C.  C.  A.  2d  Cir.),  115  Fed.  Rep.  8859  Fed.  Cas.,  s.  c.  12  N.  B.  R.  97. 
707  ,  8  Am.  B.  R.  269 ;  Seaboard  '•'^  In  re  Kelly,  91  Fed.  Rep.  504 ; 
Steel  Casting  Co.  v.  Trigg  Co.,  124  Mather  v.  Coe,  92  Fed.  Rep.  ^Zi  \ 
Fed.  Rep.  75.  In  re  Ogles,  93  Fed.  Rep.  426. 

^^  Ex  parte  Potts,  No.  11344  Fed,  "^  See  Official  Form  No.  3,  Form 

Cas.,  s.  c.  Crabbe  469.  No.  5,  post. 

^"^  In  re  Redmond,  No.  11632  Fed.  *^^  In  re   Raynor,   No.    11597   Fed. 

Cas.,  s.   c.  9   N.   B.   R.  408;   In   re  Cas.,  s.  c.   11    Blatch.  43;   Wald  v. 

Waite,  No.  17044  Fed.  Cas.,  s.  c.  i  Wehl,  6  Fed.  Rep.  163. 

Low.   207 ;    but  see  In  re   Shapiro,  ^^  g     a.    1898,    Sec.    i8c;    In    re 

106  Fed.  Rep.  495 ,  3  N.  B.  N.  385 ;  Donnelly,   5    Fed.    Rep.    783 ;   In  re 

In  re  Grant,   106  Fed.   Rep.  496,  3  Raynor,   No.   11 597  Fed.  Cas.,  s.  c. 

N.   B.   N.  425;  see  also  Chap.   XI,  it    Blatch.    43;    Wald    v.    Wehl,    6 

post.  Fed.  Rep.  163. 

5«  Bradley   Timber   Co.   v.    White  The    oath    attached    to   the    cred- 

(C.  C.  A.  5th  Cir.),  121  Fed.  Rep.  itor's  petition.  Form  No.  54.  under 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY.  20I 

Statute  nor  the  general  orders  require  the  petition  to  be  signed 
or  verified  by  the  petitioners  personally.  An  agent  or  attor- 
ney may  make  the  oath  if  it  appears  that  he  has  knowledge  of 
the  facts.  This,  however,  is  not  good  practice  \vhere  it  is  not 
inconvenient  for  the  petitioning  creditors  to  make  it.*^^  Where 
it  does  not  appear  that  the  attorney  has  knowledge  of  the  facts 
the  defect  is  waived  if  answer  is  made  on  the  merits.*'*  The 
oath  or  affirmation  may  be  administered  by  a  referee,  an  officer 
authorized  to  administer  oaths  in  proceedings  before  the 
courts  of  the  United  States  or  under  the  laws  of  the  state 
where  the  same  are  to  be  taken ;  or  a  diplomatic  or  consular 
officer  of  the  United  States  in  any  foreign  country.®^ 

§  70.     The  time  and  manner  of  filing  the  petition. 

The  petition  must  be  filed  in  the  office  of  the  clerk  of  a 
court  of  bankruptcy,  and  not  wath  a  referee. 

A  petition  in  bankruptcy  is  deemed  filed  within  the  meaning 
of  the  statute  from  the  time  it  is  presented  to  the  clerk  in  his 
office,  and  not  from  the  time  when  it  is  presented  to  the  judge 
for  his  action. ****  No  schedule  is  required  to  be  filed  with  a 
petition  in  involuntary  bankruptcy.  The  statute  provides  that 
the  petition  shall  be  filed  in  duplicate,  one  copy  for  the  clerk 
and  one  for  service  on  the  bankrupt."^  The  petition  is  re- 
ceived by  the  clerk  and  filed  and  the  case  docketed  as  in  volun- 

the  act  of  1867,  provided  for  mak-  Co.,  92  Fed.  Rep.  904 ,  i  Am.  B.  R- 

ing    oath    on    information    and    be-  197 ;  Leidigh  Carriage  Co.  v.  Sten- 

licf.    The  oath  attached  to  the  cred-  gel  (C.  C.  A.  6th  Cir.),  95  Fed.  Rep. 

iter's  petition,   Form   No.   3,   under  62,7,  2  Am.  B.  R.  383;  Simonson  v. 

the  present  statute,  provides  only  for  Sinsheimer  (C.  C.  A.  6th  Cir.),  95 

a    positive    statement    and    not    for  Fed.   Rep.  948. 

a  verification   upon  information  and  ^'^  B.  A.  1898,  Sec.  20. 

belief.  ^^  In  re  Von  Borcke,  94  Fed.  Pep. 

^'^In  re  Herzikopf,  118  Fed.  Rep.  352,  2  Arn.  B.  R.  322;  In  re  Appel, 

loi,  9  .\m.  B.  R.  90;  In  re  Hunt,  103    Fed.    Rep.   931,    4   Am.    B.    R. 

118  Fed.  Rep.  282,  9  Am.  B.  R.  722,  2  N.  B.  N.  907;  In  re  Bear, 
251;  In  re  Chequasset  Lumber  Co.,  5  Fed.  Rep.  53;  In  re  Abrahams, 
112  Fed.  Rep.  56,  7  Am.  B.  R.  87;  No.  20  Fed.  Cas.,  s.  c  5  Law  Rep. 
but  see  In  re  Nelson,  98  Fed.  Rep.  328. 

76,  I  Am.  B.  R.  63;  In  re  Simon-  «7  B.   A.    1898,   Sec.   59^.     If  only 

son,  Whiteson  &  Co.,  92  Fed.  Rep.  one  petition  is  filed   it  will  be  dis- 

904,  I  Am.  B.  R.  197 ;  In  re  Glass,  missed.     In  re  Dupree,  97  Fed.  Rep. 

119  Fed.  Rep.  509,  9  Am.  B.  R.  28;  In  re  Stevenson,  94  Fed.  Rep. 
391-  no,  2  Am.  B.  R.  66. 

°*  In    re    Simonson,    Whiteson    & 


202  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

tary  proceedings.**^  The  deposit  for  costs  should  be  made  by 
the  petitioning  creditors  as  by  a  voluntary  debtor."*'  There  is 
one  exception,  namely,  the  petitioning  creditors  are  not  per- 
mitted to  proceed  in  forma  pauperis,  without  making  a 
deposit. 

The  petition  must  be  filed  within  four  months  after  the 
'commission  of  the  act  of  bankruptcy  upon  which  it  is 
founded.^"  Such  time  does  not  expire  until  four  months  after 
the  date  of  the  recording  or  registering  of  the  transfer  or 
assignment,  when  the  act  consists  in  having  made  a  transfer 
of  any  of  his  property,  with  intent  to  hinder,  delay  or  defraud 
his  creditors  or  for  the  purpose  of  giving  a  preference,  or  a 
general  assignment  for  the  benefit  of  his  creditors,  if  by  law 
such  recording  or  registering  is  required  or  permitted,  or,  if 
it  is  not,  from  the  date  when  the  beneficiary  takes  notorious, 
exclusive  or 'continuous  possession  of  the  property,  unless  the 
petitioning  creditors  have  received  actual  notice  of  such  trans- 
fer.or  assignment.^"  Where  the  act  of  bankruptcy  complained 
of  is  a  preference  resulting  from  legal  proceedings,  the  four 
months  period  begins  to  run  from  the  date  connected  with  the 
proceedings  after  judgment  and  not  from  judgment. ^^ 
Where  the  petition  is  filed  within  four  months  after  the  com- 
mission of  the  -act  of  bankruptcy  charged,  it  has  been  helld 
sufficient  if  other  creditors  join  in  the  petition  before  an  adju- 
dication thereon,  although  after  the  four  months  period,  and 
are  reckoned  in  the  making  up  of  the  requisite  number  of 
creditors  and  amount  of  claims."  Where  the  debtor  suffers 
a  preference  to  be  gained  by  legal  proceedings  the  creditor 
need  not  wait  for  the  sale,  but  can  file  his  petition  within  the 
five  days  before  the  advertised  date  of  the  sale.'^ 

^^  Sec.    6i,    ante.     Gen.    Ords.    i  ^^  In  re  Romanow,  92  Fed.  Rep. 

and  2.  510;    In    re    Bedingfield,    96    Fed. 

69  Consult  Sec.  61,  ante.  Rep.  190,  2  Am.  B.  R.  355;  In  re 

70  B.  A.  1898,  Sec.  3&;  In  re  Min-  Mercur,  95  Fed.  Rep.  634,  2  Am.  B. 
go  Valley  Creamery  Association,  R.  626;  In  re  Stein  (C.  C.  A.  2d 
100  Fed.  Rep.  282,  4  Am.  B.  R.  67;  Cir.),  105  Fed.  Rep.  749,  5  Am.  B. 
In  re  Romanow,  92  Fed.  Rep.  510.  R.  288 ,  3  N.  B.  N.  428 ;  In  re  Ryan, 

■71  Parmenter  Mfg.  Co.  v.  Stoever  7  Am.  B.  R.  562,  114  Fed.  Rep.  2)73- 
(C.   C.   A.    1st   Cir.),  97   Fed.   Rep.  ''^  In    re    Rome    Planing    Mill,   96 

330,  3  Am.  B.  R.  220;  2  N.  B.  N.      Fed.  Rep.  812,  3  Am.  B.  R.  123. 

174- 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY.  203 

In  computing  the  four  months  within  which  the  petition  is 
to  be  filed  the  first  day  is  exckided  and  the  last  day  included, 
unless  the  last  day  falls  upon  a  Sunday  or  a  legal  holiday,  in 
which  event  the  last  day  included  shall  be  the  next  day  there- 
after which  is  not  a  Sunday  or  a  legal  holiday/*  Holidays 
are  defined  by  the  act  to  include  Christmas,  the  fourth  of 
July,  the  twenty-second  of  February,  and  any  day  appointed 
by  the  president  of  the  United  States  or  the  congress  of  the 
United  States  as  a  holiday  or  as  a  day  of  public  fasting  or 
thanksgiving/^ 

The  authority  of  an  attorney  to  file  a  petition  should  be 
challenged  by  rule  to  show  his  authority  supported  by  affida- 
vits and  not  by  answer/*^ 

§  71.     The  writ  of  subpoena. 

The  eighteenth  section  of  the  bankruptcy  act  provides  that 
"  upon  the  filing  of  a  petition  for  involuntary  bankruptcy, 
service  thereof,  with  a  writ  of  subpoena,  shall  be  made  upon 
the  person  therein  named  as  defendant  in  the  same  manner 
that  service  of  such  process  is  now  had  upon  the  commence- 
ment of  a  suit  in  equity  in  the  courts  of  the  United  States, 
except  that  it  shall  be  returnable  within  fifteen  days,  unless 
the  judge  shall  for  cause  fix  a  longer  time." 

The  first  step,  therefore,  after  filing  a  petition  in  involun- 
tary bankruptcy  in  the  clerk's  office,  is  to  have  issued  and 
served  a  writ  of  subpoena."  This  is  a  writ  issuing  out  of  the 
court  of  bankruptcy  directed  to  the  marshal,  commanding  him 
to  summon  the  defendant  or  defendants,  naming  them,  to 
appear  before  a  day  certain  and  answer  the  matters  alleged 
against  them.'"* 

■^■^  B.  A.  T898,  Sec.  31  ;  Dutchcr  v.  In  the  United  States  courts  a  sub- 
Wright,  gi  U.  S.  553 ;  In  re  Lang,  poena  is  directed  to  the  marshal, 
No.  8056  Fed.  Cas.,  s.  c.  2  N.  B.  R.  although  it  may  be  observed  that 
480.  formerly   the  writ  of   subpoena   dif- 

"^  B.   A.   1898,   Sec.   I,   clause    14;  fered  from  other  writs  of  process  in 

In  re  Stevenson,  94  Fed.  Rep.   no,  equity  in  being  directed  to  the  party 

2  Am.   B.  R.  66;   In  re  Duprce,  97  himself,     whereas     the     subsequent 

Fed.  Rep.  28.  writs  arc  directed  to  certain  minis- 

■^^  Gage  &   Co.    v.    Bell,    124   Fed.  terial   officers   commanding  them   to 

Rep.  371.  take  proceedings  against  the  defend- 

■^^  For  form  of  subpoena,  see  Offi-  ant  calculated  to  enforce  obedience, 

cial  Form  No.  5,  Form  No.  8,  post.  See    Daniels    Chan.    Prac.    (i    ed.) 

T"  Gen.   Ord.  3.  554. 


204  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

This  writ  is  issued  as  of  course  upon  application  of  the 
plaintiff.'"     The  subpoena  is  issued  under  the  seal  of  the  court 
of  bankruptcy,   and   is  signed  by  the  clferk  of  that  court.^** 
The  writ  bears  teste  t)f  the  judge  or,  when  that  office  is  vacant, 
of  the  clerk  of  that  court,^^  as  of  the  date  of  issuing  the  writ.®^ 

The  subpoena  is  returnable  within  fifteen  days  unless  the 
judge  for  cause  fixes  a  longer  time.^^  Formerly  a  writ  of 
subpoena  named  a  money  penalty  in  case  of  disobedience,  but 
this  has  fallen  into  disuse  in  equity,  and  is  unnecessary  in 
bankruptcy  for  the  reason  that  the  plaintiff  has  a  remedy  in 
procuring  an  adjudication  of  bankruptcy,  provided  neither  the 
bankrupt  nor  a  creditor  appears  to  controvert  the  facts  alleged 
in  the  petition.^* 

At  the  bottom  of  the  subpoena  in  equity  is  placed  a  memo- 
randum that  the  defendant  is  to  enter  his  appearance  in  the 
suit  and  plead  in  the  clerk's  office  on  or  before  the  day  on 
which  the  writ  is  returnable,  otherwise  the  bill  may  be  taken 
pro  confesso,^^  but  form  No.  5  in  bankruptcy  contains  no  such 
memorandum.  If  no  service  is  made  before  the  return  day, 
other  subpoenas  toties  quotics  may  be  issued  until  the  defend- 
ants are  all  served.^'' 

§  72.     In  what  cases  a  subpoena  is  necessary. 

A  subpoena  is  necessary  in  case  of  a  petition  for  involuntary 
bankruptcy,**^  but  not  when  the  petition  is  filed  by  the  bankrupt 
himself.  To  bring  a  defendant  who  is  charged  with  being  a 
bankrupt  before  the  court  in  the  first  instance  the  personal 
service  of  a  subpoena  is  proper  and  necessary.  He  can  not 
be  brought  in  any  other  way.  But  he  may  voluntarily  enter 
his  appearance  and  thereby  he  waives  any  want  of  or  defect 
in  the  service  of  a  subpcjena.^^  A  subpoena  should  be  issued 
and  served  on  all  the  defendants  named  in  the  petition. 

'''■'  Equity  Rule  12.  ^•''  Equity  Rule  12;  B.  A.  1898,  Sec. 

Form  4  provides  for  an  order  to       i8r/;  Official  Form  No.  5,  Form  No. 
show    cause,    etc.,    directing   a    sub-       8,  post. 

poena.  '*''  Equity  Rule  14. 

80  R.  S.  Sec.  911;  Gen.  Ord.  3.  ^^  B.  A.  1898,  Sec.  18. 

8i  R.  S.  Sec.  911.  «8/m   re   Ulrick,    No.    14327    Fed. 

s-R.  S.  Sec.  912.  Cas.,  s.  c.  3   Ben.   355;  Johnson  v. 

83  B.  A.  1898,  Sec.  18.  Waters,   in   U.   S.  673;   Fitzgerald 

8*B.  A.  1898,  Sec.  iSd.  Co.    v.    Fitzgerald,    137    U.    S.    98; 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY.  20^ 

§  73.     The  service  of  a  subpoena. 

A  SLibpcena  and  copy  of  the  petition  are  served  by  the  mar- 
shal or  his  deputy,  or  some  other  person  speciahy  appointed 
by  the  court  for  that  purpose.^^ '  The  service  can  be  made  only 
within  the  territorial  jurisdiction  of  the  bankruptcy  court  issu- 
ing the  writ.^"  The  writ  can  not  be  served  by  the  marshal  of 
another  district  within  his  jurisdiction. 

The  manner  of  serving  the  subpoena  and  petition  is  pre- 
scribed by  Equity  Rule  13,  which  is  as  follows:  "  The  service 
of  all  subpoenas  shall  be  by  delivery  of  a  copy  thereof  by  the 
officer  serving  the  same,  to  the  defendant  personally,  or  by 
leaving  a  copy  thereof  at  the  dwelling-house  or  usual  place 
of  abode  of  each  defendant,  with  some  adult  person  who  is  a 
member  or  resident  in  the  family."  This  must  be  strictly 
followed  or  the  service  will  be  defective  and  may  be  set  aside.''^ 

Service  is  required  to  be  made  on  each  defendant  at  least 
five  days  before  the  return  day.""  Hence  in  a  suit  against  a 
husband  and  wife  each  must  be  personally  served.''^  In  a  suit 
against  an  infant  service  should  be  made  upon  him  personally, 
and  not  only  upon  his  guardian  or  parent."* 

Service  is  regularly  made  upon  a  corporation  by  serving  the 

Henderson   v.   Carbondale    Co.,    140  "^  Romaine    v.    Union    Insurance 

U.    S.    25 ;    Buerk    v.    Imhaeuser,   8  Co.,  28  Fed.  Rep.  635-6,  and  cases 

Fed.   Rep.  457.  there  collated;  Von   Roy  v.   Black- 

""  Equity    Rule    15,    R.    S.    Sees.  man,   No.   16997,  Fed.   Cas.,  s.   c.  3 

788-790;  Bray  v.  Cobb,  91  Fed.  Rep.  Woods  98. 

102 ;  United  States  v.  Montgomery,  ■>-  See  Official  Form  4,  Form  No. 

?  Dall.   335 ;   Hyman   v.   Chales,    12  7,   ()ost. 

Fed.    Rep.  855 ;   Deacon   v.    Sewing  »3  Q'Harra  v.  McConnell,  93  U.  S. 

Machine  Co.,   No.  3694a  Fed.  Cas.,  151. 
s.  c.  14  Reporter  43.  «♦  In    Woolridge    v.    McKenna,    8 

oojobbins  v.  Montague,  No.  7329  Fed.    Rep.    670,    Judge    Hammond 

Fed.  Cas.,  s.  c.  5  Ben.  422;  Paine  v.  said  :    "  But  never  is  service  of  proc- 

Caldwell,  No.  10674  Feci.  Cas.,  s.  c.  ess    upon    the    guardian    or    parent 

I    Hask.    452:    In    re    Hirsch,    No.  or  other  substituted  process  of  that 

6529.  Fed.  Cas.,  s.  c.  2  Ben.  493;  In  charact'-r  sufficient  to  Ijind  the  infant 

re    Litchfield.     13    Fed.     Rep.    868;  where  he  is  personally  an   essential 

Herndon  v.  Ridgway  et  al.,  17  How.  party  defendant."     See  also  O'Harra 

424.      But    see    Babbitt   v.    Burgess,  v    McConnell,  93   U.   S.   150,   where 

No.  693,  Fed.  Cas.,  s.  c.  2  Dill.  169.  service  was  made  on  the  husband  of 

Toland    v.    Sprague,    12    Pet.    300;  an  infant.     In  Smith  v.  Marshal,  2 

Butterworth  v.  Hill,  114  U.  S.   128;  Atk.  70,  a  service  on  the  mother  of 

Pacific  Railroad  v.  Missouri  Pacific  infants  was  held  good,  it  appearing 

Railway  Co.,  3  Fed.  Rep.  772.  that  the  infants  were  secreted. 


206  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

subpoena  upon  one  or  more  of  its  officers  within  the  district 
within  which  it  is  domiciled."^  It  can  not  be  made  on  an 
officer  of  a  nonresident  corporation  temporarily  within  the 
district/""'  It  will  be  observed  that  the  cases  cited  arose  under 
the  act  of  August  13,  i888,'''  where  it  is  provided  that  a  per- 
son shall  be  sued  only  in  the  district  of  his  residence.  The 
bankrupt  act  provides  that  a  person  may  be  adjudged  a  bank- 
rupt who  has  his  principal  place  of  business,  resides  or  had 
his  domicile  within  the  jurisdiction  of  the  court  for  the  pre- 
ceding six  months,  or  the  greater  portion  thereof,  or  aliens 
who  have  property  within  the  jurisdiction  of  the  court.''"  But 
the  general  rule  is  probably  applicable  to  bankruptcy  suits  that 
service  can  not  be  made  upon  a  nonresident  defendant  tempo- 
rarily within  the  district  for  the  purpose  of  attending  court, 
either  state  or  federal,"''  nor  upon  a  public  officer  in  the  dis- 
charge of  his  duty  within  the  district, ^"'^  nor  upon  a  person 
fraudulently  enticed  into  the  district  for  the  purpose  of  getting 
service  on  him.^"^  So  also  a  person  is  free  to  attend  upon 
bankruptcy  proceedings  as  a  witness  or  to  prove  a  debt,  etc., 
without  interference  by  service  of  process  of  any  kind."" 
Where  personal  service  on  a  resident  defendant  by  delivery 

95  Shaw  V.  Mining  Co.,  145  U.  S.  Rep.    167 ;    Kinne  v.   Lant,  68  Fed. 

444;  Galveston  Ry.  v.  Gonzales,  151  Rep.  436. 

U.  S.  496 ;  Southern   Pacific  Co.  v,  i""  Lyell    v.    Goodwin,    No.    8616, 

Denton,  146  U.  S.  202.  Fed.  Cas.,  s.  c.  4  McLean,  29;  see 

As  to  where  the  domicile  of  a  also  U.  S.  Const.,  Art.  i,  Sec.  6, 
corporation  is  located,  see  Inter-  with  reference  to  senators  and  con- 
state Com.  Com.  v.  Ry.  Co.,  57  Fed.  gressmen ;  Miner  v.  Markham,  28 
Rep.  948,  s.  c.  6  C.  C.  A.  653 ;  Har-  Fed.  Rep.  387. 

vey   V.   Richmond,    etc.,    R.    Co.,   64  ^"^  Union       Sugar      Refinery      v. 

Fed.    Rep.    19.     As   to   corporations  Mathieson,  No.   14397,  Fed.  Cas.,  s. 

created  by  two  states,  see  William-  c.   2   Cliff.   304;   Steiger  v.   Bonn,  4 

son  V.   Krohn,  66  Fed.   Rep.  662.  Fed.  Rep.  17;  Plimpton  v.  Winslow, 

»6  Goldey   v.   Morning  News,   156  9  Fed.  Rep.  365;   Blair  v.  Turtle,  5 

U.  S.  518;  Fidelity  Trust  and  Safe-  Fed.  Rep.  394. 

ty  Vault  Co.  v.  Mobile  St,  R.  R.  Co.,  102  Matthews  v.  Tuffts,  87  N.  Y. 

53  Fed.   Rep.  850.  568,    and   cases    cited    in   appellant's 

^'^  25  Stat,  at  L.  434.  brief ;  cases  cited  in  note  to  ex  parte 

98  B.  A.   1898,   Sec.  2,  clause  i.  Hawkins,  4  Ves.   Jr.  691. 

99  Kauffman  v.  Kennedy,  25  Fed.  Brett  v.  Brown,  13  Abb.  Pr.,  N. 
Rep.  785;  Parker  v.  Hotchkiss,  No.  S.  (N.  Y.)  295;  Sanford  v.  Chase, 
10739,  Fed.  Cas.,  s.  c.  i  Wall.  Jr.  3  Cowen  (N.  Y.)  381;  Norris  v. 
269;  Matthews  v.  Puffer,  10  Fed.  Beach,  2  Johns.  (N.  Y.)  294 ;  Lamp- 
Rep.  606;  Brooks  V.  Farwell,  4  Fed.  kin  v.  Starkey,  7  Hun   (N.  Y.)  479- 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY.  20/ 

of  a  copy  of  the  subpoena  to  him  is  impracticable  or  incon- 
venient, the  rule  provides  that  the  copy  shall  be  left  at  his 
house  or  usual  place  of  abode/°^  Leaving  a  copy  with  the 
clerk  of  a  hotel  at  which  the  defendant  resided  and  of  which 
he  was  proprietor  was  held  sufficient/"*  It  is  sufficient  under 
this  provision  if  a  copy  of  the  subpoena  is  left  "  with  some 
adult  person  who  is  a  member  or  resident  in  the  family  "  on 
the  steps  or  on  a  portico,  or  in  some  outhouse  or  barn  adjoin- 
ing to  or  immediately  connected  with  the  family  mansion/"^ 
But  it  seems  that  such  service  in  the  corner  of  the  yard,  one 
hundred  and  twenty-five  feet  away  from  the  house  is  not 
sufficient/"*'  The  copy  must  be  left  at  the  present  and  not  at 
some  former  residence  of  the  defendant/"'^ 

Voluntary  Appearance  Waives  Service. —  A  person 
may  voluntarily  appear  and  plead  without  being  served  with 
subpoena.  In  such  case  the  court  has  complete  jurisdiction 
over  him  as  though  he  had  been  legally  served  with  process/"' 
So  also  if  a  nonresident  of  the  district  comes  into  the  case 
for  the  purpose  of  proving  a  claim  he  is  subject  to  the  juris- 
diction of  the  court,  irrespective  of  his  place  of  residence/"* 
and  is  bound  to  take  notice  of  and  obey  the  orders  of  the 
court  to  the  same  extent  as  a  party  to  the  suit. 

§  74.     The  return  of  the  subpoena. 

On  or  before  the  day  named  in  the  writ  on  which  it  is 
returnable  the  officer  returns  it  to  the  clerk's  office,  with  his 
action  therewith  endorsed  on  the  back  of  it.  This  is  called 
the  marshal's  return  to  the  writ,""  which  should  state  the  day 

103  Equity  Rule  13.    See  also  Form  Cas.,  s.  c.  10  Blatch.  515;  In  re  Ul- 

No.  4.  rich,   No.    14327,   Fed.   Cas.,  s.  c.  3 

i»*/n   re  Risteen,    122    Fed.   Rep.  Ben.  355;  In  re  Columbia  Real  Es- 

732.  tate  Co.,  loi  Fed.  Rep.  965  ,  4  Am. 

105  Phoenix    Ins.    Co.   v.    Wulf,    i  B.   R.  411. 

Fed.  Rep.  775  ;  Kibbe  v.  Benson,  17  i"»  Clay  v.  Smith,  3  Pet.  411  ;  In  re 

Wall.  624.  Kylcr,   No.  7956,   Fed.  Cas.,  s.  c.  2 

106  Kibbe  V.  Benson,  17  Wall.  624,  Ben.  414:  In  re  Sabin,  No.  12195, 
where  the  service  considered  was  Fed.  Cas.,  s.  c.  18  N.  B.  R.  151  :  In 
made  under  a  state  statute  very  sim-  re  Pease,  29  Fed.  Rep.  595 ;  In  re 
ilar  to  Rule  13.  Anderson,  23  Fed.  Rep.  482. 

107  Hyslop  V.  Hoppock,  No.  6988,  no  See  Loveland's  Forms  of  Fed- 
Fed.  Cas.,  s.  c.  5  Ben.  447.  eral  Prac.  No.  333. 

108 /«  re  Kirtland,  No.  7851,  Fed. 


208  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

on  which  the  writ  was  received,  and  when,  where  and  how 
service  was  made.  It  is  then  signed  by  the  marshal,  or  in  the 
name  of  the  marshal  by  his  deputy.^"  The  truth  of  an  un- 
verified return  of  a  marshal  or  his  deputy  is  not  to  be  ques- 
tioned in  the  cause.^^"  If  he  makes  a  false  return  he  is  liable 
for  any  damage  that  may  be  sustained  in  consequence  of  it.^^^ 

When  a  writ  is  served  by  one  specially  appointed  for  that 
purpose,  proof  of  the  service  is  made  by  an  affidavit  of  the 
one  who  served  it.^^*  The  return  of  the  marshal  may  be 
amended  to  comply  with  the  facts,^^^  but  not  to  supply  a  fatal 
omission,^^"  as  the  absence  of  the  clerk's  signature,  or  the 
authority  in  whose  name  it  is  issued,  or  the  like. 

If  the  officer  has  failed  to  make  service  of  it  on  the  defend- 
ants, or  any  of  them,  he  should  return  the  writ  and  state  in 
his  return  the  reason  why  no  service  has  been  made,  as  that 
the  defendant  named  has  not  been  found  within  the  district. 
An  alias  subpoena  may  then  be  issued. ^^^ 

The  endorsement  on  the  writ  that  service  is  accepted  and 
signed  by  the  defendant,  dated  at  a  place  within  the  district, 
is  sufficient. ^^^  But  accepting  service  without  the  district  "  to 
have  the  same  effect  as  if  duly  served  on  me  by  a  proper 
officer  "    is  not  a  sufficient  service. ^^^ 

§  75.     Service  by  publication. 

Section  18  of  the  act  also  provides  that  "  in  case  personal 
service  can  not  be  made,  then  notice  shall  be  given  by  pub- 
lication in  the  same  manner  and  for  the  same  time  as  pro- 

m  See   Hill   v.    Gordon,  45    Fed.  614;     Peaslee     v.     Haberstro,     No. 

Rep.  278.  IC884,    Fed.    Cas.,    s.    c.    15    Blatch. 

11-  Phoenix  Insurance  Co.  v.  Wulf,  472;  United  States  v.  Rose,  14  Fed. 

I  Fed.  Rep.  775;  Von  Roy  v.  Black-  Rep.  681. 

man,   No.    16997,   Fed.   Cas.,   s.   c.  3  ^i"  Equity  Rule  14. 

Woods,  98;  McClaskey  v.  Barr,  45  11**  The     proper    endorsement     in 

Fed.    Rep.    151.  such  a  case  is  "I  promise  to  appear 

11'  See  Walker  v.  Robbins,  14  at  the  return  of  the  within  writ  and 
How.  584 ;  Von  Roy  v.  Blackman,  pray  the  court  to  enter  my  appear- 
No.  16997,  Fed.  Cas.,  s.  c.  3  Woods  ance  accordingly,"  and  signed  by  the 
98.  defendant.      This   form   is   sufficient 

!!•*  Equity  Rule  15.  if  made  by  a  nonresident  defendant 

11^  R.    S.    Sec.   954;    Phoenix    Ins.  without  the  district. 

Co.  V.  Wulf,  I  Fed.  Rep.  775-  ^^'''  Butterworth  v.  Hill,  114  U.  S. 

116  Dwiglit  V.  Merritt,  4  Fed.  Rep.  132-3. 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY,  2O9 

vided  by  law  for  notice  by  publication  in  suits  in  equity  in 
courts  of  the  United  States." 

The  reference  here  is  to  the  method  prescribed  by  section 
8  of  the  act  of  March  3,  1875/""  This  provides  that  it  shall 
be  lawful  for  the  court  to  make  an  order  directing  such  absent 
defendant  or  defendants  to  appear  and  plead,  answer  or  demur 
by  a  day  certain  to  be  designated,  which  order  shall  be  served 
on  such  absent  defendant  or  defendants,  if  practicable,  wher- 
ever found,  and  also  upon  the  person  or  persons  in  possession 
or  charge  of  the  property,  if  any  there  be,  or  where  such  per- 
sonal service  upon  such  absent  defendant  or  defendants  is  not 
practicable,  such  order  shall  be  published  in  such  manner  as 
the  court  may  direct,  not  less  than  once  a  week  for  six  con- 
secutive weeks,  and  in  case  such  absent  defendant  shall  not 
appear,  plead,  answer  or  demur  within  the  time  so  limited, 
or  within  such  further  time  to  be  allowed  by  the  court  in  its 
discretion,  and  upon  proof  of  the  service  and  publication  of 
such  order  and  of  the  performance  of  the  directions  c(Mitained 
in  the  same,  it  shall  be  lawful  for  the  court  to  entertain  juris- 
diction and  proceed  to  the  hearing  and  adjudication  of  such 
suit  in  the  same  manner  as  if  such  absent  defendant  had  been 
served  with  such  process  within  said  district.  The  method 
prescribed  by  this  section  should  be  strictly  followed. 

It  has  been  held  that  where  service  of  the  order  on  a  peti- 
tion in  involuntary  bankrujitcy  is  made  upon  the  defendant 
outside  the  district,  without  an  appearance  on  his  part,  no  or- 
der can  be  made  which  w'ill  apply  to  him  in  person,  but  the 
proceeding  will  affect  only  property  within  the  district  which 
can  come  into  possession  of  the  trustee.^""* 

§  76.     How  to  object  to  an  irregularity  of  service  or  subpoena. 

Objections  are  properly  raised  to  the  sufficiency  of  the 
service  by  a  motion  to  set  aside  the  return  of  the  marshal ;  ^"'  to 

^2"  18  Stat,  at  L.  470,  I  Supp.  84.  form  of  order,  see  In  re  Murray,  3 

See  also  Bracken   v.   Union   Pac.  Am.  B.  R.  601 ,  96  Fed.  Rep.  600. 

Ry.   Co.,  56  Fed.   Rep.  447,   s.  c.  5  '^-^*  In   re   Appel,    103    Fed.    Rep. 

C.   C.  A.  548;   Batt.  V.   Procter,  45  931,  2  N.  B.  N.  907. 

Fed.  Rep.  515;  Beach  v.  Mosgrove,  121  RQ^naine  v.  Union  Ins.  Co.,  28 

16  Fed.  Rep.  305.  Fed.  Rep.  634-5,  where  the  authori- 

For    practice    in    bankruptcy    and  ties  are   examined   and   the  practice 


210  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

an  irregularity  in  issuing  the  subpoena  by  a  motion  to  quash 
the  writ;^*^  to  an  order  for  substituted  service  improperly 
granted  by  a  motion  to  set  aside  the  order  or  service  or  both/^^ 
In  these  cases  the  motion  should  be  accompanied  with  a  spe- 
cial appearance  for  the  purpose  of  the  motion  only,  for  by  a 
general  appearance  the  defendant  submits  himself  to  the  juris- 
diction of  the  court/'^ 

§  77.     Interlocutory  orders  to  protect  the  estate. 

Upon  filing  the  petition  in  bankruptcy  it  may  be  desirable 
and  necessary  to  apply  to  the  court  for  a  temporary  order  to 
protect  and  preserve  the  estate  of  the  bankrupt  until  the 
appointment  of  a  trustee  competent  to  take  and  administer 
the  estate.  Such  application  may  be  made  in  voluntary  or 
involuntary  proceedings.  An  application  of  this  nature,  how- 
ever, is  very  rarely  made  in  a  case  of  voluntary  bankruptcy. 

It  is  obvious  that  in  every  case  of  involuntary  proceedings 
in  bankruptcy  a  considerable  interval  of  time  is  bound  to 
elapse  between  the  filing  of  the  petition  and  the  appointment 
and  qualification  of  a  trustee.  Thus,  after  the  petition  is 
filed  a  subpoena  must  issue,  be  served  and  returned. ^^*  The 
bankrupt  is  entitled  to  ten  days  thereafter  within  which  to 
plead. ^^^  He  may  demand  and  have  a  jury  trial.^'**  All  this 
takes  place  prior  to  the  adjudication.  Not  less  than  ten  nor 
more  than  thirty  days  after  the  adjudication  a  meeting  of 
creditors  is  required  to  be  held,  at  which  a  trustee  of  the 
bankrupt's  estate  is  chosen  by  the  creditors.^^'^  Upon  their 
failure  to  agree  the  trustee  is  appointed  by  the  court.^^^  If 
there  is  danger  during  this  interval  of  the  bankrupt  or  any 
other  person  wasting  or  disposing  of  the  property,  or  of  a 
creditor  obtaining  an  undue  advantage  over  the  other  cred- 

is     explained.       See    also     Fidelity  Co.  v.  Mobile  St.  Ry.  Co.,  53  Fed. 

Trust  &   Safety  Vault   Co.  v.   Mo-  Rep.   850;    Bowen   v.    Christian,    16 

bile  St.  Ry.  Co.,  53  Fed.  Rep.  850 ;  Fed.  Rep.  730 ;  Rogers  v.  Riessner, 

Von  Roy  v.    Blackman,  No.   16997,  3^   Fed.  Rep.  591. 

Fed.    Cas.,  s.  c.  3  Woods,  98 ;  Am.  ^^^  /,j  y(,  Smith,  9  Am.  B.  R.  98. 

Bell  Tel.   Co.  v.   Pan  Electric  Tel.  "43.  A.  1898,  Sec.  i8a. 

Co.,  28  Fed.  Rep.  625 ;  Pacific  R.  Co.  125  b.  A.  1898.  Sec.  i8b. 

V.  Missouri  R.  R.  Co.,  3  Fed.  Rep.  i-«  B.  A.  1898,  Sec.  190. 

772 ;  Gregory  v.  Pike,  79  Fed.  Rep.  ^-^  B.  A.    1898,  Sees.  44  and  55 ; 

520,  s.  c.  C.  C.  A.  Gen.  Ord.  13. 

122  Fidelity  Trust  &  Safety  Vault  128  b.  A.  1898,  Sec.  44. 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY.  211 

iters  either  by  judicial  process  or  otherwise,  it  is  the  duty  of 
the  court,  upon  proper  application,  to  prevent  such  injury  by 
making  such  orders  as  may  be  most  beneficial  to  the  estate 
and  the  creditors  generally. 

There  are  four  ordinary  modes  of  proceedincr  for  this  pur- 
pose: 

First.  The  court  is  expressly  authorized  to  appoint  re- 
ceivers or  the  marshals,  upon  application  of  parties  in  inter- 
est, in  case  the  courts  shall  find  it  absolutely  necessary,  for 
the  preservation  of  estates,  to  take  charge  of  the  property  of 
bankrupts  after  the  filing  of  the  petition  and  until  it  is  dis- 
missed or  the  trustee  is  qualified.^"^ 

The  court  will  not  appoint  a  receiver  except  upon  applica- 
tion of  a  party  in  interest  for  cause  sliown.  The  application 
may  be  by  motion  or  petition  sup])orted  by  affidavits. 

The  court  may  authorize  the  business  of  a  bankrupt  to  be 
conducted  for  limited  periods  by  receivers,  the  marshals  or 
trustees,  if  necessary  in  the  best  interests  of  the  estates.'''"' 

Second.  The  court  may  order  a  suit,  which  is  founded 
upon  a  claim  from  which  a  discharge  Avould  be  a  release,  and 
which  is  pending  against  a  person  at  the  time  of  the  filing  of 
a  petition  against  him,  to  be  stayed  until  after  an  adjudica- 
tion or  the  dismissal  of  the  petition.  If  such  i:)erson  is  ad- 
judged a  bankrupt,  such  action  may  be  further  stayed  until 
twelve  months  after  the  date  of  such  adjudication,  or,  if  with- 
in that  time  such  person  applies  for  a  discharge,  then  until 
the  question  of  such  discharge  is  determined.'^' 

Third.  The  court  may  restrain  the  debtor  or  any  other 
person  or  persons  from  making  any  transfer  or  disposition  of 
any  part  of  the  debtor's  projjerty,  not  excepted  by  the  statute 
from  the  operation  thereof,  and  from  any  interference  there- 
with.'""    This  proceeding  is  further  considered  in  section  78. 

129  B.   A.    1898,   Sec.   2,   clause   3.  9    N.    B.    R.    441;    M.    &    M.    Nat. 

See     Sec.     7ya,    post;     Lazarus     v.  Bank  v.  Brady's  Iron  Co.,  No.  9018, 

Hanks,  7  Cin.  Court  Index,  No.  85,  Fed.  Cas.,  s.  c.  5  N.  B.  R.  491. 

Jan.    13,   1899:   Lansing  v.   Manton,  ^-""^  B.  A.  1898,  Sec.  2,  clause  5. 

No.  8077.  Fed.  Cas.,  s.  c.  14  N.  B.  R.  i^i  B.   A.   1898.   Sec.   iia.      As  to 

127;   In   re   Cooke,    No.    3167,   Fed.  staying  suits  see  also  Sec.  22,  a«/i?. 

Cas..  s.  c.  30  Leg.  Int.  404 :  Keenan  ^^^  B.  A.  1898,  Sec.  2,  clause  15. 
V.  Shanan,  No.  7640  Fed.  Cas.,  s.  c. 


212  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

Fourth.  The  court  may  in  a  proper  case  issue  a  warrant 
to  a  marshal  to  seize  and  hold  the  property  of  a  debtor  subject 
to  further  orders.  Proceedings  of  this  nature  are  further  con- 
sidered in  section  79. 

Applications  for  orders  of  this  nature  may  be  made  by 
petition  or  motion  supported  by  affidavits.  The  application 
should  be  made  to  the  judge  and  not  to  a  referee.  But  the 
judge  may  refer  such  an  application  or  any  specified  issue 
arising  thereon  to  the  referee  to  ascertain  and  report  the 
facts."^  In  case  the  judge  is  absent  from  the  judicial  district, 
sick  or  unable  to  act,  the  clerk  may  certify  this  fact  to  a  referee 
who  may  exercise  the  powers  of  the  judge  for  taking  posses- 
sion, and  releasing  the  property  of  the  bankrupt.^^* 

§  77a.  Receivers  in  bankruptcy. 

The  court  is  expressly  authorized  to  appoint  receivers  or 
the  marshals,  upon  application  of  parties  in  interest,  in  case 
the  court  shall  find  it  absolutely  necessary,  for  the  preserva- 
tion of  estates,  to  take  charge  of  the  property  of  the  bankrupt 
after  the  filing  of  the  petition  and  until  it  is  dismissed  or  the 
trustee  is  qualified."^  The  courts  have  frequently  exercised 
this  power  under  the  present  act.^^" 

The  application  for  a  receiver  should  be  made  by  a  party  in 
interest.  The  application  may  be  made  by  petition  or  motion 
supported  by  affidavits."^  The  petition  should  show  that  it 
is  necessary  for  the  preservation  of  the  estate  that  a  receiver 
be  appointed.  A  receiver  is  regularly  appointed  by  the  judge 
but  a  referee  has  power  to  make  the  appointment.^^^  The  ap- 
pointment should  not  be  made  until  the  adverse  interests  have 

133  Gen.  Ord.  12.  Booneville  Nat.  Bank  v.  Blakey  (C. 

134  B.  A.  1898,  Sec.  38,  clause  3.  C.  A.,  7th  Cir.),  107  Fed.  Rep.  891 , 

135  B.  A.  1898,  Sec.  2,  cl.  3.  6  Am.  B.  R.  13;  In  re  Rogers   (C. 
136 /n   re    Fixen   &    Co.,    96    Fed.  C.  A.,  7th  Cir.),  125  Fed.  Rep.  169, 

Rep.  748,  2  Am.  B.  R.  822;  Ethe-  it  Am.  B.  R.  — . 

ridge   Furniture   Co.,   92   Fed.   Rep.  i^'^  For  form  of  petition,  see  Form 

329,  I  Am.  B.  R.  112;  In  re  Sievers,  No.  23. 

91  Fed.  Rep.  366,  i  Am.  B.  R.  117;  i^^  7n  re  Florcken,  107   Fed.  Rep. 

In  re  Kelly  Dry  Goods  Co.,  102  Fed.  241 ;  5  Am.  B.  R.  802 ;  In  re  Maher, 

Rep.  747,  4  Am.  B.  R.  528;  In  re  reported    p.    117,   note,   ante;   In  re 

Reliance  Storage  &  Warehouse  Co.,  Kelly  Dry  Goods  Co.,  102  Fed.  Rep. 

100  Fed.  Rep.  619;  In  re  Florcken,  747;  4  Am.  B.  R.  528. 

107  Fed.  Rep.  241  ,  5  Am.  B.  R.  802 ; 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY.  213 

notice  and  an  opportunity  to  be  heard/"''  The  receiver  must 
quahfy  and  give  bond  before  he  takes  possession  of  the  prop- 
erty."** It  has  been  intimated  that  a  court  will  not  appoint 
an  ancillary  receiver  in  aid  of  another  court  which  is  admin- 
istering the  estate  of  a  debtor."^ 

A  receiver  in  bankruptcy  derives  his  power  from  the  statute 
and  possesses  such  power  only  as  the  statutes  confer  or  such 
as  may  be  fairly  inferred  from  the  general  scope  of  the  law  of 
his  appointment."-  He  is  not  a  general  receiver  in  the  sense 
that  receivers  are  appointed  by  courts  of  equity.  A  receiver 
in  bankruptcy  is  a  temporary  custodian  until  a  trustee  is  ap- 
pointed. He  does  not  exercise  the  powers  of  a  trustee.""  The 
court  may  order  him  to  sell  property  of  the  bankrupt  and 
may  appoint  appraisers  when  such  a  course  is  necessary  for 
the  preservation  of  the  value  of  the  estate,"^  or  to  take  any 
other  steps  incident  to  the  protection  of  the  property  in  his 
custody."*  A  receiver  may  insure  property  in  his  possession. 
The  court  will  not  authorize  a  receiver  to  take  possession  of 
property  held  and  claimed  adversely  by  third  parties,"^  or  to 
institute  actions  for  the  recovery  of  property  claimed  to  belong 
to  the  bankrupt's  estate.^^"  A  receiver  may  apply  for  an  in- 
junction to  stay  suit  for  removal  of  goods  of  bankrupt  from 
leased  premised  for  non-payment  of  rent,  when  the  receiver 
is  in  possession  of  such  goods. ^^^ 

The  statute  provides  that  the  court  may  authorize  the  busi- 
ness of  the  bankrupt  to  be  conducted  for  limited  periods  by 
receivers  if  necessary  in  the  best  interests  of  the  estates."- 

i"**  Ross-Meehan    Foundry   Co.  v.  98  Fed.  Rep.  290 .  3  Am.  B.  R.  424 : 

Southern   Car  &   Foundry  Co.,    124  In  re  Kelly  Dry  Goods  Co.,  102  Fed. 

Fed.  Rep.  403,  10  Am.  B.  R.  624.  Rep.  747 ,  4  Am.  B.  R.  528. 

»*"  Beach   v.  Macon  Grocery  Co.,  1** /h  re  Hamilton  (Rei),  4  Am. 

116  Fed.  Rep.  143,  8  Am.  B.  R.  751.  B.  R.  543,  2  I^.  B.  N.  959. 

^•*i  Ross-Meehan   Foundry   Co.   v.  i*»  Beach  v.  Macon  Grocery  Co., 

Southern   Car  6c  Foundry  Co.,   124  116  Fed.  Rep.  143,  8  Am.  B.  R.  751. 

Fed.  Rep.  403.  iso  Booneville  Nat.  Bank  v.  Blak- 

1*2  Booneville  Nat.  Bank  v.  Blak-  ey    (C.   C.  A.,  7th   Cir.),   107   Fed. 

ey,  107  Fed.  Rep.  801  .  6  Am.  B.  R.  Rep.  891  ;  6  Am.  B.  R.  13. 

^3-  But   see   In   re   Fixen   &   Co.,   96 

1*3 /„  re   Rogers    (C.   C.   A.,   7th  Fed.  Rep.  748,  2  Am.  B.  R.  822. 

Cir.).  125  Fed.  Rep.  169,  11  Am.  B.  isi /„  ,.^  Kleinhan.s,  113  Fed.  Rep. 

R.  — :   /)/  re  Becker,  98  Fed.  Rep.  107,  7  Am.  B.  R.  604. 

407.  3  Am.  B.  R.  412;  In  re  Steyer,  i^^- B.  A.  1898,  Sec.  2,  cl.  5. 


214  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

Where  there  is  a  delay  in  the  appointment  of  the  trustee  and 
it  is  for  the  best  interests  of  the  estate  that  the  business  be 
conducted  by  the  receiver,  the  court  may  authorize  such  re- 
ceiver to  borrow  money  and  issue  receivers'  certificates.  This 
should  only  be  done  when  it  is  made  to  appear  that  it  is  for  the 
best  interests  of  the  estate  to  continue  the  business  and  that  it 
cannot  be  continued  without  borrowing  money  for  that  pur- 
pose. 

The  compensation  of  receivers  is  an  expense  of  the  adminis- 
tration of  the  estate  and  is  entitled  to  priority  under  Sec.  64b 
of  the  bankrupt  act.  The  amount  of  compensation  of  re- 
ceivers rests  in  the  discretion  of  the  .court  to  be  exercised  upon 
the  consideration  of  particular  services  rendered.  The  amend- 
ment of  1903  provides  for  compensation  for  services  of  re- 
ceivers not  greater  than  that  allowed  trustees  for  similar  serv- 
ices.^^^  A  receiver  has  been  allowed  two  hundred  and  fifty 
dollars  for  one  hundred  and  nine  days  in  charge  of  three 
stores  containing  a  stock  of  general  merchandise,  and  one  dol- 
lar and  ninety-five  cents  a  day  for  each  store  for  his  actual 
expenses  in  taking  care  of  the  property  and  clerk  hire.^^* 

Objections  to  receivers'  reports  should  be  made  promptly. 
The  court  will  not  allow  a  re-examination  after  a  report  has 
been  approved  by  the  creditors  and  a  period  of  acquiescence 
has  elapsed  thereafter.^^^ 

§   78.     Temporary  injunction  or  restraining  order. 

One  means  of  protecting  the  estate  of  the  bankrupt  men- 
tioned in  the  last  section  is  by  a  temporary  injunction  or 
restraining  order.  The  court  of  bankruptcy  is  expressly  au- 
thorized to  make  such  orders,  issue  such  process  and  enter 
such  judgments  in  addition  to  those  specifically  provided  for 
as  may  be  necessary  for  the  enforcement  of  the  provisions  of 
the  bankrupt  statute.^^"  Under  this  provision  the  court  may, 
upon  proper  application  and  cause  shown,  restrain  the  debtor 
or  any  other  party  to  the  bankruptcy  proceedings  from  mak- 

153  B.    A.    1898.    Sec.   2,   cl.    5,   as  ^^^  In     re     Reliance     Storage     & 

amended  February  5.  1903 ,  32  Stat.  Warehouse  Co.,  100  Fed.  Rep.  619 , 

at  L.  797.  4  Am.  B.  R.  49. 

154 /m  re  Scott,  99  Fed.  Rep.  404,  i^e  3.  A.  1898,  Sec.  2,  clause  15. 
3  Am,  B.  R.  625. 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY.  21 5 

ing  any  transfer  or  disposition  of  any  part  of  the  debtor's 
property  not  excepted  by  the  statute  from  the  operation  there- 
of, or  from  any  interference  therewith/^'  It  has  been  held 
that  a  court  of  bankruptcy  can  not  restrain  a  stranger  from 
dealing  with  property  in  his.  possession  which  he  claims  to 
own/^^* 

The  mode  of  applying  for  a  temporary  restraining  order  is 
regularly  by  a  separate  petition  or  motion  supported  by  affi- 
davits/^^ The  petition  is  entitled  and  filed  in  the  bankruptcy 
proceedings.  It  should  be  positive  in  its  averments,  and  not 
on  information  and  belief/^^  and  should  contain  a  description 
of  the  property.  It  must  be  verified  by  the  oath  of  the  peti- 
tioner or  his  agent  or  attorney.^*"'  A  bill  in  equity  has  also 
been  issued.^''^  The  hearing  may  be  had  ex  parte.  An  order 
may  be  passed  and  an  injunction  issued  without  notice  to  the 
adverse  party.^®'  The  injunction  or  restraining  order  is  mere- 
ly temporary,  but  continues  until  vacated  by  order  of  the  court. 
The  present  statute  does  not  limit  the  duration  of  such  in- 
junction. The  writ  of  injunction  issues  out  of  the  court 
under  the  seal  thereof,  and  is  tested  by  the  clerk.^**^     The  writ 

i'*'^  Beach  v.   Macon   Grocery  Co.  from    disposing    of    or    interfering 

(C.  C.  A.,  5th  Cir.),  ii6  Fed.  Rep.  with  the  property  of  the  debtor. 

143,  8  Am.  B.  R.  751;  In  re  Gut-  ist* /„   ,.^   Ward,    104   Fed.    Rep. 

willig,    90    Fed.    Rep.    475;    Blake,  985,  5  Am.  B.  R.  215,  3  N.  B.  N. 

Moffitt  &  Towne  v.  Francis-Valen-  216. 

tme  Co.,  89  Fed.  Rep.  691.  ^^^  Irving    v.    Hughes,    No.    7076, 

Stengel-Rothschild      v.       Leidigh  Fed.  Cas.,  s.  c.  2  N.  B.  R.  61  ;  Cred- 
Carriage   Co.,    Southern   District  of  itors  v.  Cozzens,  No.  3378,  Fed.  Cas., 
Ohio  (not  reported).     The  Leidigh  s.  c.  3  N.  B.  R.  281. 
Carriage  Co.,  of  Dayton,  O.,  on  July  ^^^  In    re    BIoss,    No.    1569,    Fed. 
13,  1898,  made  an  assignment  with  Cas.,  s.  c.  4  N.  B.  R.  427. 
preferences  in  the  form  of  confessed  ^^^  In  re  Fendley,  No.  4728,  Fed. 
judgments  to  the  amount  of  some-  Cas.,  s.  c.  10  N.  B.  R.  250. 
thing  like  fifty  thousand  dollars.  At-  "^  Blake,    Moffitt    &    Towne,    v. 
tnchments    were    issued    and    levies  Francis-Valentine  Co.,  89  Fed.  Rep. 
made   under   these   judgments  prior  691  ;  In  re  Fendley,  No.  47^8,  Fed. 
to  the  assignment,  and  some  of  the  Cas.,  s.  c.  10  N.  B.  R.  250;   Black- 
property  had  been   sold,  but  funds  burn    v.    Stannard,    No.    1468,    Fed. 
arising  therefrom  had  not  been  dis-  Cas.,  s.  c.  5  Law  Rep.  250. 
tributed.    Upon  an  application  for  a  ^^^  /„  ,-^  Muller,   No.  9912,  Fed. 
temporary  injunction  filed   with  the  Cas.,    s.    c.    Deady,    513,    and    cases 
petition     of     the     creditors.     Judge  cited   in  the  opinion. 
Thompson  enjoined  the  assignee,  the  '"^  Rev.  Stat.,  Sec.  911  ;  Gen.  Ord. 
sheriff   and   the   preferred   creditors  3. 


2l6  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

is  then  served  upon  the  ])arties  by  the  marshal  and  a  return 
made  as  upon  other  process. 

Any  party  having  an  interest  in  the  property  covered  by 
the  injunction  may  appear  and  move  for  a  dissolution  there- 
of. At  the  hearing  affidavits  and  counter  affidavits  may  be 
read  by  either  party.^"*  When  the  affidavits  filed  upon  a  mo- 
tion to  dissolve  an  injunction  do  not  sustain  the  allegation  of 
the  petition,  but  disclose  the  existence  of  another  ground  for 
an  injunction,  the  petition  may  be  amended  so  as  to  cover 
that  ground. ^*'^  It  can  not  be  urged  as  a  ground  for  dissolving 
an  injunction  that  the  petition  does  not  allege  at  what  time 
the  act  of  bankruptcy  was  committed  or  contain  any  positive 
charge  of  the  act  of  bankruptcy,  or  because  there  is  an  irreg- 
ularity in  the  proceedings.  These  are  also  matters  that  may 
be  corrected  by  amendment.  Nothing  would  be  gained  by 
dissolving  the  injunction  and  then  reissuing  upon  the  same 
state  of  facts.  In  order  to  obtain  the  dissoluti-on  of  an  injunc- 
tion the  prima  facie  case  made  out  by  the  petition  and  affi- 
davits in  support  thereof  must  be  rebutted.^*"' 

§  79.     The  seizure  of  the  debtor's  property. 

Whenever  a  petition  is  filed  by  any  person  for  the  purpose 
of  having  another  adjudged  a  bankrupt  an  application  may 
be  made  to  take  charge  of  and  hold  the  property  of  the  alleged 
bankrupt,  or  any  part  of  the  same,  prior  to  the  adjudication 
and  pending  the  hearing  of  the  petition.^"  There  was  no 
provision  corresponding  to  this  one  in  the  former  bankrupt 
apts.  The  application  may  be  by  petition  or  motion  sup- 
ported by  an  affidavit  that  the  bankrupt  against  whom  an 
involuntary  petition  has  been  filed  and  is  pending  has  com- 
mitted an  act  of  bankruptcy,  or  has  neglected,  or  is  neglect- 
ing, or  is  about  to  so  neglect  his  property  that  it  has  thereby 
deteriorated,  or  is  thereby  deteriorating,  or  is  about  thereby 
to  deteriorate  in  value.^"^  If  satisfactory  proof  is  made  by  the 
applicant  the  judge  may  issue  a  warrant  to  the  marshal  to 

164 /«    re    Bloss,    No.    1562,  Fed.       Cas.,  s.  c.  4  Ben.  152;  In  re  Mullet, 

Cas.,  s.  c.  4  N.  B.  R.  147.  No.  9912,  Fed.  Cas.,  s.  c.  Deady,  513. 

105 /h    re    Bloss,    No.    1562,  Feti.           i"^  B.  A.  1898,  Sec.  3^  and  Sec.  69. 

Cas.,  s.  c.  4  N.  B.  R.  147.  i''^  B.  A.  1898,  Sec.  69 :  In  re  Kel- 

166 /„    fg   Binns,    No.    1422,  Fed.       ly,  91   Fed.  Rep.  504, 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY.  21/ 

seize  and  hold  the  property  of  the  bankrupt,  or  any  part  of 
it,  subject  to  further  orders."^ 

The  apphcation  must  regularly  be  made  to  the  judge.  A 
referee  is  authorized  to  exercise  the  powers  of  the  judge  for 
the  taking  possession  and  releasing  of  the  property  of  the 
bankrupt  in  the  event  of  the  issuance  by  the  clerk  of  a  certi- 
ficate showing  the  absence  of  a  judge  from  the  judicial  dis- 
trict, or  the  division  of  the  district,  or  his  sickness  or  inability 
to  act.^'*' 

Before  a  warrant  can  be  issued  the  petitioner  applying 
therefor  must  enter  into  a  bond/^^  with  at  least  two  good  and 
sufficient  sureties,  who  shall  reside  within  the  jurisdiction  of 
said  court,  to  be  approved  by  the  court  or  a  judge  thereof,  in 
such  sum  as  the  court  shall  direct,  conditioned  for  the  pay- 
ment, in  case  such  petition  is  dismissed,  to  the  respondent, 
his  or  her  personal  representatives,  all  costs,  expenses  and 
damages  occasioned  by  such  seizure,  taking  and  detention  of 
the  property  of  the  alleged  bankrupt.^"  If  such  petition  be 
dismissed  by  the  court  or  withdrawn  by  the  petitioner,  the 
respondent  or  respondents  shall  be  allowed  all  costs,  counsel 
fees,  expenses  and  damages  occasioned  by  such  seizure,  tak- 
ing or  detention  of  such  ijroperty.^"  Counsel  fees,  costs,  ex- 
penses and  damages  shall  be  fixed  and  allowed  by  the  court 
and  paid  by  the  obligors  in  such  bond.^'^^ 

When  the  marshal  receives  a  warrant  general  in  its  nature 
it  is  his  duty  to  take  possession  of  the  bankrupt's  property, 
if  the  warrant  commands  him  to  seize  certain  specified  prop- 
erty it  is  his  duty  to  take  possession  only  of  the  property 
specified.  He  is  not  entitled  to  seize  property  which  has 
been  transferred  by  a  bankru]:)t  to  another  person.  Such 
transfers  are  voidable,  but  the  title  is  in  the  transferee  and 
will  not  ordinarily  be  questioned  until  after  the  adjudication."* 

1'"-"  B.  A.  1898,  Sec.  69.  N.  B.  R.  403,  s.  c.  3  Cent.  Law  Jour. 

"«B.  A.   1898.  Sec.  38,  clause  3.  478. 

'^1  B.  A.  1898,  Sec.  3^  and  Sec.  69.  In  re  Rockwood,  91  Fed.  Rep.  363. 

'"-B.  A.  1898,  Sec.  3^.  Judge    Shiras,   construing   this    scc- 

\T.\  In  re  Harthill,  No.  6161,  Fed.  tion,  says:     "It  does  not  authorize 

Cas.,    s.    c.    4    Ben.    448;    Doyle    v.  the  court  to  issue  a  warrant  to  the 

Sliarpe,  74  N.   Y.   154,  affirming  41  marshal   to  take  the  property  away 

N.  Y.  Super.  312;  43  id.  545.  ^rom  the  possession  of  a  third  party 

But  see  Stevenson  v.  McLaren,  14  who  holds  it  under  a  claim  of  right 


2l8 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


Ill  such  cases  the  transferee  may  obtain  an  order,  upon  a  peti- 
tion filed  in  the  court  of  bankruptcy  for  that  purpose,  to  have 


to  title.  According  to  the  showing 
made  in  the  application  the  mortga- 
gee has  a  good  title  to  and  the  right 
to  possession  of  the  property  in 
question  unless  such  title  and  right 
are  defeated  under  the  provisions  of 
the  bankrupt  law.  Whether  these 
provisions  will  become  operative 
against  the  title  and  right  of  the 
mortgagee  depends  primarily  upon 
the  question  whether  Rockwood  will 
be  adjudicated  to  be  a  bankrupt  on 
the  petition  of  the  creditors,  which 
is  set  down  for  hearing  at  a  future 
day.  The  mortgagee,  Mary  Boeh- 
len,  is  not  a  party  to  these  proceed- 
ings, and  in  my  judgment  Sec.  69 
does  not  confer  any  authority  on 
the  court  to  arbitrarily  deprive  her 
of  the  possession  of  property  held 
by  her  under  claim  of  title.  It  can 
not  be  judicially  known  at  the  pres- 
ent time  whether  Rockwood  will  or 
will  not  be  adj  udged  a  bankrupt,  and 
until  he  is  so  adjudged  there  is  no 
ground  shown  for  attacking  the  pos- 
session of  the  property  now  held 
by  the  mortgagee.  Sec.  69  is  in- 
tended to  authorize  the  court  to  pre- 
vent the  wasting,  deterioration,  or 
loss  of  the  bankrupt's  property  in 
his  possession,  pending  the  hearing 
on  the  petition  for  adjudication,  but 
it  is  not  intended  to  authorize  the 
taking  away  from  third  parties  of 
property  to  which  they  assert  title. 
The  section  provides  that  before  the 
issuance  of  a  warrant  of  seizure  a 
bond  must  be  executed  conditioned 
to  indemnify  the  bankrupt  for  such 
damages  as  he  may  sustain  if  the 
seizure  be  wrongfully  obtained,  it 
being  further  provided  that  the  prop- 
erty seized  shall  be  released  if  the 
bankrupt  give  bond  conditioned  to 
turn  over  the  property  or  its  value 
to  the  trustee  in  case  he  is  adjudged 
a  bankrupt. 


"  These  provisions  clearly  show 
that  the  section  is  intended  to  apply 
only  to  seizure  of  property  in  pos- 
session of  the  bankrupt,  and  it  does 
not  authorize  the  seizure  of  property 
which  has  passed  from  the  posses- 
sion of  the  bankrupt  before  the  in- 
stitution of  proceedings  under  the 
act.  In  a  proper  case  and  upon  a 
proper  showing  an  injunction  or  re- 
straining order  may  be  obtained  up- 
on an  application  to  which  the  third 
person  is  made  a  party,  restraining 
the  sale  or  other  disposition  of  the 
property  until  the  hearing  upon  the 
petition  for  adjudication  and  the 
appointment  of  the  trustee,  but  the 
proper  showing  therefor  must  be 
made. 

"  The  present  application  for  a 
warrant  directing  the  marshal  to 
seize  property  in  the  possession  of 
the  mortgagee  must  be  refused  for 
the  reasons  stated."  See  also  In  re 
Kelly,  91  Fed.  Rep.  504. 

In  Goldman,  Bettman  &  Co.  v. 
Smith,  District  Court  for,  etc.,  7 
Cin.  Court  Index,  No.  70,  Dec.  24, 
1898,  s.  c.  Vol.  41  W.  L.  Bui.  4,  a 
petition  for  involuntary  bankruptcy 
was  filed  by  four  Cincinnati  credi- 
tors against  one  Newton  M.  Smith. 
It  was  alleged  that  some  four  weeks 
before  the  filing  of  the  petition 
Smith  came  to  Cincinnati,  in  pur- 
suance of  a  scheme  to  defraud 
his  creditors,  and  with  money  that 
was  advanced  him  by  his  brother-in- 
law,  paid  his  creditors  such  amounts 
as  he  was  then  owing  them  on  ac- 
count. He  immediately  purchased 
large  amounts  of  merchandise,  and 
two  weeks  thereafter  transferred  to 
his  brother-in-law  his  entire  stock 
including  the  merchandise  last  pur- 
chased. The  conveyance  was  found- 
ed upon  a  pretended  consideration  of 
a  pre-existing  debt,  consisting  large- 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY.  219 

such  property  released  from  the  marshal's  possession.^'*  The 
marshal  is  not  justified  in  taking  any  property  which  belongs 
to  a  third  person.  If  he  does  so,  it  has  been  held  that  his 
warrant  will  protect  him  only  so  far  as  the  goods  belong  to 
the  bankrupt.^^^ 

In  case  the  bankrupt  desires  to  have  possession  of  his  prop- 
erty until  the  adjudication,  and  a  bond  has  been  given  by  the 
petitioning  creditors,  the  property  must  be  released  to  him 
upon  his  giving  a  bond  in  a  sum  which  is  fixed  by  the  judge, 
with  such  sureties  as  he  shall  approve,  conditioned  to  turn  over 
such  property  or  pay  the  value  thereof  in  money  to  the  trus- 
tee in  the  event  of  his  being  adjudged  a  bankrupt  pursuant 
to  such  petition."** 

§  80.     Appearing  for  the  purpose  of  becoming  a  party  to  the 
proceedings. 

Creditors  other  than  original  petitioners  may  at  any  time 
enter  their  appearance  and  join  in  the  petition,  or  file  an 
answer  and  be  heard  in  opposition  to  the  prayer  of  the  peti- 
tion."^ This  may  be  done  more  than  four  months  after  the 
act  of  bankruptcy  was  committed."^  The  word  creditor,  as 
used  in  the  bankrupt  statute,  includes  anyone  who  owns  a  de- 
mand or  claim  provable  in  bankruptcy,  and  may  include  his 
duly  authorized  agent,  attorney  or  proxy."" 

A  person   who   has   no   provable   claim   is   not   entitled   to 

ly  of  the  money  advanced  as  above.  ^'^  B.  A.  1898,  Sec.  69. 

Upon  application  of  the  petitioning  1^^  B.    A.    1898,    Sec.    S9f ;    In    re 

creditors  and  proof  of  the  facts  by  Bates  Mach.  Co.,  91  Fed.  Rep.  625 ; 

affidavit,  Judge  Barr  issued  an  order  lu  re  Romanow,  92  Fed.  Rep.  510; 

directing  the  marshal   to  forthwith  In    re    Bedingfield,    96    Fed.    Rep. 

seize  the  property  and  hold  it,  sub-  190 ,  2  Am.  B.  R.  355 ;  In  re  Mercur, 

ject  to  the  further  order  of  court,  9.S  Fed.  Rep.  634,  2  Am.  B.  R.  626; 

the  creditors  being  required  to  give  In  re  Stein   (C.  C.  A.,  2d  Cir.),  105 

bond  for  the  value  of  the  property.  Fed.    Rep.   749,   5   Am.   B.   R.   288; 

it*/m  re  Harthill,  No.  6161,  Fed.  In  re  Ryan,  7  Am.  B.  R.  562. 

Cas.,  s.  c.  4  Ben.  448.  i^s  In  re  Stein  (C.  C.  A.,  2d  Cir.), 

IT''  Marsh  v.  Armstrong,  20  Minn.  105  Fed.  Rep.  749,  5  Am.  B.  R.  288; 

81,  s.  c.  II  N.  B.  R.  125;  In  re  Ha-  /"  re  Mammouth  Pine  Lumber  Co., 

vens,    No.  6230,   Fed.    Cas.,   s.   c.   8  109  Fed.  Rep.  308.  8  Am.  B.  R.  651, 

Ben.  309;  In  re  Marks,    No.  909S,  ""  B.    A.    1898,    Sec.    i,  clause  9. 

Fed.  Cas.,  s.  c.  2  N.  B.  R.  S7S :  In  re  See  also  Sec.  66,  ante. 
Mnller,   No.   9912,   Fed.   Cas.,   s.   c. 
Deady,  513. 


220  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

become  a  party  for  the  purpose  of  opposing  the  prayer  of  the 
petition/^"  When  a  creditor  intervenes  for  the  purpose  of 
joining  in  the  petition  he  has  a  right  to  prosecute  the  original 
petition  in  the  same  manner  as  the  petitioning  creditors  could 
have  done/*^  When  a  creditor  intervenes  for  the  purpose  of 
opposing  the  prayer  of  the  petition  he  has  the  same  right  as 
any  other  party  respondent/^^  A  preferred  creditor  may  so 
intervene  without  surrendering  his  preference/®^  An  inter- 
vening creditor  has  a  right  to  insist  upon  a  trial,  although  the 
petitioning  creditors  may  consent  to  continue  the  case/®* 

The  proceedings  may  be  conducted  by  the  bankrupt  in  per- 
son in  his  own  behalf,  or  by  a  petitioning  or  opposing  cred- 
itor ;  but  a  creditor  will  only  be  allowed  to  manage  before 
the  court  his  individual  interest.  Every  party  may  appear 
and  conduct  the  proceedings  by  attorney,  who  shall  be  an 
attorney  or  counsellor  authorized  to  practice  in  the  circuit  or 
district  court/^^  The  name  of  the  attorney  or  counsellor,  with 
his  place  of  business,  shall  be  entered  upon  the  docket,  with 
the  date  of  the  entry.  All  papers  or  proceedings  offered  by 
an  attorney  to  be  filed  shall  be  endorsed  as  above  required, 
and  orders  granted  on  motion  shall  contain  the  name  of  the 
party  or  attorney  making  the  motion.^®^  Notices  and  orders 
which  are  not,  by  the  act  or  by  these  general  orders,  required 
to  be  served  on  the  party  personally  may  be  served  upon  his 
attorney/®^ 

180  jfj,  yg  Columbia  Real  Estate  2  N.  B.  N.  929 ;  Goldman  v.  Smith, 
Co.,  112  Fed.  Rep.  643,  7  Am.  B.  93  Fed.  Rep.  182,  i  Am.  B.  R.  266; 
R.  441.  As  to  what  are  claims,  see  In  re  Meyer  (C.  C.  A.,  2d  Cir.),  98 
"  Provable  Debts,"   Chap.   XIII.  Fed.  Rep.  976. 

181  /„  yg  Romanow,  92  Fed.  Rep.  ^^^  In  re  Moench  &  Sons  Co.,  123 
510;  In  re  Bedingfield,  96  Fed.  Fed.  Rep.  977;  Goldman  v.  Smith, 
Rep.  190 ,  2  Am.  B.  R.  355 ;  In  re  93  Fed.  Rep.  182 ,  i  Am.  B.  R.  266. 
Mercur,  95  Fed.  Rep.  634 ,  2  Am.  1^*  Knickerbocker  Ins.  Co.  v. 
B.  R.  626;  In  re  Stein  (C.  C.  A.,  2d  Comstock,  No.  7879,  Fed.  Cas.,  s.  c. 
Cir.),    IDS    Fed.    Rep.    740,    5    Am.  9  N.  B.  R.  484. 

B.  R.  288 ,  3  N.  B.  N.  428 ;  In  re  ^^^  Gen.  Ord.  4. 

Ryan,  7  Am.  B.  R.  562 ;  In  re  Lacy,  An  attorney  at  the  time  of  filing 

No.  7965,  Fed.  Cas.,  s.  c.  12  Blatch.  the  petition  not  admitted  to  practice 

322.  will  not  be  recognized ;  In  re  O'Hal- 

i^^Mattoon    Nat,    Bank   v.    First  Icran,  No.  10463,  Fed.  Cas.,  s.  c.  8 

Nat.    Bank    (C.    C.    A.,    7th    Cir.),  Ben.   128. 
102  Fed.  Rep.  728,  4  Am.  B.  R.  515, 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY.  221 

There  is  no  objection  to  a  person  living  without  a  district 
entering  his  appearance  voluntarily.  In  such  case  the  court 
has  complete  jurisdiction  over  him  as  though  he  had  been 
legally  served  with  process.'*"  If  a  nonresident  comes  into  the 
case  for  the  purpose  of  proving  a  claim  he  thereby  submits 
himself  to  the  jurisdiction  of  the  court  irrespective  of  his 
place  of  residence.'"  He  thereby  makes  himself  a  party  to 
the  proceedings,  and  is  bound  to  take  notice  of  and  obey  the 
orders  of  the  court  to  the  same  extent  as  any  other  party. 
\\'hen  a  voluntary  appearance  has  been  entered  it  can  not  be 
withdrawn  without  permission  of  the  court."* 

§  8i,     Schedules. 

It  is  the  duty  of  the  bankrupt  to  prepare  and  make  oath 
to  and  file  in  court  within  ten  days,  unless  further  time  is 
granted,  after  the  adjudication,  if  an  involuntary  bankrupt, 
a  schedule  of  his  property,  showing  the  amount  and  kind  of 
property,  the  location  thereof,  its  money  value  in  detail  and 
a  list  of  his  creditors,  showing  their  residences,  if  known,  if 
unknown,  that  fact  to  be  stated,  the  amounts  due  each  of 
them,  the  consideration  thereof,  the  security  held  by  them, 
if  any,  and  a  claim  for  such  exemptions  as  he  may  be  entitled 
to."" 

He  is  required  to  file  this  schedule  in  triplicate,  one  copy 
for  the  clerk,  one  for  the  referee,  and  one  for  the  trustee.'**** 
The  form  of  schedule  is  the  same  as  in  voluntary  proceed- 
ings."" The  remarks  that  have  already  been  made  in  regard 
to  schedules  in  voluntary  petitions  apply  equally  to  proceed- 
ings in  involuntary  bankruptcy. 

There  is  one  class  of  cases,  however,  in  which  a  special 
provision  is  made  in  the  general  orders,  which  relates  solely 
to  involuntary  proceedings.  When  the  bankru])t  is  absent 
or  can  not  be  found,  it  is  the  duty  of  the  petitioning  creditor 

i*'«/n  re  Kirtland,  No.  7851,  Fed.  595:  In  re  Anderson,  23  Fed.  Rep. 

Cas.,  s.  c.  10  Blatch.  515;  In  re  Ul-  483- 

rich,   No.   14327,   Fed.   Cas.,  s.  c.   3  ^^^  In  re  Ulrich,  No.  14327,  Fed. 

Ben.  355.  Cas.,  s.  c.  3  Ben.  355 ;  see  also  U.  S. 

1**^ /n    re   Kylcr,    No.    7956,    Fed.  v.    Curry,   6   How.    106;    Eldred   v. 

Cas.,  s.  c.  2  Ben.  414;  In  re  Sabin,  Mich.  Ins.  Bank,  17  Wall.  545. 

No.  12195,  Fed.  Cas.,  s.  c.  18  N.  B.  i«'»  B.  A.  1898,  Sec!  7,  clause  8. 

R.   151 ;  In  re  Pease,  29  Fed.  Rep.  ^^"^  See  note  at  the  end  of  Form 

No.  3.     Sec  Sec.  60,  ante. 


222  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

to  tile,  within  five  days  after  the  date  of  the  adjudication,  a 
schedule  giving  the  names  and  places  of  residence  of  all  the 
creditors  of  the  bankrupt,  according  to  the  best  information 
of  the  petitioning  creditor."^  If  the  debtor  is  found  and  is 
served  with  notice  to  furnish  a  schedule  of  his  creditors  and 
fails  to  do  so,  the  petitioning  creditor  may  apply  for  an 
attachment  against  the  debtor,  or  may  himself  furnish  such 
schedule  as  aforesaid/^^ 

§  82.     Pleading  to  the  petition. 

As  soon  as  a  petition  in  bankruptcy  is  filed  and  the  re- 
spondent is  served  with  process,  he  should  consider  his  re- 
sponse to  such  petition.  The  bankrupt  or  any  creditor  may 
appear  and  plead  to  the  petition  within  ten  days  after  the 
return  day  or  within  such  further  time  as  the  court  may 
allow,^""  but  creditors  can  not  be  compelled  to  intervene.^®^ 
Where  a  respondent  waives  service  and  files  a  written  admis- 
sion of  the  truth  of  the  allegations  of  the  petition,  no  adjudica- 
tion can  be  made  until  after  the  expiration  of  the  ten  days 
wfthin  which  creditors  may  intervene.^^*  Any  creditor  with 
a  provable  claim  may  intervene  to  join  in  the  petition,^''^  or 
for  the  purpose  of  opposing  the  prayer  of  the  petition.^''" 
When  a  creditor  so  intervenes  he  has  the  same  right  as  any 
other  party  and  may  file  an  answer  if  a  respondent.*®*  Al- 
though the  statute  does  not  expressly  require  a  written  de- 


1^1  Gen.  Ord.  9.  Rep.  976,  3  Am.  B.  R.  559;  In  re 

192  B.    A.    1898,    Sec.    iSb;   In   re  C.    Moench  &   Sons    Co.,    123   Fed. 

Mackey,  no  Fed.  Rep.  355,  6  Am.  Rep.  977. 
B.  R.  577.  In  Neustadter  v.  Dry  Goods  Co., 

193/^  yg   Gillette,    104   Fed.    Rep.  96  Fed.  Rep.  830,  3  Am.  Bankr.  R. 

769,  5  Am.  B.  R.  119.  96,   it  was  said  that  "There  is  no 

10*  In  re  Humbert   Co.,   100  Fed.  right    given    to    other    creditors    to 

Rep.  439 ;  In  re  Columbia  Real  Es-  come  in  and  take  the  conduct  of  the 

tate  Co.,  loi   Fed.  Rep.  965.  case  out  of  the  hands  of  the  original 

195  /,j  yg  Etheridge  Furniture  Co.,  petitioners,  and  it  cannot  reasonably 

92  Fed.  Rep.  329,  i  Am.  B.  R.  112.  be  presumed  that  congress  intended 

19^  Mattoon  Nat.  Bank  v.  ist  Nat.  to    authorize    different    creditors    to 

Bank  (C.  C.  A.,  7th  Cir.),  102  Fed.  ccme  in  successively  and  retry  issues 

Rep.  728  ,  4  Am.  B.  R.  515  ,  2  N.  B.  which  have  been  decided,  and  in  that 

N.  929;  Goldman  v^mith,  93  Fed.  way  make  the  pendency  of  involun- 

Rep.   182,   I  Am.  B.  R.  266;  In  re  tary  cases  perpetual." 
Meyer  (C.  C.  A.,  2d  Cir.),  98  Fed. 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY.  223 

murrer.  plea  or  answer,  it  evidently  contemplates  a  formal 
written  pleading  of  some  kind. 

In  what  way  the  bankrupt  or  creditor  may  properly  plead 
to  the  petition  depends  upon  the  circumstances  in  each  par- 
ticular case.  Where  the  averments  of  the  petition  are  not 
sufficiently  precise  and  distinct  the  debtor  may  file  exceptions, 
declining  to  answer  upon  that  ground,  and  ask  that  the  alle- 
gations be  made  more  definite  and  certain  or  be  stricken  out/" 
If  the  averments  are  not  sufficient  in  law  to  sustain  the  pro- 
ceedings he  may  demur/''^  or  may  move  to  dismiss  the  peti- 
tion."** He  should,  however,  consider  before  making  any  of 
these  dilatory  pleas  whether  he  desires  a  jury  trial  as  to  insol- 
vency. If  he  desires  a  trial  by  jury  of  this  question,'  it  is 
necessary  to  file  a  written  application  therefor  at  or  before 
the  time  wathin  which  the  answer  may  be  filed.-""  If  no  such 
application  is  filed  within  such  time,  a  trial  by  jury  is  deemed 
to  have  been  waived."""  It  seems  that  a  debtor  may  file  objec- 
tions by  w\iy  of  demurrer  and  an  answer  at  the  same  time  and 
thus  obtain  a  jury  trial. ""^  Where  a  demurrer  or  exceptions 
or  a  motion  to  dismiss  is  filed,  it  should  be  set  down  for  hear- 
ing and  disposed  of  before  proceeding  further  in  the  case.  If 
either  a  demurrer,  motion  or  exception  is  sustained  the  court 
will  ordinarily  allow  the  petition  to  be  amended. """  If  it  is 
overruled  the  court  will  allow  the  respondent  to  answer  with- 
in a  time  fixed  in  the  Drder. 

As  soon  as  the  petition  is  adjudged  to  be  correct,  or  is  made 
so  by  amendment,  or  when  no  dilatory  pleading  is  resorted 
to,  the  debtor  should  i)ut  in  his  defense,  if  any,  on  the  merits. 
This  is  regularly  done  by  answer,  which  is  treated  in  the 
next  section. 

By  pleading  to  the  merits  in  the  first  instance  he  waives 
objection  to  formal  defects  in  the  petition  which  do  not  go  to 
the  jurisdiction  of  the  court.'"^ 

^'♦^/n  re  Randall,  No.  11551,  Fed.          201 /„  yg  Nickodemus,  No.  10254, 

Cas.,  s.  c.  Deady,  557.  Fed.  Cas.,  s.  c.  3  N.  B.  R.  230. 

19S  /„  yg  Bcnham,  8  N.  B.  R.  94 ;  202  See     Amendments,     Sec.     63, 

Orem   v.    Harlcy,    No.    10567,  Fed.       ante;  Gen.  Ord.  11. 

Cas.,  s.  c.  3  N.  B.  R.  263.  -'*■'  Lddigh  Carriage  Co.  v.  Sten- 

199 /„   yc   Melick,   No.  9399,  Fed.       gel  (C.  C.  A.,  6th  Cir.),  95  Fed.  Rep. 

Cas.,  s.  c.  4  N.  B.  R.  97.  637 .  i   N.  B.  N.  387 ,  2  Am.  B.  R. 

200  B.  A.  1898,  Sec.  19.  383:  Simonson  v.  Scnsheimer  (C.  C. 


224  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

§  83.     The  answer. 

The  general  defense  to  a  petition  in  bankruptcy  is  regularly- 
put  in  by  answer.  The  answer  is  entitled  in  the  court  in 
which  the  petition  is  filed  followed  by  a  caption  or  style  of  the 
proceedings  as  it  appears  upon  the  docket.  The  commence- 
ment of  the  answer  may  be  in  substantially  these  words : 
"And  now  the  said  X.  Y.,  respondent  (or,  intervening  cred- 
itor, as  may  be),  appears  and  for  answer"  admits,  denies  or 
says,  as  may  be.  The  answer  usually  admits  the  allegations 
of  the  petition  which  are  true,  if  any,  before  stating  the  de- 
fenses. 

The  defense  is  then  set  forth.  Each  defense  must  be  spe- 
cifically stated.  The  true  object  of  pleading  at  law,  in  equity 
or  in  bankruptcy  is  to  narrow  the  controversy  to  the  point 
or  points  really  in  dispute  between  the  parties.  No  greater 
latitude  in  pleading  should  be  allowed  the  defense  in  a  peti- 
tion in  bankruptcy  than  in  ordinary  actions  or  suits.^"* 

In  order  to  maintain  bankruptcy  proceedings  to  have  a 
debtor  adjudged  a  bankrupt  it  must  appear  from  the  petition 
that  the  debtor  has  committed  an  act  of  bankruptcy  within 
four  months  prior  to  the  filing  of  such  petition.*"^  It  is  also 
stated  in  the  petition  that  the  debtor  is  insolvent,^""  but  unless 
the  act  of  bankruptcy  is  that  covered  by  Sec.  3a,  clause  i,  this 
allegation  is  superflous ;  -"  that  he  owes  debts  to  the  amount 
of  one  thousand  dollars  and  is  otherwise  subject  to  be  ad- 
judged an  involuntary  bankrupt ;  ^°**  that  he  has  had  his  prin- 
cipal place  of  business,  resided  or  had  his  domicile  within  the 
territorial  jurisdiction  of  the  court  for  the  greater  portion  of 
the  preceding  six  months ;  or,  if  against  a  person  residing 
without  the  United  States,  that  he  has  property  within  the 
territorial  jurisdiction  of  the  court.""^  The  defense  set  up 
may  go  to  any  of  these  matters  and  there  may  be  several  de- 
fenses to  any  one  of  them."^**     In  such  case  the  defenses  must 

A.  6th  Cir.),  95  Fed.  Rep.  948;  In  re  205  b.  A.  1898,  Sec.  3b. 

Mason,  99  Fed.  Rep.  256 ,  2  N.  B.  N.  20c  b.  A.  1898,  Sec.  3b,  and  Form 

425;  In  re  Cliffe,  2  Am.  B.  R.  317,  No.  3. 

94  Fed.  Rep.  354 ;  Green  River  Bank  207  "West  Co.  v.  Lea,  174  U.  S.  590, 

V.  Craig,  no  Fed.  Rep.  137,  6  Am.  2  Am.  B.  R.  463. 

B.  R.  381.  20s  B.   A.   1898,   Sec.  4b. 
-o^In   re   Sutherland,    No.    13638,  209  b.  A.  1898,  Sec.  2.  clause  r. 

Fed.  Cas.,  s.  c.  Heady,  344.  210  /„  yg  Paige,  99  Fed.  Rep.  538 , 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY.  225 

be  separately  pleaded. '^^  Unless  all  the  essential  facts  re- 
quired by  the  petition  concur,  the  petitioners  have  no  right  to 
prosecute  the  petition,  and  it  must  be  dismissed. 

The  principal  defense  consists  in  a  denial  that  the  debtor 
has  committed  the  act  or  acts  of  bankruptcy  complained  of  in 
the  petition.  When  the  petition  alleges  two  or  more  acts  of 
bankruptcy,  and  one  of  them  is  established  by  proof,  it  is  suf- 
ficient. The  answer  therefore  should  deny  each  act  separately. 
This  defense  is  regularly  made  by  the  general  denial  provided 
for  in  form  No.  6,  which  is  in  these  words :  "  And  now  the  said 
X.  Y.  appears,  and  denies  that  he  has  committed  the  act  of 
bankruptcy  set  forth  in  said  petition,  or  that  he  is  insolvent, 
and  avers  that  he  should  not  be  declared  bankrupt  for  any 
cause  in  said  petition  alleged."  When  this  defense  is  made  the 
answer  should  conclude  according  to  whether  the  debtor  wishes 
the  question  tried  by  the  court  or  a  jury  in  substantially 
these  words :  "  and  this  he  prays  may  be  inquired  of  by  the 
court;  or  he  demands  that  the  same  may  be  inquired  of  by  a 
jury."  If  this  defense  is  established  by  proof  the  petition  must 
be  dismissed. 

The  question  of  how  far  a  plea  of  solvency  is  a  defense 
to  an  involuntary  petition  was  considered  by  the  supreme 
court  in  West  Co.  v.  Lea.^^'  It  is  a  complete  defense  to  the 
first  act  of  bankruptcy  to  show  solvency  at  the  time  the  peti- 
tion is  filed. "^  It  is  a  complete  defense  to  the  second  and 
third  classes  of  acts  of  bankruptcy  and  to  that  part  of  the 
fourth  class  which  relates  to  receivers  to  show  solvency  at  the 
time  the  acts  were  committed.-^*  It  was  directly  ruled  in 
West  Co.  V.  Lea  that  a  deed  of  general  assignment  for  the 
benefit  of  creditors  is  made  by  the  bankrupt  act  alone  suf- 
ficient to  justify  an  adjudication  in  involuntary  bankruptcy 

.?  Am.  B.  R.  679;  Mather  v.  Coe,  92  212  174  u.    S.   590,   2  Am.   B.   R. 

Fed.  Rep.  333 ;  In  re  Etheridge  Fur-  463. 

niture  Co.,  92  Fed.  Rep.  329.  -i''  B.  A.  1898,  Sec.  3c. 

211 /h  rf  Ouimctte,  No.  10622,  Fed.  214  West    Co.   v.    Lea,    174   U.    S. 

Cas.,  s.   c.    I    Saw.  47;    Silverman's  590,  2  Am.  B.  R.  463;  In  re  Rome 

case,   No.    12855,   Fed.    Cas.,  s.  c.    i  Planing  Mill,  96   Fed.   Rep.  812,  3 

Saw.    410;    In    re    Sutherland,    No.  Am.    B.    R.    123,   2    N.    B.    N.    531. 

13638,  Fed.  Cas.,  s.  c.   Deady,  344;  See  also  In  re  Coddington,  118  Fed. 

hi   re   Finlay,    No.   4789,   Fed.   Cas.,  Rep.  281  .  9  Am.  B.  R.  243. 
s.  c.  5  Biss.  480. 


226  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

against  the  debtor  making-  snch  deed  without  reference  to  his 
solvency  at  the  time  of  the  filing  of  the  petition  and  a  denial 
of  insolvency  is  not  a  defense.  Under  the  fifth  class  of  acts 
the  debtor  has  admitted  his  insolvency  at  the  time  of  com- 
mitting the  act  of  bankruptcy  and  solvency  at  the  time  of  filing 
the  petition  is  no  defense. "^^ 

A  person  against  whom  an  involuntary  petition  has  been 
filed  is  entitled  to  have  a  trial  by  jury  in  respect  to  the  ques- 
tion of  his  insolvency,  where  the  question  is  material,  except 
as  otherwise  provided  in  the  act,  and  any  act  of  bankruptcy 
alleged  in  such  petition  to  have  been  committed  upon  filing  a 
written  application  therefor  at  or  before  the  time  within  which 
an  answer  may  be  filed. "^*'  If  such  application  is  not  filed 
within  such  time,  a  trial  by  jury  shall  be  deemed  to  have  been 
waived."^*'  This  right  is  limited  to  the  bankrupt  and  is  not 
extended  to  intervening  creditors  contesting  such  issues. ^^^ 

The  answer  may  also  deny  that  the  petitioners  or  any  one 
of  them  is  a  creditor  owning  a  provable  debt,^^^  or  that  the 
debts  claimed  by  the  petitioning  creditors  amount  to  five  hun- 
dred dollars,^^"  or  that  his  total  indebtedness  amounts  to  one 
thousand  dollars ;  or,  when  there  is  but  one  petitioning  credi- 
tor he  may  set  up  the  fact  that  the  number  of  his  creditors  is 
more  than  twelve ; ""°  or  he  may  set  up  a  set-ofif  for  the  pur- 

215  West    Co.    V.    Lea,    174    U.    S.  creditor,  though  the  debt  is  unliqui- 

590 ,  2  Am.  B.  R.  463.  dated.       These    creditors     evidently 

-lo  B.  A.   1898,   Sec.   19.     See  also  have  a   present  fixed   debt  to   some 

Miller  v.  Keyes,  No.  9578,  Fed.  Cas.,  amount.     Only  a  trial  can  determine 

s.  c.  3  N.  B.  R.  224.  the  amount  of  the  debts.     If  insuffi- 

217  /„  yg  Herzikopf,  121  Fed.  Rep.  cient  in  amount,  the  petition  will  be 

544.  dismissed,   unless  others  join.     The 

-'^^  In    re    Brinckmann,    103    Fed.  defense   must   be   taken   by   answer. 

Rep.  65,  4  Am.  B.  R.  551 ;  Beers  v.  Motion   denied." 

Hanlin,   99    Fed.    Rep.    695 ;    In   re  In   re   Cornwall,    No.    3250,    Fed. 

Morales,  105  Fed.  Rep.  761;  Hill  v.  Cas..  s.  c.  9   Blatch.    114;   National 

Levy,  98  Fed.   Rep.  94 ;  In  re  Big  Exchange  Bank  v.  Moore,  No.  10041,, 

Meadows    Gas    Co.,    113    Fed.    Rep.  Fed.  Cas.,  s.  c.  2  Bond  170;  In  re\ 

974,  7  Am.  B.  R.  697 ;  but  see  In  re  Skelley,  No.  12921,  Fed.  Cas.,  s.  c.  3] 

Manhattan   Ice   Co.,    114  Fed.   Rep.  Biss.  260. 

400,  7  Am.  B.  R.  409.  -'^^  In    re    Ouimette,    No.     10622,' 

The  following  opinion  was  handed  Fed.    Cas.,    s.   c.    i    Saw.   47 ;   In   re  | 

down  May  21,  1901,  by  Brown,  Dis-  Cal.    Pac.    R.    Co.,    No.    2315,    Fed. 

trict  Judge:     "The  practice  in  this  Ca.s.,  3  Saw.  240. 

district  is  that  a  creditor  having  a  --"  In  such  a  case  he  must  file  a 

provable  debt  may  be  a  petitioning  list    of   his    other    creditors,    giving  j 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY. 


227 


pose  of  reducing  the  amount  of  such  debts  to  less  than  five 
hundred  dollars;""^  or  may  aver  that  the  debts  claimed  are 
barred  by  the  statute  of  limitations;-"  or  may  challenge  the 
jurisdiction  of  the  court,"^  or  plead  infancy,""*  or  that  the 
debtor  was  iion  compos  mentis  at  the  time  the  alleged  act  of 
bankruptcy  was  committed."-^  In  those  estates  where  a  mar- 
ried w^oman  has  no  separate  property  rights  and  can  not  con- 
tract debts  she  may  defend  on  the  plea  of  coverture. ^^® 

A  plea  of  payment,  in  whole  or  in  part,  of  the  debt  of  the 
petitioning  creditor  will  not  ordinarily  defeat  the  petition  for 
adjudication  in  bankruptcy. "■'  If  the  debtor  is  insolvent  he 
has  no  right  to  offer  payment  nor  the  creditor  to  accept  it. 
This  would  amount  to  a  preference,  which  can  be  avoided  by 
the  trustee.  There  are,  however,  a  few  exceptions  to  this  rule 
in  which  a  plea  of  payment  may  be  made  as  a  defense  to  the 
petition.  Thus,  when  there  is  only  one  creditor  of  the  debtor 
payment  may  be  pleaded.^-*  When  a  payment  has  been  made 
after  the  petition  has  been  filed  and  before  the  trial  the  receipt 
of  such  payment  by  the  petitioning  creditors  has  been  held  a 
waiver  sufficient  to  defeat  the  adjudication  if  the  payment  was 
sufficient  in  amount  to  reduce  the  indebtedness  below  the 
minimum  established  by  the  act.^"'* 

The  answer  should  be  signed  and  verified  "'^'^  under  oath  by 
the  person  answering  or  his  agent  or  attorney. 

The  answer  is  filed  with  the  clerk  of  the  court,   and  not 


particulars  in  regard  to  the  debts. 
Gage  &  Co.  v.  Bell,  124  Fed.  Rep. 
371- 

-21  In  re  Osage,  etc.,  R.  Co.,  No. 
10592,  Fed.  Cas.,  s.  c.  9  N.  B.  R. 
281 ;  In  re  Skelley,  No.  12921,  Fed. 
Cas.,  s.  c.  3  Biss.  260 ;  In  re  Sheehan, 
No.  12738,  Fed.  Cas.,  s.  c.  8  N.  B.  R. 
353. 

222 /;t  re  Cornwall,  No.  3250,  Fed. 
Cas.,  s.  c.  9  Blatch.  114. 

--•"  In  re  Williams,  No.  17706,  Fed. 
Cas.,  s.  c.  14  N.  B.  R.  132. 

2-'4 /»  re  Derby,  No.  3815,  Fed. 
Cas.,  s.  c.  6  Ben.  232. 

"^  In  re  Maroin,  No.  9178,  Fed. 
Cas.,  s.  c.  I  Dill.  178;  In  re  Pratt, 
No.   11371,  Fed.  Cas.,  s.  c.  2  Low. 


96;  In  re  Weitzel,  No.  17365,  Fed. 
Cas.,  s.  c.  7  Biss.  289 ;  In  re  Mur- 
phy, No.  9946,  Fed.  Cas.,  s.  c.  10 
N.  B.  R.  48. 

--"  In  re  Rachel  Goodman,  No. 
5540,  Fed.  Cas., ,  s.  c.  5  Biss.  401 ; 
In  re  Rowland,  No.  6791,  Fed.  Cas., 
s.  c.  2  N.  B.  R.  357. 

--^  In  re  Ouimette,  No.  10622,  Fed. 
Cas.,  s.  c.  I  Saw.  47;  In  re  Williams, 
No.  17703,  Fed.  Cas.,  s.  c.  i  Low. 
406. 

228  In  re  Sheehan,  No.  12738,  Fed. 
Cas.,  s.  c.  8  N.  B.  R.  353. 

228  In  re  Skelley,  No.  12921,  Fed. 
Cas.,  s.  c.  3  Biss.  260. 

230  B.  A.  1898,  Sec.  18c. 


228  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

with  a  referee.  It  should  be  tiled  within  ten  days  after  the 
return  day  of  the  subpoena  or  within  such  further  time  as  the 
court  may  allow. "^^ 


§  84.     The  order  of  proceeding  where  petitions  are  filed   in 
different  districts. 

It  is  obvious  that  two  or  more  petitions  may  be  filed  ag^ainst 
the  same  debtor  in  different  districts.  In  such  cases  ^^'^  the 
first  hearing  is  had  in  the  district  in  which  the  debtor  has  his 
domicile.^''"  and  the  petition  may  be  amended  by  inserting  an 
allegation  of  an  act  of  bankruptcy  committed  at  an  earlier 
date  than  that  first  alleged,  if  such  earlier  act  is  charged  in 
either  of  the  other  petitions;  and  in  case  of  two  or  more  peti- 
tions against  the  same  partnership  in  different  courts,  each 
having  jurisdiction  over  the  case,  the  petition  first  filed  is  first 
heard,  and  may  be  amended  by  the  insertion  of  an  allegation 
of  an  earlier  act  of  bankruptcy  than  that  first  alleged,  if  such 
earlier  act  is  charged  in  either  of  the  other  petitions;  and  in 
either  case  the  proceedings  upon  the  other  petitions  may  be 
stayed  until  an  adjudication  is  made  upon  the  petition  first 
heard ;  and  the  court  which  makes  the  first  adjudication  of 
bankruptcy  retains  jurisdiction  over  all  proceedings  therein 
until  the  same  shall  be  closed."^" 

In  case  two  or  more  petitions  are  filed  in  different  districts 
by  different  members  of  the  same  partnership  for  an  adjudica- 
tion of  the  bankruptcy  of  said  partnership,  the  court  in  which 
the  petition  is  first  filed,  having  jurisdiction,  takes  and  retains 
jurisdiction  over  all  proceedings  in  such  bankruptcy  until  the 
same  is  closed ;  and  if  such  petitions  are  filed  In  the  same 
district,  action  is  first  had  upon  the  one  first  filed.  "^~ 

But  the  court  so  retaining  jurisdiction  must,  if  satisfied 
that  it  is  for  the  greatest  convenience  of  parties  in  interest 
that  another  of  said  courts  should  proceed  with  the  cases, 
order  them  to  be  transferred  to  that  court.^^" 


231  B.  A.   1898,  Sec.   18&.  Rep.  456 .   5   Am.   B.   R.  484 :   In   re 

232  B.  A.  1898,  Sec.  32 :  Gen.  Ord.       Boston,  etc.,  R.  Co.,  No.   1678.  Fed. 
6;  In  re  Elmira  Steel  Co.,  109  Fed.      Cas.,  s.  c.  9  Blatch.  409. 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY.  229 

§  85.     The  order  of  proceeding  where  two  or  more  petitions 
are  filed  in  the  same  court. 

It  is  clear  that  a  debtor  having  a  large  number  of  creditors 
is  liable  to  have  several  petitions  filed  against  him  in  the 
same  court  by  different  creditors.  The  same  or  different  acts 
of  bankruptcy  may  be  alleged  as  a  ground  for  having  him 
adjudged  a  bankrupt. 

Whenever  two  or  more  petitions  have  been  filed  by  cred- 
itors against  a  common  debtor,  alleging  separate  acts  of  bank- 
ruptcy committed  by  said  debtor  on  different  days  within  four 
months  prior  to  the  filing  of  said  petitions,  and  the  debtor 
shall  appear  and  show  cause  against  an  adjudication  of  bank- 
ruptcy against  him  on  the  petitions,  that  petition  is  first  heard 
and  tried  which  alleges  the  commission  of  the  earliest  act  of 
bankruptcy.^^^  In  case  several  acts  of  bankruptcy  are  alleged 
in  the  different  petitions  to  have  been  committed  on  the  same 
day.  the  court  before  which  the  same  are  pending  may  order 
them  to  be  consolidated  and  proceed  to  a  hearing  as  upon  one 
petition. ^^*  If  an  adjudication  of  bankruptcy  is  made  upon 
either  petition,  or  for  the  commission  of  a  single  act  of  bank- 
ruptcy, it  is  not  necessary  to  proceed  to  a  hearing  upon  the 
remaining  petitions,  unless  proceedings  be  taken  by  the  debtor 
for  the  purpose  of  causing  such  adjudication  to  be  annulled 
or  vacated."* 

§  86.     The  reply. 

Where  the  answer  contains  simply  a  general  denial  or  trav- 
erse of  the  allegations  of  the  petition  no  replication  or  reply 
is  needed."^  If  the  petitioning  creditors  wish  to  contest  a 
defense  raising  new  matter  they  must  put  in  a  replication  and 
have  a  trial  before  an  adjudication  is  made.""  Where  a  case 
is  submitted  on  petition  and  answer,  the  allegations  of  the 
answer  are  taken  to  be  true.^''"  The  reply  may  be  filed  on 
the  day  of  the  hearing. 

It  may  be  observed  that  where  the  answer  contains  pleas 
which  are  irrevalent  and  immaterial  it  is  proper  to  move  to 

^s^Gen.    Ord.   7.  23a  Mattoon    Nat.    Bank    v.    First 

=''*Gen.  Orel.  7.  Nat.  Bank  (C.  C.  A.,  7th  Cin).  102 

235 /m  re  Dunham,  No.  4143,  Fed.  Fed.  Rep.  728,  4  Am.  B.  R.  515,  2 

Cas.,  s.  c.  2  Ben.  488 ;  In  re  Hawkeye  N.   B.  N.  929. 

Smelting  Co.,  8  N.  B.  R.  385. 


230  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

liave  them  stricken  out.  If  they  are  insufficient  in  law  it 
has  been  held  that  the  proper  practice  under  the  present  statute 
and  general  orders  is  to  set  the  case  down  for  hearing  upon 
petition  and  answer,  as  in  equity,  and  that  a  demurrer  to  the 
answer  is  improper. "^^ 

§  87.     The  hearing  or  trial. 

If  the  bankrupt  or  any  of  his  creditors  appear  within  the 
time  limited  and  controvert  the  facts  alleged  in  the  petition, 
a  hearing  or  trial  is  had  as  soon  as  may  be  thereafter  upon 
the  issues  presented  by  the  pleadings. '^^  It  is  the  duty  of  the 
judge  to  determine  the  issues  so  made  without  the  interven- 
tion of  a  jury,  except  in  cases  where  a  jury  trial  is  given  by 
the  statute.^^^*  The  case  may  be  set  for  hearing  by  either  party 
upon  any  day  after  the  issues  have  been  made  at  which  it 
can  be  heard  by  the  judge.  He  should  serve  notice  upon  the 
opposing  party  of  the  day  of  hearing  or  trial. 

The  debtor  is  entitled  to  have  a  trial  by  jury  in  respect  to 
the  question  of  his  insolvency  and  any  act  of  bankruptcy 
alleged  in  the  petition  against  him  to  have  been  committed 
upon  filing  a  written  application  therefor  at  or  before  the  time 
within  which  an  answer  may  be  filed."''**  If  any  such  written 
application  is  not  filled  within  such  time  the  debtor  is  deemed 
to  have  waived  his  right  to  trial  by  jury,"^^*  and  these  questions 
are  then  determined  by  the  judge. '^^ 

This  right  of  jury  trial  is  confined  to  the  debtor.  Creditors 
are  not  entitled  to  demand  a  jury  trial  on  the  question  of  the 

237  In  Goldman,  Bettman  &  Co.  v.  -'■s  B.  A.  1898,  Sec.  iSd ;  Mattoon 

Smith,  93  Fed.  Rep.  182,  Judge  Barr  Nat.    Bank   v.    ist    Nat.    Bank,    102 

said:     "If  we  are  to  apply  the  rules  Fed.  Rep.  728,  4  Am.  B.  R.  515,  2 

of  equity  practice  to  proceedings  in  N    B.  N.  929;  Leidigh  Carriage  Co. 

bankruptcy  —  and      we     understand  v.  Stengel,  95  Fed.  Rep.  637,  2  Am. 

these  are  to   be   applied    (see   Rule  B.  R.   383,   i   N.   B.   N.  387;  In  re 

37,  Supreme  Court),  the  sufficiency  Baumann,  96  Fed.  Rep.  946,  3  Am. 

of  an  answer  can  not  be  raised  by  B.  R.  196. 

a  demurrer,   but   can   only  be   done  ^ss*  b.    A.     1898,    Sec.     19a.     See 

by  setting  the  case  for  hearing  upon  also  Simonson  v.  Sinsheimer  (C.  C. 

the  bill  and  answer."  A.,  6th   Cir.),    100   Fed.    Rep.   426, 

Consult     as    to    the    practice     in  3  Am.  B.  R.  824;  Bray  v.  Cobb,  91 

equity.    Banks    v.    Manchester,    128  Fed.   Rep.    102;    i    Am.    B.    R.    153". 

U.  S.  244:  Walker  v.  Jack,  88  Fed.  Elliott  v.  Toeppner.  187  U.  S.  32?- 

Rep.    576;    Grether    v.    Wright,    75  "^'^  B.  A.  1898,  Sec.  iSd. 
Fed.  Rep.  742,  5I.  c.  23  C.  C.  A.  500. 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY.  23 1 

bankrupt's  solvency,'**'  nor  of  the  allowance  of  their  claims.'*^ 
The  right  to  a  trial  by  jury  on  written  application  of  the  al- 
leged bankrupt  is  absolute  and  cannot  be  withheld  at  the  dis- 
cretion of  the  court."*-  In  that  respect  it  differs  from  the 
trial  of  an  issue  out  of  chancery,  which  the  court  of  equity  is 
not  bound  to  grant,  nor  bound  by  the  verdict  if  such  trial  be 
granted.  The  court  cannot,  as  the  chancellor  may,  enter  judg- 
ment contrary  to  the  verdict,  but  the  verdict  may  be  set  aside 
or  the  judgment  may  be  reversed  for  error  of  law  as  in  com- 
mon law  cases.-*-  The  judge  and  not  the  referees  should  pre- 
side at  a  jury  trial. 

Where  the  bankrupt  has  seasonably  demanded  in  writing  a 
trial  by  jury  the  issues  may  be  tried  before  any  jury  in  attend- 
ance upon  the  court.  If  a  jury  is  not  in  attendance  upon  the 
court  one  may  be  specially  summoned  for  the  trial,  or  the  case 
may  be  postponed,  or,  if  the  case  is  pending  in  one  of  the 
district  courts  within  the  jurisdiction  of  a  circuit  court  of 
the  United  States,  it  may  l)e  certified  for  trial  to  the  circuit 
court  sitting  at  the  same  place,  or  by  consent  of  parties,  when 
sitting  at  any  other  place  in  the  same  district,  if  such  circuit 
court  has  or  is  to  have  a  jury  first  in  attendance."*^ 

Where  the  bankrupt  has  controverted  other  allegations  of 
the  petition  in  addition  to  those  relating  to  his  insolvency 
and  commission  of  acts  of  bankruptcy  there  is  nothing  in  the 
statute  prohibiting  the  court  from  submitting  all  the  issues 
to  the  jury.  Section  igc  of  the  act  would  seem  to  be  author- 
ity for  such  proceedings.  It  would  .also  seem  that  the  judge 
may  submit  the  questions  of  insolvency  and  the  commission 
of  an  act  of  bankruptcy,  with  proper  instructions  as  to  the 
other  matters. 

At  the  liearing  or  trial  the  petitioners  must  establish  by 
proof  the  truth  of  the  facts  alleged  in  the  petition.  The 
burden  of  proof  rests  upon  the  petitioners  in  all  cases,^**  except 

2*0 /«  re  Herzikopf  (C.  C.  A.,  9th  Fed.    Rep.   812,   3    Am.    B.    R.    123; 

Cir.),   121    Fed.   Rep.   544.  /;/  re  Langc,  97  Fed.  Rep.  197;  In  re 

^*^  In    re    Christensen,    loi    Fed.  Price,  No.  11411,  Fed.  Cas.,  s.  c.  8 

Rep.  243.  4  Am.  B.  R.  99.  N.    B.   R.   514;   Brock  v.   Hoppnck, 

-•♦2  Elliott  V.  Toeppner,  187  U.  S.  No.  T912,  Fed.  Cas..  .s.  c.  2  N.  B.  R. 

327 ,  9  Am.  B.  R.  50.  7 ;  In   re  Oregon  Bulletin  Co.,   No. 

2*3  B.  A.  1898,  Sec.  igh.  10559,   Fed.  Cas..  s.  c.   13  N.  B.  R 

^**  In  re  Rome  Planing  Mills,  96  503. 


232  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

in  respect  to  the  (luestion  of  insolvency.  With  reference  to 
the  question  of  solvency  the  burden  of  proof  is  regulated  by 
the  statute.""*  It  declares  that  it  shall  be  a  complete  defense 
to  any  proceedings  in  bankruptcy  instituted  under  the  first 
subdivision  of  section  3  to  allege  and  prove  that  the  party 
proceeded  against  was  not  insolvent,  as  defined  in  the  statute, 
at  the  time  of  the  filing  the  petition  against  him,  and  if 
solvency  at  such  date  is  proved  by  the  alleged  bankrupt  the 
proceedings  shall  be  dismissed,  and  under  said  subdivision 
one  the  burden  of  proving  solvency  shall  be  on  the  alleged 
bankrupt.  Whenever  a  person  against  whom  a  petition  has 
been  filed,  as  hereinbefore  provided  under  the  second  and 
third  subdivisions  of  section  3,  takes  issue  with  and  denies 
the  allegation  of  his  insolvency,  it  shall  be  his  duty  to  appear 
in  court  on  the  hearing,  with  his  books,  papers  and  accounts, 
and  submit  to  an  examination,  and  give  testimony  as  to  all 
matters  tending  to  establish  solvency  or  insolvency,  and  in 
case  of  his  failure  to  so  attend  and  submit  to  examination  the 
burden  of  proving  his  solvency  shall  rest  upon  him. 

Where  a  bankrupt  contests  the  debt  of  a  petitioning  creditor 
on  the  ground  that  it  is  illegal  because  founded  on  a  gambling 
or  wagering  contract  the  burden  of  proof  is  upon  the  bank- 
rupt.'" 

The  evidence  is  put  in  in  the  same  manner  as  at  any  other 
civil  trial.  The  court  may  summon  any  person  who  is  a 
competent  witness  to  appear  in  court  to  be  examined. ^*^ 
The  right  to  take  depositions  at  such  a  trial  is  determined  by 
and  enjoyed  according  to  the  United  States  laws  in  force  at 
that  time  relating  to  the  taking  of  depositions.-*^  When  the 
evidence  in  chief,  evidence  in  reply  and  evidence  in  rebuttal 

2«  B.  A.  1898,  Sec.  3C  and  2d;,  ^48  p.  A.  1898.  Sec.  21&.  The  sec- 
West  Co.  V.  Lea,  174  U.  S.  590.  tions  of  the  Revised  Statutes  which 

2*6  Hill  V.  Levy,  98  Fed.  Rep.  94,  apply    particularly    to    the    right   to 

3  Am.  B.  R.  374.  2  N.  B.  N.   180.  take  depositions  are  found  in  chap. 

See   also   as   to   presumption   of   le-  17  of  the  Revised   Statutes   relating 

gality  of  contracts,  Irwin  v.  Williar,  to  evidence  and  particularly  sections 

no  U.  S.  507.  861   to  870.     This  subject  has  been 

2*7  B.     A.     1898,     Sec.     2ia,     as  quite    fully    discussed    by    the    su- 

amended  Feb.  5,  1903,  32  Stat,  at  L.  preme  court   in   an   opinion   by   Mr. 

797.    In  re  Woodward,   No.    18000,  Justice  Miller  in  ex  parte  Fisk,  113 

Fed.  Cas.,  s.  c.  8  Ben.  112.  U.  S.  713. 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY.  233 

has  been  introduced  the  case  is  closed  and  arguments  of 
counsel  of  the  parties  heard.  The  court  submits  the  case  to 
the  jury  with  instructions  as  in  a  common  law  action.  When 
there  is  no  conflicting  testimony  the  court  may  direct  a  ver- 
dict."*'' A  scintilla  of  conflicting  testimony  is  not  sufficient 
to  require  a  submission  to  the  jury.  The  court  has  power  to 
set  aside  a  verdict  upon  the  grounds  recognized  in  other  civil 
actions.'^"  Where  the  case  is  submitted  to  the  judge  without 
the  intervention  of  a  jury  the  evidence  is  not  usually  intro- 
duced with  the  same  formality  as  in  a  jury  trial.  In  such 
case  the  court  determines  the  issues  presented  by  the  plead- 
ings upon  the  proofs  after  arguments  of  counsel,  and  either 
makes  an  adjudication  of  the  bankruptcy  or  dismisses  the 
petition. 

§  88.     Order  of  adjudication. 

If  the  facts  set  forth  in  the  petition  are  sufficient  and  estab- 
lished by  proof  to  be  true,  either  by  a  jury  or  by  the  court,  it 
is  the  duty  of  the  court  to  adjudge  the  debtor  to  be  a  bank- 
rupt.-'^^  An  order  of  adjudication  ought  not  to  be  made  until 
the  expiration  of  the  time  for  creditors  to  intervene  and  oppose 
the  i)etition  although  the  bankrupt  appears  and  files  a  written 
admission  of  the  acts  of  bankruptcy  and  waives  service."" 
An  adjudication  of  bankruptcy  against  a  partnership  will  be 
denied,  where  the  existence  of  the  partnership  is  put  in  issue 
by  some  of  the  members,  until  the  existence  of  the  partnership 
is  established.-'-*  The  form  of  adjudication  of  bankruptcy 
is  prescribed  by  the  supreme  court  in  form  No.  12.  This 
order  should  be  entered  by  the  clerk  of  record.  A  mere  mem- 
oraiulum  not  conforming  substantially  to  this  form  is  not  an 
adjudication.-^''' 

-^"  Hardy  v.  Clark,  No.  1420  Fed.  Rep.  439;  In  re  Columbia  Real  Es- 

Cas.,   s.   c.   3   N.   B.   R.  385;   In  re  tnte  Co.,   loi   Fed.  Rep.  965. 

Jclsh,   No.   7257,  Fed.   Cas.,  s.   c.  9  •-'^•-'*  ht  re  McLaren,  125  Fed.  Rep. 

X.  B.  R.  412.  835. 

-■'"In    re    Dunn,    No.   41713.   Fed.  ^r.a  (3o,^j.„lj.   ^-^   ,.^   j^j]}^   j^^    g^g^^ 

Cas..  s.  c.   12  Blatch.  42;  In  re  De  Fed.  Cas.,   s.  c.   7   Ben.  378;   In  re 

Forest.    No.   3745,    Fed.    Cas.,   s.   c.  Boston,  H.  &  E.  R.  Co.,  No.   1678. 

0  N.  B.  R.  278.  Fed.    Cas..   s.    c.  9   Blatch.   409;    B. 

-•'*'  B.  A.  1898.  Sec,   i8<-.  A.    1898.   Sec.   i,  clause  2. 

'"•-In   re  Humbert   Co..    100   Fed. 


234  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

When  the  debtor  resists  an  adjudication  and  the  court, 
after  hearing,  adjudges  the  debtor  a  bankrupt,  the  petitioning 
creditor  is  entitled  to  recover  and  be  paid  out  of  the  estate  the 
same  costs  that  are  allowed  to  a  party  recovering  in  a  suit  in 
equity;  and  if  the  petition  is  dismissed  the  debtor  shall  re- 
cover like  costs  against  the  petitioner."^* 

§  89.     Proceedings  to  set  aside  an  adjudication. 

An  adjudication  of  bankruptcy  which  is  correct  in  form 
and  made  by  a  district  court  having  jurisdiction  of  the  bank- 
rupt is  conclusive  of  the  fact  decreed. "^^  Until  vacated  by  a 
direct  proceeding  in  the  court  of  bankruptcy  it  is  binding  upon 
all  the  parties  and  can  not  be  attacked  collaterally.^^^  Thus 
an  adjudication  by  default  on  the  ground  that  the  bankrupt 
created  a  preference  is  conclusive  against  the  bankrupt  and 
the  creditor  preferred.'^''  The  court  of  bankruptcy  is  always 
open  for  a  reexamination  of  its  decrees  in  an  appropriate  form. 
Any  order  made  in  a  case  may  be  set  aside  and  vacated  on 
proper  showing  made,  due  regard  being  had  to  rights  which 
have  become  vested  under  it  and  which  will  be  disturbed  by 
its  revocation. 

After  the  order  has  been  formally  entered  an  application 
may  be  made  to  set  aside  the  adjudication  and  grant  a  neiv 
trial  or  hearing.  The  application  is  usually  by  motion.  The 
court  has  power  to  grant  such  a  motion  in  a  proper  case.-'*^ 
The  party  applying  to  set  aside  the  adjudication  must  file  his 
motion  within  a  reasonable  time  after  the  order  is  entered.'^** 

The  motion  to  set  aside  the  adjudication  may  be  made  by 
the  bankrupt  or  a  creditor.^^*"     Thus  an  attaching  creditor  or 

25*  Gen.  Ord.  34.  112  Fed.  Rep.  752,  7  Am.  B.  R.  463. 

255  Michaels  v.  Post,  21  Wall.  398  ;  257  /„    y^.    Dunn,    No.    4173,    Fed. 

Shawhan  v.  Wherritt,  7  How.  643;  Cas.,  s.  c.  12  Blatca.  42;  /n  r^  De 

Sloan  V.  Lewis,  22  Wall.  150;  Chap-  Forest,  No.  3745,  Fed.  Cas.,  s.  c.  9 

man  v.  Brewer,  114  U.  S.  158;  Gra-  N.  B.  R.  278;  In  re  Great  Western 

ham  V.  Boston  H.  &  E.  R.  Co.,  118  Telegraph  Co.,  No.  5739,  Fed.  Cas., 

U.  S.  161 ;  In  re  Gretchell,  No.  537i,  s.  c.  5  Biss.  359. 

Fed.    Cas.,     .  c.  8  Ben.  256;  In  re  "^^^  In  re  Neilson.  No.  10090,  Fed. 

Ives,    No.   7n5,   Fed.    Cas.,   s.   c.    5  Cas.,  s.  c.  7  N.  B.  R.  505;  Leiter  v. 

Dill.  146;  In  re  McKinley,  No.  8864,  Payson,   No.  8226,   Fed.    Cas.,  s.   c. 

Fed.  Cas.,  s.  c.  7  Ben.  562 ;  Lewis  v.  9  N.  B.  R.  205. 

Sloan,  68  N.  C.  557  ;  Mount  v.  Man-  259  /,j    ye    Columbia    Real    Estate 

hattan  Co.,  41  N.  J.  Eq.  211.  Co.,   loi    Fed.   Rep.  965.  4  Am.  B. 

256 /jj  re  American   Brewing  Co.,  R.   41 1- 


PROCEEDINGS    IN    INV^OLUNTARY    BANKRUPTCY.  235 

a  creditor  whose  security  is  impeached  as  a  preference,^®"  but 
not  a  secured  or  a  general  creditor,"*'^  has  such  an  interest  as 
will  entitle  him  to  make  such  a  motion. 

It  is  not  a  sufficient  ground  for  setting  aside  an  adjudica- 
tion in  bankruptcy,  where  the  debtor  has  admitted  an  act  of 
bankruptcy,  that  the  admission  was  not  true,""'  nor  that  a 
prior  petition  was  pending  in  another  district,-"^  nor  on  the 
ground  that  there  was  a  misjoinder  or  a  nonjoinder  of  cred- 
itors who  filed  the  petition,  unless  there  is  proof  that  the  adju- 
dication was  obtained  by  fraud  or  in  bad  faith. -'^* 

§  90.     Order  of  reference. 

At  the  time  of  making  the  order  adjudging  the  debtor  to 
i3e  bankrupt  the  court  regularly  refers'''^  the  case  for  subse- 
quent proceedings  to  a  referee  within  the  county  of  which  the 
debtor  is  a  resident  or  has  his  principal  place  of  business.  It 
may  refer  the  case  to  any  referee  within  the  territorial  juris- 
diction of  the  court  if  the  convenience  of  the  parties  in  interest 
will  be  served  thereby,  or  for  cause,  or  if  the  bankrupt  does  not 
do  business,  reside  or  have  his  domicile  in  the  district.-''® 

All  the  proceedings  thereafter,  except  as  required  by  the 
statute  or  by  the  general  orders  to  be  had  before  a  judge,  are 
had  before  the  referee,'"''^  subject  to  be  reviewed  by  the  judge.^®^ 
Applications  for  a  discharge,  or  for  the  approval  of  a  com- 
position, or  for  an  injunction  to  stay  proceedings  of  a  court 
or  officer  of  the  United  States  or  of  a  state  must  be  heard  and 
decided  by  the  judge.-"**  But  he  may  refer  such  an  applica- 
tion, or  any  specified  issue  arising  thereon,  to  the  referee  to 
ascertain  and  report  the  facts.-'"*     A  person  claiming  to  be  the 

2C0 /„   ^g   Derby,    No.   3815,    Fed.  203 /„   ^g  Harris,    No.  61 11,   Fed. 

Cas.,   s.  c.  6  Ben.  232 ;   Fogarty  v.  Cas.,  s.  c.  6  Ben.  375. 
Gcrrity,   No.   4895,   Fed.   Cas.,   s.  c.  204  /„  ,.^  McKinlcy.  No.  8864,  Fed. 

1  Saw.  233.  Cas.,  s.  c.  7  Ben.  562 ;  In  re  Duncan, 

-"1 /»    re    Bush,    No.    2222,    Fed.  No.   4131,    Fed.    Cas.,   s.    c.   8    Ben. 

Cas.,  s.  c.  6  N.  B.  R.  179;  Karr  v.  365;   In   re   Funkenstein,   No.   5158, 

Whittaker,  No.  7613,  Fed.  Cas.,  s.  c.  Fed.  Cas.,  s.  c.  3  Saw.  605. 
5  N.  B.  R.  123.     See  Columbia  Real  -"•'•  Order    of    Reference,    Official 

Estate  Co.,  loi  Fed.  Rep.  965 ,  4  Am.  Form  No.  14,  Form  No.  31,  post. 
B   R.  411.  2.;b  b.  a.  1898,  Sec.  22. 

-''-In  re  Thomas,  No.  13891,  Fed.  207  Qgri.  Ord.  12. 

Cas.,   s.   c.    II    N.    B.    R.   330;    Lea  208  Gen.  Ord.  27. 

V.  West  Co.,  91  Fed.  Rep.  237.  20.0  Qgn.  Ord.  12. 


236  PROCEEDINGS    IN    INVOLUNTARY    BAN  KRL  I'TCY. 

owner  of  property  in  the  hands  of  the  trustee  is  entitled  to  a 
jury  trial  and  can  not  be  compelled  to  submit  his  claims  to  a 
referee."^"  Upon  the  filing  of  an  answer  to  an  involuntary 
petition  in  bankruptcy  it  is  quite  usual  to  have  one  of  the 
referees  take  the  evidence  and  report  upon  the  various  ques- 
tions presented.  "^^ 

The  order  referring  a  case  to  a  referee  must  name  a  day 
upon  which  the  bankrupt  shall  attend  before  the  referee,  and 
from  that  day  the  bankrupt  is  subject  to  the  orders  of  the 
court  in  matters  relating  to  his  bankruptcy,  and  may  receive 
from  the  referee  a  protection  against  arrest,  to  continue  until 
the  final  adjudication  on  his  application  for  a  discharge,  unless 
suspended  or  vacated  by  order  of  the  court. ^^^ 

A  copy  of  the  order  must  forthwith  be  sent  by  mail  to  the 
referee,  or  be  delivered  to  him  personally  by  the  clerk  or  other 
officer  of  the  court.  The  time  when  and  the  place  where  the 
referee  shall  act  upon  the  matters  arising  under  the  several 
cases  referred  to  him  shall  be  fixed  by  special  order  of  the 
judge,  or  by  the  referee ;  and  at  such  times  and  places  the 
referee  may  perform  the  duties  which  he  is  empowered  by  the 
act  to  perform.*" 

§  91.     Proceedings  on  default. 

If  on  the  last  day  within  which  pleadings  may  be  filed 
none  are  filed  by  the  bankrupt  or  any  of  his  creditors,  the 
judge  on  the  next  day,  if  present,  or  as  soon  thereafter  as 
practicable,  makes  the  adjudication  or  dismisses  the  petition. ^^^ 

If  the  judge  is  absent  from  the  district  or  the  division  of 
the  district  in  which  the  petition  is  pending  on  the  next  day 
after  the  last  day  on  which  pleadings  may  be  filed,  and  none 
have  been  filed  by  the  bankrupt  or  any  of  his  creditors,  the 
clerk  must  forthwith  refer  the  case  to  the  referee.^^*  In  such 
cases  the  referee  is  authorized  to  consider  all  such  petitions 
and  make  the  adjudications  or  dismiss  the  petitions,^^^  with 

270 /„   re   Russell    (C.   C.   A.,  2d  272  Qen.  Ord.  12. 

Cir.),    loi    Fed.    Rep.    248,    3    Am.  -7.13.  A.  1898,  Sec.  18^. 

B.  R.  658.  -'74  B.   A.    1898.   Sec.   18/;   Official 

271  Clark  V.  American  Mfg.,  etc.,  Form  No.  15.  Form  No.  22,  post. 
Co.    (C.   C.   A.,  4th   Cir.),   loi    Fed.  2-5  b.  A.  1898,  Sec.  38.  clause  i. 

Rep.  962,  4  Am.  B.  R.  351. 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY.  237 

the  same  effect  as  if  the  order  liacl  been  made  by  the  judge. 
The  referee  is  not  authorized  to  make  an  adjudication  in  other 
cases.  An  adjudication  made  after  the  debtor  or  any  creditor 
has  failed  to  file  pleadings  is  as  binding  as  one  made  upon  a 
trial  or  hearing,  unless  set  aside  by  order  of  the  court."'''* 

§  92.     Amendments  in  involuntary  proceedings. 

The  court  may.  upon  proper  application,  allow  amendments 
to  the  petition  and  schedules.^"  Such  applications  are  ad- 
dressed to  the  judicial  discretion  of  the  court.  Mere  formal 
amendments  may  be  asked  in  open  court  at  the  time  of  the 
hearing  or  trial  and  allowed,  when  justice  may  be  done  by  so 
doing,  even  after  all  the  testimony  in  the  case  has  been  taken. ^'* 

When  new  matter  is  sought  to  be  introduced,  leave  must  be 
first  obtained  of  the  court  to  file  the  amendment.  The  appli- 
cation is  regularly  made  by  petition  or  motion.  It  should  be 
accompanied  by  a  copy  of  the  amendment  or  amendments  to 
be  made.  These  amendments  should  be  printed  or  written, 
signed  and  verified  like  original  petitions  or  schedules."''  If 
the  amendments  are  made  to  separate  schedules  the  same  must 
be  made  separately  with  proper  references."^  The  amendment 
should  state  no  more  of  the  original  paper  than  may  be  abso- 
lutely necessary  to  introduce  and  to  make  intelligible  the  new 
matter,  which  should  alone  constitute  the  chief  subject  of  the 
amendment.  The  application  for  leave  to  amend  must  state 
the  cause  of  the  error  in  the  paper  originally  filed. "**  In  other 
words,  it  must  be  shown  that  the  petitioner  or  his  attorney 
liad   no  knowledge  of  and   could   not  have  ascertained    with 

276  /„   y(,  American   Brewing  Co.,  No.    5202,   Fed.    Cas.,    s.    c.    i    Saw. 

112  Fed.  Rep.  752,  7  Am.  B.  R.  463.  224. 

In    re    I.e    Favour,    No.   8208,    Fed.  Formal  defects  are  usually  waived 

Cas.,  s.  c.  8  Ben.  43.  bj'  answering  on   the  merits,   /;;   re 

.\s  to  the  binding  force  of  a  de-  Simonson,  Whiteson  &  Co.,  92  Fed. 

crce    in    equity    pro    confcsso,    see  Rep.  904,  I  Am.  B.  R.  197 ;  Leidigh 

Thomson    v.    Wooster,    114    U.    S.  Carriage  Co.  v.   Stengel    (C.  C.   A., 

104.  6th  Cir.),  95  Fed.  Rep.  637,  2  Am. 

2'^"  Gen.  Ord.  11.  B.  R.  383:   Simonson   v.   Sinsheimcr 

'^''^In  re  Bininger,  No.  1420,  Fed.  (C.   C.  A.,  6th  Cir.),  95   Fed.   Rep. 

Cas.,  c.  s.  7  Blatch.  262;  In  re  Craft,  048;  Green  River  Bank  v.  Craig,  no 

No.  3316,  Fed.  Cas.,  s.  c.  2  Ben.  214;  Fed.  Rep.  137,  6  Am.  B.  R.  381. 

/»  rr  Haughton.  No.  6223,  Fed.  Cas.,  ^td  q^p    Ord.   11. 
s.  c.  I  N.  B.  R.  460:  In  re  Gallinger, 


238  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

reasonable  diligence  the  facts  sought  to  be  added  by  the 
amendment  at  the  time  the  original  petition  was  filed,  or  that 
the  facts  were  omitted  by  inadvertence,  mistake  or  other  reason 
which  would  excuse  such  omission. -^*^  The  application  for 
leave  to  amend  must  be  made  within  a  reasonable  time  after 
the  discovery  of  such  facts.-^^  A  copy  of  the  petition  and 
amendment  should  be  served  upon  the  adverse  party. 

The  granting  or  refusing  to  grant  leave  to  amend  rests  in 
the  sound  discretion  of  the  court.  It  is  not  a  matter  of  right. 
The  courts  are  liberal  in  allowing  amendments  so  long  as  the 
ends  of  justice  are  not  sacrificed.^^^  The  courts,  in  allowing 
such  amendments,  are  governed  by  substantially  the  same 
principles  wdiich  apply  to  similar  cases  in  other  courts.  Thus 
it  has  been  held  that  where  the  proof  discloses  acts  of  bank- 
ruptcy not  averred  in  the  petition  that  the  petition  may  be 
amended  so  as  to  conform  to  the  proofs.-^''  Where  the 
original  petition  set  out  the  conveyance  of  certain  premises  by 
the  debtor  and  charged  that  the  same  was  made  without  con- 
sideration and  with  intent  to  delay,  hinder  and  defraud  his 
creditors  and  to  defeat  the  operation  of  the  bankrupt  act,  an 
amendment  was  allowed  which  set  out  the  same  conveyances 
but  charged  that  the  conveyance  was  made  upon  the  pretended 
consideration  of  prior  indebtedness  and  with  intent  to  prefer, 
etc."^*  Where  the  verification  is  defective  it  may  be 
amended. -^^  Supplemental  affidavits  may  be  filed  to  show  an 
agent's  authority  to  sign  and  verify  the  petition.^^®     Where 

280  White  V.  Bradley  Timber  Co.,  B.   R.  231;  In  re  Mercur,  95  Fed. 

116  Fed.   Rep.  768.  Rep.  634,  2  Am.   B.  R.  626;   /;;  re 

281 /„  yg  Freudenfels,   No.  51120,  Blair,  99   Fed.   Rep.  76,   3   Am.   B. 

Fed.  Cas.  R-  588;  In  re  Gallinger,  No.  5202, 

282  j^  yg  Lange,  97  Fed.  Rep.  197,  Fed.  Cas.,  s.  c.  i  Saw.  224. 

3  Am.   B.  R.  231,  2  N.  B.   N.  85;  -^*  In  re  Henderson,  9  Fed.  Rep. 

In  re  Mercur,  95   Fed.   Rep.  634,  2  196. 

Am.    B.   R.  626 ;   In  re  Nelson,   98  ^ss  /„  yg  Simmons,  No.  12864  Fed. 

Fed.  Rep.  76,  i  Am.  B.  R.  63,  In  re  Cas.,  s.  c.   10  N.   B.   R.  253;  In  re 

Blair,  99  Fed.  Rep.  76,  3  Am.  B.  R.  Sargent,    12361    Fed.    Cas.,    s.    c.   13 

588;  In  re  Cliffe,  94  Fed.  Rep.  354,  N.   B.   R.   144;   In  re   Cal.   Pac.   R. 

2  Am.  B.  R.  317;  In  re  Miller,  104  Co.   No.  2315  Fed.  Cas.,  s.  c.  3  Saw. 

Fed.  Rep.  764.  240;    In    re   Donnelly,    5    Fed.    Rep. 

283  White  V.  Bradley  Timber  Co.,  78.3  :  /"  re  Nelson,  98  Fed.  Rep.  76 . 
116    Fed.    Rep.    768;    In    re    Miller,  i  Am.  B.  R.  63. 

104  Rep.  764;  In  re  Lange,  97  Fed.  ^se /„    ^g    Rosenfields.    No.    12061 

Rep.   197,   2   N.    B.   N.   85,  3  Am.       Fed.  Cas.,  s.  c.  11  N.  B.  R.  86. 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY.  239 

leave  to  amend  is  granted,  costs  may  be  taxed  against  the  peti- 
tioner.-^'^ The  amendment  to  a  petition  in  bankruptcy  relates 
back  to  the  time  of  the  filing  of  the  original  petition,  and  has 
the  same  force  and  effect  as  though  included  in  that  petition."^® 

Where  the  proposed  amendments  to  a  petition  state  entirely 
new  acts  of  bankruptcy  they  may  be  allowed  if  new  acts  were 
committed  prior  to  that  alleged  in  the  original  petition  but> 
not  if  they  were  subsequent."**^  Leave  to  amend  will  not  be 
granted  for  the  purpose  of  adding  a  member  of  a  firm  as  a 
new  party  after  all  the  evidence  has  been  taken  and  the  case  is 
before  the  court  for  final  hearing.-""  An  amended  petition  can 
not  be  filed  as  an  original  petition  by  erasing  "  amended  " 
after  execution. ^^^ 

Where  a  petition  is  referred  to  a  referee  to  make  the  adju- 
dication he  may  also  allow  amendments  to  the  petition.  He 
is  expressly  authorized  and  it  is  his  duty  to  examine  all  sched- 
ules of  property  and  lists  of  creditors  filed  by  bankrupts  and 
to  cause  such  as  are  incomplete  and  defective  to  be  amended. ^''^ 
The  referee  may  also  refuse  to  allow  an  amendment.  Whether 
he  grants  or  refuses  an  amendment  to  be  made,  the  question 
is  subject  to  review  by  the  judge."^^ 

§  93.     Dismissing  a  petition. 

After  an  involuntary  petition  has  been  filed  in  court  it  can 
not  be  dismissed  by  the  petitioning  creditors  or  for  want  of 
prosecution  or  by  consent  of  parties  until  after  notice  to  the 
creditors.-^* 

The  court  may  dismiss  a  petition  by  consent  of  the  petition-/ 
ing  creditors  after  the  time  has  expired  within  which  other 
creditors  may  intervene  to  join  in  the  petition  or  to  be  heard 
in  opposition  to  it.     The  reason  is  that  the  notice  required 

2"/;t  re  Rowland,  No.  6791  Fed.  2907,1  re  Pitt,  No.  11 188  Fed.  Cas., 

Cas..  s.  c.  2  N.  B.  R.  357.  s.  c.  8  Ben.  389. 

-*8  Sherman  v.  International  Bank,  291  /,i  ^^  Hyde  &  Gload  Mfg.  Co., 

No.    12765   Fed.   Cas.,   s.   c.   8   Biss.  103    Fed.    Rep.   617,   4  Am.    B.    R. 

371-  602. 

"»/m  re  Sears  (C.  C.  A.  2d  Cir.),  292  b.  A.   1898,   Sec.  39.  clause  2; 

117    Fed.    Rep.   294;   but   see  In  re  In  re  ATiller,  104  Fed.  Rep.  764. 

Lange,  97  Fed.  Rep.  197 ,  3  Am.  B.  203  Gen.  Ord.  27. 

R.  231.  See  also  White  v.  Bradley  -^*B.  A.  1898,  Sees.  S9g  and  580. 
Timber  Co.,  116  Fed.  Rep.  768. 


240  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

by  Sec.  58a  is  to  be  given  to  the  creditors  of  the  bankrupt  as 
they  appear  in  the  papers  in  the  case.  If  no  other  creditors 
appear  in  the  papers  in  the  case,  the  petitioning  creditors  may 
dismiss  the  petition  for  want  of  prosecution  or  by  consent. 
Such  a  dismissal  is  vaHd  though  there  are  other  creditors  and 
they  have  received  no  notice  of  the  proceedings.  Such  cred- 
itors may  move  to  have  the  proceedings  reinstated  but  must 
do  so  within  a  reasonable  time.^^^  A  petition  will  not  be  dis- 
missed if  one  of  the  petitioning  creditors  objects  to  such  dis- 
missal.-*"^ The  court  will  not  permit  a  petitioning  creditor  to 
withdraw  to  reduce  the  amount  of  debts  represented  on  the 
petition  below  the  jurisdictional  amount. ^^^  It  has  been  held 
that  the  provisions  of  the  bankrupt  act  with  reference  to 
notice  to  creditors  before  dismissal  of  proceedings  relates  to 
dismissals  by  consent  of  parties  and  not  by  order  of  court.""* 
Where  a  petition  had  been  dismissed  without  notice  to  creditors 
and  creditors  thereafter  petition  to  re-open  the  case  their 
application  was  denied  with  leave  to  institute  new  proceed- 
ings.^®* 

The  rule  was  otherwise  under  the  former  acts.""®  The 
death  of  a  person  against  whom  an  involuntary  petition  has 
been  filed  after  the  service  of  the  subpoena  and  before  the 
return  day  does  not  authorize  a  dismissal  of  the  petition.^**"  If 
the  court  is  satisfied  that  a  petition  in  involuntary  bankruptcy 
Avas  not  presented  in  good  faith,  or  for  sinister,  oppressive 
and  vexatious  purposes,  it  has  power  to  dismiss  the  proceed- 
ings after  notice  to  the  creditors. ^"^  The  court  may  dismiss 
the  petition  upon  condition  that  the  majority  of  the  creditors 
desiring  a  dismissal  give  security  for  the  payment  of  the  debts 
of  the  objecting  creditors.^**" 

295  /„  ^g  Jemison  Mercantile  Co.  Co.,  No.  2338  Fed.  Cas.,  s.  c.  3  N. 

(C.  C.  A.  5th  Cir.),  112  Fed.  Rep.  B.   R.  590. 

966 ,  7  Am.  B.  R.  588.  300  In  re  Hicks,  107  Fed.  Rep.  910 . 

298  In    re    Cronin,    98    Fed.    Rep.  6  Am.  B.  R.  182. 

584 ,  3  Am.  B.  R.  552.  301  /„  ^g  Hamlin,  No.   5994  Fed. 

207  /„  yg  Bedingfield,  96  Fed.  Rep.  Cas.,  s.  c.  8  Biss.  122.     See  also  Ex 

190,  2  Am.  B.  R.  355.  parte  Ashworth,  18  L.  R.  Eq.  705; 

298  Neustadter  v.  Dry  Goods  Co.,  Ex  parte  Harcourt,  2  Rose  203  :  £.1- 
95  Fed.  Rep.  830,  3  Am.  B.  R.  96.  parte  Bourne,  2  Glyn.  &  J.  137. 

299  In    re    Camden    Rolling    Mill  •"•'-  In  re  Indianapolis,  etc.,  R.  C, 

No.  7023  Fed.  Cas.,  s.  c.  5  Biss.  287. 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY.  24I 

§  94.  Involuntary  proceedings  as  to  grounds  for  a  suit  for 
damages. 
Proceedings  by  a  creditor  to  force  a  debtor  into  bankruptcy 
can  not  be  resorted  to  as  proceedings  ///  tcrrorcui  for  the  pur- 
pose of  collecting  a  debt.  The  malicious  institution  of  such 
proceedings  in  bankruptcy  may  be  the  foundation  for  an  action 
for  damages  sustained. ^**^  In  order  to  maintain  an  action  for 
damages  it  is  necessary  to  allege  and  prove  that  the  proceed- 
ings were  instituted  maliciously  and  without  probable  cause 
and  terminated  without  an  adjudication  in  bankruptcy.^"* 

§  94a.  Costs. 

Where  a  petition  is  contested  the  petitioning  creditors  if 
successful  may  recover  the  same  costs  that  are  allowed  to  a 
party  recovering  in  a  suit  in  equity;  and  if  the  petition  is  dis- 
missed the  debtor  may  recover  like  costs  against  the  peti- 
tioners.^"^ But  this  does  not  authorize  the  taxation  of 
attorneys'  fees.^""  Upon  an  application  for  a  warrant  of  seiz- 
ure the  court  may  allow  attorneys'  fees  as  costs  of  the  proceed- 
ings when  the  petition  is  dismissed. ^"^  Witness  fees  must  be 
paid  according  to  statute ;  one  dollar  and  fifty  cents  per  day 
for  actual  attendance  and  mileage.^"^  No  allowance  will  be 
made  for  expert  witnesses. ^"^ 

Where  an  adjudication  is  made  the  petitioning  creditors 
are  entitled  to  have  the  deposit  of  thirty  dollars  refunded 
to  them  out  of  the  estate.'^""  It  is  competent  for  the  court  to 
make  a  reasonable  allowance  as  indemnity  for  costs  and  ex- 
penses in  preserving  the  estate,^^"  but  no  such  allowance  will 
be  made  for  vain  attempts  to  discover  concealed  assets  made 

3»3  Farley  v.    Banks.  4  El.   &  Bl.  7(V  (785)  ,  2  Am.  B.  R.  266.     As  to 

493;  Chapman  v.  Pickersgill,  2  Wil-  aUorneys'  fees,  see  Sec.  41a,  ante. 

son  145 ;  Cooley  on  Torts,  187 ;  Ad-  ^•"*  In  re  Carolina  Cooperage  Co., 

(lison  on  Torts,  867.  96  Fed.  Rep.  604,  3  Am.  B.  R.  154, 

•"'*  Stewart  v.  Sonneborn,  98  U.  S.  2  N.  B.  N.  23. 

187,  reversing  No.   13176  Fed.  Cas.,  -'09 /„  yg  Silverman,  97  Fed.  Rep. 

s.   c.   2   Woods   599;   Whitworth   v.  325,  4  Am.   B.   R.  83,  2  N.  B.  N. 

Hall,  2  B.  &  Ad.  695.  760;  In  re  Harrison  Mercantile  Co., 

•"'=>  Gen.  Ord.  34.  95  Fed.  Rop.  123,  2  Am.  B.  R.  419. 

•■*"•'  In  re  Ghiglione,  93  Fed.  Rep.  •''i"  In  re  Carolina  Cooperage  Co., 

186.  I  Am.  B.  R.  580.    As  to  attor-  96  Fed.  Rep.  604,  3  Am.  B.  R.  154, 

neys'  fees,  see  Sec.  41a,  ante.  2  N.   B.   N.  23;   In  re  Lesser,   100 

•'"^  In  re  Abraham,  93  Fed.  Rep.  Fed.  Rep.  433 ,  3  Am.  B.  R.  758 ,  2 

N.   B.  N.  599. 


242  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

at  the  suggestion  of  the  attorney  for  the  creditors  and  against 
the  objection  of  labor  claimants,  whose  claims  will  exhaust 
the  entire  estate.^^^  A  person  can  not  recover  expenses  and 
costs  incurred  by  him  in  an  attachment  suit  to  enforce  a  lien, 
which  was  invalidated  by  the  bankruptcy  proceedings. ^^^  An 
assignee  is  entitled  to  pay  for  services  in  a  state  assign- 
ment proceedings  when  the  property  is  subsequently  admin- 
istered in  bankruptcy.^^^ 

The  costs  and  expenses  of  administration  of  an  estate  in 
bankruptcy  must  be  paid  out  of  the  estate  before  there  is  any 
distribution  to  creditors.^" 

§  95.     Proceedings  subsequent  to  the  adjudication. 

Proceedings  in  involuntary  bankruptcy  subsequent  to  the 
order  of  adjudication  and  reference  are  not  dififerent  from  the 
proceedings  had  upon  a  voluntary  petition  or  a  petition  for 
the  purpose  of  having  a  partnership  or  the  members  thereof 
adjudged  bankrupts.  The  examination  of  the  bankrupt,  the 
first  creditors'  meeting,  the  election  of  the  trustee,  the  collec- 
tion of  the  assets  of  the  bankrupt,  the  distribution  of  the  estate 
and  other  matters  pertaining  to  the  proper  administration  of 
the  estate  will  be  considered  hereafter  under  appropriate  heads. 

^1^  In  re  Rozinsky,  loi  Fed.  Rep.  appeals  held    that   where   an   assig- 

229 ,  3  Am.  B.  R.  830 ,  2  N.  B.  N.  nee  in  a  state  court  had  been  paid  a 

787.  fee  and   had   paid  his   attorney  for 

.•«i2/,j  yg  Young,  96  Fed.  Rep.  606,  services  rendered  in  a  state  proceed- 

2  Am.  B.  R.  673.  ing   that    such    sums    could   not    be 

313  Randolph  v.  Scrugg,  190  U.  S.  recovered  in  a  court  of  bankruptcy 

533,  10  Am.  B.   R.   I ;  In  re  Pauly  by  a  rule  to  show  cause.     Affirmed 

(Ref.  Op.),  2  Am.  B.  R.  2i2>2>',  In  re  Louisville   Trust   Co.    v.   Comingor, 

Scholtz,   106  Fed.  Rep.  834.  184  U.  S.  18,  7  Am.  B.  R.  421. 

In  Sinsheimer  v.  Simonson  (C.  C.  ^14  g  ^  1898,  Sec.  64;  In  re  Tebo, 

A.  6th  Cir.),   107  Fed.  Rep.  898,  5  loi    Fed.    Rep.   419,   4   Am.    B.   R. 

Am.  B.  R.  537,  the  circuit  court  of  235. 


PROCEEDINGS    PECULIAR    TO    PARTNERSHIPS  243 


CHAPTER    XI. 

PROCEEDINGS    PECULIAR    TO    PARTNERSHIPS. 

§  96.     Partnership  bankruptcy  generally. 

The  mode  of  proceeding  to  have  a  partnership  adjudged  to 
be  bankrupt  is  the  same  as  in  the  case  of  an  individual  debtor.^ 
Partners  may  present  a  voluntary  petition,  or  a  petition  may 
be  filed  against  them  by  creditors,  or  a  petition  may  be  pre- 
sented by  or  against  the  partners  individually  as  by  or  against 
any  other  person.  Where  a  creditor  brings  the  petition 
against  a  firm  an  act  of  bankruptcy  and  a  sufficient  debt  must 
be  alleged  and  proved,  as  in  the  case  of  an  individual.  There 
are,  however,  some  peculiarities  connected  with  the  bank- 
ruptcy of  partnerships  which  should  be  noticed  and  which  will 
be  dealt  with  in  tliis  chapter.  These  peculiarities  arise  partly 
from  the  rights  of  partners  between  themselves  and  partly  from 
the  rule  which  has  long  prevailed  in  equity  for  the  distribution 
of  the  effects  of  insolvent  partners  among  their  creditors,  ac- 
cording to  which  the  joint  creditors  are  entitled  to  priority  of 
payment  out  of  the  joint  estate,  and  the  separate  creditors  of 
each  partner  out  of  his  separate  estate.^ 

The  general  scheme  of  the  bankrupt  act  with  reference  to 
the  settlement  of  the  estates  of  firms  and  the  partners  is 
founded  upon  and  its  provisions  merely  declaratory  of  recog- 
nized equitable  principles  of  the  administration  of  insolvent 
partnerships."'     By  the  provisions  of  section  5  of  the  bankrupt 

^  B.  A.  1898,  Sec.  5 ;  compare  R.  8  How.  414 ;  Ex  parte  Cook,  2   P. 

S.   Sec.  5121.  Wms.  500;  Gray  v.  Chiswell,  9  Ves. 

^  B.  A.  1898,  Sec.  5/  and  g;  In  re  118;    Ridgeway  v.    Clare,   19   Beav. 

Melick,  No.  9399  Fed.  Cas.,  s.  c.  4  in. 

N.  B.  R.  97;  In  re  Collier,  No.  3002  ^  In  re  Meyer  (C.  C.  A.  2d  Cir.), 

Fed.   Cas.,  s.  c.    12   N.    B.   R.  266;  98  Fed.  Rep.  976,  3  Am.  B.  R.  559; 

Harrison  v.   Sterry,   5   Cranch  289;  Amsinck    v.    Bean,    22    Wall.    403; 

Collins  V.  Hood,  No.  301.S  Fed.  Cas.,  Murray  v.   Murray,  2  Johns.   Chan, 

s.  c.  4  McLean  186:  Murrill  v.  Neill,  60;   Colly.   Part.  854. 


244  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

act,  "a  partncrslii])."  during  the  continuance  of  the  l)usiness, 
or  after  its  dissolution  and  before  the  final  settlement  of  its 
business,  may  be  adjudged  a  bankrupt,  and  jurisdiction  of  all 
the  partners  and  the  administration  of  the  partnership  and 
individual  property  is  conferred  upon  any  court  of  bankruptcy 
having  jurisdiction  of  one  of  the  partners.  The  section  provides 
that  the  creditors  of  the  partnership  shall  appoint  the  trustee ; 
that  the  trustee  shall  keep  separate  accounts  of  the  partner- 
ship property  and  of  the  individual  property;  that  the  ex- 
penses shall  be  paid  from  the  partnership  property  and  the 
individual  property  in  such  proportion  as  the  court  may  deter- 
mine;  and  that  the  net  proceeds  of  the  partnership  property 
shall  be  appropriated  to  the  payment  of  the  partnership  debts, 
and  any  surplus  added  to  the  assets  of  the  individual  part- 
ners, and  the  net  proceeds  of  the  individual  estate  of  each 
partner  shall  be  appropriated  to  the  payment  of  his  individual 
debts,  and  any  surplus  to  the  payment  of  the  partnership  debts. 
It  authorizes  the  partnership  estate  to  prove  against  the  indi- 
vidual estates,  and  vice  versa,  and  directs  the  assets  of  the 
partnership  estate  and  the  individual  estates  to  be  marshaled 
so  as  to  prevent  preferences,  and  secure  the  equitable  distri- 
bution of  the  property  of  the  several  estates.  It  further  pro- 
vides that  the  property  of  a  partnership  shall  not  be  adminis- 
tered in  bankruptcy  when  less  than  all  the  members  are  ad- 
judged bankrupt;  and  in  that  event  the  partner  not  adjudged 
bankrupt  is  to  settle  the  partnership  business  expeditiously, 
and  account  for  the  interests  of  the  adjudged  bankrupt. 

§  96a.     Individual  petition  by  or  against  a  partner. 

There  is  nothing  in  the  bankrupt  statute  to  prevent  a  petition 
by  or  against  a  partner  individually  and  separately  without 
joining  the  other  members  of  the  firm.  The  statute  contains 
no  restrictions  upon  partners  because  they  are  partners  w^ith 
respect  to  the  right  to  adjudge  them  bankrupts  individually  as 
other  persons.  The  statute  recognizes  the  right  of  such  a 
proceeding.*  It  expressly  provides  that  in  the  event  of  one  or 
more  but  not  all  of  the  members  of  a  partnership  being  ad- 

<  B.  A.  1898.  Sees.  y.  5/i  and  16;       N.  B.  N.  137;  In  re  Mercur  (C.  C. 
Jr.   re  Hirsch,  97  Fed.  Rep.  571  ;  2       A.  3d  Cir.).  122  Fed.  Rep.  384- 


PROCEEDINGS    PECULIAR    TO    PARTNERSHIPS.  245 

judged  bankrupt,  the  partnership  property  shall  not  be  admin- 
istered in  bankruptcy,  unless  by  consent  of  the  partner  or 
partners  not  adjudged  bankrupt;  but  such  partner  or  partners 
not  adjudged  bankrupt  shall  settle  the  partnership  business  as 
expeditiously  as  its  nature  will  permit,  and  account  for  the 
interest  of  the  partner  or  partners  adjudged  bankrupt.^  This 
provision  applies  to  a  proceeding  by  or  against  one  partner  or 
any  number  less  than  all,  and  means  that  the  bankruptcy  of  one 
partner  shall  not  preclude  the  other  members  from  settling 
the  partnership  business.*^  unless  by  the  consent  of  the  solvent 
partners.  This  consent  may  be  inferred  from  the  acts  of  the 
partners.^  Such  proceedings  are  simply  voluntary  or  invol- 
untary by  or  against  the  individual.  The  partnership  debts 
and  assets  are  not  drawn  into  bankruptcy  to  be  administered. 
Only  the  individual  debts  and  assets,  including  the  interest  of 
the  bankrupt  partner  or  partners  in  the  partnership  as  ac- 
counted for  by  the  solvent  partners,  is  administered  in  bank- 
ruptcy. All  debts  of  the  partnersliip  having  been  settled  by 
the  solvent  partners,  a  discharge  granted  the  bankrupt  partner 
will  release  him  from  all  liability  for  partnership  as  well  as 
his  individual  debts.^ 

It  has  been  held  that  if  the  petition  does  not  pray  that  the 
firm  be  adjudged  bankrupt  the  co-partners  cannot  come  in 
voluntarily  and  make  themselves  ])arties  to  the  proceedings  for 
the  purpose  of  adjudicating  the  firm  bankrupt.®  A  part- 
nershi])  creditor  may  join  in  a  petition  against  one  of  the 
partners  individually.^" 

Petitions  by  an  insolvent  i)artner  of  a  partnership,  which  lias 
ceased  to  do  business  and  has  no  assets,  have  attracted  con- 

^  B.  A.  1898,  Sec.  5/1;  Amsinck  v.      Am.  B.  R.  794 ;  2  N.  B.  N.  607 :  lu  re 
Bean,  22  Wall.  395;  Moses  v.  Pond,      Grant,   106  Fed.  Rep.  496;  3  N.  B. 

4  Am.  B.  R.  655.  N.  425. 

As  to  the  power  of  a  solvent  part-  **  Jarecki  Mfg.  Co.  v.  McElwaine, 

ner  to  compromise,  see  In  re  Saul,  7  Fed.  Rep.  249. 

5  Fed.  Rep.  715.  "  Mahoney  v.  Ward,  100  Fed.  Rep. 
«/h  re  Meyer  (C.  C.  A.  2d  Cir.),  278;  2  N.  B.  N.  538;  In  re  Boylan, 

98  Fed.  Rep.  976;  3  Am.  B.  R.  559;  No.  1757  Fed.  Cas.,  s.  c.  i  Ben.  266; 

In    re   Hirsh.   97    F'ed.    Rep.   571;   3  ir    re   Merciir    (C.   C.   A.   3d   Cir.), 

Am.  B.  R.  344:  2  N.  B.  N.  137.  122  Fed.  Rep.  384. 

''In  re  Meyer  (C.  C.  A.  2d  Cir.),  '^ /h  re  Merciir.  95  Fed.  Rep.  634: 

98  Fed.  Rep.  976:  3  Am.  B.  R.  559;  s.  c.    (C.  C.  A.  3d  Cir.),   122  Fed. 

In  re  Duguid.  100  Fed.  Rep.  274 ;  3  Rep.  384. 


246  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

siderable  atention.  How  can  such  a  partner  proceed  to  be 
relieved  of  his  liabiHty  for  partnership  debts  as  well  as  indi- 
vidual debts?  Two  methods  of  procedure  have  been  adopted 
under  the  present  act. 

An  insolvent  partner  of  such  a  firm  has  filed  his  individual 
petition,  scheduled  the  partnership  and  his  individual  debts, 
averred  that  the  firm  has  no  assets,  set  forth  his  property  if  he 
had  any,  and  prayed  to  be  adjudged  a  bankrupt  without  asking 
an  adjudication  against  the  firm.  The  prevailing  opinion  seems 
to  be  that  in  such  cases  he  must  at  least  give  notice  to  his 
former  partners  of  the  proceeding  and  his  desire  to  be  dis- 
charged from  partnership  debts."  It  has  been  held  that  a 
discharge  upon  an  individual  petition  releases  the  debtor  from 
his  liability  for  individual  and  partnership  obligations.^" 

The  other  and  safer  course  to  pursue  is  to  have  the  part- 
nership and  himself  adjudicated  bankrupts  upon  a  petition  by 
less  than  all  of  the  partners. ^^  In  this  way  the  partnership 
affairs  are  surely  brought  into  the  bankruptcy  proceedings  and 
there  can  be  no  question  but  what  a  discharge  will  operate  as  a 
release  of  both  firm  and  individual  obligations. 

§  97.     When  a  partnership  may  be  adjudged  bankrupt. 

A  partnership  which  owes  debts  is  entitled  to  be  adjudged  a 
voluntary  bankrupt."  Any  unincorporated  company  owing 
debts  to  the  amount  of  one  thousand  dollars  or  over  may  be 
adjudged  an  involuntary  bankrupt  upon  default  or  impartial 
trial,  and  is  subject  to  the  provisions  and  is  entitled  to  the 
benefits  of  the  statute.^^  In  order  to  maintain  proceedings 
against  a  partnership  they  must  also  be  alleged  and  proved  to 

''-''■  In  re  Meyers,  96  Fed.  Rep.  408 ;  ^^  For  proceedings  on  such  a  peti- 

s.  c.  97  Fed.  Rep.  757 ,  3  Am.  B.  R.  tion,    see   Sec.   98,    third  post. 

260,  2  N.  B.  N.  Ill ;  /w  r^?  Russell,  In  re  Russell,  97  Fed.  Rep.  32,  3 

97  Fed.  Rep.  32 ,  3  Am.  B.  R.  91  ;  Am.    B.    R.   91 ;   In  re   Murray,   96 

In  re  McFaun,  96   Fed.   Rep.   592;  Fed.  Rep.  600,  3  Am.  B.  R.  601. 

In  re  Elliott  (Ref.  Op.),  2  N.  B.  N.  ^*  B.  A.  1898,  Sec.  4a  and  Sec.  i, 

350;   In  re  Laughlin,  96  Fed.   Rep.  clause  19. 

589 :   In  re  Hartman,  96  Fed.  Rep.  ^^  B.  A.  1898,  Sec.  4b.     In  Davis 

593.  V.  Stevens,  104  Fed.  Rep.  235,  a  cor- 

i-Jarecki  v.  McElwaine,  107  Fed.  poration  non  de  jure  was  adjudged 

Rep.  249.     See  also  In  re  Meyer,  97  bankrupt  as  a  partnership. 
Fed.  Rep.  757 ,  3  Am.  B.  R.  260 ,  2 
N.  B.  N.  III. 


\ 


PROCEEDINGS    PECULIAR    TO    PARTNERSHIPS.  247 

be  insolvent,'"  to  have  committed  an  act  of  bankruptcy  within 
four  months  prior  to  fihng  the  petition/'  and  to  have  had  their 
principal  place  of  business  within  the  territorial  jurisdiction  of 
the  court.'^  In  other  words,  the  same  things  must  concur  in 
respect  to  the  partnership  as  in  case  of  proceedings  against 
an  individual.'^ 

A  partnership  may  be  adjudged  bankrupt  at  any  time  during 
the  continuation  of  the  partnership  business,  or  after  its  disso- 
lution and  before  the  final  settlement  thereof.-'*  The  language 
of  this  provision  is  simply  declaratory  of  a  well-recognized 
rule  that  where  there  are  assets  or  debts  of  a  partnership  re- 
maining, the  partnership,  even  after  dissolution,  may  properly 
be  considered  as  subsisting  as  to  its  creditors  and  for  the  pur- 
pose of  applying  its  joint  stock  and  property  to  the  payment  of 
its  creditors. ^^ 

When  a  partnership  is  dissolved  by  the  death  of  one  of  the 
partners  the  firm  can  not  be  adjudged  to  be  bankrupt.^-  The 
reason  for  this  rule  is  that  a  court  of  bankruptcy  has  no  juris- 
diction to  adjudge  a  deceased  person  to  be  a  bankrupt  or  to 
administer  his  estate.  It  has,  however,  been  held  that  a  sur- 
viving partner  may  be  adjudged  to  be  a  voluntary-^  or  an 

16  Vaccaro  v.   Security   Bank    (C.  Levy,  95  Fed.  Rep.  812;  In  re  Rud- 

C.  A.  6th  Cir.),  103  Fed.  Rep.  436,  nick,  102  Fed.  Rep.  750,  2  N.  B.  N. 

4  .\m.  B.  R.  474,  2  N.  B.  N.  1037;  975,  4  Am.  B.  R.  531 ;  In  re  Rosen- 

In  re  Blair,  99  Fed.  Rep.  76,  3  Am.  baum,  i  N.  B.  N.  541. 

B.  R.  588 ,  2  N.  B.  N.  364 ;  Davis  v.  21  /,j  y^   Crockett,   No.  3402  Fed. 

Stevens,  104  Fed.  Rep.  235,  4  Am.  Cas.,  s.  c.  2  Ben.  514;  In  re  Noo- 

B.  R.  763,  3  N.  B.  N.  131.  nan,    No.    10292    Fed.    Cas.,    s.   c.   3 

1^  B.  A.  1898,  Sec.  ib;  In  re  Sha-  Biss.  491 ;  In  re  Stowers,  No.  13516 

piro,  106  Fed.  Rep.  495 ,  3  N.  B.  N.  Fed.  Cas.,  s.  c.  i   Low.  528 ;  In  re 

385;  In  re  Grant,  106  Fed.  Rep.  496,  Foster,   No.  4962  Fed.  Cas.,  s.  c.  3, 

3  N.  B.  N.  425;  In  re  Meyer  (C.  C.  Ben.    386;    In    re    McFarland,    No. 

A.   2d   Cir.),   98   Fed.    Rep.   976,   3  8788   Fed.   Cas.,   s.  c.    10   N.   B.   R. 

Am.    B.    R.    559;    Albany    Bank    v.  381. 

Johnson,  No.  133  Fed.  Cas. ;  5  L.  R.  22  /„  y^  Temple,   No.   13825   Fed. 

Rep.  313.  Cas.,    s.    c.  4    Saw.   92;    Adams   v. 

"  B.  A.  1898,  Sec.  2,  clause  i  ;  In  Terrell,  4  Fed.  Rep.  802 ;  Vaccaro  v. 

re  Blair,  99  Fed.  Rep.  76,  3  Am.  B.  Bank  (C.  C.  A.  6th  Cir.),  103  Fed. 

R.  588 .  2  N.  B.  N.  364.  Rep.  436 ,  4  Am.  B.  R.  474 ,  2  N.  B. 

1"  For  further  consideration  of  this  N.    1037. 

subject,   see   Sec.  98.   post.  2.'i  Briswalter  v.  Long,  14  Fed.  Rep. 

'-"  B.    A.    i8q8,    Sec.    5a;    In    re  153:    In    re    Pierce,    102    Fed.    Rep. 

Meyers  (C.  C.  A.  2d  Cir.).  98  Fed.  977,  4  Am.  B.  R.  489,  2  N.  B.  N. 

Rep.  976,  3  Am,   B.  R.  559;  In  re  979. 


248  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

involuntary"*  bankrupt,  both  individually  and  as  surviving 
partner  of  the  tirm.  By  this  method  the  property  of  a  part- 
nership dissolved  by  the  death  of  a  partner  can  be  drawn  into 
the  court  of  bankruptcy  and  the  administrator  has  nothing  to 
do  with  it,  except  to  receive  the  share  of  the  surplus,  if  any 
there  be,  after  settlement  of  the  partnership  affairs  belonging 
to  the  deceased  partner.-'^ 

The  trustee  cannot  take  possession  of  any  property  of  which 
the  administrator  has  custody  without  his  consent.'® 

Where  one  of  the  partners  is  an  infant  the  adjudication  may 
be  made  against  the  firm  and  the  partner  who  is  of  age."^  In 
such  case  the  petition  should  be  dismissed  as  to  the  minor 
partner  without  costs  and  with  a  specific  statement  that  the 
dismissal  is  made  by  reason  of  his  minority."^ 

§  98.     How  to  institute  proceedings  to  have  a  partnership  de- 
clared bankrupt. 

Proceedings  to  have  a  partnership  declared  to  be  bankrupt 
may  be  instituted  upon  three  descriptions  of  petitions.  The 
proceedings  may  be  begun,  first,  upon  the  petition  of  all  the 
partners  of  the  firm ;  second,  upon  the  petition  of  creditors  of 
the  partnership;  and,  third,  upon  the  petition  of  less  than  all 
of  the  partners. 

First.  The  petition  of  all  the  partners  is  a  purely  voluntary 
petition  under  section  4.0.'-^  Where  they  all  unite  in  it  the 
jurisdiction  must  be  shown,  as  that  they  have  had  their  prin- 
cipal place  of  business  or  resided  or  have  had  their  domicile 
within  the  territorial  jurisdiction  of  the  court  for  the  greater 
portion  of  the  preceding  six  months.  It  is  not  necessary  to 
allege  an  act  of  bankruptcy  to  have  been  committed.  The 
filing  of  such  a  petition  is  an  act  of  bankruptcy.^' 

2*/«   re  Stevens,  No.   13393  Fed.  4  Am.  B.  R.  489,  2  N.  B.  N.  979; 

Cas.,  s.  c.   I    Saw.  397 ;  Vaccaro  v.  Moses  v.  Pond,  4  Am.  B.  R.  655. 
Security  Bank   (C.  C.  A.  6th  Cir.),  -''In   re   Dunnigan,  95    Fed.   Rep. 

103  Fed.  Rep.  436-,  4  Am.  B.  R.  474,  428,  2  Am.  B.   R.  628;  In  re  Du- 

2  N.  B.  N.  1037.  guid,  100  Fed.  Rep.  274,  3  Am.  B. 

25  Briswalter  v.  Long,  14  Fed.  Rep.  P-  794 .  2  N.  B.  N.  607. 
153 ;    In   re    Pierce,    102    Fed.    Rep.  '"  See      Voluntary      Proceedings, 

977 .  4  Am.  B.  R.  489 .  2  N.  B.  N.  Chap.  IX. 


I 


979- 

-^  In  re  Pierce,  102  Fed.  Rep.  977, 


29  B.  A.  1898,  Sec.  3a,  clause  5. 


PROCEEDINGS    PECULIAR    TO    PARTNERSHIPS,  249 

Second.  The  proceeding  upon  the  petition  of  creditors  of 
the  firm  is  a  purely  involuntary  proceeding  under  section  46.^** 
Such  a  petition  must  specify  an  act  of  bankruptcy  to  have  been 
committed  and  set  forth  other  requisites  of  an  involuntary- 
petition. 

To  support  an  adjudication  of  bankruptcy  against  a  part- 
nership it  seems  that  formerly  there  must  have  been  separate 
acts  of  bankruptcy  by  each  partner/'^  The  present  act  pro- 
vides that  the  court  of  bankruptcy  which  has  jurisdiction  of 
one  of  the  partners  may  have  jurisdiction  of  all  the  partners 
and  of  the  administration  of  the  partnership  and  individual 
property.^^  A  partnership  has  been  adjudged  bankrupt  upon 
a  petition  charging  an  act  of  bankruptcy  by  one  or  more  (but 
less  than  all)  of  the  partners,  where  such  act  was  within  the 
scope  of  the  partnership  business  so  as  to  constitute  in  fact  an 
act  of  the  firm.^^  Where  it  is  sought  to  have  the  individual 
partners  also  declared  bankrupts  in  the  same  proceeding  it  is 
necessary  to  show  that  they  have  committed  or  been  partici- 
pants in  committing  one  of  the  enumerated  acts.^*  A  general 
assignment  by  a  partnership  is  an  act  of  bankruptcy  by  the  firm 
and  the  partners.''^  The  sale  by  one  member  of  an  insolvent 
firm  of  his  interest  to  his  partner  is  an  act  of  bankruptcy.^"     If 

3"  See     Involuntary     Proceedings,  ^2  g   y\    jggg^  gg^,    ^^ 

Chap.  X.  33 /„  ,.^  Meyer  (C.  C.  A.  2d  Cir.), 

31  Allen   V.   Hartley,  4   Doug.   20;  98  Fed.  Rep.  976,  3  Am.  B.  R.  559; 

/.'/  re  Redmond,  No.  11632  Fed.  Cas.,  In   re   Grant,    106   Fed.   Rep.  496,   3 

s.  c.  9  N.  B.  R.  408,  and  cases  cited  N.   B.   N.  425;   In   re   Duguid,    100 

in  opinion:  In  re  Weaver.  No.  17307  Fed.  Rep.  274.  3  Am.  B.  R.  794.  2 

Fed.  Cas.,  s.  c.  9  N.  B.  R.  132:  In  re  N.    B.   N.  C07;   In  re   Kersten,   no 

Waite,  No.  17044  Fed.  Cas..  s.  c.   i  Fed.  Rep.  929,  6  Am.  B.  R.  516. 

Low.    207;    In    re    Cook.    No.    3150  ^*  In  re  Meyer  (C.  C.  A.  2d  Cir.), 

Fed.  Cas.,  s.  c.  3  Biss.  122.  98  Fed.  Rep.  976,  3  Am.  B.  R.  559; 

It   was   held    not   evidence    of   an  In  re  Shapiro,  106  Fed.  Rep.  495,  3 

act    of    bankruptcy    by    tlirce    part-  N.    B.    N.   385. 

ners   of   a   banking   concern,    where  •""*  Green    River    Deposit    Bank    v. 

one   of   them    resided    at    the   place  Craig,  no  Fed.  Rep.  137,  6  Am.  B. 

where  the  banking  house  was,  and  R.   381. 

was    the    only    partner    who    trans-  ^^  In   re   Shapiro,    106   Fed.    Rep. 

acted    business,    the    other   two    re-  495 ,  3  N.  B.  N.  385 ;  In  re  Waite, 

siding   at    a    distance    from    it,    ab-  No.    17044   Fed.   Cas.,   s.  c.    i    Low. 

sented    himself    from    the    banking  207;  In  re  Cook,  No.  3150  Fed.  Cas., 

house,  shut   it  up  and   stopped  pay-  s    c.  3  Biss.  122. 
ment.     Mills  v.   Bennett,  2  M.  &  S. 
556,  s.  c.  2  Rose  269. 


250  LAW    AKD    rROCEEDTNGS    IN    BANKRUPTCY. 

a  panncrsliip  has  coniinittcd  any  one  or  more  of  tlic  enumer- 
ated acts  of  bankruptcy  it  is  sufficient  to  support  an  adjudica- 
tion. 

To  maintain  an  adjudication  against  a  ]vartnership  it  must 
generally  be  shown  to  be  insolvent.  Each  j^artner  is  liable 
;■//  solido  for  the  debts  of  the  firm  so  that  they  are  debts  of 
each  individual  partner.  It  has  accordingly  been  held  that  a 
partnership  is  not  insolvent  within  the  meaning  of  the  bankrupt 
act  while  any  of  the  partners  are  able  to  pay  the  firm  liabili- 
ties.''" \\'here  a  partnership  has  made  a  general  assignment, 
which  is  charged  as  an  act  of  bankrujitcy,  it  should  be  ad- 
judged bankrupt  irrespective  of  its  solvency."''^ 

Third.  Proceedings  upon  petition  of  less  than  all  the  part- 
ners to  have  a  firm  adjudged  bankrupt  is  a  proceeding  which 
necessarily  is  neither  wholly  voluntary  nor  wholly  involun- 
tary. So  far  as  the  petitioners  are  concerned,  it  is  voluntary.^* 
So  far  as  the  partners  not  petitioning  are  concerned,  it  is  not 
involuntary  in  the  sense  of  section  4b.  unless  the  adjudication 
is  asked  on  the  ground  of  the  commission  of  an  act  of  bank- 
ruptcy, although  it  may  be  involuntary  in  the  sense  of  not  being 
voluntary  under  section  40.^^  Where  it  is  not  involuntary  in 
the  sense  of  section  4b  the  adjudication  may  be  asked  for  on  the 
ground  that  the  members  of  the  partnership  are  unable  to  pay 
all  their  debts  in  full.  Form  No.  2,  prescribed  by  the  supreme 
court,  is  a  petition  of  this  character. 

Any  member  of  a  partnership  who  refuses  to  join  in  a  peti- 
tion to  have  the  partnership  declared  bankrupt  is  entitled  to 
resist  the  prayer  of  the  petition  in  the  same  manner  as  if  the 
petition  had  been  filed  by  a  creditor  of  the  partnership.  No- 
tice of  the  filing  of  the  petition  must  be  given  to  him  in  the 
same  manner  as  provided  by  law  and  by  the  rules  in  the  case 
of  a  debtor  ]:>etitioned  against.**'     He  has  the  right  to  appear 

3"Vaccaro  v.   Security  Bank    (C.  i  N.  B.  N.  570,  3  Am.  B.  R.  601; 

C.  A.  6th  Cir.),  103  Fed.  Rep.  436,  In  re  Carleton,  115  Fed.  Rep.  246; 

4  Am.  B.  R.  474 ,  2  N.  B.  N.  1037 ;  8  Am.  B.  R.  270. 
h\  re  Blair,  99  Fed.  Rep.  76 ,  3  Am.  *"  Gen.  Ord.  8 ;  In  re  Russell,  97 

B.  R.  588;  2  N.  B.  N.  364 ,  Davis  v.  Fed.  Rep.  32 ,  3  Am.  B.  R.  91 ;  In  re 

Stevens,  104  Fed.  Rep.  763,  3  N.  B.  Elliott  (Ref.  Op.),  2  N.  B.  N.  350; 

N.  131 ,  4  Am.  B.  R.  763.  In  re  Altman,  95  Fed.  Rep.  263 ;  In 

3*  West  Co.  V.  Lea,  174  U.  S.  590.  r^'  Moore,  No.  9750  Fed.  Cas.,  s.  c. 

39  In  re  Murray,  96  Fed.  Rep.  600 ,  5    Biss.    79 ;    I^^^    re    Prankard,    No. 


PROCEEDINGS    PECULIAR    TO    PARTNERSHIPS.  25 1 

at  the  time  fixed  by  the  court  for  the  hearing  of  the  petition 
and  to  make  proof,  if  he  can,  that  the  partnership  is  not  in- 
solvent or  has  not  committed  an  act  of  bankruptcy,  and  to 
make  all  defenses  which  any  debtor  proceeded  against  is 
entitled  to  take  by  the  provisions  of  the  act."*^ 

In  any  proceeding  to  have  a  partnership  declared  bankrupt 
all  of  the  partners  should  be  named  in  the  petition  and  brought 
before  the  court.*-  One  who  holds  himself  out  as  a  partner, 
although  he  has  actually  retired  from  the  firm,  may  be  made  a 
bankrupt  as  a  member  of  the  firm  upon  a  creditor's  petition." 
It  is  not  necessary,  however,  to  name  or  serve  a  secret  or  dor- 
mant partner  in  order  to  have  a  valid  adjudication  in  bank- 
ruptcy.** If  the  name  of  such  partner  is  known,  he  should 
be  made  a  party  to  the  proceedings. 

The  petition  to  have  a  partnership  adjudged  to  be  bankrupt 
may  be  filed  in  the  district  where  the  firm  has  had  its  principal 
place  of  business  for  the  greater  portion  of  the  six  months 
preceding  the  filing  of  the  petition!*'  It  may  be  filed  in  any 
district  in  which  a  court  of  bankruptcy  has  jurisdiction  of  one 
of  the  partners.*"  If  the  court  has  jurisdiction  of  one  of  the 
partners  of  a  firm  it  may  have  jurisdiction  of  all  the  partners 
and  of  the  administration  of  the  partnership  and  of  the  indi- 
vidual property.*"  In  case  two  or  more  petitions  are  tiled  in 
different  districts  by  different  members  of  the  same  partner- 

11366  Fed.  Cas.,  s.  c.  i  N.  B.  R.  297;  *•' /h  re   Krueger,   No.  7941    Fed. 

/;;    re   Lewis,    No.   831 1    Fed.    Cas.,  Cas.,  s.  c.  2  Low.  66. 

s.  c.  2  Ben.  96.  **  Metcalf  v.  Officer,  No.  9496  Fed. 

For  form  of  notice  when  service  Cas.,  s.  c.  5  DiH-  565 ;  /»»  re  Harris^ 

\~   made   by   publication,   see  In    re  4   Am.    B.    R.    132,    108    Fed.    Rep. 

Murray,  96  Fed.    Rep.  600,  3  Am.  5i7- 

B.  R.  601.  *^  B.  A.  1898,  Sec.  2,  clause  i. 

*i  Gen.  Ord.  8;  In  re  Laughlin,  96  *'"'  B.  A.  1898,  Sec.  5c;  In  re  Blair, 

Fed.  Rep.  589 .  3  Am.  B.  R.  i  ;  In  re  99  Fed.  Rep.  76 .  3  Am.  B.  R.  588 , 

Fowler,  No.  4998  Fed.  Cas.,  s.  c.  i  2  N.  B.  N.  364;  In  re  Murray,  96 

Low.  161.  Fed.  Rep.  600,   i   N.  B.  N.  570,  3 

*2/»  re  Moore,  No.  9750  Fed.  Am.  N.  B.  R.  601. 
Cas.,  s.  c.  5  Biss.  79;  In  re  Lewis,  In  re  Strauss  &  Stern,  a  partner- 
No.  8311  Fed.  Cas.,  s.  c.  2  Ben.  96;  ship,  S.  D.  O.  (not  reported),  it  was 
/r.  r^  Prankard,  No.  11366  Fed.  Cas.,  ruled  under  this  clause  that  the 
s.  c.  I  N.  B.  R.  297;  Gen.  Ord.  8;  court  had  jurisdiction  of  the  part- 
In  re  Meyers.  97  Fed.  Rep.  757 ,  3  nership  by  virtue  of  Stern's  resid- 
Am.  B.  R.  260.  2  N.  B.  N.  TTi;  In  ing  within  the  district.  Strauss  was 
re  Laughlin,  96  Fed.  Rep.  589 ,  3  a  nonresident  of  the  district  and 
Am.  B.  R.  I.  the  firm  had  no  place  of  business. 


252  LAW    A\I)    PUOCKKDINC.S    I X     BANKRUPTCY. 

sliip  for  an  acljudication  of  the  bankruptcy  of  said  partnership, 
the  court  in  which  the  i)etiti(in  is  first  filed  having  jurisdiction 
takes  and  retains  juriscHction  over  all  proceedings  in  such  bank- 
ru])tcy  until  the  same  are  closed/^  If  such  petitions  are  filed 
in  the  same  district,  action  is  first  had  upon  the  one  first  filed. 
But  the  court  so  retaining  jurisdiction  may,  if  satisfied  that  it 
is  for  the  greatest  convenience  of  parties  in  interest  that  an- 
other of  said  courts  should  proceed  with  the  cases,  order  them 
to  be  transferred  to  that  court.*^ 

Where  a  petition  is  filed  by  partners,  whether  all  or  a  part 
only  join,  the  petition  must  be  in  the  prescribed  form.**'  It 
must  be  accompanied  by  a  separate  schedule  of  the  liabilities 
and  assets  of  the  partnership  and  by  separate  schedules  of  the 
individual  liabilities  and  assets  of  each  petitioning  partner.^" 
These  schedules  are  prepared  in  the  manner  required  in  a 
case  of  voluntary  bankruptcy.^^  If  any  partner  refuse  to  join 
in  the  petition  to  have  the  partnership  declared  bankrupt  and 
an  adjudication  is  made,  such  partner  must  file  a  schedule  of 
his  debts  and  an  inventory  of  his  property  in  the  same  manner 
as  is  required  by  the  act  in  cases  of  debtors  against  whom 
adjudication  of  bankruptcy  shall  be  made."  In  the  case  of  a 
petition  filed  by  creditors  the  schedules  are  prepared  as  in 
involuntary  proceedings. 

It  is  not  necessary  to  file  a  petition  by  or  against  all  the 
partners  and  also  a  separate  petition  against  each  in  order  to 
administer  the  joint  and  separate  estates  of  the  firm  and  the 
several  partners.^^  A  petition  by  or  against  a  partnership  is 
one  proceeding.  Only  one  deposit  for  costs  need  be  made.'^ 
The  statute  expressly  authorizes  the  court  of  bankruptcy  which 

*''  Gen.  Ord.  6.  A  and  B ;  see  Forms  Nos.  2  and  3, 

*'*B.  A.  1898,  Sec.  32;  Gen.  Ord.  post. 
6.  ^'^  Gen.  Ord.  8. 

*^  Official  Form  No.  2,  Form  No.  f>'«  In  re  Gay,  98  Fed.  Rep.  870 .  3 

4.  post.  Am.    B.    R.    529;    In    re    Langslow, 

50  In   re   Laughlin,  96   Fed.    Rep.  98  Fed.  Rep.  869 ,  i  N.  B.  N.  232 ,  3 

589 ,   3   Am.    B.   R.   I  :   In  re   Brick,  Am.  B.  R.  52911 ;  but  see  Jn  re  Bar- 

4  Fed.  Rep.  804:  Wilkins  v.  Davis,  den.  loi  Fed.  Rep.  553,  2  N.  B.  N. 

No.    17664   Fed.   Cas.,   s.   c.   2   Low.  741  ,  4  Am.  B.  R.  31  ;  In  re  Farley, 

511.  115    Fed.    Rep.   359,   8   Am.    B.    R. 

^^  Official  Form  No.   i.  Schedules  266. 


PROCEEDINGS    PECULIAR    TO    PARTNERSHIPS.  253 

has  jurisdiction  of  one  of  the  partners  to  administer  the  part- 
nership and  individual  property.^* 

A  creditor  will  not  be  permitted  ordinarily  to  intervene  to 
oppose  an  adjudication  of  a  partnership  upon  petition  of  a 
partner/^ 

§  98a.     The  adjudication  and  reference  in  partnership  cases. 

The  proceedings  leading  up  to  an  adjudication  and  refer- 
ence in  partnership  cases  are  the  same  as  in  other  voluntary  or 
involuntary  proceedings  according  as  the  petition  seeking  an 
adjudication  is  voluntary  or  involuntary.^® 

When  a  petition  on  behalf  of  a  part  of  the  members  of  a 
firm  is  filed  in  the  clerk's  ofiice.  it  cannot  then  be  classed  as  an 
involuntary  proceeding,  because  it  may  never  become  such. 
and.  in  the  absence  of  the  judge  from  the  district  or  division, 
it  is  the  duty  of  the  clerk  to  refer  the  case  to  the  proper  referee. 
The  case,  however,  whether  coming  before  the  judge  or  a 
referee,  cannot  be  properly  proceeded  with  until  notice  of  the 
pendency  of  the  proceeding  has  been  given  to  the  member  or 
members  of  the  firm  who  have  not  joined  in  the  petition  as 
filed,  and,  under  the  provisions  of  general  order  No.  8,  a  time 
must  be  fixed  for  a  hearing  upon  the  petition,  of  which  due 
notice  must  be  given. 

If  the  non joining  member  or  members  of  the  firm  can  be 
found,  in  the  district  or  out  of  it,  personal  service  of  the  notice 
must  be  made;  but,  if  personal  service  cannot  be  had,  then, 
upon  filing  before  the  judge  (or  the  referee,  if  the  case  has 
been  referred  by  the  clerk)  an  affidavit  showing  that  personal 
service  of  notice  cannot  be  made,  an  order  of  publication  of 
notice  will  be  made,  as  provided  for  in  section  i8  of  the  act, 
which  enacts  that  notice  by  publication  shall  be  given  in  the 
same  manner,  anrl  for  the  same  time,  as  in  cases  in  equity  in 
courts  of  the  United  .States,  which  are  governed  by  the  pro- 
visions of  section  8  of  the  judiciary  act  of  March  3,  1875." 
which  rerjuires  the  court  to  make  an  order  requiring  the  named 
])arty  to  appear  and  j)lcad  to  the  petition  by  a  named  day.  and 
to   direct  the   j)ublication  of  such   order,    if   j)crsonal    service 

••*  B.  A.  1898,  Sec.  5C.  '^^  In  re  ATurray,  g6  Fvd.  Rep.  600, 

^''  In   re   Carleton,    115   Fed.    Rep.       3  Am.  B.  R.  601  .  i  N.  B.  N.  570. 
246,  8  Am.  B.  R.  270.  "  18  Stat,  at  L.  472. 


J54  LAW    AND    I'UOCliKDIXClS    IN    BANKRUPTCY. 

thereof  cannot  be  made,  in  such  a  manner  as  the  court  may 
direct,  not  less  than  (Mice  a  week  for  six  consecutive  weeks. 
If.  upon  the  hearing  tiuis  provided  for,  the  nonpctitioninj^ 
member  or  members  of  the  firm  join  with  their  copartners  in 
the  prayer  of  the  petition,  or,  by  faiHng  to  enter  an  appearance, 
show  that  they  do  not  puriu)se  to  contest  the  adjudication,  then 
the  referee  will  enter  the  adjudication,  and  the  case  will  be 
proceeded  with  as  in  other  voluntary  proceedings. 

If  the  nonpetitioning  members  of  the  firm  should  appear  at 
the  hearing,  and,  by  proper  pleading,  should  make  defense  to 
the  proceedings,  as  provided  for  in  general  order  No.  8,  then 
the  referee  must  certify  the  case  to  the  judge,  before  whom  the 
issue  will  be  heard,  a  jury  trial  being  had  if  the  party  has 
demanded  the  same  under  the  provisions  of  section  19  of  the 
act ;  that  is,  by  filing  with  the  referee  a  written  demand  for  a 
jury  at  or  before  the  time  fixed  for  the  hearing  before  him. 

Where  a  i)roper  case  is  made  by  the  petition  and  proofs  the 
firm  and  the  individual  partners  are  regularly  adjudicated 
bankrupt  in  one  proceeding.  As  the  commission  of  an  act  of 
bankruptcy  is  indispensable  to  jurisdiction  in  an  involuntary 
proceeding,  the  individual  partners  cannot  be  adjudged  bank- 
rupts in  such  a  proceeding,  who  have  not  committed,  or  been 
participants  in  committing,  one  or  more  of  the  enumerated 
acts.^*  This  draws  into  the  court  of  bankruptcy  the  estates 
and  debts  of  the  partnersliip  and  the  individual  estates  and 
debts  of  the  several  partners  to  be  administered."'''  The  firm 
and  the  individual  partners  may  thereupon  be  discharged  from 
both  firms  and  individual  debts.^* 

A  partnership  may  be  adjudged  a  bankrupt  in  a  voluntary 
or  involuntary  proceeding,  without  an  adjudication  against 
any  or  some  of  the  partners  individually. •"'^  Such  a  proceeding 
may  draw  to  the  administration  the  individual  estates  of  the 

5s/n  re  Meyer  (C.  C.  A.  2d  Cir.),  N.  232.     See  also  In  re  Barden,  loi 

98  Fed.  Rep.  976 ,  3  Am.  B.  R.  559;  Fed.  Rep.  553 ,  2  N.  B.  N.  741 ;  In  re 

In  re   Shapiro,   106  Fed.  Rep.  495,  Farley,  115  Fed.  Rep.  359,  8  Am.  B. 

3  N.  B.  N.  385;  In  re  Hale,  6  Am.  P.  266. 
B.  R.  35,  107  Fed.  Rep.  432.  «»/«  re  Meyer  (C.  C.  A.  2d  Cir.), 

59  In  re  Gay,  98  Fed.  Rep.  870 ,  3  98  Fed.  Rep.  976 ,  3  Am.  B.  R.  559 ; 

Am.    B.    R.    529;   In    re   Grant,    106  In  re  Stokes,  106  Fed.  Rep.  312;  In 

Fed.  Rep.  496 ,  3  N.  B.  N.  425 ;  In  re  re    Duguid,    100    Fed.    Rep.    274,    3 

Langslow,  98  Fed.  Rep.  869,  i  N.  B.  Am.  B.  R.  794 ,  2  N.  B.  N.  607. 


PROCEEDINGS    PECULIAR    TO    PARTNERSHIPS.  255 

partners  as  well  as  the  partnership  assets,  and  marshal  and  dis- 
tribute them  according  to  equity.''"  The  assets  of  the  individual 
estates  and  the  debts  provable  against  them  can  be  ascertained 
-without  adjudicating  the  individual  partners  bankrupts.  If 
there  is  an  adjudication  of  any  of  the  partners  there  is  nothing 
to  prevent  such  partners  from  receiving  a  discharge  individ- 
ually, if  they  are  otherwise  entitled  to  it  under  the  act.®^  The 
partners  are  not  entitled  to  a  discharge  individually  if  they  are 
not  adjudicated  bankrupts.®" 

§  99.     The  administration  of  partnership  estates. 

The  trustee  in  proceedings  to  have  a  firm  declared  bankrupt 
is  appointed  by  the  creditors  of  the  partnership,  as  distin- 
guished from  the  creditors  of  the  individual  partners.*'^  The 
trustee  administers  both  the  partnership  property  and  the  prop- 
erty belonging  to  the  individual  partners.  He  is  required  to 
keep  separate  accounts  of  such  properties. ''*  The  expenses 
are  paid  from  the  partnership  property  and  the  individual 
property  in  such  proportions  as  the  court  may  determine.*" 

\\'hen  a  person  not  in  partnership  with  another  is  adjudged 
a  bankrupt  the  whole  of  his  property  becomes  divisible  among 
all  his  creditors  ratably.  A  different  mode  of  distribution 
prevails  as  to  bankrupt  partners. 

The  statute  enacts  '''*  that  "  the  net  proceeds  of  the  partner- 
ship property  shall  be  appropriated  to  the  payment  of  the  part- 
nership debts,  and  the  net  proceeds  of  the  individual  estate  of 
each  partner  to  the  payment  of  his  individual  debts.  Should 
any  surplus  remain  of  the  ])roperty  of  any  partner  after  paying 
his  individual  debts,  such  sur])lus  shall  be  added  to  the  part- 
nership assets  and  be  applied  to  the  payment  of  the  partnership 
debts.  Should  any  surplus  of  the  partnership  property  remain 
after  paying  the  partnership  debts,  such  surplus  shall  be  added 
to  the  assets  of  the  individual  partners  in  the  proportion  of 
their  respective  interests  in  the  i)artnership.     The  court  may 

«i  In  re  Meyer  (C.  C  A.  2cl  Cir.),  Rep.  590,  5  Am.  B.  R.  225,  3  N.  B. 

98  Fed.  Rep.  976,  3  Am.  B.  R.  559;  N.  276. 

In  re  Amelia  Meyers,  97  Fed.  Rep.  «•'' B.    A.     1898.    Sec.    5&;    In    re 

y^y ,  3  Am.  B.  R.  260,  2  N.  B.  N.  Eagles  &  Crisp.  99  Fed.  Rep.  695,  2 

III.  N.   B.   N.  462. 

«2  Strause    v.    Hooper,    105    Fed.  <'•*  B.  A.  1898,  Sec.  ^d. 

05  B.  A.  1898.  Sec.  se- 


256  LAW    AND    PROCEEDINGS    IN    BANKRLPTCY. 

permit  the  proof  of  the  chiiin  of  the  ]);irtnershi])  estate  against 
the  individual  estates,  and  vice  versa,  and  may  marshal  the 
assets  of  the  partnership  estate  and  individual  estates  so  as  to 
prevent  preferences  and  secure  the  equitable  distribution  of 
the  property  of  the  several  estates.""® 

This  is  substantially  the  rule  stated  at  an  early  date  by 
Lord  Chancellor  King  in  ex  parte  Cooke,®^  and  subsequently 
confirmed  by  Lord  Eldon"*  and  others.  It  has  been  the  sub- 
ject of  enactment  in  the  English  bankruptcy  act  of  1883,®"  and 
in  the  former  bankruptcy  laws  of  the  United  States.'^" 

Where  several  persons  are  members  of  different  firms  and  a 
joint  adjudication  is  obtained  against  all  of  them,  distinct 
accounts  will  be  had  of  the  estates  of  the  respective  firms  as 
well  as  of  the  separate  estate  of  each  bankrupt,  and  each  estate 
will  be  made  to  bear  its  own  debts  and  its  fair  proportion  of 
the  expenses."  Where  the  same  partners  conduct  business  in 
two  different  places  under  different  names,  the  two  firms  will 
be  treated  as  one  firm  in  the  distribution  of  the  assets,  and  no 
notice  will  be  taken  of  the  indebtedness  of  one  firm  to  the 
other,^^  Where  one  partner  has  sold  out  to  his  copartner 
before  bankruptcy,  the  property  belonging  to  the  firm  at  the 
time  of  the  dissolution  should  be  applied  first  to  the  payment 
of  the  firm  creditors,  the  separate  estate  of  the  purchasing 
partner  should  be  applied  first  to  the  payment  of  his  separate 
debts,  and  any  surplus  in  either  fund  should  then  be  applied 
on  the  other." 

The  general  rule  prescribed  by  the  statute  applies  only  when 

•■'«  B.  A.  1898,  Sec.  5/  and  g;  In  re  2  Bro.  C.  C.  15;  In  re  Stanton,  No. 

Blumer,    12    Fed.    Rep.   489;    In   re  13295     Fed.     Cas.,    s.     c.    6    Cush. 

Bates,  100  Fed.  Rep.  263,  4  Am.  B.  (Miss.)  447. 
R.  56.  '^2  jn  re  Vetterlein,  No.  16927  Fed. 

«^2  P.  W.  500.  Cas.,  s.  c.  5  Ben.  311;   Buckner  v. 

*••'"  Ex  parte  Clay,  6  Ves.  813a;  Ex  Calcote,  28  Miss.  432,  and  note  on 

parte  Taitt,  16  Ves.  193.  page  447 ;  In  re  Lloyd,  22  Fed.  Rep. 

«••  Sec.  40,  subsec.  3,  of  the  act  of  90;   Ballin  v.  Ferst,  55  Ga.  546;  In 

1883.  Eng.  Bank.  Rule,  No.  293.  re  Williams,    No.    17707    Fed.   Cas., 

'"R.  S.  Sec.  5121  ;  the  act  of  1841,  s.   c.   3   Woods  493;   In  re   Savage, 

5  Stat,  at  L.,  Sec.  14,  p.  448.  No.  12381   Fed.  Cas.,  s.  c.   16  N.  B. 

" /n  r^  Hinds,  No.  6516  Fed   Cas.,  R    368;    In    re   Vetterlein,   44    Fed. 

s.  c.  3  N.  B.  R.  351  ;  In  re  Dunker-  Rep.  57. 

son.  No.  4156  Fed.  Cas.,  s.  c.  4  Biss.  ''^  In  re  Denning,    114  Fed.    Rep. 

227;  In  re  Ellis,  No.  4399  Fed.  Cas.,  219,  8  Am.  B.  R.   133. 
s    c.  5  Ben.  421  ;  Ex  parte  Marlin, 


PROCEEDINGS    PECULIAR    TO    PARTNERSHIPS. 


257 


there  are  two  funds  to  be  administered — a  joint  fund  and  an 
individual  fund.  \Miere  there  are  no  "  net  proceeds  "  of  the 
partnership  estate  for  distribution  the  firm  and  individual 
creditors  may  share  pari  passu  in  the  individual  estate.^*  Any 
partnership  assets,  however  small,  which  are  available  for  dis- 
tribution will  defeat  the  right  of  firm  creditors  to  receive  divi- 
dends from  the  separate  estate  until  after  the  individual  debts 
are  paid."  ^^^here  the  firm  assets  are  only  sufficient  to  pay 
the  expenses  of  the  proceedings,  the  firm  creditors  may  share 
in  the  individual  estate,  for  the  words  "  net  proceeds  "  refer 
to  the  estate  to  be  distributed  among  the  creditors.'^"  The 
weight  of  authority  is  to  the  effect  that  in  order  to  exclude  the 
firm  creditors,  an  available  joint  fund  must  be  affirmatively 
shown  to  exist.  The  burden  of  proving  that  there  is  such  a 
fund  rests  upon  the  individual  creditors."  Where  there  are 
no  individual  assets  the  separate  creditors  of  the  partners  can 
not  prove  against  the  partnership  fund,''*  except  in  the  surplus 
after  paying  the  firm  debts. 


'*/n  re  Conrader,  118  Fed.  Rep. 
676 ;  In  re  Green,  1 16  Fed.  Rep. 
118,  8  Am.  B.  R.  553;  In  re  West, 
39  Fed.  Rep.  203 ;  In  re  Downing, 
No.  4044  Fed.  Cas.,  s.  c.  i  Dill  7,3 ', 
In  re  Jewett,  No.  7304  Fed.  Cas., 
s.  c.  I  N.  B.  R.  491  ;  In  re  Rice, 
No.  1 1750  Fed.  Cas.,  s.  c.  9  N.  B.  R. 
372 ;  In  re  McEwen,  No.  8783  Fed. 
Cas.,  s.  c.  6  Biss.  294;  In  re  Col- 
lier, No.  3002  Fed.  Cas.,  s.  c.  12 
N.  B.  R.  266;  In  re  Alills,  No.  961 1 
Fed.  Cas.,  s.  c.  11  N.  B.  R.  74 ;  In  re 
Knight,  No.  7880  Fed.  Cas.,  s.  c.  2 
Biss.  518. 

In  re  Wilcox,  94  Fed.  Rep.  84,  2 
Am.  B.  R.  117,  Judge  Lowell  has 
reviewed  the  history  of  the  prac- 
tice in  this  country  and  in  England 
in  an  elahorate  opinion  .-md  held 
that  this  exception  to  the  general 
rule  did  not  apply  under  the  present 
bankrupt  act.  The  large  number  of 
cases  reviewed  by  him  shows,  how- 
ever, that  this  exception  has  gen- 
erally been  recognized  both  in  equity 
and  bankruptcy  from  very  early 
times. 


In  re  Mills,  95  Fed.  Rep.  269 ,  2 
Am.  B.  R.  667,  Judge  Baker  re- 
fused to  permit  partnership  cred- 
itors, who  had  received  fifty-five  per 
centum  of  their  claims  in  a  state 
proceeding,  closing  up  a  partnership, 
to  prove  the  residue  of  their  claims 
equally  with  the  individual  cred- 
itors in  the  distribution  of  the  in- 
dividual estate.  There  were  no  firm 
assets. 

■"*  In  re  Marwick.  No.  9181  Fed. 
Cas.,  s.  c.  2  Ware  233 ;  In  re  Smith, 
No.  12987  Fed.  Cas.,  s.  c.  13  N.  B. 
R.  500;  In  re  Morse,  No.  9854  Fed. 
Cas.,  s.  c.  13  N.  B.  R.  376;  In  re 
Blumer,  12  Fed.  Rep.  489;  In  re 
Letchfield,  5  Fed.  Rep.  47. 

'"  In  re  McEwen,  No.  8783  Fed. 
Cas.,  s.  c.  6  Biss.  294;  In  re  Letch- 
field, 5  Fed.  Rep.  47. 

''"'  In  re  Jewett,  No.  7304  Fed.  Cas., 
s.  c.  1  N.  B.  R.  491  ;  In  re  West, 
39  Fed.  Rep.  203 ;  contra  In  re 
Byrne,  No.  2270  Fed.  Cas.,  s.  c.  i  N. 
B    R.  464. 

■'*  In  re  Kinkc.-id.  No.  7825  Fed. 
Cas.,  s.  c.  3  Biss.  405. 


25t5  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

It  seems  that  the  general  rule  may  be  waived  by  the  part- 
nership, as  by  giving  a  mortgage  upon  partnership  property 
to  secure  an  individual  debt.^" 

In  view  of  the  general  rule  of  distribution  prescribed  by  the 
statute,  it  is  important  to  ascertain,  first,  what  ]iroperty  is  to 
be  treated  as  belonging  to  the  firm  and  what  property  as  be- 
longing to  the  individual  partners ;  and,  second,  what  debts 
are  properly  firm  debts  and  what  are  properly  individual  debts. 
These  matters  will  be  discussed  in  the  next  two  sections. 

§  loo.     What  is  firm  and  individual  property  respectively. 

It  may  be  stated  generally  that  the  partnership  property 
consists  of  all  the  property  which  forms  the  stock  of  the  firm, 
and  all  debts  owing  to  the  partnership,  and  all  of  the  real  or 
personal  property  purchased  with  the  firm  money. *°  The  pre- 
sumption that  it  belongs  to  the  firm  will  arise  when  real  estate 
is  purchased  with  firm  money,  although  the  conveyance  is  made 
to  one  partner  alone,  who  in  such  case  is  considered  a  trustee 
for  the  firm  f^  so  also  when  stock  in  a  corporation  is  purchased 
with  firm  money  and  transferred  in  the  name  of  one  of  the 
partners  he  will  be  deemed  the  trustee  for  the  firm.®^  But 
where  property  is  bought  with  firm  money  and  taken  in  the 
name  of  one  partner  under  an  agreement  that  it  shall  be  his 
separate  property,  it  will  be  regarded  as  a  loan  to  him  from 
the  partnership  of  the  partnership  money.^^  Property  ac- 
quired by  a  surviving  partner  by  means  of  his  position  as  part- 
ner is  deemed  firm  property.*** 

''^  In    re   Kahley,    No.    7593    Fed.  in  Collumb  v.  Read,  24  N.  Y.  505; 

Cas.,  s.  c.  2  Biss.  383 ;  Thompson  v.  Fereday  v.  Wightwick,   i   R.  &  M. 

Spittle,  102  Mass.  207.  49. 

See    also    Fisher    v.    Syfers,    109  But  not  so  when  the  deed  to  real 

Ind.  514;  Nat.  Bank  v.  Sprague,  20  estate  is  taken  to  themselves  jointly 

N.  J.  Eq.  13 ;  Kennedy  v.  Nat.  Union  as  tenants  in  common.     Jones'  Ap- 

Bank,  23  Hun  (N.  Y.)  494;  Purple  peal,  70  Penn.    169. 

V    Farrington,   119  Ind.   164;  Wins-  ^^  Smith  v.  Smith,  5  Ves.  193;  Ex 

low  V.  Wallace,  116  Ind.  317;  Jones  parte  Hinds,  3  De  G.  &  S.  613. 

Chat.  Mort.,  Sec.  44.  **2  Ex  parte  Connell,  Deac.  201,  s. 

^oHiscocks   V.    Jaycox,    No.   6531  c.  3  M.  &  A.  581. 

Fed.   Cas.,   s.  c.    12   N.   B.   R.   507;  ^3  Smith    v.    Smith,    5    Ves.    193; 

Marrett  v.  Murphy,  No.  9103  Fed.  Taylor    v.    Rasch,    No.    13801    Fed. 

Cas.,  s.  c.  II  N.  B.  R.  131  ;  Thrall  Cas.,  s.  c.  5  N.  B.  R.  399. 

V.  Crampton,  No.   14008  Fed.   Cas.,  ^*  Featherstonhaugh    v.    Fenwick, 

s.  c.  9  Ben.  218;   Buchan  v.   Sum-  17   Ves.   308;    Clements   v    Hall,  2 

ner,  2  Barb.  Ch.  165,  and  approved  De  G.  &  J.  172. 


PROCEEDIXGS    PECULIAR    TO    PARTXERSHIPS.  259 

Premises  used  by  persons  for  the  purpose  of  carrying  on 
their  trade  are  prima  facie  a  part  of  the  partnership  property, 
but  this  presumption  may  be  rebutted. ^^ 

A  sale  by  one  partner  to  his  copartner,  when  the  firm  is 
insolvent,  which  if  held  would  operate  to  apply  the  property 
of  the  retiring  partner  to  the  payment  of  the  individual  debts 
of  the  partner  purchasing,  is  considered  fraudulent.  Such  a 
sale  will  be  set  aside  and  the  property  distributed  as  firm  prop- 
erty.*" But  it  is  competent  for  solvent  partners  to  make  any 
arrangements  which  they  think  proper  with  respect  to  their 
joint  projjerty  in  the  partnership,  or  the  separate  property  of 
the  partners,  and  to  alter  the  character  of  the  property  so  as  to 
convert  joint  into  separate  property  and  vice  versa.  Such 
agreement,  if  made  bona  fide,  will  bind  their  creditors,  and  in 
the  event  of  bankruptcy  the  property  will  be  administered  as 
firm  or  separate  property,  according  to  the  character  which 
the  partners  have  placed  upon  it.**'  Where  one  partner  sold 
his  interest  to  another,  with  an  agreement  that  the  continuing 
partner  should  collect  the  firm  assets  and  pay  the  firm  debts, 
and  he  carried  on  the  business  and  from  time  to  time  replen- 
ished the  stock  of  goods,  mingling  the  old  and  new  together 
and  sold  from  either  indifferently  so  that  it  was  impossible  to 
tell  which  were  the  goods  of  the  old  firm  and  which  were  the 
goods  of  the  continuing  partner  alone,  it  was  held  upon  the 
bankruptcy  of  both  partners  of  the  old  firm  that  the  assets  in 
the  hands  of  the  continuing  partner  were  to  be  regarded  as 
individual  assets,  to  be  applied  to  the  payment  of  his  individual 
debts  before  any  portion  could  be  used  to  pay  the  debts  of  the 
old  firm.**^ 

The  assets  of  an  individual  partner  consist  of  that  property 
in  which  such  partner  is  separately  interested  at  the  time  of 

^^  Osborn  v.  McBride,  No.  10593  "^  ^«  r<^  Long,  No.  8476  Fed.  Cas., 

Fed.  Cas.,  s.  c.  3  Saw.  590;  Feather-  s.  c.  7  Ben.  141  :  In  re  Montgomery, 

stonhaugh  v.  Fenwick,  17  Ves.  308.  No.  9727  Fed.  Cas.,  s.  c.  3  Ben.  565; 

*«/n    re    Cooke,    No.    3150    Fed.  In  re  Willey,  No.  17656  Fed.  Cas., 

Cas.,  s.  c.   3   Biss.    122;    Collins   v.  s    c.  4  Biss.  214;   In  re  Lane,  No. 

Hood,  No.  3015   Fed.  Cas.,  s.  c.  4  ^044  Fed.  Cas..  s.  c.  2  Low.  333;  In 

McLean  186;  In  re  Byrne,  No.  2270  re    McEwen,    No.    8783    Fed.    Cas., 

Fed.  Cas.,  s.  c.  i  N.  B.  R.  464;  Mat-  s.  c.  6  Biss.  294;  In  re  Kahley,  No. 

tocks  V.  Rogers,  i  Hask.  547 ;  In  re  759.3  Fed.  Cas..  s.  c.  2  Biss,  383. 

Zng.  No.   18222  Fed.  Ca*,  s.  c.   16  *•« /«    re    Montgomery,    No.    9727 

N.  B.  R.  280.  Fed.  Cas.,  s.  c.  3  Ben.  565. 


26o  LAW    AND    PROCKKOI  xXC.S    IN    BANKRUPTCY. 

the  bankruptcy."''  Where  all  iho  ])ro])erty  of  the  firni  belongs 
to  one  partner  and  the  others  have  no  interest  in  tlie  gains  and 
profits,  sucli  property  is  the  individual  property  of  the  i)artner. 
Where  the  interest  of  each  partner  extentls  to  the  entire  stock 
in  tratle.  the  excess  of  the  interest  of  one  partner  over  that  of 
the  other  partners  is  riot  the  former's  separate  estate.®" 

§101.     What  are  firm  and  individual  debts  respectively. 

Having  regard  to  the  rule  prescribed  by  the  statute  for  the 
administration  of  the  estates  of  firms  and  partners,  their  debts 
may  be  divided  into  three  classes,  namely,  first,  joint  or  firm 
debts,  that  is,  debts  for  which  the  partners  are  jointly  liable; 
second,  individual  debts,  that  is,  debts  for  which  they  are  sepa- 
rately liable;  and.  thirdly,  joint  and  separate  debts,  or  debts  for 
which  the  partners  are  separately  as  well  as  jointly  liable. 

First  :  Firm  Debts. — A  debt  is  considered  a  firm  debt  and 
may  be  proved  against  the  joint  or  partnership  fund  when  it 
is  contracted  or  incurred  by  the  partnership  in  the  ordinary 
course  of  business.  It  is  clearly  so  when  all  the  partners  act 
jointly.  Thus  it  has  been  held  to  be  joint  debt  where  a  joint 
and  several  note  was  given  for  money  borrowed  by  a  firm  and 
signed  in  the  firm  name,  with  other  names  following,"^  or 
where  a  note  was  endorsed  in  the  name  of  the  firm.**-  Trust 
funds  which  have  been  invested  by  an  executor  in  his  partner- 
ship business  with  the  knowledge  and  consent  of  his  copartner 


89  In  re  Lowe,  No.  8564  Fed.  Cas.,  »»  In  re  Lowe,  No.  8564  Fed.  Cas., 

s.  c.  II   N.  B.  R.  221  ;  In  re  Clark,  s.  c.  11  N.  B.  R.  221. 

No.  2798  Fed.  Cas.,  s.  c.  4  Ben.  88.  »i  In  re  Holbrook,  No.  6588  Fed. 

In  re  Rudnick,  102  Fed.  Rep.  750,  Cas.,    s.    c.    2    Low.    259;    Bush    v. 

4  Am.  B.  R.  531 ,  2  N.  B.  R.  975,  it  Crawford,  No.  2224  Fed.  Cas.,  s.  c. 

was    held    that    where    one   partner  7  N.   B.   R.  299.     See  McDaniel  v. 

had,  prior  to  bankruptcy,  transferred  Stroud    (C.    C.    A.    4th    Cir.),    106 

all  of  his  property  and  interests  to  Fed.  Rep.  486,  3  N.  B.  N.  505. 

the    other    partner,    and    it    became  **-  Gauss  v.  Schrader,  48  Fed.  Rep. 

in   the  hands   of  the  other  partner,  816;   In  re  Norris,  No.   10302  Fed. 

who    was   also   a    bankrupt    debtor,  Cas.,  s.  c.  2  Hask.  19;  In  re  Morse, 

exempt  under  the  laws  of  the  state.  No.  9853  Fed.  Cas.,  s.  c.  11  N.  B.  R. 

he   may  lawfully  sell  or  dispose  of  482;    Ex  parte    Russell.    No.    12148 

it,    and    the   trustee    takes    no    title  Fed.  Cas.,  s.  c.  16  N.  B.  R.  476.   But 

therein.     But  see  In  re  Rosenbaum,  see  In  re  Jones,  100  Fed.  Rep.  781  , 

I  N.  B.  N.  541.  4  Am.  B.  R.  141  ,  2  N.  B.  N.  i93- 


PROCEEDINGS    PECULIAR    TO    PARTNERSHIPS.  261 

may  be  proved  against  the  partnership  fund."^  A  judgment 
against  partners  and  others  jointly  is  a  several  claim  as  against 
the  partners,  and  can  not  receive  a  dividend  from  the  joint  es- 
tate.'** but  a  judgment  on  a  firm  note  for  a  firm  debt  is  provable 
against  the  firm.®^  A  claim  on  a  bond  or  notes  signed  by 
individual  {partners,  but  not  for  a  firm  obligation,  is  not  enti- 
tled as  against  the  firm  creditors  to  be  paid  from  the  partner- 
ship assets.®**  When  a  note  or  bond  is  given  for  a  firm  debt 
the  rule  is  otherwise."^  A  note  given  by  a  firm  and  endorsed 
by  one  partner  is  a  firm  debt.®^ 

A  debt  is  not  always  so  manifestly  a  firm  debt  when  it  is 
contracted  by  one  of  the  partners  for  the  firm.  In  determin- 
ing whether  such  a  debt  is  a  firm  debt  or  an  individual  debt 
resort  must  be  had  to  the  general  law  of  partnership.®"  The 
general  rule  is  that  every  partner  is  the  general  agent  of  the 
firm  to  carry  out  its  objects  and  transact  its  business  in  the 
usual  and  (ordinary  way :  that  he  is  not  the  agent  of  each 
partner  individually  and  can  not  bind  them  severally  or  any 
number  of  them  less  than  all.  Unless  his  power  is  limited  by 
the  articles  and  the  restriction  is  known,  he  rej^resents  all  the 
powers  of  the  firm  within  the  scope  of  its  ordinary  business, 
but  is  confined  to  such  acts  as  are  necessary  for  carrying  on 
the  partnership  business  in  the  ordinary  way,  according  to 
the  usages  of  the  particular  business.  The  several  instatices 
in  which  a  partner  may  contract  a  debt  for  the  firm  will  be 
found  in  the  works  on  partnership  and  need  not  be  consid- 
ered here."" 

"3 /n   re  Tesson,   No.   13844   Fed.  180;    In   re    Bucyrus    Machine    Co., 

Cas.,  s.  c.  ^  N.  B.  R.  .378.  No.  2100  Fed.  Cas.,  s.  c.  5  N.  B.  R. 

•*  In   re   Herrick,    No.   6420   Fed.  303 ;    Strau.se   v.    Hooper,    105    Fed. 

Cas.,  s.  c.   13  N.  B.   R.  312;   In   re  Rep.  590,  5  Am.  B.  R.  225,  3  N.  B. 

Lewis,  No.  8313   Fed.   Cas.,  s.  c.  8  N.  276. 

N.  B.  R.  546.  "^  In   re-  Warren,  No.  17191   Fed. 

^^  In  re   Berriam,   No.    1351    Fed.  Cas.,  s.  c.  2  Ware  322. 

Cas.,  s.  c.  6  Ben.  297 ;  In  re  Kitz-  »«  Lamoille  County   Nat.  Bank  v. 

inger.  No.  7861  Fed.  Cas.,  s.  c.  19  N.  Stevens,   107  Fed.  Rep.  245,  6  Am. 

B    R.  152.  B.  R.  164. 

"«/n    re    Webb,    No.    17313    Fed.  ""See  Bates  on  Partnership.  Sec. 
Cas.,  s.  c.  2  N.  B.  R.  614: /«  r*'  Rod-  31.S,    *''    seq.;    Lindley    f)n    Partner- 
din,    No.    11989    Fed.    Cas..    .s.    c.    6  .ship,  p.    124;   Taylor  v.   Rasch.   No. 
Biss.   377;   In   re   Miller,  No.  9556  13800  Fed.  Cas..  s.  c.   i   Flip.  385. 
Fed.  Cas.,  s.  c.   i    N.   Y.  Leg.  Obs. 


262  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

Second:  Individual  Debts. — Individual  debts  are  such 
as  are  contracted  by  the  individual  partners  for  their  own 
benefit  or  such  liabilities  as  by  law  they  are  required  to  liqui- 
date. Debts  for  individual  clothing,  furniture  and  the  like 
are  individual  and  not  partnership  debts.""  Creditors  holding 
individual  obligations  of  the  members  of  the  firm,  although 
given  for  a  consideration  moving  to  the  firm,  are  entitled  to  a 
dividend  out  of  the  individual  estates."^  A  solvent  partner 
who  has  paid  firm  debts  out  of  his  separate  estate  is  entitled  to 
prove  contribution  against  the  separate  estate  of  his  bankrupt 
partners."-  An  administrator  of  a  deceased  partner,  whose 
property  has  been  converted  1)y  the  surviving  partner,  has  a 
provable  claim  against  the  separate  estate  of  the  surviving 
partner."^  A  firm  may  prove  against  the  separate  estate  of  a 
partner  for  moneys  withdrawn  by  the  latter  from  the  firm."* 
A  firm  debt  may  be  proved  in  proceedings  instituted  by  a 
single  partner  on  an  individual  petition."^  The  reason  for 
this  is,  that  each  partner  is  liable  for  the  lebts  of  the  firm  and 
is  released  from  such  liability  by  his  discharge."" 

Third:  Joint  and  Separate  Debts. — There  are  some 
debts  of  such  a  character  that  they  may  be  proved  both  against 
the  firm  and  the  individual.  In  such  cases,  where  a  dividend 
has  been  paid  on  one  estate,  the  amount  should  be  deducted 

100  Taylor  v.  Rasch,  No.  13800  estate  of  a  member  of  the  other 
Fed.  Cas.,  s.  c.  i  Flip.  385.  firm. 

101  In  re  Lehigh  Lumber  Co.,  loi  i"-'  In  re  Mills,  No.  961 1  Fed.  Cas., 
Fed.  Rep.  216,  4  Am.  B.  R.  221  ,2  s.  c.  11  N.  B.  R.  74. 

N.   B.   N.   512;   In  re   Stevens,   104  104 /„  ^^  May,  No.  9328  Fed.  Cas., 

Fed.  Rep.  323 ,  5  Am.  B.  R.  9 ;  In  re  s.  c.    19  N.   B.  R.   loi ;   In  re  Mc- 

Jones,  116  Fed.  Rep.  431 ;  In  re  Bu-  Lean,  No.  8879  Fed.  Cas.,  s.  c.  15  N. 

cyrus   Machine   Co..   No.  2100  Fed.  B.    R.   333;    Sec.   5g   of   the  act   of 

Cas.,  s.   c.   5   N.   B.  R.  303;    In  re  July    i,    1898,   30    Stat,    at    L. 

Miller,  No.  9556  Fed.  Cas.,  s.  c.   i  See   In   re  Lane,    No.   8044   Fed. 

N.  Y.  Leg.  Obs.  180.  Cas.,  s.  c.  2  Low.  333 ;  In  re  Mc- 

102 /«    re    Dillon,    rod   Fed.    Rep.  Ewen,   No.  8783   Fed.   Cas.,  s.  c.  6 

627 ,  4  Am.   B.   R.  63 ;  In  re   Car-  Biss.  294 ;  In  re  Smith,  No.   12991 

michael,  96  Fed.  Rep.  594,  2  Am.  B.  Fed.  Cas.,  s.  c.  16  N.'B.  R.  113. 

R.  815;  In  re  Swift,  106  Fed.  Rep.  ^"^ /n   re   Webb,   No.    1731?   Fed. 

65;  In  re  Dell,  No.  3774  Fed.  Cas.,  Cas.,  s.  c.  4  Saw.  326;   Wilkins  v. 

s.  c.  5  Saw.  344.     See  In  re  Hamil-  Davis,  No.  17664  Fed.  Cas.,  s.  c.  2 

ton,    I    Fed.    Rep.    800,   where   two  Low.    511;   In   re   Frear,   No.   5074 

firms   were  partners,  and   one  firm  Fed.  Cas.,  s.  c.  2  Ben.  467. 

tried  to  prove  against  the  individual  ^"8  ggg  Effect  of  Discharge,   Sec. 

102,  post. 


PROCEEDINGS    PECULIAR    TO    PARTNERSHIPS.  263 

and  a  dividend  only  on  the  balance  allowed  from  the  other. 
But  when  the  dividends  on  both  estates  are  simultaneous  the 
creditor  is  entitled  to  prove  against  both  estates  for  the  whole 
debt.  In  no  case  is  he  entitled  to  collect  more  than  the  amount 
of  his  debt  from  both  estates. 

Thus,  a  note  made  by  a  firm  and  endorsed  by  one  of  the 
partners  individually  may  be  proven,  both  against  the  estate 
of  the  firm  and  the  individual  estate  of  the  endorser.^'^'  So 
also  the  beneficiaries  of  a  trust  fund,  invested  by  the  executor 
in  his  partnership  business  with  the  knowledge  and  consent  of 
his  copartner,  may  prove  their  claim  against  the  partnership, 
although  they  have  proved  it  against  the  estate  of  the  execu- 
tor."* Where  a  member  of  a  firm  which  is  general  agent  of  a 
corporation  misappropriated  funds  to  the  uses  of  the  firm, 
which  was  known  by  the  firm,  it  was  held  that  proof  might  be 
made  both  against  the  firm  and  the  individual  estate."** 
\\"here  a  creditor  holds  different  notes  for  partnership  debts, 
some  made  by  the  individual  partners  and  others  in  the  name 
of  the  firm,  he  may  prove  the  individual  notes  against  the  indi- 
vidual estates  and  the  firm  notes  against  the  firm  estates.^'" 

Where  a  creditor  of  a  partnership  has  a  lien  on  both  the 
partnership  and  individual  assets  of  the  members,  he  may 
resort  to  either  fund  for  payment  at  his  option,  unless  there 
are  creditors  having  liens  only  on  the  individual  fund.  Then 
the  equitable  rule  as  to  two  funds  will  apply  and  the  partner- 
ship creditor  must  first  exhaust  the  partnership  fund.'^^  A 
partnership  creditor  who  is  secured  by  a  pledge  or  mortgage 
upon  the  individual  property  of  a  partner  may  ordinarily  prove 
for  his  whole  claim  against  the  partnership  without  first  ex- 
hausting his  security."^ 

^'>''  In  re  Farnum,  No.  4674  Fed.  Fed.   Cas.,  s.  c.  7  Ben.   141  ;  In  re 

Cas.,  s.  c.  6  Law   Rep.  21  ;   Emery  Adams,  29  Fed.  Rep.  843. 

V.   Canal    National    Bank,   No.  4446  i""*  In  re  Tesson,  No.   13844  Fed. 

Fed.  Cas.,  s.  c.  3  Cliff.  507 ;  Stephen-  Cas.,  s.  c.  9  N.  B.  R.  378. 

son  V.Jackson,  No.  13374  Fed.  Cas.,  i»» /»   re   Baxter,    No.    11 19   Fed. 

s.  c.  2  Hughes  204;  In  re  Bradley,  Cas.,  s.  c."  18  N.  B.  R.  62. 

No.  1772  Fed.  Cas.,  s.  c.  2  Biss.  515;  no  Mead   v.    National    Bank,   No. 

Mead   v.    National    Bank,    No.  9366  9366  Fed.  Cas.,  s.  c.  6  Blatch.  180. 

Fed.  Cas..  s.  c.  6  Blatch.   180:  In  re  ^^^  In    re    Lewis,    No.    8313    Fed. 

Knight,    No.    7880    Fed.    Cas.,    s.   c.  Cas.,  s.  c.  2  Hughes  320. 

2  Biss.  518;  In  re  Long,  No.  8476  "s/ji  re  May,  No.  9327  Fed.  Cas., 


264  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

Another  class  of  joint  and  separate  debts  arises  upon  the 
conversion  of  joint  into  separate  debts  and  vice  versa.  Thus, 
when  one  of  the  partners  takes  the  firm  assets  and  agrees  to 
pay  the  joint  debts  he  becomes  individually  liable/"  and  the 
retiring  partner  will  also  continue  liable  as  before  the  dissolu- 
tion of  the  partnership."^  The  retiring  partner  may  be  re- 
leased from  such  liability  if  the  creditors  agree  to  accept  the 
continuing  partner  as  their  sole  debtor.  Precisely  what 
amounts  to  such  an  acceptance  it  is  impossible  to  state.  It 
seems  that  mere  dealing  by  the  creditor  with  the  continuing 
partner  as  his  debtor,  or  the  taking  of  a  separate  security  from 
him  not  involving  a  merger  of  the  original  debt,  is  not  conclu- 
sive evidence  of  an  intention  to  abandon  all  claims  against  the 
retiring  partner."^  In  order  that  the  transaction  should  have 
this  effect  it  must  be  shown  that  the  security  was  intended  to 
be  taken  in  satisfaction  of  the  original  debt,  or  that  a  new  was 
substituted  for  the  old  liability."^ 

In  case  there  is  no  such  acceptance  the  firm  creditors  may 
prove  against  the  estate  of  the  continuing  partner  and  share 
pari  passu  with  the  separate  creditors."®  They  may  then  pur- 
sue the  individual  partner  for  the  balance.^^** 

It  may  happen  upon  the  formation  of  a  partnership  between 
two  persons  that  it  is  agreed  that  the  debts  of  one  of  them 
shall  become  the  joint  debts  of  the  firm.  Such  an  agreement 
will  not  make  his  separate  creditors  joint  creditors  of  both 
partners  unless  the  creditors  assent  to  the  arrangement.     If 

s.  c.  17  N.  B.  R.  192.     See  also  In  re  Ex  parte     Smith,     i    M.    D.    &    D. 

Norris,  No.  10302  Fed.  Cas.,  s.  c.  2  165 ;    Heath    v.    Percival,    i    P.    W. 

Hask.  19.  682;    Lodge    v.    Dicas,   3    B.    &   A. 

"*/m  re  Lloyd,  22  Fed.  Rep.  88;  611. 

In   re  Collier,    No.  3002  Fed.   Cas.,  ^^^  See    cases    cited    in    last    note 

s.  c.  12  N.  B.  R.  266;  In  re  Down-  above,  and  Bilborough  v.  Holmes,  5 

ing,    No.    4044    Fed.    Cas.,    s.    c.    I  Chan.  Div.  255 ;  Ex  parte  Butcher, 

Dill.  33;  In  re  Rice,  No.  11750  Fed.  13  Chan.  Div.  465. 

Cas.,  9  N.   B.  R.  373;  In  re  Long,  ^i" /m  re  Lloyd,  22  Fed.  Rep.  88; 

No.  8476  Fed.  Cas.,  s.  c.  7  Ben.  141.  Ir   re  Collier,   No.   3002   Fed.   Cas., 

ii« /«   re    Pease,    No.    10881    Fed.  s.  c.  12  N.  B.  R.  266;  In  re  Down- 

Cas.,  s.  c.  13  N.  B.  R.  168;  Dicken-  ing,  No.  4044  Fed.  Cas.,  s.  c.  i  Dill, 

son  V.  Lockyer,  4  Ves.  36;  Smith  v.  a;  In  re  Rice,  No.  11750  Fed.  Cas., 

Jameson,   5   T.   R.   601  ;    Graham   v.  Q   N.   B.   R.   T,yi ;   In  re   Long,    No. 

Whichelo,  i  Cr.  &  M.  186.  8476  Fed.  Cas.,  s.  c.  7  Ben.  141. 

"^  Harris  v.  Farwell,  15  Beav.  31  ;  1^" /«    re    Pease,    No.    10881    Fed. 

David    v.    Ellice,    5    B.    &    C.    196;  Cas.,  s.  c.  13  N.  B.  R.  168. 


PROCEEDINGS    PECULIAR    TO    PARTNERSHIPS.  265 

the  partnership  is  adjudged  bankrupt  before  such  assent  is 
given,  such  creditors  will  not  be  entitled  to  prove  their  claims 
as  joint  creditors  of  the  firm  against  the  partnership  estate.'-^ 

The  character  of  a  debt  may  be  changed  from  joint  to  sepa- 
rate or  vice  versa  by  taking  security  of  a  higher  nature  or  by 
obtaining  a  judgment.  The  theory  upon  which  this  rule  rests 
is  that  the  original  debt  is  extinguished  or  merged,  and  the 
right  to  prove  depends  upon  the  nature  of  the  substituted  se- 
curity whether  it  is  joint  or  separate.  Thus,  a  simple  contract 
debt  will  merge  in  a  bond  and  a  bond  in  a  judgment,'"  but  a 
simple  contract  debt  will  not  merge  in  a  bill  of  exchange  or  a 
promissory  note,  for  the  quality  is  not  changed. ^^^ 

§  102.     The  effect  of  a  discharge. 

Proceedings  to  obtain  a  discharge  and  in  opposition  thereto 
in  cases  in  which  partners  are  adjudged  bankrupts  are  the 
same  as  in  other  cases.'^*  It  is.  however,  imjx^rtant  to  consider 
the  effect  of  a  discharge  of  bankrupt  partners.  Where  the 
firm  and  some  or  all  of  the  partners  are  declared  bankrupts  the 
discharge  of  a  partner  releases  him  from  his  individual  and 
the  partnership  debts  which  are  provable  in  bankruptcy.^ -^ 

The  effect  of  a  discharge  of  a  partner  upon  an  individual 
I)etition  and  without  any  proceedings  by  or  against  the  firm  is 
not  so  clear.  The  authorities  are  conflicting  upon  this  point. 
It  has  been  held  that  where  an  individual  member  of  a  part- 
nership files  his  petition  in  bankruptcy  and  obtains  a  discharge, 
that  such  discharge  releases  him  from  his  individual  debts  and 
also  from  his  partnership  obligations.^''*'     This  is  also  the  rule 

121 /„    re    Isaacs,    No.    7093    Fed.  N.    B.    N.    in;    In   re   Lcland,    No. 

Cas..  s.  c.  3  Saw.  35.  8228  Fed.  Cas.,  s.  c.  5  Ben.  168. 

'"Higgens's   Case,  6   Coke   344;  '-'"Jarccki     Mfg.    Co.    v.    McEl- 

Ex    parte    Christy,   2  Dea.   &  Chit.  waine,  107  Fed.  Rep.  249 ,  5  Am.  B. 

15s;    Price    V.    Mouhon,    10    C.    B.  R.  7.=?' :  Wilkins  v.  Davis,  No.  17664 

5f>l  :  Ex  parte  Davy  Ridg.  289.  Fed.    Cas.,   s.   c.   2   Low.   511;   In   re 

123  Ex  parte  Lrjbb.  7  Ves.  592 ;  Ex  Downing.   No.  4044  Fed.  Cas.,  s.  c. 

parte  Seddon,  2  Cox  49.  i  Dill,  ^.t^  ;  In  re  Stevens,  No.  13393 

'■^♦See  Discharges,  Chap.  XXVI.  Fed.   Cas.,   s.  c.   i   Saw.  397;  In  re 

12"  /„  re  Meyer  (C.  C.  A.  2d  Cir.),  Abbe,  No.  4  Fed.  Cas.,  s.  c.  2  N.  B. 

98  Fed.  Rep.  976.  3  Am.  B.  R.  559;  R.  75:  /«  re  Leland,  No.  8228  Fed. 

In  re  Gay,  98  Fed.  Rep,  870,  3  Am.  Cas.,  s.  c.  5  Ben.   168:  In  re  Brick, 

P.  R.  329:  In  re  Amelia  Meyers.  97  4    Fed.    Rep.    805-6;    In    re    Webb, 

Fed.  Rep.  757,  3  Am.  B.  R.  260.  2  No.    17317   Fed.   Cas.,  s.   c.  4   Saw. 

326. 


266  LAW    AND    rROCEEDINGS    IN     I5ANKRUPTCY. 

in  England/'"'  lUit  it  has  been  hclil  that  such  a  discharge 
does  not  release  him  from  partnership  obligations/"** 

"  The  cases  holding  that  a  discharge  granted  to  one  member 
of  a  firm  does  not  release  him  from  partnership  indebtedness, 
where  he  alone  is  adjudged  a  bankrupt,  proceed  on  the  prin- 
ciple that  the  trustee  could  not  acquire  possession  of  and  ad- 
minister the  assets  of  the  firm.  In  so  holding  it  seems  to 
have  been  overlooked  that  the  bankruptcy  of  one  member  is 
ipso  facto  a  dissolution  of  the  firm,  and  that,  while  the  solvent 
partner  would  be  allowed  to  administer  the  partnership  assets, 
yet  the  trustee  in  bankruptcy  is  entitled  to  the  bankrupt's  share 
of  the  partnership  assets  after  the  payment  of  the  partnership 
debts.  The  separate  estate  of  the  bankrupt  partner,  and  his 
beneficial  interest  in  the  firm  after  the  payment  of  firm  debts, 
is  to  be  administered  by  the  trustee  for  the  payment  of  the 
bankrupt's  individual  debts.  The  adjudication  of  one  partner 
as  a  bankrupt  brings  within  the  jurisdiction  of  the  court  his 
entire  estate  for  administration,  and  if,  after  the  payment  of 
his  individual  debts  out  of  his  individual  estate,  any  surplus 
remains,  it  will  be  applicable  to  the  payment  of  firm  indebted- 
ness. For  the  purpose  of  reaching  any  such  surplus,  firm 
creditors  may  prove  against  the  estate  of  the  bankrupit 
partner."^-^ 

Where  an  individual  petition  is  filed  by  a  partner  of  a  firm 
without  assets,  the  prevailing  opinion  at  present  is,  that,  if 
objection  is  made  pending  the  bankruptcy  proceeding,  on  the 
ground  that  the  other  partner  has  not  been  made  a  party,  the 
court  should  order  that  to  be  done  and  ujxdu  failing  to  comply 
with  such  order,  to  dismiss  the  proceeding  or  refuse  a  dis- 
charge.^"*^ But  if  a  discharge  is  granted  without  objection  it 
will  operate  to  release  all  debts  provable  in  bankruptcy. 

^-'^  Ex  parte   Yale,  3    P.   W.   25,  3  N.  B.  R.  227;  In  re  Bidwell,  No. 

note    a ;    Ex    parte    Hammond,    21  1392  Fed.  Cas.,  s.  c.  2  N.  B.  R.  229. 

Wkly.  Rep.  865;  Thomson  v.  Hard-  129  judge   Baker  in  Jarecki   Mfg. 

ing,  3  C.  B.   (N.  S.)   254.  Co.   v.    McElwaine,    107   Fed.   Rep. 

i2«Hudgins    v.    Lane,    No.    6827  249,  5  Arti.  B.  R.  751. 

Fed.  Cas.,  s.  c.  2  Hughes  361;  In  re  ^^'^  In    re    Meyers,    96    Fed.    Rep. 

Noonan,  No.   10292  Fed.  Cas.,  s.  c.  408,  s.  c.  97  Fed.  Rep.  757,  3  Am. 

10  N.  B.  R.  330;  In  re  Little,  No.  E    R.  260,  2  N.  B.   N.  iii  ;   In  re 

8390  Fed.  Cas.,  s.  c.  2  Ben.  186;  In  Russell,  97  Fed.  Rep.  32,  3  Am.  B. 

re  Grady,  No.  5654  Fed.  Cas.,  s.  c.  R.  91  ,  In  re  McFaun,  96  Fed.  Rep. 


PROCEEDINGS    PECULIAR    TO    PARTNERSHIPS.  267 

It  may  be  doubted  if  a  firm  will  be  released  from  partnership 
debts  without  each  partner  is  declared  to  be  bankrupt,  unless  it 
be  shown  in  the  bankruptcy  proceeding  that  there  is  no  indi- 
vidual estate  of  any  partner.  The  reason  for  this  is,  that  each 
individual  estate  is  liable  for  partnership  debts  after  paying 
the  individual  debts.  A  partner  will  not  be  granted  a  dis- 
charge unless  he  is  individually  adjudicated  to  be  a  bank- 
rupt."' 

When  objections  are  filed  to  the  discharge  of  partners  who 
are  bankrupts  the  trial  may  be  joint,  but  the  verdicts  and 
judgments  must  be  separate.'^^ 

552;  In  re  Elliott  (Ref.  Op.),  2  N.  N.  276;  In  re  Meyer   (C.  C.  A.  2d 

B    N.  350;  In  re  Laughlin,  96  Fed.  Cir.),  98  Fed.  Rep.  976,  3  Am.  B. 

Rep.  589;  In  re  Hartman,  96  Fed.  R.  559;  In  re  Hale,  107  Fed.  Rep. 

Rep.  593.  432,  5  Am.  B.  R.  35. 

131  Strause   v.    Hooper,    105    Fed.  ^^'- In  re   George,    No.   5325   Fed. 

Rep.  590 ,  5  Am.  B.  R.  225 ,  3  N.  B.  Cas.,  s.  c.  i  Low.  409. 


268  1-A\V    AM)    PROCEEDINGS    IN    BAN  KRri'TCY. 


CHAPTER  XII. 

MEETINGS  OF  CREDITORS. 

§  103.     Proceedings  after  a  reference  generally. 

A  copy  of  the  order  referring  a  case  to  a  referee  is  imme- 
diately sent  by  mail  to  the  referee,  or  delivered  to  him  per- 
sonally by  the  clerk  or  other  officer  of  the  court. '  All  the 
proceedings  thereafter,  except  such  as  are  required  by  the 
act  or  by  the  general  orders  to  be  had  before  the  judge,  are 
regularly  had  before  the  referee.*  Proofs  of  claims  and  other 
papers  filed  subsequent  to  the  reference,  except  such  as  call 
for  action  by  the  judge,  may  be  filed  either  with  the  referee 
or  with  the  clerk. ^ 

The  first  step  usually  taken  by  a  referee  after  having  notice 
of  the  reference  is  to  call  the  first  meeting  of  the  creditors  of 
the  person  adjudged  to  be  bankrupt.  The  purpose  of  this 
meeting  is  to  afford  the  creditors  of  the  bankrupt  an  oppor- 
tunity to  prove  their  claims,  to  appoint  a  trustee,  to  examine 
the  bankrupt  and  to  transact  such  other  business  as  properly 
may  be  transacted,  relating  to  the  administration  of  the  estate 
of  the  bankrupt. 

g  104.  The  time  and  manner  of  calling  the  first  meeting  of 
creditors. 
The  first  meeting  of  the  creditors  of  a  bankrupt  should  be 
held  not  less  than  ten  nor  more  than  thirty  days  after  the 
adjudication  at  the  county  seat  of  the  county  in  which  the 
bankrupt  has  had  his  principal  place  of  business,  resided  or 
had  his  domicile.  If  that  place  would  be  manifestly  incon- 
venient as  a  place  of  meeting  for  the  parties  in  interest,  or  if 
the  bankrupt  is  one  who  does  not  do  business,  reside  or  have 
his  domicile  within  the  United  States,  the  court  fixes  a  place 
for  the  meeting  which  is  the  most  convenient  for  parties  in 
interest.*     If  such  meeting  should   by  any  mischance  not  be 

iGen.Ord.  12.  «  B.  A.  1898,  vSec.  55(7.     Compare 

2  Gen.    ()T(\.    2.   20:    In    re   Oder-      R.  S.  Sees.  5034  and  5035. 

kirk.   103   Fed.   Rep.   779,  4  Am.   B. 

P    61-. 


MEETINGS    OF    CREDITORS.  269 

held  within  such  time,  the  court  or  the  referee  fixes  the  date  as 
soon  as  may  be  thereafter  when  it  shall  be  held.*  The  meet- 
ing must  be  held  in  strict  accordance  with  the  time  and  place 
specified.^ 

The  creditors  should  have  at  least  ten  days'  notice  by  mail 
to  their  respective  addresses,  as  they  appear  in  the  list  of  cred- 
itors of  the  bankrupt  of  the  first  meeting.®  The  notice  to 
creditors  of  the  first  meeting  should  also  be  published  at  least 
once  and  may  be  published  such  number  of  additional  times 
as  the  court  may  direct.*  The  last  publication  must  be  at  least 
one  week  prior  to  the  date  fixed  for  the  meeting."  The  paper 
in  which  the  notice  is  published  is  designated  by  order  of 
court.* 

The  form  of  notice  is  prescribed  by  the  supreme  court,"  and 
is  regularly  given  by  the  referee.^"  In  mailing  these  notices 
the  referee  is  entitled  to  use  a  government  penalty  envelope 
and  need  not  pay  postage.^^ 

§  105.  Who  are  entitled  to  vote  at  the  first  creditors'  meet- 
ing. 

Only  creditors,  of  the  bankrupt  are  entitled  to  vote  at  the 
first  or  any  subsequent  meeting  of  the  creditors.  Not  all  of 
his  creditors;  however,  are  entitled  to  vote.  A  creditor  is 
defined  by  the  statute  to  include  anyone  who  owns  a  demand 
or  claim  provable  in  bankru]:)tcy,  and  may  include  his  duly 
authorized  agent,  attorney  or  proxy. ^" 

In  order  to  vote  a  creditor  must  own  an  unsecured  claim 
provable  in  bankruptcy  and  have  actually  proved  it  and  had  it 
allowed.'^  An  attorney  at  law  can  not  vote  without  pro- 
ducing a  letter  of  attorney,  duly  appointing  him  an  attorney 
in    fact.'*     The   same  rule  applies  to   an   agent  or  a   proxy. 

♦  B:   A.    1898,    Sec.    55a,  and    Sec.       nient  at  Washington,  page  98,  note 
I,  clause  7;  Gen.  Ord.  12,  par.  2.  3,  aiitr. 

^  In  re  Eagles,  99  Fed.  Rep.  695,           '^*H.  A.  1898,  Sec.  i.  clause  9. 

^  Am.  B.  U.  733.  I'' B.  A.   1898,  S^c.  56(7  and  h;  In 

«  B.  A.   1898,  Sec.  58a.  re  Malino.  118  Fed.  Rep.  3^)8,  8  Am. 

^B.  A.   i8f>8.  Sec.  ^Sb.  B.    R.   205:    In    re    Eagles.   99   Fed. 

"  B.  A.  1898,  Sec.  28.  Rep.  69.'; .  3  Am.  B.  R.  7^.r 

•  Form  No.  18.  '♦  hi  re  Blankfein,  97  Fed.  Rep. 
1"  B.  A.  1898,  Sec.  58f.  191.  3  Am.  B.  R.  165;  In  re  Eagles, 
"This    question    has    been    ruled       (ki  Fed.  Rep.  695,  3  Am.  B.  R.  733; 

upon    by    the    Post    Office    Depart-       /;;  re  Richards,   103  Fed.  Rep.  849; 


2/0 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY, 


Such  letters  of  attorneys  should  be  hied  by  the  referee  as  a  part 
his  record/'*  Where  a  claim  has  been  assigned  after  proof 
the  real  owner  alone  can  vote,  and  if  he  holds  several  claims  he 
can  only  cast  one  vote.^''  The  managing  officers  of  a  bank- 
rupt corporation,  when  bona  fide  creditors,  have  the  same  right 
to  vote  as  any  other  creditor."  An  individual  creditor  of 
one  partner  can  not  vote  for  a  trustee  for  the  partnership 
estate."  Where  a  power  of  attorney  is  mislaid  and  not  pro- 
duced until  the  meeting  is  over,  the  attorney  is  properly  refused 
the  right  to  participate.^''*  The  creditors  of  the  partnership 
appoint  such  trustee.^*  A  joint  or  firm  creditor,  on  the  separate 
bankruptcy  of  one  member  of  a  firm,  may  vote  at  the  creditors' 
hieeting.^"  The  reason  for  this  distinction  seems  to  be  that 
each  individual  partner  is  liable  for  the  firm  debts  and  will  be 
released  from  such  liability  by  a  discharge.  A  separate  cred- 
itor can  vote  for  the  trustee  in  the  separate  bankruptcy  of  one 
of  the  partners  although  all  the  assets  are  joint.""  It  has  been 
held  that  one  of  several  joint  creditors,  who  are  not  partners, 
can  not  vote  without  the  consent  of  the  others."^ 

Creditors  holding  claims  which  are  secured  or  have  priority 
are  not  in  respect  to  such  claims  entitled  to  vote.""     Such  a 


4  Am.  B.  R.  631  ;  In  re  Lazoris, 
120  Fed.  Rep.  716,  10  Am.  B.  R. 
31  ;  In  re  Scully,  108  Fed.  Rep.  372, 

5  Am.  B.  R.  716. 

As  to  what  constitutes  a  sufficient 
form  of  power  of  attorney,  see  In  re 
Blue  Ridge  Packing  Co.,  125  Fed. 
Rep.  619,  II  Am.  B.  R.  36. 

15  In  re  Eagles,  99  Fed.  Rep.  695 , 
3  Am.  B.  R.  733- 

'^•'*  In  re  Blue  Ridge  Packing  Co., 
125  Fed.  Rep.  619,  11  Am.  B.  R.  36. 

18  In  re  Frank,  No.  5050  Fed. 
Gas'.,  s.  c.  5  Ben.  164. 

1'''  In  re  Northern  Iron  Co.,  No. 
10322  Fed.  Cas.,  s.  c.  14  N.  B.  R. 
356. 

18  B.  A.  1898,  Sec.  sb  of  the  act  of 
July  I,  1898,  30  Stat,  at  L. 

19 /„  re  Beck,  no  Fed.  Rep.  140, 

6  Am.  B.  R.  554;  In  re  Webb,  No. 
17317  Fed.  Cas.,  s.  c.  4  Saw.  326; 
Wilkins    v.    Davis,    No.    17664    Fed. 


Cas.,  s.  c.  2  Low.  511 ;  In  re  Down- 
ing, No.  4044  Fed.  Cas.,  s.  c.  i  Dill. 
33 ;  In  re  Stevens,  No.  13393  Fed. 
Cas.,  s.  c.  I  Saw.  397 ;  In  re  Abbe, 
No.  4  Fed.  Cas.,  s.  c.  2  N.  B.  R.  75 ; 
In  re  Leland,  No.  8228  Fed.  Cas., 
s.  c.  5  Ben.  168;  In  re  Brick,  4  Fed. 
Rep.  805-6;  Ex  parte  Yale,  3  P.  W. 
25,  note  a. 

There  is  authority  holding  the  op- 
posite view.  In  re  Purvis,  No. 
1 1476  Fed.  Cas.,  s.  c.  i  N.  B.  R.  163; 
Iludgins  V.  Lane,  No.  6827  Fed. 
Cas.,  s.  c.  2  Hughes  361 ;  In  re 
Nocnan,  No.  10292  Fed.  Cas.,  s.  c. 
i<,  N.  B.  R.  330;  In  re  Little,  No. 
8390  Fed.  Cas.,  s.  c.  i  N.  B.  R.  341. 

"^^  In  re  Beck,  no  Fed.  Rep.  140, 
6  Am.  B.  R.  554. 

21 /n  re  Purvis,  No.  11476  Fed. 
Ca   ,  s.  c.  I  N.  B.  R.  163. 

22  B.  A.  1898,  Sec.  56&;  In  re 
Eagles,  99  Fed.  Rep.  695 ,  3  Am.  B. 


MEETINGS    OF    CREDITORS.  2/1 

creditor  may  surrender  his  security  or  preference  at  the  first 
meeting,  when  it  is  of  such  a  nature  as  to  be  effectually  de- 
stroyed by  such  surrender,  and  thereupon  he  is  entitled  to  vote 
like  any  other  creditor."^  The  holder  of  a  lien  which  is  made 
void  by  the  act  no  longer  has  any  security  and  therefore  may 
vote.-*  Claims  of  secured  creditors  and  those  who  have  pri- 
ority may  be  allowed  to  enable  such  creditors  to  participate 
in  the  proceedings  at  creditors'  meetings  held  prior  to  the  de- 
termination of  the  value  of  their  securities  or  priorities,  but 
shall  be  allowed  for  such  sums  only  as  to  the  courts  seem  to 
be  owing  over  and  above  the  value  of  their  securities  or  pri- 
orities.^^ Where  the  debt  consists  of  several  parts,  one  of 
which  is  secured,  he  may  vote  on  the  unsecured  portion."  If 
the  security  is  upon  property  of  a  third  person, ^^  or  on  prop- 
erty exempted  to  the  bankrupt  by  law,""  the  creditor  may  prove 
the  whole  claim  and  vote.  It  was  held  under  the  former  act 
that  where  a  mortgage  creditor  had  sold  the  mortgaged  prem- 
ises after  the  adjudication  and  had  become  himself  the  pur- 
chaser he  could  not  vote  on  the  deficiency  as  an  unsecured 
creditor.^"  Where,  under  a  general  assignment  made  by  a 
debtor  more  than  a  year  before  the  commencement  of  proceed- 
ings in  bankruptcy,  a  creditor  therein  preferred  had  received 
a  partial  payment  of  his  claim,  he  is  not  required,  before  being 
admitted  to  prove  his  debt  in  the  bankrui)tcy  proceedings  and 
vote  in  the  election  of  a  trustee,  to  refund  to  the  estate  of  the 
bankrupt  the  amount  so  received. ^^  The  claim  is  provable  for 
the  balance  remaining  unpaid. 

In  order  to  entitle  a  creditor  to  vote  at  a  creditor's  meeting 
it  is  not  only  necessary  that  he  prove  his  claim,  but,  as  has 

R-  733'>  /«  re  Malino,  ii8  Fed.  Rep.  R    733;   In   re    Parkes.    No.    10754 

368 ,  8  Am.  B.  R.  205.  Fed.  Cas.,  s.  c.  10  N.  B.  R.  82 ;  In  re 

^^  In  re  Saunders,  No.  12371  Fed.  Hanna,  No.  6027  Fed.  Cas.,  s.  c.  5 

Cas.,  s.  c.  2  Low.  444;  B.  A.  1898,  Ben.  5. 

Sec.  571:;  In  re  Eagles,  99  Fed.  Rep.  ^s  /„  ^g  Cram,  No.  3343  Fed.  Cas., 

695 ,  3  Am.  B.  R.  733 ;  In  re  Malino,  s.  c.  i  Hask.  8g. 

118   Fed.    Rep.    368,   8  Am.    B.   R.  2» /n  re  Stillwell,  No.  13448  Fed. 

205.  Cas.,   s.  c.   7   N.    B.   R.  226;   In   re 

2< /n  rt- Scully,  108  Fed.  Rep.  372 ,  Tcrtelling,   No.    13842  Fed.  Cas.,  s. 

S  Am.  B.  R.  71^'-  c.  2  Dill.  339. 

-''  B.  A.   1898,  Sec.  S7e.  ""  ^«  ^^  Hunt.  No.  6884  Fed.  Cas., 

"  B.    A.    i8q8.    Sec.    56b;    In    re  s.  c.  17   N.   B.   R.  205. 

Eagles,  99  Fed.  Rep.  695 ,  3  Am.  B.  ^'^  In  re  Folb,  91  Fed.  Rep.  107. 


272  LAW    AM)     I'KOl  KKDIXCS    IN     HANKRUPTCY. 

already  been  stated,  it  must  be  allowed.  The  statute  expressly 
provides  that  "  claims  which  have  been  duly  proved  shall  be 
alknved.  upon  receipt  by  or  upon  presentation  to  the  court, 
unless  objection  to  their  allmvancc  shall  be  made  by  parties  in 
interest,  or  their  consideration  be  continued  for  cause  by  the 
court  upon  its  own  motion."'" 

W^here  claims  are  presented  to  which  objection  is  made  or 
cause  exists  for  continuing  the  consideration  of  the  claim  upon 
his  own  motion,  how  shall  a  referee  proceed  with  reference  to 
the  voting?  It  is  clear  that  so  long  as  objections  are  pending 
against  their  claims  creditors  are  not  entitled  to  vote.  Where 
such  objections  can  be  disposed  of  by  the  referee  at  once  he 
should  either  sustain  or  overrule  them,  so  as  to  permit  the 
creditor  to  vote  if  he  shall  allow  the  claim.  The  bankrupt  is 
regularly  present  at  the  first  meeting  of  the  creditors.  Under 
section  7  it  is  his  duty  to  examine  the  correctness  of  proofs  of 
claims  filed  against  his  estate  when  ordered  to  do  so  by  the 
referee  or  a  judge,  and  to  disclose  the  fact  when  any  person 
tries  to  prove  a  false  claim  against  his  estate.  It  would  there- 
fore seem  that  with  the  assistance  of  the  bankrupt  and  such 
evidence  as  may  be  introduced  that  the  referee  can  ordinarily 
dispose  of  objections  at  the  first  meeting  before  a  vote  is  taken. 
In  case  he  can  not  conveniently  do  so.  he  has  undoubted  au- 
thority to  continue  the  allowance  of  a  particular  claim.  The 
act  of  1867  expressly  provided  for  continuing  claims  when  the 
register  entertained  doubts  of  their  validity  or  the  right  of  the 
creditors  to  prove  them  or  was  of  the  opinion  that  the  validity 
or  right  should  be  investigated  by  an  assignee.^^  It  would 
seem  that  a  cause  which  would  justify  the  postponement  of 
the  ])roof  under  the  former  act  would  not  necessarily  be  suf- 
ficient to  justify  a  postponement  under  the  present  act. 

Where  a  claim  is  regularly  and  ])roperly  proved,  the  referee 
should  allow  it  and  permit  the  creditor  to  vote  at  the  first 
meeting,  unless  a  clear  case  is  made  in  opposition  to  it^*  A 
claim  which  has  been  allowed  may  be  reconsidered  and  re- 

32  B.  A.  1898,  Sec.  57c/.  Herrman,  No.  6425  Fed.  Cas.,  s.  c. 

33  R.    S.    Sec.    5083;    In    re    Bar-       4  Ben.  126;  In  re  Orne,  No.  10581 
tusch.  No.  1088  Fed.  Cas.,  9  N.  B.       Fed.  Cas.,  s.  c.  i  Ben.  361. 

R,    478:    In    re   Jackson,    No.    7123  ^^  In   re    Malino,    118    Fed.    Rep. 

Fed.   Cas.,   s.  c.  7   Biss.   280 ;   In   re       368 ,  8  .^m.  B.  R.  205. 


MEETINGS    OF    CREDITORS.  273 

allowed,  or  rejected  in  whole  or  in  part,  according  to  the 
equities  of  the  case  at  any  time  before  the  estate  has  been 
closed. ^^  The  application  for  such  re-examination  may  be 
made  to  the  referee.'"  The  judge  may  review  the  matter  upon 
the  question  being  certified  to  him.""^  The  effect  of  allowing 
the  claim  or  postponing  the  proof  of  it  affects  no  right  of  a 
creditor  except  the  right  to  vote  at  the  creditor's  meeting.  If 
it  is  made  to  appear  to  a  reasonable  certainty  that  the  result 
would  be  changed  by  such  vote  or  votes,  the  referee  or  the 
judge  may  set  aside  the  result  of  the  vote  and  direct  a  new 
vote  to  be  taken.^^  Where  it  appears  that  the  exercise  of  the 
riglit  to  vote  would  have  been  barren  of  result  the  court  will 
not  delay  proceedings  in  order  to  affofd  such  creditors  the 
opportunity  to  exercise  such  right.^" 

The  referee  and  the  bankrupt  are  required  by  law  to  attend 
the  first  meeting  of  the  creditors,  but  neither  of  them  are  en- 
titled to  vote,  because  the  business  is  transacted  by  the  creditors 
alone."'' 
§  106.     How  to  conduct  the  first  meeting  of  creditors. 

The  first  meeting  of  creditors  of  a  bankrupt  should  be  held 
at  the  time  and  place  specified  in  the  notice  for  holding  if** 
It  is  not  proper  to  hold  a  meeting  before  that  time.  If  any 
creditor  desires  to  have  a  voice  in  the  business  for  which  the 
meeting  is  called  he  should  attend  personally  or  by  a  dulv 
authorized  agent  or  attorney.*^  Where  no  creditor  is  present 
or  represented  the  meeting  is  considered  as  held  as  fully  and 
effectually  as  if  creditors  had  appeared  or  been  represented 
and  the  referee  is  not  authorized  to  wait '  for  or  require  a 
"  quorum."  *^  The  judge  or  referee  is  required  by  statute  to 
be  present.''*     The  referee  regularly  attends.     The  bankrupt  is 

•■»«  B.  A.  1898,  Sec.  57k.  •»'•  B.    A.    1898,    Sec.    56,    Sec.    7, 

*«Gen.  Ord.  21,  par.  6.  clause  i,  and  Sec.  55^. 

"  Gen.  Ord.  27.  •»!  In  re  Eagles,  99  Fed.  Rep.  695 , 

'*  In  re  Eagles,  99  Fed.  Rep.  695 ,  3  Am.  B.  R.  7^^^. 

3,  Am.   B.  R.  7i:i.  ♦a  See  Official  Forms  Nos.  20  and 

^^  In   re   Northern    Iron    Co.,   No.  21  ,  sec  Forms  Nos.  39  and  40,  post. 

10322   Fed.   Cas.,   s.  c.    14   N.   B.   R.  "'■■'  In  re  Eagles.  99  Fed.  Rep.  695  . 

356;     In    re    Lake     Superior    Ship  3   Am.   B.   R.   7t,t,;  In  re  Cogswell. 

Canal  R.   R.  &  Iron   Co.,  No.  7997  No.  2959  Fed.  Cas.,  s.  c.  i  Ben.  388. 

Fed.  Cas.,  s.  c.  7  N.  B.  R.  376:  In  re  "  B.  A.  1898,  Sec.  556. 

Jrckson,  No.  7123  Fed.  Cas.,  s.  c.  7 

Biss.  280. 


274  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

also  required  to  be  present,  provided  the  meeting  is  had  at  a 
place  not  more  than  one  hundred  and  fifty  miles  from  his  home 
or  principal  place  of  business.*^ 

If  creditors  attend,  the  meeting  should  be  organized  at  the 
hour  designated  in  the  notice  or  as  soon  thereafter  as  prac- 
ticable. The  judge  or  referee  presides.^"  The  duties  of  the 
referee  as  presiding  officer  are  of  a  judicial  character.  His 
actions,  therefore,  under  all  circumstances  should  be  free  from 
reproach  and  above  all  suspicion  of  interest  or  partisanship. 
It  is  especially  incumbent  upon  him  in  no  manner  to  interfere 
with  or  influence  the  choice  of  a  trustee  by  the  creditors.  The 
policy  of  the  bankrupt  law  is  to  give  the  creditors  of  a  bank- 
rupt a  free,  deliberate,  unbiased  choice  in  the  first  instance  of 
the  person  who  is  to  take  the  assets  and  manage  them.*^  It  is 
also  incumbent  upon  the  creditors  to  take  such  steps  as  may 
be  pertinent  and  necessary  for  the  promotion  of  the  best  in- 
terests of  the  estate  and  the  enforcement  of  the  act.**  The 
referee  presides  at  this  meeting  exactly  in  the  same  manner 
and  in  the  same  sense  that  a  judge  presides  over  his  court. 

Before  proceeding  with  the  other  business  the  referee  regu- 
larly allows  or  disallows  the  claims  o£  creditors  there  pre- 
sented.*" Although  creditors  may  prove  their  claims  at  any 
time  after  the  commencement  of  the  proceedings  in  bank- 
ruptcy, they  do  not  generally  prove  them  until  the  first  meet- 
ing. In  practice,  therefore,  where  the  estate  is  large  and  the 
creditors  numerous,  it  may  require  a  whole  day  or  several 
days  to  take  the  proofs,  elect  the  trustee  and  transact  the 
other  business  that  may  properly  come  before  the  creditors. 
In  such  cases  the  meeting  may  be  adjourned  from  day  to  day 
so  as  to  furnish  proper  opportunity  for  all  creditors  to  prove 
their  debts  and  to  come  to  an  agreement  in  regard  to  the 
selection  of  a  trustee  if  possible.  The  several  adjournments 
will  constitute  but  one  meeting.  It  will  be  the  first  meeting 
of  the  creditors  within  the  contemplation  of  the  statute, 
whether  held  on  the  day  designated  in  the  notice  or  on  the 

« B.    A.    1898,    Sec.    7 ;    Official  *''  In   re    Smith,    No.    12971    Fed. 

Forms  Nos.  14  and  18,  see  Forms  Cas.,  s.  c.  2  Ben.  113. 

Nos.  31  and  35,  post;  In  re  Eagles,  ■*«  B.  A.  1898,  Sec.  55c. 

99  Fed.  Rep.  695,  3  Am.  B.  R.  7iZ-  *"  B.  A.  1898,  Sec.  55^. 

*9  B.  A.  1898,  Sec.  55&. 


MEETINGS    OF    CREDITORS.  2/5 

day  to  which  the  meeting  assembled  on  that  day  has  been 
adjourned/"  What  debts  are  provable  ''  and  the  manner  of 
making  the  proof  ^'-  are  considered  in  another  place.  The 
referee  should  include  in  his  record  a  list  of  creditors  who 
have  proved  their  debts  at  the  first  meeting,  together  with 
their  residences  and  the  amount  of  each  creditor's  debt.^^ 

The  referee  may  publicly  examine  the  bankrupt  or  cause  him 
to  be  examined  at  the  instance  of  a  creditor  before  proceeding 
with  the  election  of  the  trustee  or  with  other  business.^*  The 
examination  should  not  be  permitted  at  the  instance  of  a 
creditor  until  after  he  has  proved  his  claim.  The  proceed- 
ings relating  to  the  examination  of  the  bankrupt  and  other 
persons  are  treated  under  a  separate  head.^^  After  the  exam- 
ination of  the  bankrupt  an  offer  of  composition  may  be  made. 
It  is  not  necessary  to  call  a  special  meeting  for  this  purpose.'''^^ 

The  principal  business  to  be  transacted  at  the  first  creditors' 
meeting  is  the  election  of  one  trustee  or  three  trustees.^*"  The 
manner  of  conducting  the  election  of  the  trustee  is  not  pre- 
scribed by  the  statute,  and  is  therefore  left  to  be  determined 
by  the  creditors  themselves.  They  may  either  organize  into 
a  general  meeting  or  vote  in  the  same  manner  as  at  any  other 
election.  The  preliminary  ballots  may  be  taken  either  viva 
voce  or  upon  written  slii)S.  If  on  the  first  vote  there  is  no 
choice  made,  a  second,  third,  or  any  num1)er  of  ballots  may 
be  had  until  the  required  concurrence  is  obtained.  A  creditor 
may  change  his  vote  at  any  time  during  the  progress  of  such 
election."  Votes  may  be  solicited  for  any  particular  trus- 
tee. The  creditors  should  canvass  and  discuss  the  different 
candidates  so  that  the  choice  of  a  trustee  may  be  made  with 
full  knowledge  of  all  the  facts  and  their  bearings.  The  solici- 
tation of  votes  must  be  properly  exercised.  Improper  means 
and  undue  influence  will  n(jt  be  permitted.     Where  such  means 

•'•"/n  re  Eagles.  99  Fed.  Rep.  695,  "^^  B.  A.  1898.  Sec.  55^. 

3  Am.  B.  R.  733 ;  In  re  Phelps,  No.  •■'''  See  Examinations,  Chap.  XIX. 

11071  Fed.  Cas.,  s.  c.  i  N.  B.  R.  525;  ''^*  In  re  Hilborn,   104  Fed.  Rep. 

In  re  Norton,  No.  10348  Fed.  Cas.,  866,  4  Am.  B.  R.  741. 

s.  c.  6  N.  B.  R.  297.  ''"'  B.  A.  1898,  Sec.  44- 

Bichap.  XITI.  "^»  re  Pfromm.  No.  11061  Fed. 

'•^  Chap.  XIV.  Cas.,  s.  c.  8  N.  B.  R.  357- 

■53  Official  Form  No.  19 ;  see  Form 
No.  38,  post. 


2yt 


LAW      AM)    I'KOCKEDIXC.S    IN     HANKKL' I'TCV. 


are  eniployctl  or  where  tlie  voters  had  no  right  to  vote  the 
referee  will  reject  the  vote  or  disapprove  the  election/'**  The 
referee  has  power  to  reject  improper  votes  ''''  but  has  no  power 
to  set  aside  the  election  for  such  reasons,  but  can  merely  re- 
fuse to  confirm  it  and  report  his  disapproval  to  the  judge  who 
alone  can  remove  the  trustee  elected.''"  The  court  will  often 
reject  a  trustee  elected  through  the  influence  of  the  bankrupt  ^^ 
but  will  not  do  so  where  all  the  general  creditors  have  been 
paid  in  full."'"  The  unanimous  choice  of  creditors  should  not 
be  disapproved  on  complaint  of  the  bankrupt  except  in  ex- 
treme cases.**^  When  a  final  result  is  reached,  it  must  be  made 
a  matter  of  record  in  the  form  prescribed."*  The  creditors 
who  have  appointed  a  trustee  must  sign  the  certificate,  with 
their  residences  and  amount  of  debts  claimed  and  allowed. 
The  reason  for  this  requirement  is,  that  if  any  dispute  should 
arise  in  regard  to  the  actual  result  of  election  there  would  be 
satisfactory  evidence  before  the  court  to  settle  the  controversy. 
After  a  creditor  has  signed  this  certificate  he  can  not  change 
his  vote."^  Where  only  one  creditor  appears  at  the  first  meet- 
ing of  creditors  and  proves  his  debts  he  may  appoint  the  trus- 
tee.«« 

If  the  creditors  do  not  appoint  the  trustee  the  court  should 
do  so,"^  but  only  after  the  creditors  have  been  given  full  op- 


J*8/n  re  McGill  (C.  C.  A.  6th 
Cir.),  io6  Fed.  Rep.  57,  5  Am.  B.  R. 
155;  In  re  Henschel  (C.  C.  A.  2d 
Cir.),  109  Fed.  Rep.  861,  at  865; 
In  re  Rekersdres,  108  Fed.  Rep. 
206,  5  Am.  B.  R.  811;  In  re  Day- 
ville  Woolen  Co.,  114  Fed.  Rep.  674, 

8  Am.  B.  R.  85;  In  re  Morton,  118 
Fed.  Rep.  908. 

5»/«  re  McGill  (C.  C.  A.  6th 
Cir.),  106  Fed.  Rep.  57,  5  Am.  B. 
R.  155;  In  re  Malino,  118  Fed.  Rep. 
368,  8  hm.  B.  R.  205. 

«" /h  re  Hare,  119  Fed.  Rep.  246, 

9  Am.  B.  R.  520;  In  re  Mackellar, 
116  Fed.  Rep.  547;  Gen.  Ord.  13. 

"/n  re  McGill  (C.  C.  A.  6th 
Cir.),  106  Fed.  Rep.  57,  5  Am.  B.  R. 
155;  In  re  Henschel  (C.  C.  A.  2d 
Cir.),  109  Fed.  Rep.  861,  at  865; 
In    re    Rekersdres,    108    Fed.    Rep. 


206,  5  Am.  B.  R.  811;  In  re  Day- 
ville  Woolen  Co.,  114  Fed.  Rep.  674, 
8  Am.  B.  R.  85;  In  re  Morton,  118 
Fed.  Rep.  908. 

•52 /«  re  Morton,  118  Fed.  Rep. 
908. 

«3  In  re  Lewensohn,  98  Fed.  Rep. 
576 ,  3  Am.  B.  R.  299. 

•5*  Official  Form  No.  22 ;  see  Form 
No.  41,  post. 

"s  In  re  Scheiflfer,  No.  12445  Fed. 
Cas.,  s.  c.  2  N.  B.  R.  591. 

88  In  re  Haynes,  No.  6269  Fed. 
Cas.,  s.  c.  2  N.  B.  R.  227;  Anon., 
No.  458  Fed.  Cas.,  s.  c.  i  N.  B.  R. 
216. 

'■'■'  B.  A.  1898,  Sec.  44,  and  Sec.  i, 
clause  7 ;  Official  Form  No.  23 ;  see 
Form  No.  42,  post;  In  re  Brooke, 
100  Fed.  Rep.  432;  4  Am.  B.  R.  50. 


MEETINGS    OF    CREDITORS.  2'J'] 

portunity ; "  ■  thus  where  the  creditors  are  unable  to  agree  at 
their  first  meeting  and  a  majority  in  number  and  amount  re- 
quest an  adjournment  for  a  reasonable  time  in  order  that  they 
may  come  to  some  agreement  the  referee  should  grant  such 
adjournment  and  should  not  himself  appoint  a  trustee,®" 
Where  two  days  have  been  used  up  in  unsuccessful  attempts 
by  creditors  to  choose  a  trustee  and  one  is  needed  at  once  the 
referee  should  appoint  him/"  Where  the  majority  in  number 
vote  for  one  person  for  trustee  and  the  majority  in  amount 
for  another  the  referee  may  appoint.'^ 

If  the  schedule  of  a  voluntary  bankrupt  discloses  no  assets, 
and  if  no  creditor  appears  at  the  first  meeting,  the  court  may, 
by  order  setting  out  the  facts,  direct  that  no  trustee  be  ap- 
pointed ;  but  at  any  time  thereafter  a  trustee  may  be  api^X)int- 
ed,  if  the  court  shall  deem  it  desirable.^^  If  no  trustee  is 
appointed  as  aforesaid,  the  court  may  order  that  no  meeting 
of  the  creditors  other  than  the  first  meethig  shall  be  called/^ 

The  number  of  votes  for  an  election  or  to  carry  any  matter 
of  business  is  prescribed  by  the  statute.  Creditors  pass  upon 
matters  submitted  to  them  at  their  meetings  by  a  majority 
vote  in  number  and  amount  of  claims  of  all  creditors  whose 
claims  have  been  allowed,  and  are  ]:)resent,  except  as  other- 
wise provided  by  statute.'* 

It  will  be  observed  that  in  order  to  pass  a  matter  it  is  neces- 
sary to  have  a  majority  of  the  votes  of  all  who  have  proved 
claims  and  are  present,  and  not  merely  a  majority  of  the 
votes  cast."^  The  claims  of  creditors  who  are  not  present  are 
not  counted.^*  and  a  creditor  is  not  considered  as  present  who 
has  sent  a  jjroxy  which  has  been  rejected."'  The  number  and 
amount  of  debts  proved  upon  the  first  day  is  determined  from 

"" /«  re  Hare,  119  Fed.  Rep.  246,  '*  B.  A.  1898.  Sec.  56. 

9  Am.  B.  R.  520:  In  re  Mackellar,  '^  In   re    Purvis,   No.    11476    Fed. 

116   Fed.    Rep.   547;    In   re  Lewen-  Ca.s.,   s.  c.    i    N.   B.   R.    163;    /n   re 

sohn,  98  Fed.  Rep.  576,  3  Am.  B.  R.  SclieifFer,  No.  12445  Fed.  Cas..  s.  c. 

299.  2   N.    B.    R.   591  ;    B.   A.    1898,    Sec. 

*"•  In  re  Nice  &  Schreihcr,  123  Fed.  56. 

Rep.  987.  ■'«/«   re   Henschel    (C.    C.    A.   2d 

""'In  re  KiifBer,  97  Fed.  Rep.  187,  Cir.),  113  Fed.  Rep.  443,  7  Am.  B. 

3   Am.   B.   R.   162.  R.   ('/)2:    In    re   Mackellar,    116   Fed. 

^'  In   re   Richards,    103   Fed.    Rep.  Ktp.  547 

849,  4  Am.  B.  R.  631.  "W»    rr   Henschel    (C.    C.    A.    2d 

^■'' Gen.  Ord.   15.  Cir.),  113  Fed.  Rep.  443,  7  Am.   B. 


'jy^  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

the  list  required  to  be  made  by  the  referee."'*  It  is  also  neces- 
sary that  there  be  a  majority  in  number  and  value  of  all  the 
debts  proved.  By  this  mode  of  counting  every  debt  upon 
which  a  vote  has  not  been  cast  in  favor  of  a  question  or  person 
must  be  counted  as  a  vote  in  the  negative,  if  the  creditor  owing 
claim  is  i)resent.  A  question  is  not  carried  which  receives  the 
majority  of  the  debts  proved  unless  the  majority  in  number 
also  constitutes  a  majority  in  the  amount  of  claims  proved. 
So,  also,  it  is  not  carried  where  a  majority  in  amount  of  debts 
proved  is  cast  in  favor  of  the  question  unless  that  majority  in 
amount  also  constitutes  a  majority  in  number.  The  majority 
must  be  a  joint  majority  of  both  the  number  and  the  value. 
The  reason  for  this  provision  seems  to  be  to  prevent  one  large 
creditor  from  controlling  the  meeting  to  the  detriment  of 
other  creditors,  and  at  the  same  time  to  prevent  several  cred- 
itors having  small  claims  from  uniting  to  the  injury  of  the 
large  creditor,  who  may  be  the  only  one  who  has  a  real  in- 
terest in  the  ])roceedings. 

The  creditors  not  only  appoint  the  trustee  or  trustees,  but 
they  should  fix  the  amount  of  the  bond  required.®**  They 
may  at  any  time  increase  the  amount  of  the  bond.  If  the 
creditors  do  not  fix  the  amount  of  the  bond  of  the  trustee  the 
court  must  do  so.®" 

§  107.     Notice  to  trustee. 

The  appointment  of  a  trustee  by  the  creditors  is  subject  to 
be  approved  or  disapproved  by  the  referee  or  the  judge.®^ 
Ordinarily  the  referee  makes  the  order  approving  the  appoint- 
ment. He  thereupon  immediately  notifies  him  in  person  or 
by  mail  of  his  appointment.**-  The  notice  should  contain  a 
statement  of  the  penal  sum  of  the  trustee's  bond.®"  The  trus- 
tee is  required  forthwith  to  notify  the  referee  of  his  accept- 
ance or  rejection  of  the  trusteeship.®^  Where  the  trustee 
accepts  the  trust  he  should  immediately  qualify.®*  If  he  de- 
clines to  accept  the  trust  a  vacancy  occurs  in  the  office  of 
trustee.  The  creditors  are  then  entitled  to  have  another 
R    662;  In  re  McGill  (C.  C.  A.  6th  s"  B.  A.  1898,  Sec.  50c. 

Cir.),  106  Fed.  Rep.  57,  5  Am.  B.  ^1  Gen.  Ord.  13. 

R    155;  In  re  Mackellar,  116   Fed.  82  Gen.  Ord.  16;  Official  Form  No. 

Rep.  547-  24;  see  Form  No.  43,  post. 

""^  Official  Form  No.  19 ;  see  Form  s^  q^^    Qrd.  16. 

No.  38,  (?osi.  84  Trustees,  Chap.  XV. 


MEETINGS    OF    CREDITORS.  2/9 

meeting  to  elect  a  trustee.*^  The  creditors  may.  of  course, 
waive  this  privilege,  in  which  case  the  judge  or  referee 
(usually  the  referee)  appoints  one  or  three  trustees.*^ 

§  io8.     Other  meetings  of  creditors. 

Creditors  may  hold  meetings  other  than  the  first  one  when- 
ever it  may  be  necessary  to  consider  matters  pertinent  to  the 
administration  of  the  estate  or  other  matters  relating  to  the 
proceedings  in  bankruptcy.  Where  the  schedule  of  a  volun- 
tary bankruct  discloses  no  assets,  and  no  creditor  appears  at 
the  first  meeting,  the  court  may  direct  that  no  trustee  be  ap- 
pointed, and  no  meeting  of  the  creditors  other  than  the  first 
meeting  be  called.^" 

A  meeting  of  creditors,  subsequent  to  the  first  one,  may  be 
held  at  any  time  and  place  when  all  of  the  creditors  who  have 
secured  the  allowance  of  their  claims  sign  a  written  consent 
to  hold  a  meeting  at  such  time  and  place. ^^  Whenever,  by- 
reason  of  a  vacancy  in  the  office  of  trustee,  or  for  any  other 
cause,  it  becomes  necessary  to  call  a  special  meeting  of  the 
creditors  in  order  to  carry  out  the  purposes  of  the  act,  the 
court  may  call  such  a  meeting,  specifying  in  the  notice  the 
purpose  for  which  it  is  called. *"*  The  judge  or  referee  is  re- 
quired to  call  a  meeting  of  creditors  whenever  one  fourth  or 
more  in  number  of  those  who  have  proven  their  claims  shall 
file  a  written  request  to  that  effect ;  if  such  request  is  signed 
by  a  majority  of  such  creditors,  which  number  represents  a 
majority  in  amount  of  such  claims,  and  contains  a  request  for 
such  meeting  to  be  held  at  a  designated  place,  the  court  shall 
call  such  meeting  at  such  place  within  thirty  days  after  the 
date  of  the  filing  of  tlie  request.**" 

Creditors  who  have  ])roved  their  claims  at  the  first  meeting 
or  have  i)roved  them  subsecjuently  are  entitled  to  vote  at  these 
meetings  subject  to  the  restrictions  contained  in  section  56. 
Creditors,  whether  they  have  proved  their  claims  or  not,  are 
entitled  to  have  at  least  ten  days'  notice  by  mail  to  their 
respective  addresses  as  they  appear  in  the  list  of  creditors  of 
the  l)ankru|)t.  or  as  afterwards  filed  with  the  papers  in  the  case 
by  the  creditors,  unless  they  waive  notice  in  writing  of  all  such 

8^'  B.  A.  1898.  Sec.  44.  8«  Gen.  Orel.  25. 

80  Gen.  Orel.  15.  «•»  B.  A.   1898,  Sec.  55^,  and  Sec. 

"  B.  A.  1898,  Sec.  S5d.  i,  clause  7. 


28o  LAW    AND    I'ROCKEOINGS    IN    BANKRUPTCY. 

ineeting-s  of  creditors.'"'  Tlie  referee  regularly  gives  this  no- 
tice." 

The  referee  is  not  required  to  be  present  or  preside  at  these 
meetings,  but  in  practice  he  usually  does  so.  The  bankrupt 
is  not  required  to  attend  sucli  meetings  unless  specially  ordered 
to  do  so.  Hiere  is  no  form  prescribed  for  conducting  the 
business  or  taking  the  votes  except  that  the  creditors  can  only 
pass  upon  matters  submitted  to  them  at  such  meetings  by  a 
majority  vote  in  number  and  amount  of  claims  of  all  creditors 
whose  claims  have  been  allowed  and  are  present."-'  Such 
meetings  are  properly  guided  by  the  rules  and  usages  of  par- 
liamentary bodies.**^ 

Whenever  the  affairs  of  the  estate  are  ready  to  be  closed  a 
final  meeting  of  creditors  must  be  ordered.®* 

90  B.  A.  1898,  Sec.  58a.     See  In  re         92  B.  A.  1898.  Sec.  560. 
Mills,   No.   9610  Fed.   Cas.,   s.   c.   7  ^^  In  re  Merchants'  Ins.  Co.,  No. 

Ben.  452 ;  Anon.,  No.  457  Fed.  Cas.,  9442  Fed.  Cas.,  s.  c.  6  Hiss.  252. 
s.  c.  I  N.  B.  R.  122.  8*  B.  A.  1898,  Sea  55/. 

»iB.   A.    1898,    Sec.   39,  clause  4, 
and  Sec.  58c. 


WHAT    DEBTS    ARE    PROVABLE.  2S.I 


CHAPTER  XIII. 

WHAT  DEBTS  ARE  PROVABLE. 

§  109.     Provable  debts  defined. 

Debts  of  the  bankrupt  may  be  proved  and  allowed  against 
his  estate/ 

First,  which  are  a  fixed  liability,  as  evidenced  by  a  judg- 
ment or  an  instrument  in  writing,  absolutely  owing  at  the 
time  of  the  filing  of  the  petition  against  him,  whether  then 
payable  or  not,  with  any  interest  thereon  which  would  have 
been  recoverable  at  that  date  or  with  a  rebate  of  interest  upon 
such  as  were  not  then  payable  and  did  not  bear  interest. 

Second,  debts  due  as  costs  taxable  against  an  involuntary 
bankrupt  who  was  at  the  time  of  the  filing  of  the  petition 
against  him  plaintiff  in  a  cause  of  action  which  would  pass 
to  the  trustee  and  which  the  trustee  declines  to  proescute 
after  notice.  " 

Third,  debts  founded  upon  a  claim  for  taxable  costs  in- 
curred in  good  faith  by  a  creditor  before  the  filing  of  the  peti- 
tion in  an  action  to  recover  a  provable  debt. 

Fourth,  debts  founded  upon  an  open  account,  or  upon  a 
contract  express  or  implied. 

Fifth,  debts  founded  upon  provable  debts  reduced  to  judg- 
ments after  the  filing  of  the  petition  and  before  the  considera- 
tion of  the  bankrupt's  application  for  a  discharge,  less  costs 
incurred  and  interests  accrued  after  the  filing  of  the  petition 
and  up  to  the  time  of  the  entry  of  such  judgments. 

The  five  classes  of  debts  quoted  above  arc  contained  in  Sec. 
630  and  inchule  every  class  of  debt  provable  in  bankruptcy. 
If  a  claim  does  not  fall  within  one  of  these  classes  it  is  not 
prova])lc. 

In  order  that  a  debt,  dcmanfl  or  claim  may  be  ])roved  against 
the  estate  of  a  bankru])!  it  must  be  lif|ui(latc(l." 

1  B.    A.    1898,    Sec.    63.     Compare       21Q,   2   N.   B.   N.   7^'0.  4  Am.    B.    R. 

K.  S.  Sees.  5067  to  5072.  8^;    /"    re    Big    Meadow    Gas    Co., 

* /«   re   Silverman,   loi    Fed.   Rep.        11.?    Fed.    Rep.    974,    7    Am.    B.    R. 


282 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


In  Section  6;i,b  provision  is  made  for  unliquidated  claims 
against  tlie  bankrupt,  which  may  be  liquidated  upon  applica- 
tion to  the  court  in  such  manner  as  it  shall  direct  and  may 
thereafter  be  proved  and  allowed  against  his  estate.  Par.  b  of 
Sec.  63  adds  nothing  to  the  class  of  debts  which  may  be  proved 
imder  par.  a  of  the  same  section."*  Its  purpose  is  to  permit  an 
unliquidated  claim,  coming  within  the  provisions  of  Sec.  63a 
to  be  liquidated  as  the  court  may  direct. 

Unliquidated  claims  which  may  be  liquidated  arid  proved 
under  this  provision  are  numerous  and  varied.  Familiar  ex- 
amples are  damages  for  breach  of  executory  contracts,  damage 
for  breach  of  covenants  in  a  contract  and  stockholder's  lia- 
bility.^ Notes  and  contracts  to  deliver  specific  articles  of  mer- 
chandise may  be  liquidated.^* 

The  rights  of  creditors  to  prove  debts  and  share  in  the  dis- 
tribution of  the  estate  of  the  bankrupt  are  fixed  by  the  status 
of  their  claims  at  the  time  of  filing  the  petition  in  bankruptcy.* 


697.  But  see  In  re  Manhattan  Ice 
Co.  (C.  C.  A.  2nd  Cir.),  116  Fed. 
Rep.  604,  8  Am.  B.  R.  569. 

2*- See  observation  of  Mr.  Justice 
Peckham  in  Dunbar  v.  Dunbar,  190 
V  S.  340,  350.  In  re  Hirschman, 
104  Fed.  Rep.  69,  4  Am.  B.  R.  715. 

3  Fourth  National  Bk.  v.  Franck- 
lyn,  120  U.  S.  747 ;  Garrett  v.  Saylcs, 
I  Fed.  Rep.  371 ;  James  v.  Atlantic 
Delaine  Co.,  No.  7179  Fed.  Cas., 
s  c.  II  N.  B.  R.  390,  Gibson  v. 
Lewis,  No.  5398  Fed.  Cas.,  s.  c.  11 
N.  B.  R.  247. 

In  re  Rouse,  40  Law  Bui.  (Ohio) 
220,  the  referee  held  that  a  stock- 
holder's statutory  liability  in  an  in- 
solvent Ohio  corporation  is  not  only 
a  liability  created  by  statute,  but  is 
also  a  claim  founded  upon  an  im- 
plied contract,  and  as  such  is  a 
provable  debt  against  the  estate  of 
the  bankrupt  stockholder,  whenever 
the  circumstances  are  such  that  a 
stockholder's  liability  suit  would  lie. 

It  is  an  unliquidated  claim,  and 
upon  application  to  the  court  the 
court  will  direct  the  manner  of  its 
liquidation. 


But  the  court  will  not  proceed  to 
direct  the  manner  of  liquidation  un- 
less application  is  made  to  it  there- 
for. 

In  cases  of  stockholder's  double 
liability  the  court  may  direct  that 
a  stockholder's  liability  suit  be  in- 
stituted by  the  creditor  making  the 
application,  or  that  an  already  pend- 
ing suit  in  the  state  court  be  main- 
tained for  the  purpose  of  liquidat- 
ing the  claim ;  or,  if  the  facts  are 
simple  and  undisputed,  may  itself 
undertake  to  determine  the  amount 
provable  as  the  bankrupt's  stock-/ 
holder's  liability,  and  to  whom  the 
same  is  payable. 

3*  Chandler  v.  Windship,  6  Mass. 
310;  McMullen  v.  Bank  of  Penn.,  2 
Penn.  St.  243. 

*  Swarts  V.  Fourth  National  Bank 
(C.  C.  A.  8th  Cir.),  117  Fed.  Rep. 
1 ,  8  Am.  B.  R.  673 ;  In  re  Bing- 
ham, 94  Fed.  Rep.  796 ,  2  Am.  B.  R. 
223 ;  Phillips  V.  Dreher  Shoe  Co., 
112  Fed.  Rep.  404,  7  Am.  B.  R. 
326;  In  re  Swift  (C.  C.  A.  ist  Cir.), 
112  Fed.  Rep.  315,  7  Am.  B.  R.  374; 
In  re  Graff,  8  Am.  B.  R.  744. 


WHAT    DEBTS    ARE    PROVABLE.  283 

A  debt  contracted  by  the  bankrupt  subsequent  to  the  filing 
of  the  petition  can  not  be  proved  in  bankruptcy.**  The  pay- 
ment of  such  debts  may  be  sought  out  of  property  acquired 
after  the  adjudication  of  bankruptcy  at  any  time.  The  bank- 
rupt is  not  released  from  such  debts  by  discharge  in  bank- 
ruptcy. 

Debts  secured  by  a  mortgage  Hen  or  other  kind  of  security 
are  not  provable  under  this  section  until  the  secured  creditor 
surrenders  such  preferences,  except  for  the  amount  each  claim 
exceeds  the  value  of  its  securit}^^  This  section  relates  to 
debts,  demands  and  claims  only  which  are  not  preferred  or 
secured,  and  which  have  no  priority  over  any  other  debts. 
They  are  the  debts,  demands  and  claims  of  the  general  cred- 
itors against  the  general  assets  of  the  bankrupt  at  the  time 
the  petition  was  filed. 

§110.     What  is  "a  debt." 

It  is  to  be  observed  that  debts  only  are  provable  under  the 
first  paragraph  of  section  63  —  the  first  five  clauses  above.  To 
ascertain,  therefore,  what  is  provable  under  these  provisions 
it  is  necessary  to  inquire  at  the  outset  what  is  included  in  the 
word  "  debts." 

A  debt,  as  defined  by  the  act  itself,  includes  "  any  debt, 
demand  or  claim  provable  in  bankruptcy."  ®  This  definition 
does  not  throw  much  light  on  its  meaning  in  this  connection, 
although  it  fully  defines  it  wherever  it  is  used  in  any  other 
part  of  the  act. 

The  word  "  debt  "  seems  to  have  been  used  in  other  bank- 
rupt acts  ^  as  defined  by  Mr.  Justice  Blackstone.     He  said : 

**  In    re    Merrell,     ig    Fed.    Rep.  fore  barred  by  a  discharge  in  bank- 

874:  In  re  Ward,  12  Fed.  Rep.  325;  riiptcy. 

In  re  Biirka,  104  Fed.  Rep.  326 ,5  ^^  B.   A.    1898,   Sec.   57c,  /  and  g. 

Am.  B.  R.  12;  In  re  Penneweii   (C.  See  Rights  of  a  Secured  Creditor, 

C    A.  6th  Cir.),  119  Fed.  Rep.  139,  Sec.  203,  f>ost. 

9  Am.  B.  R.  490;  In  re  Garhngton,  "  B.  A.  i8g8,  Sec.  i,  clause  11. 

115  Fed.  Rep.  999,  8  Am.  B.  R.  602.  '^  In  re  Sutherland,  No.  13639  Fed. 

But  see  Spalding  v.  Dixon,  21  Vt.  Cas.,  s.  c.  Deady,  416  ;/n  re  Lachc- 

45,    where    it    was    held    under    the  meyer,  No.  7966  Fed.  Cas.,  s.  c.  18 

act  of  1841,  that  a  debt  arising  after  N.  B.  R.  270;  In  re  Foye,  No.  5021 

the  petition  filed  and  before  the  ad-  Fed.  Cas.,  s.  c.  2  Low.  399:  Sigsby 

judication  was  provable,  and  there-  v.  Willis.  No.  12849  Fed.  Cas.,  s.  c. 

3  Ben.  371. 


284  LAW    .\NJ>    PROCEEDINGS    IN    BANKRUPTCY. 

"  riie  legal  acceptation  (if  debt  is  a  sum  of  money  due  by 
certain  and  express  agreement,  as  by  a  bond  for  a  determinate 
sum ;  a  bill  or  note ;  a  special  bargain ;  or  rent  reserved  on  a 
lease ;  where  the  quantity  is  fixed  and  specific  and  does  not 
depend  upon  any  subsequent  valuation  to  settle  it."  *  That 
this  is  the  sense  in  which  debt  is  used  in  this  section  is  fairly 
to  be  inferred  from  the  context.  It  appears  to  be  in  contra- 
distinction to  "unliquidated  claims"  employed  in  the  last 
paragraph.  A  sum  of  money  due  is  deemed  fixed  and  certain 
when  it  can  be  ascertained  from  fixed  data  by  mere  computa- 
tion. 

If  this  is  the  meaning  of  debts  in  this  section  it  is  clear 
that  a  judgment  for  a  fine  or  penalty,''  or  a  claim  for  ali- 
mony,^" or  any  other  claim  or  due  not  founded  upon  an  agree- 
ment or  contract,  however  just  or  lawful  in  itself,  is  not 
provable  in  bankruptcy.  A  claim  against  a  father  to  pay  for 
the  support  of  his  minor  children  which  at  common  law  he  is 
bound  to  support  is  not  such  a  debt  as  may  be  proved  in  bank- 
ruptcy."    Such  claims  might  be  enforced  at  law  or  in  equity.^'" 

In  construing  state  laws  relating  to  insolvents  a  broader 
meaning  has  been  given  to  the  word  "  debt."  Thus  it  has 
been  said  that  "  the  word  '  debt '  is  of  large  import,  including 
not  only  debts  of  record,  or  judgments,  and  debts  by  specialty, 
but  also  obligations  arising  under  simple  contract  to  a  very 
wide  extent,  and  in  its  popular  sense  includes  all  that  is  due 
to  a  man  under  any  form  of  obligation  or  promise."  ^^ 

®  Blackstone's  Coin.  154.     See  also  ^^  Dunbar   v.    Dunbar,    190  U.    S. 

Audubon  v.  Shufeldt,  181  U.  S.  575  ,  340 ;  In  re  Baker,  96  Fed.  Rep.  954 , 

5  Am.  B.  R.  829.  3  Am.   B.   R.   loi ;  In  re  Hubbard, 
9/n  re  Moore,  in  Fed.  Rep.  145,  98  Fed.  Rep.  710,  3  Am.  B.  R.  528. 

6  Am.  B.  R.  590;  In  re  Sutherland,  12  stockwell  v.  U.  S.  13  Wall. 
No.    13639   Fed.    Cas.,   s.   c.   Deady,      531. 

416;  Spalding  V.  New  York,  4  How.  That     judgments     to     enforce    a 

21,   affirming   7   Hill    (N.   Y.)    301  ;  moral  or  natural  duty,  as  for  seduc- 

s.  c.  10  Paige   (N.  Y.)  284;  Wilson  tion    or    the    support    of   a   bastard, 

V.    Nat.    Bank,    3    Fed.    Rep.    391  ;  are  not  discharged  —  not  being  debts 

Macey  v.  Jordan,  2  Den.    (N.   Y.)  in   the   sense  that  word  is   used   in 

570.  bankruptcy,   see   In   re   Cotton,   No. 

As   to   penalties   due   the    United  3269  Fed.  Cas.,  s.  c.  2  N.  Y.  Leg. 

States,  a  state  or  municipality,  see  Obs.    370;    Comm.    v.    Erisman,    21 

P.  A.  1898,  Sec.  57/.  Pitts.  L.  Jour.  69;  Nassau  v.  Parker, 

^•^  Audubon  v.  Shufeldt,  181  U.  S.  2  Penn.  L.  Jour.  298. 

575,  5  Am.   B.  R.  829;   Dunbar  v.  is  Gray  v.  Bennett,  3  Met.  (Mass.) 

Dunbar,  190  U.  S.  340.  526.     This    view    was    approved    by 


WHAT    DEBTS    ARE    PROVABLE. 


28  = 


§111.     Equitable  debts. —  Assignee's  expenses,  etc. 

It  has  been  repeatedly  held  in  England  that  an  equitable 
as  well  as  a  legal  debt  may  be  proved  in  bankruptcy."  And 
the  same  rule  would  appear  to  be  established  in  this  country 
under  the  former  bankrupt  acts.^^ 

Thus,  a  solvent  partner  upon  winding  up  the  partnership  is 
entitled  to  prove  against  bankrupt  partners  the  share  of  the 
loss  which  each  partner  should  have  borne  as  a  debt  against 
his  separate  estate.^''  The  reason  for  this  is  that  the  solvent 
partners  havmg  paid  all  of  the  joint  debts  of  the  firm  are  re- 
garded as  standing  in  the  light  of  sureties  or  persons  liable 
for  him,  and  therefore  entitled  to  come  in  and  prove  in  respect 
to  the  bankrupt's  share  of  the  copartnership  debts. ^'  So  also 
where  a  trustee  demanded  wagons  of  the  bankrupt  which 
were  in  the  possession  of  a  bailee  it  was  held  that  the  bailee 
was  entitled  to  an  equitable  compensation  for  storage. ^^  So 
also  charges  against  the  estate  for  expenses  incurred  in  the 
administration  of  it.  as  wages,  rent,  etc.,  are  provable  debts 
in  bankruptcy. ^'^ 

An  assignee  for  the  benefit  of  creditors  and  his  attorney 
may  prove  for  services,  rendered  both  prior  and  subsequent  to 


Mr.  Justice  Story  in  Carver  v.  Mf. 
Co.,  No.  2485  Fed.  Cas.,  s.  c.  2 
Story  432.  But  neither  of  the  cases 
arose   under  a  bankrupt  statute. 

1*  Ex  parte  Yonge,  3  Ves.  &  B. 
31  ;  Jeffs  V.  Wood,  2  P.  Williams 
128;  Murphy's  Case,  i  Schoaels  8 
L.  44;  Ex  parte  Watson,  4  Madd. 
477. 

'f'/n  re  Kelly,  18  Fed.  Kcp.  528; 
In  re  Fortune,  No.  4955  Fed.  Cas., 
s  c.  I  Low.  306 ;  In  re  Secor,  18 
Fed.  Rep.  319;  In  re  Wells,  4  Fed. 
Rep.  68;  Butcher  v.  Forman,  6  Hill 
(N.  Y.)  583. 

'^  Ex  parte  Watson,  4  Madd.  477  ; 
Sigsby  V.  Willis,  No.  12849  I'*^d. 
Cas.,  s.  c.  3  Ben.  371  ;  In  re  Dillon, 
TOO  Fed.  Rep.  627,  4  Am.  B.  R.  63; 
In  re  Carmichael,  96  Fed.  Rep.  594  , 
2  Am.   B.   R.  815. 

^^  Ex  parte  Yonge,  3  Ves.  &  B.  31  ; 
Aflalo  V.   Fonrdrinier,  6  Bing.  306; 


Sigsby  V.  Willis,  No.  12849  Fed. 
Cas.,  s.  c.  3  Ben.  371. 

18  In  re  Kelly,  18  Fed.  Rep.  528. 

1"  In  re  Wells,  4  Fed.  Rep.  68 ;  In 
r-;  Socor,  18  Fed.  Rep.  319;  In  re 
Fortune,  No.  4955  Fed.  Cas.,  s.  c.  i 
Low.  306 ;  In  re  Hufnagel,  No.  6837 
Fed.  Cas.,  s.  c.  12  N.  B.  R.  554;  In 
re  Dunham,  No.  4145  Fed.  Cas., 
s.  c.  27  Leg.  Int.  404;  Buckner  v. 
Jewell,  No.  3060  Fed.  Cas.,  s.  c.  2 
Woods  220;  In  re  Walton,  No.  17131 
Fed.  Cas.,  s.  c.  i  N.  B.  R.  557 ;  In  re 
Appold,  No.  499  Fed.  Cas.,  s.  c.  i 
N.B.R.621;  In  re  Hamburger,  No. 
5975  Fed.  Cas.,  s.  c.  12  N.  B.  R. 
277;  In  re  Ives,  No.  71 16  Fed.  Cas., 
s.  c.  18  N.  B.  R  28;  In  re  Yeaton, 
No.  181 33  Fed.  Cas.,  s.  c.  i  Low. 
420 ;  In  re  Beaver  Coal  Co.,  107  Fed. 
Rep.  98,  5  Am.  B.  R.  787:  In  re 
.Mien,  96  Fed.  Rep.  512,  3  Am.  B. 
R.    38. 


286  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

the  filing  of  the  petition  in  bankruptcy,  which  were  beneficial  to 
the  estate.""'  An  attorney  may  prove  for  services  rendered 
the  bankrupt  in  preparing  a  deed  of  assignment,  which  was 
afterwards  set  aside  by  bankruptcy  proceedings.-^ 

§  112.     Contingent  demands  and  liabilities  not  debts. 

A  sum  of  money  payable  upon  a  contingency  is  not  prov- 
able because  it  does  not  become  a  debt  until  the  contingency 
has  happened."     Non  constat  the  contingency  will  not  happen. 

Thus,  under  the  trustee  laws  of  Massachusetts,  it  has  been 
held  that  the  wages  of  a  sailor,  being  contingent  on  the  arrival 
of  the  ship,  are  not  a  debt  until  the  ship  has  arrived,  and, 
therefore,  until  then  not  attachable."^  So  of  a  covenant  to 
pay  rent  quarterly.  It  creates  no  debt  until  it  becomes  due,  for, 
before  that  time  the  lessee  may  quit,  with  the  consent  of  the 
lessor,  or  he  may  assign  his  term  with  his  consent,  or  he  may 
be  evicted  by  a  title  paramount  to  that  of  the  lessor,  in  either 
of  which  cases  he  will  be  discharged  from  his  covenant."*  So 
a  contract  between  the  shippers  of  a  cargo  and  the  owners  of 
the  ship,  that  the  latter  shall  receive  a  share  of  the  profits,  does 
not  create  a  debt  from  the  former  to  the  latter  until  the 
termination  of  the  voyage. ^^ 

So  a  claim  for  damages  upon  a  bond  conditioned  upon  the 
faithful  performance  of  certain  duties  is  not  a  debt  until  the 
contingency  has  happened  and  the  damage  has  been  assessed."' 
Before  the  day  at  which  rent  is  covenanted  to  be  paid  it  is  in 
no  sense  a  debt.     It  is  neither  dchituui  nor  solvendnm.^'' 

A  contract  by  a  husband  to  pay  his  wife  a  certain  sum  an- 

20  Randolph  v.  Scruggs,  190  U.  S.  -^  Wentworth  v.  Whittemore,  i 
533,  10  Am.  B.  R.  I  ,  overruling  In      Mass.  471. 

re   Peter  Paul   Book  Co.,   104  Fed.  -•*  Wood    v.    Partridge,    11    Mass. 

Rep.  786 ;  Stearns  v.  Flick,  103  Fed.  488.     See  also   Riggin  v.   Magwire, 

Rep.  919.  15  Wall.  549. 

21  Randolph  v.  Scruggs,  190  U.  S.  ^^  Davis  v.  Ham,  3  Mass.  33 ; 
533,  10  Am.  B.  R.  I.  Frothingham  v.  Haley,  3  Mass.  68. 

22  Dunbar  v.  Dunbar,  190  U.  S.  ^«  Ellis  v.  Ham,  28  Me.  385; 
340;  Godding  v.  Roscenthal,  180  Woodard  v.  Herbert,  24  Me.  358; 
Mass.  43 ;  Morgan  v.  Wordell,  178  Godding  v.  Roscenthal,  180  Mass. 
Mass.    350;    Insley    v.    Garside   (C.  43. 

C.  A.  9th  Cir.),  10  Am.  B.  R.  52.  27  Dgang   y.    Caldwell,    127    Mass. 

244. 


WHAT    DEBTS    ARE    PROVABLE.  287 

nually  during-  her  lifetime  or  widowhood  is  not  provable  in 
bankruptcy."^ 

It  has  been  held  that  the  bond  of  the  bankrupt  to  secure 
payment  to  the  obligee  of  an  annuity  for  life  may  be  proved 
tinder  Sec.  63a,  clause  i,'^  and  that  the  creditor  might  prove 
under  Sec.  63a,  clause  4,  against  the  estate  of  the  bankrupt 
after  the  liability  had  become  fixed,  where  the  contingency  was 
that  the  bankrupt  was  the  endorser  of  commercial  paper  not 
due  at  the  time  of  filing  the  petition.^" 

It  was  hekl  under  the  act  of  1841,  which  provided  for 
proving  uncertain  and  contingent  demands,  that  so  long  as 
the  demand  remained  wholly  uncertain  whether  a  contract 
or  engagement  would  ever  give  rise  to  an  actual  debt  or  lia- 
bility and  there  was  no  means  of  removing  the  uncertainty 
by  calculation,  such  contract  or  engagement  was  unprovable 
under  the  act.^^ 

§  113.     Debts  which  are  a  fixed  Hability  provable. 

Debts  of  the  bankru])t  may  be  proved  and  allowed  against 
his  estate  which  are  a  fixed  liability,  as  evidenced  by  a  judg- 
ment or  an  instrument  in  writing-,  absolutely  owing  at  the 
time  of  the  filing  of  the  petition  against  him,  whether  then 
payable  or  not,  with  any  interest  thereon  which  would  have 
been  recoverable  at  that  date  or  with  a  rebate  of  interest  upon 
such  as  were  not  then  payable  and  did  not  bear  interest.'" 

In  order  to  be  a  debt  provable  under  this  provision  two 
things  must  concur.  First,  it  must  be  a  debt  with  a  fixed 
liability  absolutely  owing  at  the  time  of  the  filing  of  the 
petition ;  and.  second,  the  del)t  must  be  evidenced  by  a  judg- 
ment or  an  instrument  in  writing. 

Under  this  provision  debts  may  be  proved  which  are  due  at 
the  time  of  filing  the  petition  in  bankruptcy  on  judgments, 
bonds  for  a  determinate  sum,  some  debts  arising  under  con- 
tract, notes,  bills  of  exchange,  checks,  etc.     It  should  be  ob- 

28  Dunbar  v.   Dunbar,   190  U.   S.  A.,  3d  Cir.).   107  I'cd.   Rop.  897,  6 

340.  Am.  B.  R.   II. 

-"Cobb   V.    Overman    (C.    C.    A.,  ■■'^  Riggen    v.    Magwire,    15    Wall. 

4th  Cir.).  109  Fed.  Rep.  65,  6  Am.  549. 

B.  R.  324.  ••'2  B.  A.  1898,  Sec.  63a. 

=">  Mock  V.  National  Bank   (C.  C. 


288  LAW     AM)    1'K(.)C1:K1)1NGS    in     BAXKKL  I'TCV. 

served  tliat  many  debts  may  be  provetl  under  tbis  clause  and 
also  under  clause  4  of  tlie  same  section  w  bicb  is  broader  in  its 
terms  and  includes  debts  wbicb  cannot  be  proved  under  this 
section.  \\  hat  constitutes  a  hxed  liability  absolutely  owing- 
and  what  are  debts  evidenced  by  a  judgment,  or  an  instrument 
in  writing  is  further  considered  in  the  next  three  paragraphs. 

§    114.     What  constitutes  a  fixed  liability  absolutely  owing. 

A  fixed  liability  absolutely  owing  means  that  the  obligation 
to  pay  exists  at  the  time  of  filing  the  petition  and  is  sufficiently 
definite  in  amount  to  permit  of  computation.  It  has  been  held 
that  the  bond  of  a  bankrupt  to  secure  the  payment  to  the 
obligee  of  an  annuity  for  life  may  be  proved  under  this  sec- 
tion.^^  A  judgment  note  waiving  exemptions  is  a  provable 
debt.'* 

Contingent  debts  or  liabilities  or  demands,  the  valuation  or 
estimation  of  which  it  is  substantially  impossible  to  prove  are 
not  provable  debts  under  this  clause.'^  The  liability  of  a 
bankrupt  as  surety  on  the  bond  of  an  administrator  is  not  a 
fixed  liability  absolutely  owing  where  no  final  decree  has  been 
rendered  in  the  state  court  adjudging  the  liability  of  the  prin- 
cipal,'*' nor  a  claim  for  a  breach  of  a  covenant  in  a  lease  where 
no  breach  is  shown  prior  to  bankruptcy,'^  or  an  attorney's 
fee  stipulated  in  a  judgment  note  where  the  note  has  not  been 
placed  in  the  hands  of  an  attorney  for  collection  prior  to  the 
filing  of  the  petition  in  bankruptcy,'^  or  for  the  breach  of  a 
contract  of  lease  where  the  lessor  has  re-entered  and  taken  pos- 
session of  the  leased  property.'^  The  liability  of  a  bankrupt  as 
surety  becomes  a  fixed  liability  by  maturity  notice  and  non- 

^•''-Cobb   V.    Overman    (C.    C.   A.,  -'In  re  Pennewell,  119  Fed.  Rep. 

4th  Cir.),  109  Fed.  Rep.  65,  6  Am.  139,  9  Am.  B.    R.  489. 

B    R.  324,  overruling  Bray  v.  Cobb,  ^**  In  re  Garlington,  115  Fed.  Rep. 

100  Fed.  Rep.  270,  3  Am.  B.  R.  788.  999,  8  Am.  B.  R.  602. 

■'■■*  Claster    v.    Soble     (Super.    Ct.  But     see      Merchants'      Bank     v. 

Penna.),  22  Pa.   Super.  Ct.  631,   10  Thomas    (C.    C.   A.,   5th   Cir.),    121 

.Am.  B.  R.  446.  Fed.  Rep.  306,  10  Am.  B.  R.  299. 

■'■^  Dunbar  v.    Dunbar,    190   U.    S.  •'"'  Lamson    Consol.    Store    Service 

340.  V.  Boland   (C.  C.  A.,  6th  Cir.),  114 

^^  /h   re  Wiseman.   123  Fed.   Rep.  Fed.  Rep.  639. 
185 ,  10  Am.  B.  R.  545- 


WHAT    DEBTS    ARE    PROVABLE.  289 

payment  of  the  debt/"  but  may  be  proved  under  clause  4  as  a 
contract  of  endorsement.*^ 

The  word  '*  debt  "  is  as  applicable  to  a  sum  of  money 
which  has  been  promised  at  a  future  day  as  to  a  sum  now 
due  and  payable.  Whether  the  debt  is  owing  or  not  is  in  no 
respect  determined  by  a  reference  to  the  time  of  payment. 
A  sum  of  money,  which  is  certainly  and  in  all  events  payable, 
is  a  debt  absolutely  owing  without  regard  to  the  fact  whether 
it  be  payable  now  or  at  a  future  time.  The  provision  re- 
quires the  tlebt  to  be  absolutely  owing,  and  expressly  includes 
both  classes  of  debts;  namely,  those  debts  which  are  pay- 
able at  the  date  of  the  commencement  of  bankruptcy  and  those 
debts  which  are  payable  at  a  subsequent  date.  It  is  sufficient 
if  the  debt  is  a  fixed  liability  absolutely  owing  when  the  petition 
in  bankruptcy  is  filed.*' 

It  is  the  actual  value  of  the  debt  owing  at  the  commence- 
ment of  bankruptcy  proceedings  that  is  provable.*^  This  pro- 
vision establishes  that  date  as  the  time  at  which  the  liability 
is  to  be  ascertained  and  determined.  Accrued  interest  at 
that  date  is  as  much  a  part  of  the  indebtedness  as  the  princi- 
pal.** But  interest  accruing  thereafter  is  not  provable.  The 
question  of  interest  is  further  considered  elsewhere.*^ 

§  115.     Judgment  debts  provable. 

It  may  be  stated  as  a  general  rule  that  judgment  debts  are 
provable  in  bankruptcy.  The  statute  recognizes  two  classes 
of  judgment  debts  whicli  may  be  i)roved.  First,  a  debt  evi- 
denced by  a  judgment  obtained  prior  to  tlie  commencement 
of  bankruptcy  proceedings;  *"  and,  second,  a  debt  founded  upon 

*°/n  re   Schaefer,    104   Fed.    Rep.  Merchants'  Rank  v.  'I'hdinas   (C.  C. 

973.  5  Am.  B.  R.  92n;  /m  rr  Gerson,  A.,  5th  Cir.),  10  Am.  B.  R.  299,  121 

105  Fed.  Rep.  891  .  5  Am.  B.  R.  89,  Fed.  Rep.  306;  In  re  Wiseman,  123 

affirmed    (C.    C.    A.,   3d    Cir.).    107  Fed.  Rep.  185,  10  Am.  B.  R.  545. 

Fed.   Rep.  897,  6  Am.   B.   R.   11.  ■»♦  Sloan   v.   Lewis,   22  Wall.    150; 

*i  In    re    Gerson    (C.    C.    A..    3d  In   re    Bartenbach,    No.    1068,    Fed. 

Cir.),  107  Fed.  Rep.  897,  6  Am.  B.  Cas.,   s.  c.    11    N.   B.   R.   61;   In   re 

R-  II-  Haake,  No.  5883,  Fed.  Cas.,  s.  c.  2 

*2  B.  A.  i8(>S,  Sec.  63,  clause  i.  Saw.    231;    In    re    New    Brunswick 

*3/h  re  Garlington,  115  Fed.  Rep.  Carpet  Co..  4  Fed.  Rep.  514. 

999.  8  Am.  B.  R.  602;  In  re  Pen-  ■•''Sec.  117. 

newell    fC.    C.    A,.    6th    Cir.),    119  .  ■»"  B.   A.   1898,   Sec.  63,  clau.se   i; 

Fed.    Rep.    139.   9    Am.    B.    R.   489;  /;/  re  McCauley,  roi  Fed.  Rep.  223, 


290  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

a  provable  debt  reduced  to  judgment  pending  bankruptcy 
proceedings/" 

Judgment  Debts  Prior  to  Bankruptcy. — In  order  to 
constitute  a  judgment  debt  provable  under  the  first  clause  of 
section  63  a  judgment  must  have  been  actually  rendered/*  A 
mere  verdict  in  an  action  is  not  sufficient.  A  certified  copy 
of  the  judgment  is  evidence  of  the  debt.^"  A  judgment  car- 
ries also  costs  and  interest  to  the  date  of  the  filing  of  the 
])etition,  where  it  would  do  so  under  the  laws  of  the  state  in 
which  it  was  rendered.  Such  costs  and  interest  form  a  part 
of  the  provable  debt  in  such  cases.^"  A  judgment  for  costs  is 
regularly  a  provable  debt.'^^  A  judgment  for  breach  of 
promise  of  marriage  is  a  provable  debt.^" 

It  should  be  observed  that  only  a  judgment  which  is  an  evi- 
dence of  debt  is  provable.  If  the  nature  of  the  liability,  the 
original  cause  of  action,  is  not  debt,  it  cannot  be  proved  under 
this  clause.  Thus  it  is  not  a  provable  debt  where  the  judg- 
ment is  for  a  fine  or  penalty  imposed  for  punishment  under 
the  state  law,^^  or  for  alimony  whether  in  arrear  at  the  time 
of  adjudication  in  bankruptcy  or  for  alimony  accruing  since 
that  adjudication,^*  because  a  judgment   for  alimony  or  an 

4  Am.  B.   R.   122;  In  re  Alderson,  ^^  In  re  Moore,  iii  Fed.  Rep.  145, 

98  Fed.  Rep.  588,  3  Am.  B.  R.  544,  6  Am.  B.  R.  590. 

3  N.  B.  N.  189.  But  see  In  re  Alderson,  98  Fed. 

*7B.   A.    1898,   Sec.  63,  clause  5;  Rep.  588,  3  Am.  B.  R.  544. 

In  re   McBryde,  99  Fed.  Rep.  686,  ^*  Audubon  v.  Shufeldt,  181  U.  S. 

3  Am.   B.   R.  729;  In  re  Fife,   109  575,   5  Am.   B.  R.  829;   Dunbar  v. 

Fed.  Rep.  880,  6  Am.  B.  R.  258.  Dunbar,   190   U.   S.   340;   Turner  v. 

•**  Black  V.  McClelland,  No.   1462,  Turner,   108  Fed.   Rep.  785,  6  Am. 

Fed.   Cas.,   s.   c.    12   N.    B.   R.   481;  B.  R.  289. 

Crouch  V.  Gridley,  6  Hill    (N.  Y.)  But    see    Arlington    v.    Arlington 

250;  Ex  parte  Columbian  Ins.  Co.,  (Sup.  Ct.  N.  E.),  10  Am.  B.  R.  103, 

No.  3037,  Fed.  Cas.,  s.  c.  2  Low.  5.  wbere  it  was  held  that  a  final  judg- 

*^  Ex   parte    Anderson,    14   Q.    B.  m.ent    for    alimony    entered    in    an- 

D.  606.  other  state  upon  a  decree  for  abso- 

^^  Ex    parte    O'Neil,    No.     10527,  lute  divorce  is  a  provable  and  dis- 

Fed.  Cas.,  s.  c.  i  Low.  163.  chargeable   debt. 

''^Graham  v.   Pierson,  6  Hill    (N.  In    England    alimony    is    neither 

Y.)    247.  discharged    nor    provable    in    bank- 

^- In  re   Fife,   109  Fed.   Rep.  880,  ruptcy.      Linton    v.    Linton    ("1885), 

6  Am.  B.  R.  258:  In  re  McCauley,  15  Q.  B.  D.  239;  Hawkins  v.  Haw- 

loi    Fed.    Rep.    223,    4    Am.    B.    R.  kins    (1894),   i   Q.  B.  D.  25;  Wat- 

122;  Finnegan  v.  Hall   CN.  Y.  Sup.  kins  v.  Watkins  (1896),  Prob.  222; 

Ct.),  6   Am.    B.    R.   648.  Kerr  v.  Kerr  rT897),  2  Q.  B.  439. 


WHAT    DEBTS    ARE    PROV'ABLE.  29 1 

allowance  in  the  nature  of  alimony  is  not  a  debt  within  the 
meaning"  of  that  word  as  used  in  Sec.  63  of  the  bankrupt  act, 
but  is  a  penalty  imposed  for  failure  to  perform  a  duty,  or  for 
the  support  of  minor  children,^^  or  a  judgment  for  seduction, 
or  for  the  commission  of  an  immoral  act  or  for  the  failure  to 
perform  a  natural  duty.^'' 

A  judgment,  if  not  outlawed,  obtained  at  any  time  prior  to 
the  filing  of  the  petition,  even  within  four  months,  is  prov- 
able/^ It  should  be  observed  that  while  a  judgment  lien  may 
be  invalid  as  a  preference  for  the  reason  that  it  was  obtained 
within  four  months,  the  judgment  is  not  for  this  reason  in- 
valid as  an  evidence  of  the  debt.  The  creditor  may  not  be 
entitled  to  a  preference,  but  still  be  entitled  to  prove  his  debt 
as  a  general  creditor.^''  But  where  the  judgment  no  longer 
exists  it  is  not  evidence  of  the  debt,  and  the  proof  of  the  claim 
will  not  be  allowed.*'''  Where  a  writ  of  error  has  been  prose- 
cuted the  judgment  debt  may  still  be  proved,®^  subject  to  hav- 
ing the  dividends  withheld  until  the  appellate  court  disposes 
of  the  writ  of  error. 

How  far  a  court  of  bankruptcy,  at  the  instance  of  a  trustee 
or  creditors,  may  go  behind  a  judgment  offered  for  proof  is 
not  free  from  doubt.  The  American  cases  under  the  act  of 
1867  incline  strongly  to  the  opinion  that  a  judgment  valid 
against  the  debtor  and  not  in  fraud  of  creditors,  can  not  be 
attacked  in  a  court  of  bankruptcy.*'"  But  where  the  judgment 
is  void  for  fraud  or  want  of  jurisdiction  in  the  court  rendering 
it,  it  may  be  examined  into  by  a  court  of  bankruptcy  in  which 
it  is  offered  for  proof.  If  there  be  an  intermediate  case  in 
which   it   would  be  discretionary  with   tlie  court   wliich   ren- 

^•^ /n    re    Richard,    94    Fed.    Rtp.  ■'"''/«    re    Farmer,    116    Fed.    Rep. 

633,  2   Am.    B.    R.   506;    Dunbar  v.  763,  9  Am.  B.  R.  19. 
Dunbar,  190  U.  S.  340;  In  re  Hul>-  ^^  In    re    Richard,    94    Fed.    Rep. 

bard,  98   Fed.   Rep.  710,  3   .Xm.   B.  633,  2  Am.  B.  R.  506. 
R.  528 ;  In  re  Baker,  96  Fed.  Rep.  °°  In    re    Bruce,    No.    2044,    Fed. 

954.  Cas.,  s.  c.  6  Ben.  515;  In  re  Lipman, 

"^"Consult  Colvvell  v.  Tinker   (N.  94  Fed.  Rep.  353,  2  Am.  B.  R.  46. 
Y.    Sup.    Ct.),   6    Am.    B.    R.    434;  "W»  re  Shcehan,  No.  12737,  Fed. 

Distler   v.    McCaulcy    CN.    Y.    Sup.  Cas.,  s.  c.  8  N.  B.  R.  345. 
Ct.),6Am.  B.  R.  491  :  In  re  Maples,  See   In   re   Yates,    114   Fed.    Rep. 

5  Am.  B.  R.  426;  Burnham  v.  Pid-  365.  8  Am.  B.  R.  (V). 
cock    (N.   Y.   Slip.   Ct.   App.   Div.),         «2 /„    ^e    Burns,    No.    2182.    Fed. 

5  Am.  B.  R.  590.  Cas,,  s.  c.   i   N.   B.   R.    174;   Camp- 


2g2  LAW    AND    PKOCEEDINGS    IN    BANKRUPTCY. 

dei'cxl  the  jiulgnient  to  vacate  it  upon  the  ground  of  mistake, 
a  court  of  bankruptcy  usuaHy  will  leave  the  trustee  to  that 
remedy,  postponing  the  proof  in  the  meantime."" 

The  English  rule  seems  to  be  somewhat  broader.  A  judg- 
ment is  there  deemed  prima  facie  evidence  of  a  provable  debt, 
but  if  there  are  circumstances  which  cast  suspicion  upon  the 
judgment  or  on  the  debt  on  which  it  was  founded,  the  court 
has  the  right  to  call  upon  the  claimant  to  prove  the  consider- 
ation for  the  debt.''^ 

It  has  been  held  under  the  present  act  that  "  the  court  will 
look  beyond  the  form  of  the  judgment.  It  will  look  at  the  na- 
ture of  the  liability,  the  original  cause  of  action."  *^* 

Debts  Reduced  to  Judgment  Pending  Bankruptcy. — 
Another  class  of  judgment  debts  which  may  be  proved  in 
bankruptcy  are  those  "  founded  upon  provable  debts  reduced 
to  judgments  after  the  filing  of  the  petition  and  before  the 
consideration  of  the  bankrupt's  application  for  a  discharge, 
less  costs  incurred  and  interests  accrued  after  the  filing  of  the 
petition  and  up  to  the  time  of  the  entry  of  such  judgments."  ^^ 

Two  elements  are  necessary  to  make  a  judgment  debt  of 
this  character  provable.  First,  it  must  be  founded  upon  a 
provable  debt ;  and.  second,  it  must  be  reduced  to  judgment 
pending  bankruptcy  proceedings  before  the  bankrupt's  ap- 
plication for  a  discharge  is  considered  by  the  court.  In  this 
class  all  debts  are  on  the  same  basis  in  respect  to  interest  as 
other  claims.**"  The  actual  value  of  the  debt  at  the  date  of 
the  filing  of  the  petition  is  what  is  provable  after  costs  have 
been  deducted. 

There  was  much  conflict  of  opinion  with  reference  to 
w^hether  this  class  of  debts  was  provable  under  the  former 
bankrupt  acts.     Under  these  acts,  as  under  the  present  stat- 

bell's  Case,  No.  2349,  Fed.  Rep.,  s.  315;  Ex  parte  Revell,  13  Q.  B.  D. 

c.    I    Abb.    U.    S.    185 ;    Ex    parte  720 ;  Ex  parte  Seaton,  8  Mor.  97. 

O'Neil,  No.   10527,  Fed.  Rep.,  s.  c.  «*  Turner    v.    Turner,     108    Fed. 

I  Low.  163 ;  McKensey  v.  Harding,  Rep.  785,  6  Am.   B.  R.  289. 

No.  8866,  Fed.   Cas.,  s.  c.  4  N.   B.  «5  b.   A.    1898.   Sec.  63,  clause  5 ; 

R.   38.  In  re  McBryde,  99   Fed.   Rep.  686, 

«3£x  parte  Anderson,  14  Q.  B.  D.  3  Am.   B.  R.  729;   In  re   Fife,   109 

606;  Ex  parte  Lennox,  16  Q.  B.  D.  Fed.  Rep.  880,  6  Am.  B.  R.  258. 

•"^  See  Sec.  117. 


WHAT    DEBTS    ARE    PROVABLE.  293 

u'te,  debts  created  during  bankruptcy  were  not  provable.  The 
division  of  opinion  grew  out  of  the  appHcation  of  the  doc- 
trine of  merger.  Some  judges  conceived  the  debt  existing  at 
the  time  of  fihng  the  petition  to  be  merged  in  the  judgment 
obtained  thereafter  and  to  become  a  new  debt,  as  of  the  date 
of  the  judgment,  and  hence  not  provable.'''  Others  held  the 
view  that  the  judgment  retained  the  character  of  the  indebted- 
ness out  of  which  it  arose,  and  was  not  to  be  regarded  as  a 
new  debt  arising  subsequently  to  the  filing  of  the  petition.''® 
The  latter  view  was  taken  by  the  supreme  court  when  the 
matter  came  before  it,  for  the  first  time,  about  eight  years  after 
the  bankrupt  law  had  been  repealed."'*  No  such  conflict  of 
opinion  can  arise  under  the  present  statute,  which  expressly 
declares  such  judgments  to  be  provable  debts. 

§  116.     Debts  evidenced  by  an  instrument  in  writing, 

A  debt  which  is  a  fixed  liability  as  evidenced  by  an  instru- 
ment in  writing  and  absolutely  owing  at  the  time  (if  the  filing 
of  the  petition  is  provable.'"  A  debt  created  by  oral  agree- 
ment or  upon  an  open  account  is  provable  under  another  pro- 
vision of  the  63d  section  but  not  under  the  first  clause.'^  An 
instrument  in  writing,  as  used  in  this  connection,  is  a  written 

"^ /«  re  Williams,  No.  17705,  Fed.  v.   Woodruff,  9  Barb.  498;   Dresser 

Cas.,   s.   c.   2   N.    B.    R.   229;   In   re  v.   Brooks,  3  Barb.  429;  Johnson  v. 

Mansfield,  No.  9049,  Fed.  Cas.,  s.  c.  Fitzhugh,  3  Barb.  Ch.  360;  Clark  v. 

6  N.  B.  R.  388;  In  re  Gallison,  No.  Rowling,  3  N.  Y.  216;  Stockwell  v. 

5203,    Fed.    Cas.,    s.    c.    2    Low.    72;  Woodward,  52  Vt.  234;  Harrington 

Sanford  v.   Sanford,  58  N.   Y.  67;  v.   McNaughton,  20  Vt.  293:   Blan- 

Bradford    v.    Rice,    102   Mass.   472;  ford  v.  Foote,  i  Cowp.  138:  Rogers 

Cutter    V.    Evans,    115    Mass.    27;  v.  Ins.  Co.,  i  La.  Ann.   161:   Imlay 

Woodbury  v.   Perkins,  5  Cush.  86;  v.  Carpentier,  14  Cal.  173:  Stratton 

Ellis  V.  Ham,  28  Me.  385;   Uran  v.  v     Perry,    2    Tenn.    Ch.    633:    Ray- 

Houdlctte,  36  Me.   15;   Pike  v.  Mc-  mond    v.    Merchant.    3    Cow.    147; 

Donald,    32    Me.    418;    Kellogg    v.  Dick  v.   Powell,  2  Swan,  632;   Mc- 

Schuyler,  2  Denio  (N.  Y.)  7^,;  Ro-  Donald  v.  Ingraham,  30  Miss.  389; 

den  V.  Jaco,  17  Ala.  344;  McCarthy  Anderson  v.  Anderson,  65  Ga.  518; 

V.  Goodwin,  8  Mo.  App.  380.  Betts  v.  Baglcy,  12  Pick.  572;  Daw- 

""  In  re  Crawford.  No.  3363,  Fed.  son    v.    Hartsfield,    79    N.    C.    334 ; 

Cas.,   s.  c.  3   N.   B.    R.   698;  In   re  Dinsdale  v.   Fames,  4   Moore,  350: 

Brown,  No.  1975,  Fed.  Cas.,  s.  c.  5  2  Brod.  &  B.  8. 
Ben.    I  :    Barnes    v.    United    States,  «»  Boynton  v.  Ball,  121  U.  S.  457, 

No.   1023.  Fed.  Cas.,  s.  c.   12  N.  B.  466. 

R.   526:    In   re  Vickery,   No.    16930,  t"  B.  h.  1898.  Sec.  63,  clause  i. 

Fed.  Cas.,  s.  c.  3  N.  B.  R.  696;  Fox  ^i  b.  A.  1898,  Sec.  63,  clause  4. 


294  ^-^^'^'    -"^^'l^    rROCEEniNGS    IN    BANKRUPTCY. 

document  which  is  the  legal  evidence  of  a  fixed  liability  to 
pay  a  debt,  such  as  bonds  for  a  determinate  sum.  notes,  bills 
of  exchange,  checks,  etc.  Checks,  however,  are  not  evidence 
of  a  debt  accruing  to  a  bank  by  reason  of  an  overtlraft.'^- 

Where  the.  bankrupt  is  the  maker,  or  the  one  primarily 
bound  by  the  written  instrument,  the  de1)t  evidenced  by  the 
written  instrument  is  clearly  provable.  But  it  is  the  debt 
due  in  ecpiity  which  is  provable  and  not  the  penalty.'^'  It  has 
been  held  that  where  a  person  previous  to  becoming  a  bank- 
rupt was  liable  on  a  bond.  1)y  the  terms  of  which  he  became  a 
continuing  guarantor  of  notes  discounted  by  a  certain  bank 
for  a  company  of  which  he  was  the  president,  and  at  the  time 
of  his  bankruptcy  the  bank  held  a  note  so  discounted  indorsed 
by  him,  the  fact  that  a  renewal  note  was  given  after  the  filing 
of  his  ])etition  did  not  prevent  the  debt  from  being  proved 
as  a  claim  against  his  estate.^* 

The  Liabilities  of  Bankrupts  as  Sureties,  Endors- 
ers, ETC. — A  provable  debt  may  arise  with  reference  to  an 
endorser  or  surety,  first,  where  the  bankrupt  is  the  endorser 
or  the  surety;  second,  where  another  person  is  the  surety  or 
an  endorser  for  the  bankrupt. 

In  case  the  bankrupt  is  the  person  secondarily  liable  as  an 
endorser  or  a  surety,  it  is  necessary  that  the  liability  has 
become  absolute  and  fixed,  as  by  maturity  notice  and  nonpay- 
ment of  the  debt  prior  to  bankruptcy  i)roceedings,  to  be  prov- 
able under  the  first  clause  of  Sec.  63,''  but  the  contract  of  en- 

72 /n    re    New   Brunswick   Carpet  cmild   only    be   had    for   the   actual 

Co.,   4  Fed.    Rep.   515;    Fletcher   v.  damage  sustained. 

Manning,  12  M.  &  W.  571.  "^^  ^n  re  Letchworth,  19  Fed.  Rep. 

''■■'Ex  parte  Fidgeon,  4  Dea.  217;  873.     But    see    In    re    Ankeny,    100 

Ex   parte    Maclean,   2   Mont.    D.    &  Fed.  Rep.  614,  4  Am.  B.  R.  72. 

D.  564,  s.  c.  6  Jur.  609.     See  also  ^^ /n  re   Schaefer,   104  Fed.  Rep. 

Wilson  V.  Nat.   Bank,  3   Fed.   Rep.  973 ,  3  N.  B.  N.  261  ,  5  Am.  B.  R. 

3gi.  Q2;!;   In   re  Gerson,   105    Fed.    Rep. 

In  ex  parte   Capper,  4  Chan.   D.  891,  5   Am.   B.   R.  89,  3    N.   B.   N. 

724   it  was  held  that  where  a  build-  249,   affirmed    (C.    C    A.,   3d    Cir.), 

ing   contract   provided   that   in    case  107  Fed.  Rep.  897,  6  Am.  B.  R.  II ; 

the   contract    should    not   be    in    all  In  re  Loder,  No.  8457.  Fed  Cas.,  s. 

things  duly  performed  by  the  con-  c    4    Ben.    305;    In   re   Bruce,    No. 

tractors  they  should  pay  to  the  em-  2044,  Fed.  Cas.,  s.  c.  6  Ben.  515. 

ployer    1000/   as   and    for   liquidated  In   McNeil  v.   Knott,   11   Ga.   142, 

damages,  yet  that  the   1000/  was  in  Segur   and   Crawford   made   a   note 

the  nature  of  a  penalty,  and  proof  for    $100,    payable    Chri<^*mas    next 


WHAT    DEBTS    ARE    PROVABLE.  295 

dorsement  may  be  proved  under  clause  4  of  the  same  section/*^ 

It  has  been  held  that  where  a  city  treasurer  defaulted  and 
the  city  council  passed  a  resolution  that  the  sureties  might 
give  their  individual  bonds  for  their  pro  rata  of  the  balance 
due,  but  that  the  old  bonds  should  be  retained  and  remain  in 
full  force,  that  the  estates  of  the  bankrupt's  sureties  who  did 
not  give  such  bonds  were  liable,  and  that  the  city  might 
prove  against  their  estate  for  the  whole  debt." 

A\^here  the  holder  has  forfeited  his  right,  or  the  debt  has 
been  discharged  by  payment,  no  provable  debt  exists  against 
the  estate  of  the  bankrupt.  Thus,  where  the  note  is  barred 
by  the  statute  of  limitations,  or  where  a  note  payable  on 
demand  is  not  presented  for  payment,  and  no  demand  made 
within  a  reasonable  time,  the  endorser  is  released."*  Where 
tlie  maker  has  paid  a  part  of  the  note  to  tlie  holder,  the 
holder  can  prove  against  the  bankru]:)t's  estate  only  for  the 
balance  not  paid.'^''  So  also  where  a  settlement  has  been, 
with  leave  of  court,  made  with  the  makers  of  a  note  at  forty 
cents  on  the  dollar,  the  creditor  is  only  entitled  to  prove  for 
sixty  percent  against  the  estate  of  the  bankrupt  sureties.'"' 

It  may  be  observed  in  this  connection  that  the  liability  of 
a  person  who  is  a  co-debtor  with,  or  guarantor,  or  in  any 
manner  a  surety  for,  a  bankrupt,  is  not  altered  by  the  dis- 
charge of  such  bankrupt.*^ 

Where  the  Endorser,  Surety,  etc.,  is  a  person  other 
THAN  the  Bankrupt. — A  person  who  is  secondarily  lial)le 
for  a  debt  of  the  bankrupt,  as  endorser  or  surety,  has  a  ])rov- 

thereafter  to  Henry  Kiinkle  or  bear-  See  R.  S.  Sec.  5069. 

er.    Kunkle,   the  payee,   transferred  ''" /w    re    Gerson    (C.    C.    A.,    3d 

the  note  by  delivery  to  Knott,  who  Cir.),  107  Fed.  Rep.  897.  6  Am.  B. 

endorsed    it    "to    be    liable    in    the  R.  11,  affirming  105  Fed.  Rep.  891, 

second  instance  "  to  McNeil.    Segur  5  Am.  B.  R.  89. 

paid  off  and  discharged  the  note  to  "^  In  re  Blunicr,  13  Fed.  Rep.  623. 

Kunkle   while  the  note  was   in   his  ^^  hi  re  Crawford,  No.  3364,  Fed. 

possession.    McNeil  then  sued  Knott  Cas.,  s.  c.  5  M.  B.  R.  301. 

who,  pending  the   action,  had   been  ''" /n  re  Pulsifcr,  14  Fed.  Rep.  247. 

discharged  under  the  bankrupt  act  ''"  In   re  Howard,  No.  6750,  Fed. 

of    1841.     Knott    pleaded    discharge  Cas.,   s.   c.   4   N.    B.   R.  571;   In  re 

in  bankruptcy.     The  court  held   the  Burchell,  4  Fed.  Rep.  406. 

debt  to  be  a  provable  debt  in  bank-  "'  B.  \.   1898,  Sec.   16. 

ruptcy    and    the    plea    of    discharge 

in  bankruptcy  a  good  defense. 


296  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY, 

able  claim  against  the  estate,  provided  the  princiixd  creditor 
fails  to  prove  his  debt.*- 

Tiie  statute  provides  that  "  whenever  a  creditor,  whose 
claim  against  a  bankrupt  estate  is  secured  by  the  individual 
undertaking  of  any  person,  fails  to  prove  such  claim,  such 
person  may  do  so  in  the  creditor's  name,  and  if  he  discharge 
such  undertaking  in  whole  or  in  p.art  he  shall  be  subrogated 
to  that  extent  to  the  rights  of  the  creditor."  "''  The  surety 
has  no  provable  claim  unless  he  has  paid  the  debt.^* 

This  provision  is  intended  t(j  protect  the  surety  or  en- 
dorser. The  creditor  may  prove  his  debt  under  section  63 
of  the  act,  but  he  is  not  compelled  to  do  so.  He  has  the 
double  security  of  the  bankrupt's  liability  and  that  of  the 
surety.  He  may  prefer  not  to  prove  his  debt  against  the 
bankrupt's  estate,  but  rely  wholly  upon  the  endorser  or  sure- 
ty. In  such  case,  were  it  not  for  this  provision,  the  surety 
clearly  would  be  without  protection,  for  it  is  evident  that  the 
debt  to  be  proved  by  the  surety  is  not  the  indebtedness  of  the 
bankrupt  to  him.  He  therefore  would  have  no  provable 
claim  against  his  estate.  This  clause  of  the  act,  however, 
expressly  gives  him  this  right.  If  the  creditor  proves  his 
debt,  and  receives  his  proportionate  share  of  the  bankrupt's 
estate  with  other  creditors,  the  surety  or  endorser  has  no 
provable  claim.  For,  were  he  also  i)ermitted  to  prove  the 
debt,  it  would  1)e  to  allow  the  same  debt  to  be  proved,  in 
part  at  least,  twice.     Whatever  the  creditor  receives  in  div- 

«- B.  A.  1898,  Sec.  57?.  800,  2  Am.   B.   R.  651;   Morgan  v. 

See  also  Mace  v.  Wells,  7  How.  Wordcll,  178  Mass.  350,  3  N.  B.  N. 
272;  In  re  Hollister,  3  Fed.  Rep.  513;  Livingston  v.  Heineman  (C.  C. 
452;  Kyle  &  Gunter  v.  Bostick  &  A.,  6th  Cir.),  120  Fed.  Rep.  786, 
Sherrod,  10  Ala.  589;  Liscomb  v.  10  Am.  B.  R.  39;  In  re  Lyon  (C. 
Grace,  26  Ark.  231;  Liddell  v.  Wis-  C.  A.,  2d  Cir.),  121  Fed.  Rep.  723, 
well,  59  Vt.  365 ;  Post,  Administra-  10  Am.  B.  R.  25 ;  Insley  v.  Gar- 
tor,  V.  Losey,  et  al.,  in  Ind.  74;  side  (C.  C.  A.,  9th  Cir.),  121  Fed. 
Fulwood  V.  Bushfield,  14  Penn.  St.  Rep.  699,  10  Am.  B.  R.  52:  Swarts 
90;  Tubbs  V.  Williams,  9  N.  C.  i  :  v.  Fourth  Nat.  Bank  (C.  C.  A.,  8th 
Morse  v.  Hovey,  7  N.  Y.  Chan.  Cir.),  117  Fed.  Rep.  i,  8  Am.  B.  R. 
Rep.  (i  Sandf.)  186;  In  re  Filer-  673:  Swarts  v.  Siegel  (C.  C.  A., 
horst.  No.  4381,  Fed.  Cas.,  s.  c.  5  N.  8th  Cir.),  117  Fed.  Rep.  13,  8  Am. 
B.  R.  144.  E.  R.  689. 

^'B.  A.  1898.  Sec.  57/.     Compare  «*  Phillips  v.  Drehcr  Co.,  112  Fed. 

R.    S.    Sec.    5070.  Rep.  404,  7  Am.  B.  R.  326. 

In     re     Heyman,     95     Fed.     Rep. 


WHAT    DEBTS    ARE    PROVABLE.  29/ 

idends  diminishes  pro  tanto  the  surety's  liability,  and  is 
equivalent  to  a  payment  made  on  his  account  and  for  his 
benefit. 

Where  the  surety  has  paid  a  part  of  the  debt  to  the  creditor, 
such  creditor  may  prove  for  the  full  amount  owing  by  the  bank- 
rupt upon  the  obligation  and  after  receiving  in  dividends  satis- 
faction of  the  balance  due  him,  will  hold  as  trustee  for  the 
surety  any  dividends  received  by  him  in  excess.^^  In  case 
the  creditor  does  not  so  receive  the  full  amount  of  his  debt  the 
surety  can  not  complain  if  called  upon  to  pay  the  balance. 
Where  the  creditor  has  insisted  upon  the  double  liability  he  had 
secured,  the  surety  has  no  right  to  intercept  any  sums  which 
iht  creditor  can  collect  from  the  bankrupt's  estate,  or  to  di- 
minish the  funds  to  which  he  has  a  right  to  look  for  satisfac- 
tion. It  is  only  when  the  holder  is  fully  satisfied  that  the 
surety  can  urge  any  claims  to  dividends  payable  on  the  original 
debt  of  the  bankrupt. 

Where  a  judgment  recovered  against  a  maker  and  payee 
of  a  note  is  satisfied  by  the  payee,  the  latter's  claim  against  the 
maker  is  provable  under  Sec.  57/  and  barred  by  discharge.®*' 

In  case  the  creditor  omits  to  prove,  the  surety  may  do  so, 
and  will  hold  any  dividends  he  may  receive  to  meet  his  lia- 
bility to  the  original  creditor  to  the  extent  he  shall  have 
actually  discharged  it  and  no  further.  It  is  not  necessary  to 
make  the  claim  provable  that  the  surety  has  paid  the  debt  for 
which  he  is  liable.®^  lie  may  prove  his  claim  although  he 
does  not  pay  the  note  or  other  liability  until  after  the  com- 
mencement of  proceedings  in  bankruptcy, ''^  or  although  the 
debt  does  not  fall  due  until  after  the  petition  is  filed. '^'•*  A 
joint  maker  who  takes  up  the  note  by  giving  his  own  indi- 

8«  Swarts    V.    Fourth    Nat.    Bank  Ch.  404 ;   Kyle  v.   Bostick,   10  Ala. 

(C.  C.  A.,  8th  Cir.),  117  Fed.  Rep.  589;  Tiibhs  v.  Williams,  9  Ired.  i; 

I,  8  Am.  B.  R.  673 ;  In  re  Bingham,  Fulvvood  v.  Biishficld,  14  Pcnn.  90. 

94  Fed.  Rep.  796,  2  Am.  B.  R.  223;  Contra.   Cake   v.   Lewis,  8   Pcnn. 

/;;    re    Ileyman,  95    Fed.    Rep.   800,  493;    McMullin    v.    Bank,    2    Penn. 

2  Am.   B.  R.  651.  343. 

««  Smith    V.    Wheeler,    55    N.    Y.  8«  Hardy    v.    Carter,    8    Humph. 

App.  Div.  170.  (Tenn.)    153;  Tunno  v.  Bethune,  2 

"Mace  V.  Wells,  7  How.  272;  s.  Dessau.   (S.  C.)   285. 

c    17  Vt.   503:   Morse  v.   Hovey,   i  ^"Crafts  v.  Mott,  5  Barh.  (N.  Y.) 

Sandf.  Ch.  (N.  Y.)  186,  s.  c.  i  Barb.  305,  affirmed  in  4  N.  Y.  606. 


298  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

vidual  note  is  entitled  to  prove  his  debt.""  But  an  endorser 
or  a  surety  is  authorized  to  prove  a  debt  in  case  only  that  the 
principal  creditor  could  ])rove  it  and  fails  to  do  so,"^  He  can 
not  participate  in  the  distribution  of  the  estate  until  he  has 
surrendered  jireferences  received  by  the  creditor."^  He  ac- 
quires no  higher  or  better  rights  than  the  prior  holder. 

A  creditor  or  a  surety  or  endorser  is  entitled  regularly  to 
prove  the  whole  debt  against  the  estate  of  a  bankrupt  maker, 
irrespective  of  whether  payments  have  been  made  by  the 
surety  to  the  creditor  or  not."^  It  is  evident  that  the  estate  of 
the  bankrupt  is  indebted  to  the  creditor  for  the  whole  debt. 
This  debt  is  not  aflfected  by  dealings  between  the  surety  and 
the  principal.  It  is  immaterial  whether  the  payment  of  this 
indebtedness  is  made  to  the  creditor  directly  or  to  an  endorser 
or  surety  who  has  been  subrogated  to  the  rights  of  the  cred- 
itor by  actual  payments  made  by  liim. 

Where  Principal  and  Surety  are  both  Bankrupts. — 
It  is  well  settled  that  if  a  mortgage,  pledge  or  other  lien  is 
given  by  a  principal  debtor  to  secure  his  endorser  and  other 
surety,  and  both  become  bankrupts,  the  holders  of  the  notes 
or  other  debts  for  which  the  surety  is  bound  have  an  equity 
to  apply  the  property  to  the  discharge  of  their  debts  specific- 
ally.'** A  distinction  has  been  sometimes  taken  between  a 
security  for  the  indemnity  of  the  surety  and  one  conditioned 
for  the  payment  of  the  debt.  But  it  seems  well  settled  by 
the  authorities  that  the  creditor  has  an  equitable  claim  to  the 

^^  In  re  Morrow,  No.  9821,  Fed.  800,  2  Am.  B.  R.  651;  In  re  Swift, 

Cas.,  s.  c.  2  Saw.  356.  106  Fed.  Rep.  65 ;  Swartz  v.  Fourth 

91  B.  A.  1898,  Sec.  571;  Morgan  v.  Nat.  Bank  (C.  C.  A.,  8th  Cir.),  117 

Wordell,  178  Mass.  350,  3  N.  B.  N.  Fed.  Rep.  i,  8  Am.  B.  R.  673;  In  re 

513;    Sigsby   V.    Willis,    No.    12849,  Bingham,  94  Fed.  Rep.  796,  2  Am. 

Fed.  Cas.,  s.  c.  3  Ben.  371 ;  Ellis  v.  B.    R.    223 ;    In   re   Ellerhorst,    No. 

Ham,  28  Me.  385;   Crafts  v.  Mott,  4381,  Fed.  Cas.,  s.  c.  5  N.  B.  R.  144; 

4  N.  Y.  606.  Downing  v.  Traders  Bank,  No.  4046, 

"2  Livingston  v.  Heineman  (C.  C.  Fed.  Cas.,  s.  c.  2  Dill.   136;  as  ex- 

A.,  6th   Cir.),    120   Fed.   Rep.   786,  plained  In  re  Hollister,  3  Fed.  Rep. 

10  Am.  B.  R.  39;  In  re  Lyon  (C.  C.  452;   Ex  parte  Talcott,    No.    13184, 

A.,   2d    Cir.),    121    Fed.    Rep.    723,  Fed.  Cas.,  s.  c.  9  B.  R.  502. 
10  Am.  B.  R.  25  ;  Swarts  v.  Siegel  '•'^  Ex  parte  Morris,  No.  9823,  Fed. 

(C.  C.  A.,  8th  Cir.),  117  Fed.  Rep.  Cas.,   s.   c.   2  Low.   424;    Matthews 

13,  8  Am.  B.  R.  689.  V   Abbott,  No.  9275,  Fed.  Cas.,  s.  c. 

9"  In    re    Heyman,    95    Fed.    Rep.  2    Hask.    289. 


WHAT    DEBTS    ARE    PROVABLE.  299 

security  as  well  when  a  mortgage  is  given  for  mere  indemnity 
as  when  the  condition  is  added  that  the  principal  shall  pay 
the  debt.'" 

It  is  quite  immaterial  whether  the  surety  has  or  has  not 
actually  paid  the  debt.  If  he  has  become  absolutely  bound 
for  its  payment,  as  was  said  by  Lord  Eldon,"''  "  It  is  true  these 
bills  were  not  paid,  but,  inasmuch  as  the  estate  of  the  debtor 
could  not  be  withdrawn  until  the  debts  were  paid  . 
and  inasmuch  as  the  estate  of  the  creditor  holding  the  security 
was  in  a  condition  that  he  was  not  able  to  make  payment  of 
the  bills  in  money's  worth,  the  only  way  was  to  dispose  of 
the  security  and  pay  the  bills.  .  .  .  The  bill  holder  comes 
in.  not  on  account  of  any  special  lien  he  has  upon  the  property, 
but  because  the  person  from  whom  he  holds  has  a  security, 
which  security  can  not  be  taken  away  until  all  liability  upon 
the  bills  is  at  an  end." 

Where  a  maker  and  endorser  whose  liability  is  fixed  are 
both  adjudged  bankrupts  the  whole  debt,  it  seems,  may  be 
proved  against  either  or  both  estates.**^  The  reason  is  that 
each  of  them  is  liable  for  the  full  amount.  The  debt  only 
can  be  collected  once.  If  the  estate  of  the  endorser  discharges 
a  part  of  the  debt  it  would  seem  that  the  trustee  of  the  en- 
dorser might  prove  such  claim  against  the  estate  of  the 
maker.  "^ 

§  117.     Interest. 

In  ascertaining  the  amount  of  a  debt  actually  owing  at  the 
time  the  petition  in  bankruptcy  is  filed,  the  question  of  in- 
terest becomes  important.  Debts  which  are  provable  under 
the  first  clause  of  section  63  are  allowable  "  with  any  interest 
thereon  which  would  have  been  recoverable  at  that  date  or 
with  a  rebate  of  interest  upon  sucli  as  were  not  then  payable 
and  did  not  bear  interest." 

By  this  provision,  interest  wliich  has  accrued  and  would 
have  been  recoverable  at  the  date  of  filing  the  petition  is  to 

^^  New  Bedford  Institution  v.  Fair  »•>  In    ex    parte    Waring,    iq    Ves. 

Haven  Bank,  9  Allen   (Mass.)    178;      343. 

approved    in    Matthews    v.    Abbott,  "^  Wollaston  v.  Porter,  122  Mass. 

No.  9275,  Fed.  Cas.,  s.  c.  2  Hask.      308. 

289-  "^  B.  A.  1808.  Sec.  57;;i.    See  Wol- 

laston  V.  Porter,  122  Mass.  308. 


300  LAW    AND    TROCEEDINGS    IN    BANKRUPTCY. 

be  added  to  and  become  a  part  of  the  principal  debt.""  The 
interest  which  is  to  be  so  added  is  clearly  that  which  could 
have  been  recovered  under  the  state  law/''"  or,  in  the  absence 
of  state  law,  under  the  laws  of  the  United  States."^  Hence, 
if  the  interest  is  usurious,  so  much  of  the  debt  and  interest  is 
provable  as  could  be  recovered  under  the  local  law.^""  It  is 
obvious  that  interest  which  accrues  subsequently  is  not  a 
debt  absolutely  owing  at  the  time  of  the  filing  of  the  petition 
in  bankruptcy.  Where  a  debt,  bearing  interest  at  specified 
intervals,  becomes  due  and  payable  before  proceedings  in 
bankruptcy  are  commenced,  the  creditor  is  entitled  to  prove 
for  such  interest,  and  also  for  interest  from  the  date  of  ma- 
turity.'"^ 

Where  the  debt  is  payable  at  a  future  date  the  present 
value  of  the  debt  only  is  provable.  If  such  debts  bear  inter- 
est all  interest  subsequent  to  the  filing  of  the  petition  is  re- 
bated. Where  such  debts  do  not  bear  interest  and  are  paya- 
ble at  a  future  date,  the  present  value  of  the  debt  is  ascer- 
tained by  deducting  from  the  amount  of  the  debt  the  amount 
of  interest  on  it,  from  the  date  of  the  filing  of  the  petition 
until  the  time  it  becomes  payable.'"*  The  remainder  only  is 
provable. 

It  is  manifest  that  both  classes  of  creditors,  namely,  those 
whose  debt  has  matured  and  those  whose  debt  is  payable  at 
a  future  date,  are  to  be  on  an  equal  footing.  The  date  of 
the  filing  of  the  petition  is  established  as  the  time  at  which 
the  liability  is  to  be  ascertained  and  determined.  It  may 
also  be  observed  that  where,  as  in  most  of  the  states  of  the 
Union,  interest  is  regulated  by  law,  and  all  the  debts  of  the 

»9  Sloan   V.   Lewis,  22  Wall.    150;  Saw.   416;   Nat.   Exchange  Bank  v. 

In   re  Haake,   No.   5883,  Fed.   Cas.,  Moore,  No.   10041,   Fed.  Cas.,   s.   c. 

s    c.  2  Saw.  231  ;  In  re  Bartenbach,  2   Bond   170. 

1068,   Fed.   Cas.,   s.  c.    11    N.   B.   R.  i"i /«   re   Wild,    No.    17645,    Fed. 

61;    In    re    Ornc,    No.    10581,    Fed.  Cas.,  s.  c.  11  Blatch.  243;  Nat.  Ex- 

Cas.,  s.  c.  I  Ben.  161.  change  Bank  v.  Moore,  No.   10041,. 

ioo/„  yg  Prescott,  No.  11389,  Fed.  Fed.   Cas.,  2   Bond   170. 

Cas.,  s.  c.  5  Biss.  523 ;  In  re  Conrad,  '^^^  See    cases    cited    in    last    two 

No.  3126,  Fed.   Cas.,  s.  c.  6  A.  M.  notes  above. 

Law  Rev.  385 ;   Providence  County  ^"^  /„    ^^    Bartenbach,    No.    1068, 

Sav.  Bank  v.  Frost,  No.  11453,  Fed.  Fed.  Cas.,  s.  c.  11  N.  B.  R.  61. 

Cas.,   s.  c.  8   Ben.  293 ;   In  re   Pit-  i"*  In   re   Orne,    No.    10581,    Fed. 

tock.   No.   1 1 189.   Fed.   Cas.,   s.  c.   2  Cas.,    s.   c.    i    Ben.   361. 


WHAT    DEBTS    ARE    PROVABLE,  3OI 

bankrupt  bear  the  same  or  nearly  the  same  rate  of  interest, 
it  is  immaterial  to  the  creditor  at  what  time  the  interest  stops 
on  his  debts,  provided  interest  on  all  the  debts  stops  simul- 
taneously with  his  own.  For  his  proportionate  share  of  the 
assets  will  be  the  same  if  the  same  period  is  fixed  for  the 
stoppage  of  interest  on  all  the  debts. 

Preferred  creditors,  however,  are  entitled  to  interest  upon 
their  claims  to  the  date  of  the  actual  payment.^°^ 

§  118.     Costs. 

Where  costs  are  incident  to  a  judgment  obtained  prior  to 
bankruptcy  proceedings  ^"^  it  is  regularly  a  provable  debt 
under  section  63.  The  reason  for  this  is  that  it  is  a  fixed 
liability  evidenced  by  a  judgment. 

The  former  acts  contained  no  provision  for  costs  in  pend- 
ing cases,  or  where  the  judgment  was  obtained  pending  bank- 
ruptcy proceedings."^  But  the  present  act  expressly  provides 
that  costs  are  provable  in  such  cases.  Among  the  debts  of 
the  bankrupt  which  may  be  proved  and  allowed  against  his 
estate  are  debts  "  due  as  costs  taxable  against  an  involun- 
tary bankrupt  who  was  at  the  time  of  the  filing  of  the  peti- 
tion against  him  plaintiff  in  a  cause  of  action  which  would 
pass  to  the  trustee  and  which  the  trustee  declines  to  prose- 
cute after  notice  "  ;  ""*  and  debts  "  founded  u])on  a  claim  for 
taxable  costs  incurred  in  good  faith  by  a  creditor  before  the 
filing  of  the  petition  in  an  action  to  recover  a  provable  debt.""" 
Costs  to  be  provable  must  fall  witliin  one  of  these  provisions.^" 

§  119.     Debts  founded  upon  contract. 

Debts  founded  upon  an  open  account,  or  upon  a  contract 
express  or  implied,  are  ])rovable  in  bankruptcy.'"  It  is  not 
necessary  to  be  provable  under  this  provision  that  the  debt 

"5  In  re  Strachcn.  No.  1.3519,  Fed.  /"  re  Allen,  96  Fed.  Rep.  512 ,  3  Am. 

Cas.,  s.  c.  3  Biss.  181.  B.  R.  3^^:  /"  re  Lewis,  99  Fed.  Rep. 

108  £.r    fyarte    O'Neil,    No.    10527,  935.   4   Am.    B.    R.   51. 

Fed.  Cas..  s.  c.  i  Low.  163;  Graham  But    see    In    re    Young,    96    Fed. 

V.  Pierson,  6  Hill    (N.  Y.)   247.  Rep.  606,  2  Am.  B.  R.  673. 

i"T/«  re  Fortune,  No.  4935,  Fed.  "•> /n   re   Marcus,    104   Fed.    Rep. 

Cas..  s.  c.  I  Low.  306;  Sandford  v.  ^,^^  ,   S  Am.  B.  R.   19.  affirmed    (C 

Sandfnrd,   58  N.  Y.  66.  C.  A.,  ist  Cir.),  105  Fed.  Rep.  907, 

i''8  B.  A.  1898,  Sec.  63,  cl.  2.  5  Am.  B.  R.  3^)5- 

100  B.    A.    1898,    Sec.    63,    cl.    3;  1"  B.  A.  1898,  Sec.  63,  cl.  4. 


302  LAW     AND    PROCEEDINGS    IN    BANKRUPTCY. 

exist  or  be  owing  at  the  time  of  tlie  filing  of  the  petition.  It 
nuisi.  however,  arise  within  one  year  after  the  adjudication.'^" 
It  need  not  be  evitlenced  by  a  writing,  but  may  be  founded 
upon  an  oral  agreement.""' 

It  would  seem,  however,  that  the  contract  must  have  been 
made  prior  to  the  commencement  of  bankruptcy  proceedings. 
The  reasons  for  this  are,  First,  the  aim  of  the  bankrupt  act 
is  to  distribute  the  assets  of  the  bankrui>t  of  that  date  equally 
among  those  to  whom  the  debtor  has  become  liable.  Second, 
contracts  made  subsequent  to  the  filing  of  the  petition  are 
presumed  to  be  made  upon  the  credit  of  after-acquired  propn 
erty.  Third,  if  debts  arising  ujwn  contracts  made  subse- 
quent to  bankruptcy  proceedings  were  allowed  to  be  proved, 
it  would  open  a  wide  door  for  fraud  on  the  part  of  the  bank- 
rupt. The  statute,  however,  does  not  expressly  restrict  con- 
tracts to  those  made  prior  to  the  bankruptcy  proceedings. 

Under  this  clause  debts  arising  upon  open  accounts  or  the 
usual  contracts  of  bargain  and  sale,  although  for  future  de- 
livery, are  provable.  Where  a  loss  upon  a  policy  of  insur- 
ance has  been  duly  and  regularly  adjusted  in  good  faith  be- 
fore the  company  is  adjudicated  a  bankrupt,  the  claim  can 
be  proved  like  any  other  debt  arising  upon  a  contract."* 
Where  a  bankrupt  ha'i  received  property  in  trust,  and  has 
appropriated  it  in  violation  thereof,  the  debt  thus  created  is 
provable."^  So  also  a  claim  founded  upon  a  covenant  to 
repay  a  part  of  a  premium,  paid  upon  a  ])olicy  of  insurance 
upon  the  cancellation  of  the  policy,  is  provable  in  the  absence 
of  provisions  in  the  state  laws,  the  charter  or  by-laws  of  the 
company  whicli  would  make  it  void.^^" 

A  stockliolder's  statutory  liability  in  an  insolvent  corpora- 

112  B.    A.    1898,    Sec.    S7w;    In   re  '^'^^  In  re  Firemen's  Ins.  Co.,  No. 

Rhodes,   105  Fed.  Rep.  231  ,  5  Am.  4796,  Fed.  Cas.,  s.  c.  3  Biss.  462. 

B.  R.  197,  3  N.  B.  N.  112;  Bray  v.  '^^■'  In  re  Jordan,  2  Fed.  Rep.  319; 

Cobb,  100  Fed.  Rep.  270,  3  Am.  B.  In   re   Upson,    123    Fed.    Rep.   807; 

R.    788,    2    N.    B.    N.    586;    In    re  In  re  Rundle,  No.  12138,  Fed.  Cas., 

Leibowitz,  108  Fed.  Rep.  617,  6  Am.  s.  c.  2  N.  B.  R.  113;  Ungewitter  v. 

R.  R.  268:  In  re  Moebius,  116  Fed.  Von    Sachs,    No.    14343,    Fed.    Cas., 

Rep.  47  ,  8  Am.  B.  R.  590.  s    c.  4  Ben.   167. 

ii-"*  Capelle  v.  M.  E.   Church,  No.  i'"/;r    re    Independent    Ins.    Co., 

2392,  Fed.   Cas.,   s.  c.    11    N.   B.   R.  No.   7019,   Fed.   Cas.,   s.   c.   2   Low. 

536.  187. 


WHAT    DEBTS    ARE    PROVABLE,  303 

tion,"'  and  unpaid  subscriptions  for  stock  in  a  corporation  may- 
be proved  against  the  estate  of  a  bankrupt  stockholder. 

A  claim  arising  ex  delicto  and  also  of  such  a  character  as 
to  constitute  a  claim  on  the  theory  of  a  quasi  contract  is  prov- 
able under  Sec.  63,  clause  4.^" 

It  has  been  held  that  a  county  may  prove  a  claim  for  money 
due  for  the  hire  of  convict  labor.''*'  A  claim  for  damages  for 
breach  of  contract  of  employment  is  provable  when  it  can  be 
liquidated/'"  but  a  general  manager  of  a  trading  corporation 
has  been  refused  under  the  circumstances  of  the  case  the  right 
to  prove  a  claim  for  the  unpaid  balance  of  his  salary.'-'  A 
debt  has  been  held  provable  against  the  estate  of  a  corporation 
in  bankruptcy,  where  it  was  contracted  by  the  company  and 
amounted  to  more  than  one-half  the  sum  of  its  available  assets, 
but  did  not  exceed  one-half  the  amount  of  the  stock  paid  up  and 
actually  issued  to  stockholders  and  held  by  them,  where  the 
articles  of  association  limited  the  amount  of  indebtedness  which 
it  might  contract  to  one-half  the  amount  of  the  paid  up  capital 
stock.'"  The  value  of  an  annuity  based  upon  the  expectancy 
of  life,  has  been  held  to  be  a  ])rovable  debt.'--"*  A  claim  for 
margins  against  a  bankrupt  broker  has  been  allowed.'^* 

It  would  seem  as  if  a  contingent  debt  founded  in  contract 
might  be  proved  in  case  the  contingency  happened  and  a  debt 
was  thereby  created,  although  the  contingency  happened  pend- 
ing bankruptcy  proceedings.'-"'     Where  the  liability  of  an  en- 

1^^ /«    re    Rouse,    40    Law    Biil.  ^-^  Cunningham  v.  German  Insur- 

(Ohio)  220.  ance    Bank    (C.    C.    A.,    6th    Cir.), 

11" /n  re  Filer,  125  Fed.  Rep.  262;  loi    Fed.    Rep.   977,   4   Am.    B.    R. 

In  re  Hildebrant,  10  Am.  B.  R.  184 ;  363. 

In  re  Hirschman,  104  Fed.  Rep.  69,  12a  Cobb  v.   Overman    (C.   C.  A., 

4  Am.  B.  R.  715.  4th  Cir.),  109  Fed.  Rep.  65,  6  Am. 

ii»  In    re    Wright,    95    Fed.    Rep.  B.  R.  324,  overruhng  Bray  v.  Cobb, 

807,  2  Am.  B.  R.  592,  affirmed  on  100    Fed.    Rep.    270,    3    Am.    B.    R. 

appeal   sub   nam;   In   re   Worcester  788.     See   also   Dunbar  v.    Dunbar, 

County,   102  Fed.  Rep.  808,  4  Am.  190  U.    S.   340. 

B.  R.  496.  ^-*  In    re    Swift,    105    Fed.    Rep. 

^'"  In  re  Silverman,  101  Fed.  Rep.  493.  5  Am.  B.  R.  398;  In  re  Graff, 

219.  4  Am.  B.  R.  83,  2  N.   B.  N.  S  Am.  B.  R.  744- 

760.  But    see    In   re    Knott,    109    Fed. 

'-' /h    re    Grubbs- Wiley    Grocery  Rep.  626 ,  6  Am.  B.  R.  749. 

Co.,  y6  Fed.  Rep.  183.  2  Am.  B.  R.  ^-^  In   re   Gerson    (C.    C.    A.,   2d 

442;  In  re  Carolina  Cofipcragc  Co.,  Cir.),  T07  Fed.  Rep.  897,  6  Am.  B. 

96  Fed.  Rep.  950,  3  Am.  B.  R.  154,  R    11.     See  Dunbar  v.  Dunbar,  190 

2   N.   B.    N.   23.  I'.  S.  340. 


304  LAW    AXD    rROCEEDINGS    IN    BANKRUTTCY. 

dorser  becomes  fixed  after  l)ankriiptcy  but  within  the  time 
hniited  for  proving"  claims  he  may  prove  under  this  clause,  al- 
though he  has  not  a  provable  claim  under  Sec.  63a,  clause  !.■''" 

Damages  for  breach  of  an  executory  contract  may  be  proved 
when  they  can  be  liquidated. ^"^  Where  a  creditor  proves  for 
goods  sold  and  delivered  he  is  not  entitled  to  prove  for  dam- 
ages sustained  by  fraudulent  representations  in  making  the 
contract.^ '^ 

An  annual  corporation  fee  required  by  state  law  solely  as  a 
condition  of  its  continued  existence  without  regard  to  the 
value  of  its  property  and  franchises  is  not  provable  as  a  debt 
upon  contract  express  or  implied,^""  or  damages  for  breach  of 
a  covenant  for  quiet  enjoyment  of  a  lease  where  the  breach 
had  not  occurred  at  the  time  of  bankruptcy/''**'  or  where  a 
lessor  has  re-entered  and  taken  possession  of  the  property."^ 

A  contract  by  a  husband  to  pay  a  wife  a  certain  sum  at 
stated  periods  during  her  life  or  widowhood,"^  or  for  the 
support  of  his  minor  children  is  not  provable  against  his  estate 
in  bankruptcy/'^^ 

A  debt  is  not  provable  when  founded  upon  an  illegal  con- 
sideration/^* as  where  money  is  loaned  a  debtor  for  the  pur- 
pose of  committing  an  act  of  bankruptcy/^^  or  where  an  over- 
draft has  been  made  by  a  collusion  with  the  cashier/^** 

§  120.     Rent. 

Rent  due  by  the  bankrupt  is  regularly  provable  in  bank- 

128 /„   re   Gerson    (C.    C.   A.,   3d  "^ /n   re   Shaffer,    124  Fed.    Rep. 

Cir.),  107  Fed.  Rep.  897,  6  Am.  B.  in;  /n  re  Ells,  98  Fed.  Rep.  967, 

R.  II.  3  Am.  B.  R.  564;  Lamson  Consol. 

127  In  re  Manhattan  Ice  Co.  (C.  Store  Service  Co.  v.  Boland  (C.  C. 
C.  A.,  2d  Cir.),  116  Fed.  Rep.  604,  A.,  6th  Cir.),  114  Fed.  Rep.  639. 
8  Am.  B.  R.  569,  affirming  114  Fed.  See  Sec.  120,  post. 

Rep.  399 ,  7  Am.  B.  R.  408 ,  In  re  i''-  Dunbar  v.  Dunbar,  190  U.  S. 

Swift  (C.  C.  A.,  1st  Cir.),  112  Fed.  340. 

Rep.  315,  7  Am.  B.  R.  374.  i'*'*  Dunbar  v.  Dunbar,  190  U.  S. 

128  /„  re  Hildebrant,  10  Am.  B.  R.  340. 

184.  1''*  Forsyth    v.    Woods,    11    Wall. 

129 /n    re    Danville    Rolling    Mill  484- 
Co.,   10  Am.   B.  R.  327.  i"*^  In   re   Hatje,    No.    6215,    Fed. 

130  In    re    Pennewell     f  C.    C.    A.,  Cas.,  s.  c.  6  Biss.  436. 
6th  Cir.),  119  Fed.  Rep.  139,  9  Am.  i^"/;?    re    Eureka    Ins.    Co.,    No. 

B.  R.  490.  4550,  Fed.  Cas.,  s.  c.  i  Low.  500. 


WHAT    DEBTS    ARE    PROVABLE.  305 

ruptcy.  Under  the  act  of  1867  rents  ceased  at  the  time  of 
the  bankruptcy/^' 

Under  the  present  act  there  is  no  such  provision.  The 
courts  have  uniformly  permitted  to  be  proved  against  the  es- 
tate of  the  bankrupt  lessee  rent  due  prior  to  the  adjudication/''^ 
and  rent  for  the  occupation  and  use  of  leased  premises  after 
bankruptcy  where  such  premises  were  actually  used  by  a  re- 
ceiver or  trustee.^^"  Where  bankruptcy  occurs  between  rent 
days  it  may  be  doubted  if  the  landlord  can  prove  rent  beyond 
the  last  rent  day.  The  general  rule  is,  that  rent  can  not  be 
apportioned  as  to  time."° 

A  contract  of  lease  is  not  ipso  facto  terminated  by  the  bank- 
ruptcy of  the  lessee.^"  Whether  rent  under  a  lease  accruing 
after  bankruptcy  may  be  proved  against  the  tenant's  estate 
in  bankruptcy  dejiends  upon  the  terms  of  the  lease,  and  the 
election  of  the  trustee  to  take  or  reject  the  contract  of  lease. 

It  is  entirely  competent  to  contract  that  the  consequences  of 
a  default  of  rent  for  the  use  of  property,  or  the  bankruptcy 
of  the  lessee,  shall  be  the  precipitancy  of  the  maturity  of  future 
installments  for  the  rental  of  the  property  in  respect  to  which 
default  has  been  made.""  Such  terms  in  a  lease  make  future 
rent  provable.  But  the  trustee  may  reject  the  contract  of  lease 
and  render  such  claim  not  provable. 

In  the  opinions  of  the  referees  and  of  the  judges  there  is  a 
marked  unanimity  to  the  extent  that  rent  to  accrue  in  the  fu- 
ture is  not  a  provable  debt  under  the  leases  which  have  been 

i"R.  S.  Sec.  5017-  ice   Co.   v.    Boland    (C.    C.    A.,   6th 

^38 /m    re    Hinckel    Brewing    Co.,  Cir.),    114    Fed.    Rep.    639;    In    re 

123   Fed.   Rep.  942 .    10  Am.   B.   R.  Ells,  98  Fed.  Rep.  967,  3  Am.  B.  R. 

484;  In  re  Arnstein,   loi   Fed.  Rep.  564;   Atkin.s  v.   Wilcox    (C.   C.   A., 

706,   4   Am.    B.   R.   246.  Sth  Cir.),  105  Fed.  Rep.  595,  5  Am. 

139  /„    j.^    Hinckel    Brewing    Co.,  B.  R.  313. 
123   Fed.   Rep.  942,    10  Am.    B.   R.  But  see  In   re  Jefferson.  93   Fed. 

484.  Rep.  948.  2  Am.   B.   R.  206:   In   re 

i-*"Hoagland    v.    Cnim,     11.^     111.  Hays,  Foster  &  Ward  Co.,  117  Fed. 

365;    Zule   V.    Ziilc,   24    Wend,    ( N.  Rep.  879,  9  Am.    B.   R.   144;   Bray 

y.)  74;  The  Mayor  v.  Ketchum,  67  v.  Cobb.  100  Fed.  Rep.  270.  3  Am. 

How.    Prac,    N.    Y.    161  ;    Perry   v.  B.  R.  788. 

Aldrich.  13  N.  H.  343;  Randall  v.  1*2  La^nson  Consol.  Store  Service 

Rich,  II  Mass.  494.  Co.  v.  Boland   (C.  C.  A.,  6th  Cir.), 

i*! /n  re  Pennewell  (C.  C.  A.,  6th  114  Fed.  Rep.  639;  Piatt  v.  Johnson, 

Cir.),  119  Fed.  Rep.  139,  9  Am.  B.  168   Pa.   47. 
R.  490;  Lamson  Consol.  Store  Serv- 


306  LAW    AND    rUOCEEDINGS    IN    BANKRUPTCY. 

considered.  There  is  a  threat  diversity  oi  view  as  to  the 
ground  on  which  this  rulin<;-  is  placed.'*''  Where  by  the  terms 
of  the  lease  future  installments  of  rent  are  made  immediately 
due  and  jiayable.  the  landlord  may.  acting-  under  another  clause 
of  the  lease,  terminate  it  by  re-entry/**  or  by  accei)ting  a 
surrender  of  a  part  of  the  lease/*"*  and  thereafter  be  estopped 
from  proving  for  future  rents  after  bankruptcy. 

It  has  been  held  that  a  tenant  could  not  prove  for  damages 
for  a  breach  of  covenant  for  quiet  enjoyment  of  premises  un- 
der a  lease  to  begin  after  the  date  of  bankruptcy/*"  or  a  land- 
lord for  breach  of  a  covenant  that  the  lessee  should  be  liable 
for  loss  and  damage  sustained  by  the  lessor  on  account  of  the 
premises  remaining  unleased  or  relet  for  less  rent  after  the  ter- 
mination of  the  lease  by  re-entry."^  The  landlord  cannot 
prove  for  damages  occasioned  by  restoring  alterations  made  by 
the  lessee  when  in  possession."'*  Where  a  landlord  claims  full 
rental  under  his  lease,  it  may  be  show-n  that  he  agreed  to  reduce 
the  rent,  had  accepted  several  installments  at  the  reduced  rates, 
and  had  been  moved  to  make  the  reduction  by  considerations 
advantageous  to  himself,  his  claim  for  rent  against  the  tenant's 
estate  in  bankruptcy  must  be  reduced  by  the  amount  received 
from  reletting  the  premises."'' 

The  trustee  in  bankruptcy  may  elect  to  take  the  lease  as  an 
asset  of  the  bankrupt  tenant's  estate.     In  such  case  the  rent  for 

1*3/,,   ,c  Jefferson,  93   Fed.   Rep.  ice   Co.   v.    Boland    (C.    C.   A.,   6th 

948,  2  Am.  B.  R.  206;  In  re  Hays,  Cir.),    114    Fed.    Rep.    639;    In    re 

Foster  &  Ward  Co.,  117  Fed.  Rep.  Mahler,   105  Fed.  Rep.  428,  5  Am. 

879,  9  Am.  B.  R.  144;  In  re  Arn-  B.  R.  453;  In  re  Ells,  98  Fed.  Rep. 

stein,  1 01   Fed,  Rep.  706,  4  Am.  B.  967,  3  Am.  B.  R.  564. 

R.  246;  Bray  v.  Cobb,  100  Fed.  Rep.  ^^^  Wilson    v.    Penn.    Trust    Co., 

270,  3  Am.  B.  R.  788;  In  re  Ells,  114  Fed.  Rep.  742,  8  Am.  B.  R.  169. 

98  Fed.  Rep.  967 ,  3  Am.  B.  R.  564 ;  But   see   Evans  v.   Lincoln   Co.,  204 

In  re  Mahler,  105  Fed.  Rep.  428,  5  Pa.  St.  448,  10  Am.  B.  R.  401. 

Am.    B.    R.    453;    Wilson    v.    Penn  i-*o/m    re    Pennewell    (C.    C.    A., 

Trust  Co.,  114  Fed.  Rep.  742,  8  Am.  6th  Cir.),  119  Fed.  Rep.  139.  9  Am. 

B.  R.  169:  Atkins  v.  Wilcox  (C.  C  B.  R.  490. 

A.,  5th  Cir.),   105  Fed.  Rep.  595,  5  1*'^ /n   re   Shaffer,   124   Fed.    Rep. 

Am.    B.    R.    313;    Lamson    Consol.  in,  11  Am.  B.  R.  — ;  In  re  Ells, 

Store  Service  Co.  v.  Boland  (C.  C.  98  Fed.  Rep.  967,  3  Am.  B.  R.  564- 

A.,  6th  Cir.),  114  Fed.  Rep.  639.  "^/m  re  Arnstein,  loi  Fed.  Rep. 

"*/n  re  Pennewell  CC.  C.  A.,  6th  706.  4  Am.  B.  R.  246. 

Cir.),  119  Fed.  Rep.  139,  9  Am.  B.  1^'' Evans  v.  Lincoln  Co.,  204  Pa. 

R.  490;  Lamson  Consol.  Store  Serv-  St.  448,  10  Am.  B.  R.  401. 


WHAT    DEBTS    ARE    PROVABLE.  3O7 

the  entire  residue  of  the  term  would  be  provable  as  an  un- 
preferred  debt  and  the  landlord  would  be  entitled  to  a  pro 
rata  dividend.  The  unexpired  portion  of  the  term  would  be- 
come an  asset  of  the  bankrupt's  estate  to  be  disposed  of  by  the 
trustee  in  bankruptcy  for  the  benefit  of  the  estate. 

If  the  trustee  elects  to  reject  the  contract  of  lease,  as  he  has 
a  right  to  do,  it  is  a  nullity  so  far  as  the  bankruptcy  proceed- 
ings are  concerned.  In  such  cases  future  rent  although  made 
due  and  payable  at  once  by  the  terms  of  the  lease,  is  not  a  prov- 
able debt.  The  landlord  may  prove  for  rent  due  prior  to  bank- 
ruptcy for  the  use  and  occupation  of  the  premises  either  as 
"  a  fixed  liability  due  and  owing  "  or  as  a  "  debt  arising  in  con- 
tract." For  the  same  reason  he  may  prove  for  subsequent  use 
and  occupancy  of  the  premises  by  the  trustee  or  receiver,^^" 

Where  the  state  law  entitles  the  landlord  to  a  lien  upon  the 
goods  of  his  tenant  for  rent  the  court  of  bankruptcy  will  en- 
force such  lien  as  against  the  proceeds  of  such  goods  when  sold 
by  the  trustee.^^^ 

§  121.     Mutual  debts  and  credits. 

The  present  bankrupt  statute  provides  that  "  In  all  cases 
of  mutual  debts  or  mutual  credits  between  the  estate  of  a 
bankrupt  and  a  creditor  the  account  shall  be  stated  and  one 
debt  shall  be  set  off  against  the  other,  and  the  balance  only 
shall  be  allowed  or  paid.  A  set-ofif  or  counterclaim  shall  not 
be  allowed  in  favor  of  any  debtor  of  the  bankrupt  which  ( i ) 
is  not  provable  against  the  estate;  or  {2)  was  purchased  by 
or  transferred  to  him  after  the  filing  of  the  petition,  or  within 
four  months  before  sucli  filing,  with  a  view  to  such  use  and 
with  knowledge  or  notice  that  such  bankrupt  was  insolvent, 
or  had  committed  an  act  of  bankruptcy."  ^^" 

Similar  provisions  are  contained  in  the  former  United  States 
bankrupt  acts  and  in  the  English  acts.^^"'     The  opinions  of  the 

""  In    re    Hinckel    Brewing    Co.,  ''''■'  Sec.  68  of  the  act  of  July  i, 

123  Fed.   Rep.  942,   10  Am.   B.   R.  1898,  .^o  Stat,  at  L. 

484.  ^''■'  Act  of  1867  :     "  In  all  cases  of 

'^^^  In  re  Mitchell,  116  Fed.  Rep.  mutual  debts  or  mutual  credits  be- 

87,   8   Am.    B.    R.   324;    Wilson    v.  tween   the  parties,   the  account   he- 

Penn.  Trust  Co.  (C.  C.  A.,  3d  Cir.),  tween  them  shall  be  stated,  and  one 

114  Fed.  Rep.  742.  8  Am.  R.  R.  169.  debt  set  off  against  the  other,  and 


3o8 


LAW    AND    rROCEEniNGS    IN    BANKRUPTCY. 


courts  construing  these  provisions  are  valuable  in  determin- 
ing the  true  meaning  of  the  present  section. 

The  right  of  set-off  in  bankruptcy  does  not  rest  on  the 
same  principle  as  the  right  of  set-off  between  solvent  parties. 
The  latter  is  given  by  the  statutes  of  set-off  and  counter  claim 
to  prevent  cross  actions.  But  under  the  bankrupt  statutes  the 
mutual  credit  clause  has  not  been  so  construed.  The  object 
of  this  clause  is  not  to  avoid  cross  actions,  for  none  would 
lie  against  trustees  in  bankru])tcy,  and  one  against  the  bank- 
rupt would  be  unavailing,  but  to  do  substantial  justice  be- 
tween the  parties  where  a  debt  is  really  due  from  the  bank- 
rupt to  a  debtor  to  his  estate.^^* 


the  balance  only  shall  be  allowed 
or  paid,  but  no  set-off  shall  be  al- 
lowed in  favor  of  any  debtor  to  the 
bankrupt  of  a  claim  in  its  nature 
not  provable  against  the  estate,  or 
of  a  claim  purchased  by  or  trans- 
ferred to  him  after  the  filing  of 
the  petition."—  R.  S.  Sec.  5073 ;  Act 
of  March  2,  1867,  14  Stat,  at  L. 
526,  Sec.  20. 

Act  of  1841  :  "  In  all  cases  where 
there  are  mutual  debts  or  mutual 
credits  between  the  parties,  the  bal- 
ance only  shall  be  deemed  the  true 
■debt  or  claim  between  them,  and  the 
residue  shall  be  deemed  adjusted  by 
the  set-off." — Act  of  August  19, 
1841,  5  Stat,  at  L.  445,  Sec.  5. 

Act  of  1800:  "And  be  it  further 
enacted,  That  where  it  shall  appear 
to  the  said  commissioners  that  there 
hath  been  mutual  credit  given  by 
the  bankrupt,  and  any  other  person, 
or  mutual  debts  between  them  at 
any  time  before  such  person  became 
bankrupt,  the  assignee  or  assignees 
of  the  estate  shall  state  the  account 
between  them,  and  one  debt  may  be 
set  off  against  the  other,  and  what 
shall  appear  to  be  due  on  either  side 
on  the  balance  of  such  account  after 
such  set-off,  and  no  more,  "shall  be 
claimed  or  paid  on  either  side  re- 
spectively."— Act  of  April  4,  1800, 
2  Stat,  at  L.  33,  Sec.  42. 


English  Act  of  1883:  "Where 
there  have  been  mutual  credits,  mu- 
tual debts,  or  other  mutual  dealings 
between  a  debtor  against  whom 
a  receiving  order  shall  be  made 
under  this  act,  and  any  other  per- 
son proving  or  claiming  to  prove  a 
debt  under  such  receiving  order,  an 
account  shall  be  taken  of  what  is 
due  from  the  one  party  to  the  other 
in  respect  of  such  mutual  dealings, 
and  the  sum  due  from  the  one  party 
shall  be  set  off  against  any  sum 
due  from  the  other  party,  and  the 
balance  of  the  account,  and  no 
more,  shall  be  claimed  or  paid  on 
either  side  respectively ;  but  a  per- 
son shall  not  be  entitled  under  this 
section  to  claim  the  benefit  of  any 
set-off  against  the  property  of  a 
debtor  in  any  case  where  he  had  at 
the  time  of  giving  credit  to  the 
debtor,  notice  of  an  act  of  bank- 
ruptcy committed  by  the  debtor,  and 
available  against  him." — 46  and  47 
Vic,  Chap.  52,  Sec.  38.  This  is  in 
substance  a  re-enactment  of  the  pri- 
or English  statutes,  beginning  with 
the  temporary  act  of  IV  and  V 
Anne,  Chap.  17.  Each  act  differs 
slightly  from  the   others. 

IS*  Forster  v.  Wilson,  12  M.  &  W. 
203. 


WHAT    DEBTS    ARE    PROVABLE.  3O9 

It  may  be  doubted  whether  this  mutual  credit  clause  ap- 
plies except  between  a  creditor  and  trustee."^ 

§  122.     What  are  "  mutual  debts  "  and  "  mutual  credits." 

The  words  "  mutual  debts  "  and  "  mutual  credits  "  appear 
in  all  of  the  bankrupt  acts.  The  word  "  debt  "  includes  any 
debt,  demand  or  claim  provable  in  bankruptcy  in  the  pres- 
ent act.^^« 

Prior  to  the  leading-  case  of  Rose  v.  Hart,'^'  decided  in 
1818,  the  words  "mutual  credit"  generally  received  a  very 
wide  interpretation,  much  more  extensive  than  the  words 
"  mutual  debt."^^^  In  that  case  this  phrase  was  defined  in 
the  following  words :  "  Something  more  is  certainly  meant 
here  by  mutual  credits  than  the  words  mutual  debts  import; 
and  yet,  upon  the  final  settlement,  it  is  enacted  merely  that 
one  debt  shall  be  set  against  another.  We  think  this  shows 
that  the  legislature  meant  such  credits  only  as  must  in  their 
nature  terminate  in  debts,  as  where  a  debt  is  due  from  one 
party,  and  credit  given  by  him  on  the  other  for  a  sum  of 
money  payable  at  a  future  day,  and  which  will  then  become 
a  debt,  or  where  there  is  a  debt  on  one  side,  and  a  delivery 
of  property  w^ith  directions  to  turn  it  into  money  on  the 
other;  in  such  case  the  credit  given  by  the  delivery  of  the 
property  must  in  its  nature  terminate  in  a  debt,  the  balance 
will  be  taken  on  the  two  debts,  and  the  words  of  the  statute 
will  in  all  respects  be  complied  with  ;  but  wlicre  there  is  a 
mere  deposit  of  property,  without  any  authority  to  turn  it 
into  money,  no  debt  can  ever  arise  out  of  it,  and  therefore,  it 
is  not  a  credit  within  the  meaning  of  the  statute."^"^"  The 
rule  established  in  this  case  as  to  the  nature  of  the  credits 

ifi'-  Consult  New  Qucliracia  Co.  v.  Englisli  and  .'\mcrican  cases  on  the 

Carr,  4  L.  R.  C.  P.  651  ;  Turner  v.  .subject   collated   and    reviewed    in   a 

Thomas,  6  L.   R.  C.   P.  Oio;   In  re  note  at  the  end  of  the  opinion. 

Fort  Wayne  Electric  Corp.,  95  Fed.  ">'*  £.t-  parte   Deeze,   i    Atk.  228; 

Rep.  264,  2  Am.  B.  R.  503-  Murray  v.  Riggs,  15  John.  (N.  Y.) 

if'«B.  A.  1898,  Sec.  I,  clause  11.  57i- 

I'-'S  Taunt.  499,  s.   c.  2  Smith's  i^-"  Rose  v.  Hart,  8  Taunt.  506,  s. 

Leading  Cases,    Part   i,  308,  where  c.  2  Smith's  Leading  Cases,  Part  I, 

the  doctrine  of  set-off  in  bankrupt-  308,  and  note, 
cy  is  considered  at  length  and  the 


3IO  LAW    AND    TROCEEDINGS    IN    BANKRUPTCY. 

which  can  be  subject  of  set-off  has  been  declared  in  other 
cases.^"" 

In  the  case  of  Libby  z'.  Hopkins/"^  speaking  of  the  act  of 
1867.  which  is  ahnost  identical  with  the  present  statute  in  this 
respect,  the  supreme  court  said :  "  In  our  act  the  terms 
'  credits  '  and  '  debts  '  are  used  as  correlative.  What  is  a  debt 
on  one  side  is  a  credit  on  the  other,  so  that  the  term  *  credits  ' 
can  have  no  broader  meaning  than  the  term  '  debts.'  We  find 
no  warrant  in  the  language  of  this  section  or  its  contents  for 
extending  the  terms  so'  as  to  include  trusts."  Having  in  mind 
the  definition  of  debts  as  used  in  the  bankrupt  law,  this  lan- 
guage would  not  seem  to  limit  the  rule  laid  down  in  Rose  v. 
Hart.^*^-  But  "  mutual  debts  "  and  "  mutual  credits  "  would 
include  debts,  demands  or  claims  provable  in  bankruptcy  which 
must  in  their  nature  terminate  in  debts.  In  Rose  v.  Hart,  the 
word  debt  is  evidently  used  with  its  technical  legal  meaning. 

A  claim  for  unliquidated  damages  provable  under  the  act 
can  not  be  set  off  against  the  debt  of  a  creditor  or  a  bankrupt 
until  it  has  been  put  into  the  shape  of  a  debt.^"^ 

In  order  that  a  debt  or  credit  may  be  set  off  it  is  necessary 
that  four  things  concur.  First.  The  debts  or  credits  must 
be  mutual.  Second.  They  must  be  in  the  same  right.  Third. 
They  must  be  debts  or  credits  provable  in  bankruptcy. 
Fourth.  They  must  be  debts  or  credits  which  were  not  pur- 
chased by  or  transferred  to  the  debtor  of  the  bankrupt  after 
the  filing  of  the  petition,  or  within  four  months  before  such 
filing  for  the  purpose  of  setting  them  off,  and  with  knowl- 
edge or  notice  that  the  bankrupt  was  insolvent  or  had  com- 
mitted an  act  of  bankruptcy.  If  any  one  of  these  elements 
is  wanting  the  debt  or  credit  can  not  be  used  as  a  set-off. 
These  elements  will  be  considered  separately. 

leo  Libby  v.   Hopkins,   104  U.   S.  i«M04  U.  S.  309- 

307;  In   re  Caylus,  No.   2534,   Fed.  "^g  Taunt.  499,   s.  c.  2  Smith's 

Cas.,   s.    c.    I    Low.    550;    Catlin   v.  Leading  Cases,  Part  I,  308. 

Foster,  No.  2519  Fed.  Cas.,  s.  c.  i  ^"^^  In   re   Orne,   No.    10581,   Fed. 

Saw.   Z7;   Easum  v.   Cato,   5   B.   &  Cas.,    s.    c.    i    Ben.   361;    Brown   v. 

Aid.  861  ;  Young  V.  Bank,  I  Moore,  Cuming,    2    Caines     (N.     Y.)    2,3', 

P.  C  150;  Palmer  v.  Day  (1895),  2  Booth  v.   Hutchinson,   15  L.  R.  Eq. 

Q    B.  618;   Smith  v.  Hodson.  4  T.  30;   Palmer  v.  Day,  2  Q.  B.  618. 
R.    212;    Goodrich    v.    Dobson,    43 
Conn.  576. 


WHAT    DEBTS    ARE    PROVABLE.  311 

§  123.     What  mutuality  is  necessary. 

The  debts  and  credits  which  are  to  be  set  off  one  against 
the  other  must  be  mutual/*'*  In  order  to  constitute  that 
mutuahty  of  debts  or  credits  which  is  required  by  the  statute 
it  is  necessary  that  the  debt  or  credit  which  is  set  off,  and  the 
debt  or  crecHt  against  which  it  is  set  off.  should  be  between 
the  same  parties.  Thus  ordinarily  a  joint  debt  can  not  be 
set  off  against  a  separate  debt,  nor  a  separate  debt  against  a 
joint  debt,  nor  debt  due  from  three  persons  against  a  debt 
due  to  two  of  them,  or  the  like.^*'^  Where  the  joint  debt 
may  be  collected  from  the  property  of  either  of  the  joint 
debtors,  and  is  provable  in  bankruptcy  against  the  estate  of 
him  who  has  been  adjudged  a  bankrupt,  it  may  be  set  off 
against  any  claim  which  the  bankrupt  has  against  the  cred- 
itor."* A  debt  of  one  of  two  partners  to  the  other  partner  may 
be  set  off  against  a  balance  in  his  hands  arising  upon  the  set- 
tlement of  the  partnership  accounts. ^"^ 

The  question  whether  a  debt  payable  in  fittnro  could  be  set 
off  against  a  debt  payable  m  praescnti  was  one  of  the  earliest 
which  arose  under  the  English  bankrupt  act.  It  was  decided 
in  the  affirmative  on  the  ground  that,  though  there  might 
not  be  debts  mutually  payable  between  the  parties,  there 
were  mutual  credits,  and  that  the  case  came  within  the  equity 
of  the  statute."*  The  same  question  has  received  a  similar 
answer  in  the  United  States  in  cases  arising  under  the  former 
bankrupt  acts."^ 

18*  Libby   v.    Hopkins,    104  U.    S.  i""  Tucker  v.  Oxley,  5  Cranch  34. 

309;   Gray  v.   Rollo,    18  Wall.  632;  as   explained   in   Gray  v.   Rollo.    18 

Sawyer    v.    Hoag,    17    Wall.    622;  Wall.   633;    Cosgrove  v.    Cosby,   86 

Scovill    V.   Thayer,    105   U.   S.    143;  Ind.  511. 

Wilson  V.   Nat.   Bank,  3   Fed.   Rep.  ^'"' /n  re  Voetter,  4  Fed.  Rep.  632 ; 

391-  Clark  v.  Sparhawk,  No.  2836,  Fed. 

'^'^  Gray  v.    Rollo,    18  Wall.   629;  Cas.,    s.    c.    2    Weekly    Notes,    Cas. 

Forsyth    v.    Woods,    11    Wall.   484;  115. 

Clark  V.  Sparhawk,  No.  2836,  Fed.  "^^'^  Ex  parte  Prescott,   i  Atk.  230; 

Cas.,    s.    c.    2    Weekly    Notes,    Cas.  Alsagar  v.  Cnrrie,  12  M.  &  W.  751 ; 

IIS;  /m  ^c  Crystal   Spring  Bottling  Ex    parte    WagstafF,    13    Ves.    65; 

Co.,  ICO  Fed.  Rep.  265,  4  Am.  B.  R.  Sheldon  v.  Rot!  schild,  8  Taunt.  156; 

55,  3  N.  B.  N.  179;  In  re  Bingham,  Atkin.son  v.  Elliott,  7  T.  R.  378. 

94  Fed.  Rep,  796,  2  Am.  B.  R.  223.  "'"  Marks    v.    Barker,    No.    9096, 

Ex  parte  Twogood,  ii  Ves.  517;  Fed.  Cas.,  s.  c.  i  Wash.  C.  C.  178; 

Ex   parte    Ross    Buck,    125;    Stani-  Catlin    v.    Foster,    No.    2519    Fed. 

forth  V.  Fellowes,  i  Marsh,  184.  Cas.,  s.  c.   i   Saw.  27 '<  Fort  v.  Mc- 


312 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


Ill  (Mxler  to  render  debts  and  credits  nuitual,  it  is  not  neces- 
sary that  the  creditor  and  the  bankrupt  should  have  had  any 
intention  to  create  cross  demands.^'" 

It  is  not  necessary  that  the  demand  should  be  of  the  same 
nature.  They  may  be  different  in  their  nature.  Thus,  one 
may  be  founded  on  deed  and  the  other  on  simple  contract. 
A  loss  upon  a  policy  of  insurance  may  be  set  off  against  an 
indebtedness  for  money  borrowed  from  an  insurance  com- 
pany/"^ or  for  money  deposited  with  the  holder  as  a  banker/^- 
A  person  may  set  off  a  credit  on  deposit  in  a  bankrupt  bank 
against  his  indebtedness  on  notes  or  as  the  endorser  upon  a 
note  held  by  the  bank  which  has  been  protested. ^^^  A  check  is- 
sued by  a  bankrupt  may  be  set  off  against  a  note  due  the  bank- 
rupt's estate. ^^* 

Where  bills,  money  or  chattels  are  de}X)sited  with  the  cred- 
itor for  a  specific  purpose,  he  can  not  claim  to  set  off  a  debt 
owing  to  him  from  the  bankrupt  against  the  trustee  claiming 
such  bills  or  goods. ^^^  Such  a  case  exists  where  goods  are  de- 
Cully,  59  Barb.   (N.  Y.)   87;  In  re      does  not  come  within  the  terms  of 


City  Bank,  No.  2742,  Fed.  Cas.,  s.  c. 
6  N.  B.  R.  71  ;  Drake  v.  Rollo,  No. 
4066,  Fed.  Cas.,  s.  c.  3  Biss.  273. 

1^0  Hankey  v.  Smith,  3  T.  R.  507 ; 
Edmeads  v.  Newman,  i  B.  &  C. 
418. 

But  see  observation  of  Mr.  Jus- 
tice Bradley  in  Gray  v.  Rollo,  18 
Wall.  632.  He  said :  "  Nor  does 
the  case  present  one  of  mutual  cred- 
it. There  was  no  connection  be- 
tween the  claims  whatever,  except 
the  accidental  one  of  the  complain- 
ant's being  concerned  in  both.  The 
insurance  company,  so  far  as  ap- 
pears, took  the  notes  without  any 
reference  to  the  policies  of  insur- 
ance ;  and  Gray  Brothers  insured 
with  the  company  without  any  ref- 
erance  to  the  notes.  Neither  trans- 
action was  entered  into  in  conse- 
quence of,  or  in  reliance  on,  the 
other ;  and  no  agreement  was  ever 
made  between  the  parties  that  the 
one  claim  should  stand  against  the 
other.  There  being  neither  mutual 
debts   nor  mutual   credits,  the   case 


the  bankrupt  law." 

I'^i  Scammon  v.  Kimball,  92  U.  S. 
362;  Drake  v.  Rollo,  No.  4066,  Fed. 
Cas.,  s.  c.  3  Biss.  273 ;  Common- 
wealth V.  Shoe  Insurance  Co.,  112 
Mass.  131. 

i'^2/„  r<?  Fornsworth,  No.  4673, 
Fed.  Cas.,  s.  c.  5  Bis.  223 ;  Scam- 
mon V.  Kimball,  No.  12435,  Fed. 
Cas.,  s.  c.  5  Biss.  431  ;  In  re  Petrie, 
No.  1 1040,  Fed.  Cas.,  s.  c.  5  Ben. 
no;  Bank  v.  Massey,  192  U.  S. 
138. 

i'^-'  Marks  v.  Barker,  No.  9096, 
Fed.  Cas.,  s.  c.  i  Wash.  C.  C.  178; 
Winslow  v.  Bliss,  3  Lans.  (N.  Y.) 
220;  In  re  Meyers,  99  Fed.  Rep. 
691 ,  3  Am.  B.  R.  760;  In  re  Henry 
L.  Meyer,  5  Am.  B.  R.  593 ,  106 
Fed.  Rep.  828.  But  see  Henry  L. 
Meyer,  5  Am.  B.  R.  596. 

i^*Ogden  V.  Cowley,  2  Johns.  (N. 
Y.)  274. 

1^^  Libby  v.  Hopkins,  104  U.  S. 
303:  Sawyer  v.  Hoag,  17  Wall.  610; 
Rose  V.  Hart,  8  Taunt,  499 ;  Jenkins 


WHAT    DEBTS    ARE    PROVABLE.  313 

posited  with  a  bailee  for  the  purpose  of  having  work  done 
upon  them,^'''  or  where  money  is  deposited  for  a  specific  pur- 
pose.^^"  So  where  a  trustee  seeks  to  set  aside  a  preference 
the  defendant  can  not  set  off  notes  of  the  bankrupt.^'®  But 
if  a  mutual  debt  or  credit  within  the  meaning  of  this  section 
is  once  estabHshed  a  temporary  suspension  of  it  has  been  held 
not  to  destroy  the  right  to  set  off  where  the  mutual  debt  or 
credit  afterwards  revives."" 

\\'here  there  is  a  debt  on  one  side  and  on  the  other  a  de- 
livery of  property  with  power  to  turn  it  into  money,  he  may 
turn  it  into  money  and  the  two  debts  may  be  set  off  one 
against  the  other.  The  test  is  whether  the  credit  given  by 
the  delivery  of  the  property  must  in  its  nature  terminate  in 
a  debt.  Thus  a  creditor,  who  at  the  time  of  the  bankrujitcy 
has  in  his  hands  goods  or  chattels  of  the  bankrupt  with  a 
power  of  sale  or  choses  in  action  with  a  power  of  collection, 
may  sell  those  goods  or  collect  those  claims,  and  set  them 
off  against  the  debt  the  bankrupt  owes  him,  and  this  althougli 
the  power  to  sell  or  to  collect  were  revocable  by  the  bank- 
rupt before  his  bankruptcy.^®'' 

§  124.     The  debts  and  credits  must  be  in  the  same  right. 

In  order  that  (lel)ts  and  credits  may  be  set  off  they  must  be 
due  respectively  in  tlie  same  right. ^®^  This  rule  is  subject  to 
a  few  exceptions  to  be  mentioned  presently.  It  is  evident 
that  there  is  a  distinction  between  debts  being  mutual  and 
debts  being  held  in  the  same  right.  Debts  may  be  mutual 
and  held  in  different  rights. 

Thus  it  has  been  licid  that  a  debt  due  to  an  executor,  as 

V.  Armour,  No.  7260,  Fed.  Cas.,  s.  c.  Fed.   Cas.,  s.  c.  2  Low.  472;   Rose 

6  Biss.  312;  Goodrich  v.  Dobson,  43  v   Hart,  8  Taunt.  506,  s.  c.  2  Smith 

Conn.   576;   In  re   Lane,   No.  8043,  Leading    Cases,    Part    i,    330,    and 

Fed.  Cas.,  s.  c.  2  Low.  305.  notes  thereto ;  Goodrich  v.  Dnhson, 

i^"  Rose  V.  Hart,  8  Taimt.  400.  43  Conn.  576;  In  re  McVay,  13  Fed. 

1^^  Lihby   V.    Hopkins,    104    U.    S.  Rep.  443. 
303.  Rut   see   Brown   v.   New   Bedford 

1"*  Fleming   v.    Andrews,   3    Fed.  Savings  Inst.,  137  Mass.  262. 
Rep.  632.  J*'  Sawyer  v.  Hoag,  17  Wall.  622; 

^^^  Collins  V.  Jones,   to   B.   &   C.  Libby  v.   Hopkins,   104  U.    S.  303; 

777;   Bolland   v.    Nash.  8   B.   &    C.  Wright  v.  Rogers,  No.   18090.  Fed. 

105.  Cas..    s.    c. .  3    McLean,    229;    West 

^^^  Ex  parte  Whiting,   No.    17573,  v.   Prycc,  2  Ring.  455. 


314  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

executor,  can  not  be  set  off  against  a  debt  due  from  bini  in 
his  own  right.'"""  lUit  where  a  i)erson  as  executor  and  resid- 
uary legatee  had  a  balance  in  the  hands  of  bankers  he  has 
been  allowed  to  set  off,  in  an  action  by  the  trustee  of  the 
bankers  for  a  debt  due  from  him  to  them,  the  balance  due 
him  as  executor  and  residuary  legatee,  it  appearing  that  he 
had  in  his  hands  more  than  sufficient  assets  to  pay  all  the 
testator's  debts  and  legacies  remaining  unpaid/^^  It  has  also 
been  held  that  a  debt  due  for  stock  in  a  corporation  could  not 
be  set  off  against  a  debt  due  from  the  corporation/^*  The 
reason  for  this  is,  that  the  debt  which  the  appellant  owed  for 
his  stock  is  a  trust  fund  held  by  the  corporation  for  the  bene- 
fit of  all  creditors  of  the  company,  and,  therefore,  not  in  the 
same  right  as  a  debt  between  the  company  and  the  debtor. 
Where  a  creditor  of  a  bankrupt  knowing  him  to  be  in  failing 
circumstances  agrees  to  open  a  new  account  irrespective  of 
the  old  indebtedness  he  can  not  set  off  the  amount  due  by 
him  on  the  new  account  against  the  amount  due  to  him  on 
the  old  account.' ^^ 

A  judgment  for  a  penalty  incurred  by  the  violation  of  a 
statute  against  usury  is  not  a  proper  set-off  against  a  claim 
of  the  judgment  debtor  against  the  bankrupt's  estate.^****  It 
has  also  been  held  that  a  debt  owing  to  a  wife  when  sole 
can  not  be  set  off  against  a  debt  from  her  husband. ^^'^  nor  a 
debt  owing  by  the  bankrupt's  wife  before  marriage  against  a 
debt  owing  to  him  ^*^  unless  after  marriage  he  makes  the  wife's 
debt  his  own.^^®  A  debt  due  to  or  from  the  trustee  in  bank- 
ruptcy and  arising  after  the  bankruptcy  in  the  management 
of  the  estate  can  not  be  set  off  against  a  debt  due  from  or  to 
the  bankrupt  before  the  bankruptcy. ^°° 

1*2  Bishop  V.  Church,  3  Atk.  691.  i85/„  yg  Troy  Woolen   Co.,  No. 

IS"*  Bailey  v.  Finch,  7  L.  R.  Q.  B.  14203,  Fed.  Cas.,  s.  c.  8  N.  B.   R. 

34.     See  observations  on   this  case  412. 

in  ex  parte  Morier,   12  Chan.  Div.  i^"  Wilson    v.    National    Bank,    3 

491.  Fed.  Rep.  391. 

1"*  Sawyer  v.  Hoag,  17  Wall.  610;  '^^'^  Rx  parte  lilagden,  19  Ves.  465. 

Scovill   V.   Thayer,   105   U.    S.   143;  ^^s  Yates  v.  Sherrington,  II  M.  & 

Scammon  v.  Kimble,  92  U.  S.  362;  W.  42;  s.  c.  12  M.  &  W.  855. 

Sanger  v.  Upton,  91  U.  S.  56;  Mor-  i^s  Wood  v.  Akers,  2  Esp.  594. 

gan  V.  Allen,  103  U.   S.  498;  In  re  i""  Alloway  v.  Stecre.  10  Q,  B.  D. 

Goodman    Shoe   Co.,   96   Fed.    Rep.  22 ;  West  v.  Prycc.  2  Bing.  455. 
949,  3  Am.  B.  R.  200. 


WHAT    DEBTS    ARE    PROVABLE.  315 

For  the  same  reasons  the  separate  debt  of  one  partner  can 
not  be  set  off  against  a  partnership  debt  or  vice  rcrsa.^^'^  But 
the  rule  excluding  a  set-off  as  between  joint  and  separate 
debts  does  not  apply  to  a  sun-iving  partner,  as  the  right  to 
sue  for  partnership  debts  survives  to  him  alone/^^  Neither 
does  it  apply  where  the  joint  debt  is  in  fact  a  security  for 
the  separate  debt,  as  where  one  partner  joins  in  a  bond  merely 
as  surety  for  another/®^  In  such  case  the  debt  on  the  joint 
security  is  in  reality  the  debt  of  the  principal  debtor  only, 
who  may  set  off  a  debt  owing  to  him  by  the  obligee.  It  has 
been  thought  that  the  mutual  credit  clause  does  not  apply  to 
partnership  debts  unless  all  the  members  of  the  firm  are 
bankrupt;  for  it  was  intended  to  operate  only  in  respect  of 
demands  by  and  against  bankrupts.  Hence  it  would  not  ap- 
ply if  there  was  a  solvent  partner.^"'*  If  it  should  be  held  to 
apply  in  such  cases  it  is  manifest  that  it  would  not  release 
the  liability  of  the  solvent  partner.^'*'^ 

There  are  a  few  exceptions  to  the  general  rule.  Thus,  in 
the  case  of  a  factor  selling  goods  as  his  own  without  disclos- 
ing his  principal  the  debtor  may  set  off  against  the  principal 
any  debt  which  he  could  have  set  off  against  the  factor.^''® 
So  also  it  seems  that  by  special  agreement  debts  in  separate 
rights  may  be  set  off.  one  against  the  other.^"^ 

§  125.     Set-offs  must  be  provable  debts. 

The  statute  expressly  provides  that  a  set-off.  or  counter- 
claim, in  favor  of  any  debtor  of  the  bankrupt  must  be  provable 
against  the  estate.'"*     It  would  seem  that  any  debt  provable  in 

i"!  Forsyth    v.    Woods,    11    Wall.  ^^^  Ex  parte  Hanson,  12  Ves.  346; 

484;  Gray  v.   Rollo,   18  Wall.  629;  s.  c.  18  Ves.  232;  In  re  Dillon,  100 

Clark  V.  Sparhawk,  No.  2836,  Fed.  Fed.  Rep.  627 ,  4  Am.  B.  R.  63. 

Cas.,  s.  c.  2  Weekly  Notes,  Cas.  115;  ^^*  See  Vulliany  v.  Noble,  3  Met. 

Ex   parte   Twogood,    11    Ves.    517;  621;  Ex  parte  Stephens,  11  Ves.  24. 

Lanesborough    v.    Jones,    i    P.    W.  '"''  B.  A.  1898,  Sec.  16. 

326;  Ex  parte  Ross  Buck,  125;  Ab-  ^""  George  v.  Clagctt,  7  T.  R.  359. 

bott  V.  Hicks,  5  Bing..  N.  C.  578.  '"^  Cu.xon  v.  Chadley,   i  C.  &  P. 

"*2  Tucker  v.  Oxley,  5  Crauch,  34;  174. 

a?  explained    in   Gray   v.   Rollo,    18  "'^  B.  A.   1898.  Sec.  68fc ;  Morgan 

Wall.  633:   Cosgrove  v.   Crosby,  86  v.  Wordell,  178  Mass.  350,  3  N.  B. 

Ind.   511;   French  v.   .Andrade.  6  T.  N.  513. 
R.   582;    Slipper  v.  Stidstone,  5   T. 

R-  49.3. 


3l6  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

bankruptcy  might  l)e  set  off  against  any  mutual  (lel)t  held  in 
the  same  right,  provided  it  was  not  purchased  for  this  pur- 
pose within  the  time  limited  in  the  act.  What  constitutes  a 
provable  debt  is  the  subject  of  this  chapter,  and  does  not  re- 
quire further  explanation  at  this  point. 

It  was  held  formerly  that  the  liability  of  an  endorser  or 
surety  could  not  be  made  a  subject  of  set-off  unless  he  had 
actually  paid  the  debt.^""  Where,  under  section  c^yi,  such  claim 
is  provable  it  would  seem  that  it  may  be  set  off  against  any 
claim  of  the  principal  debtor  against  the  surety  to  the  extent 
that  the  endorser  or  surety  can  prove  his  claim.  So  also 
costs  provable  under  the  act  may  be  the  subject  of  set-off.^"" 
Under  the  former  acts  untaxed  costs  were  not  provable,  and, 
therefore,  could  not  be  used  as  set-offs,  but  under  the  present 
act  they  are  provable,  and  consequently  can  be  the  subject  of 
set-off.^'^^ 

§  126.     Debts  acquired  by  purchase  as  set-offs. 

There  is  nothing  unlawful  in  purchasing  a  debt,  though  it 
be  for  the  purpose  of  using  it  as  a  set-off.""'"  Such  debts  may 
be  the  subject  of  set-off,  provided  they  were  not  purchased  by 
or  transferred  to  such  person  after  the  filing  of  the  petition,  or 
within  four  months  before  such  filing,  with  a  view  to  such 
use,  and  with  knowledge  or  notice  that  such  bankrupt  was 
insolvent  or  had  committed  an  act  of  bankruptcy.""'* 

It  would  therefore  seem  that  a  claim  or  debt  purchased 
more  than  four  months  prior  to  the  filing  of  the  petition 
might  be  used  as  a  set-off,  irrespective  of  whether  the  person 
purchasing  or  receiving  it  had  knowledge  or  notice  that  the 
bankrupt  was  insolvent  or  not.""* 

189  Abbott  V.  Hicks,  5  Bing.,  N.  C.  224 ;     Humphreys    v.     Blight,  No. 

578.  6870,   Fed.   Cas.,   s.   c.  4  Dall.  370; 

200  See  Stani forth  v.  Fellowes,  i  In  re  City  Bank,  No.  2742,  Fed. 
Marsh,  184;  Thomason  v.  Frere,  10  Cas.,  s.  c.  6  N.  B.  R.  71. 

East,  418.  20.3  B.  A.  1898,  Sec.  68b.    Compare 

But  see  Robarts   v.   Bree,  8  Cha.  R.  S.  Sec.  5073  ;  Mclver  v.  Wilson, 

Div.    198.  No.  8833,  Fed.  Cas.,  s.  c.   i   Cranch 

201  See  Costs,  Sec.  118,  ante.  C.   C.  423;  Smith  v.  Brinkerhoff,  2 

202  Mattocks  V.  Lovering,  3  Fed.  Selden    (N.  Y.)   305. 

Rep.    212;    Lloyd    v.    Turner,    No.  204  Mju^tQ^ks  y    Lovering.  3   Fed. 

8436,   Fed.   Cas.,   s.  c.  5   Saw.  463 ;  Rep.    212 :    Lloyd    v.    Turner,    No. 

Hovey  v.  Home  Insurance  Co..  No.  8436,  Fed.    Cas.,   s.   c.  5   Saw.  463 ; 

6743,  Fed.   Cas.,  s.  c.   10  N.   B.   R.  Hovey  v.  Home  Insurance  Co.,  No. 


WHAT    DEBTS    ARE    PROVABLE.  31/ 

In  computing  the  four  months  the  first  day  is  excluded  and 
the  last  day  included  unless  the  last  day  falls  on  a  Sunday  or 
holiday,  in  which  event  the  last  day  included  shall  be  the 
next  day  thereafter  which  is  not  a  Sunday  or  a  legal  holiday.-"^ 
Holidays  are  defined  by  the  act  to  include  Christmas,  the 
fourth  of  July,  the  twenty-second  of  February,  and  any  day 
appointed  by  the  president  of  the  United  States  or  the  con- 
gress of  the  United  States  as  a  holiday  or  as  a  day  of  public 
fasting  or  thanksgiving.'*"^ 

§  127.     Rights  of  preferred  creditor  to  set-offs. 

Under  the  mutual  credit  clause  -"'  a  creditor  having  a  pref- 
erence can  not  set  off  an  individual  debt  in  a  suit  by  the 
trustee  to  set  aside  such  preference.  The  reason  is,  that 
the  debts  are  not  mutual  nor  in  the  same  right.  The  prefer- 
ence which  is  being  avoided  is  a  debt  between  the  preferred 
creditor  and  the  general  creditors  —  not  the  bankrupt.  The 
individual  debt  is  between  the  preferred  creditor  and  the 
bankrupt.  The  trustee  holds  one  of  the  debts  as  the  rep- 
resentative of  the  general  creditors  and  the  other  as  the 
representative  of  the  bankrupt. 

But  the  act  expressly  provides  for  set-offs  in  such  cases,  as 
follows  :  "  If  a  creditor  has  been  ]ireferred,  and  afterwards  in 
good  faith  gives  the  debtor  further  credit  without  security  of 
any  kind  for  proj)erty  which  becomes  a  ])art  of  the  debtor's 
estates,  the  amount  of  such  new  credit  remaining  uuj^aid  at 
the  time  of  the  adjudication  in  bankruptcy  may  be  set  off 
against  the  amount  which  would  otherwise  be  recoverable 
from  him.^"® 

Waiver  of  Off-set. — If  a  claim  for  set-off,  or  counter- 
claim, is  not  set  up  at  the  time  of  proving  the  claim  in  bank- 
ruptcy it  will  be  deemed  as  waiver.     It  has  been  held  that 

6743,   Fed,   Cas.,   s.  c.   10  N.   B.   R.  v.    Wrislit,    04    U.    S.    553:    /«    re 

224;     Humphreys    v.     Blight,     No.  Lang,   No.   8056,   Fed   Cas.,   s.  c.   2 

6870,   Fed.    Cas..   s.   c.   4   Dall.  370.  N.  B.  R.  480. 

But    see    Hitchcock    v.    Rollo,    No.  2003    a.   1898,  Sec.   i,  clause  14. 

653.';,   Fed.   Cas.,   s.  c.   3   Biss.   276;  2"' B.  A.  1898.  Sec.  68. 

Rollins  V.  Twitchell,  No.  12027,  Fed.  2093.    A.    1898,    Sec.    6or,-    In    re 

Cas.,    s.    c.    2    Hask.   66;    Smith    v.  Seckler,   106  Fed.   Rep.  484:   In   re 

Hill,  8  Gray  572.  Christensen,    loi    Fed.    Rep.   8oe,  4 

20B  B.  A.   1898,   Sec.  31  ;   Diitcher  Am.    B.    R.   202. 


3l8  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

the  creditor  could  not  maintain  a  suit  upon  such  a  debt  there- 

after.^'^^" 

§  128.     Torts. 

Under  tlie  former  bankruptcy  acts  unhquidated  damages  for 
torts,  such  as  assault,  slander,  deceit  or  personal  injury,  were 
not  provable  in  bankruptcy."^" 

The  bankruptcy  act  of  1898  does  not  authorize  proving  any 
claim  arising  ex  dclicto."'^^  The  courts  have  frequently  refused 
to  allow  proof  of  unliquidated  claims  for  tort.""'^  Where  dam- 
ages for  torts  have  been  liquidated  and  reduced  to  judgment 
prior  to  bankruptcy,  such  judgment  is  not  a  provable  claim, 
for  the  reason  that  it  is  not  a  debt,  within  the  meaning  of  the 
bankruptcy  statute,  evidenced  by  judgment.  It  has  been  held 
that  the  court  will  look  beyond  the  form  of  the  judgment.  It 
will  look  at  the  nature  of  the  liability, the  original  cause  of  ac- 
tion,to  determine  whether  it  is  a  debt  within  the  meaning  of  the 
statute  that  is  evidenced  by  the  judgment.^'^  It  has  been 
claimed  that  such  judgment  is  a  provable  debt  because  Sec.  17 
excepts  some  judgments  of  this  nature  from  debts  released  by 
discharge.  The  same  section  as  amended  releases  claims  for 
alimony  which  the  supreme  court  had  held  prior  to  the  amend- 
ment not  to  be  provable  in  bankruptcy.^^*  It  does  not  follow, 
therefore,  that  all  debts  and  claims,  included  in  the  exception 
to  those  released  by  a  discharge,  are  provable  claims  against 
the  estate  of  the  bankrupt. 

In  England  a  distinction  is  made  where  a  demand  may 
arise  upon  contract  or  upon  tort,  as  in  actions  for  negligence 
against  carriers,  or  in  actions  against  bailees  to  recover  the 
pledge  after  the  determination  of  the  bailment,   which  may 

2f>n  Brown    v.    Farmers'    Bank,    6  212 /„    ,-^    Hirschman,     104    Fed. 

Bush.   (Ky.)    198;  Russell  v.  Owen,  Rep.  69,  4  Am.   B.   R.  715;  In  re 

61   Mo.   185.     See  also  In  re  State  Morales,  105  Fed.  Rep.  761 ,  5  Am. 

Ins.  Co.,  16  Fed.  Rep.  756.  B.   R.  425 ;  In  re  Brinckmann,   103 

2ioZimmer     v.     Schleehauf,     115  Fed.    Rep.   65,   4   Am.    B.    R.   S5i ; 

Mass.    52:    Jn    re    Hennocksburgh.  Beers  v.   Hanlin,  99  Fed.   Rep.  695, 

No.   6267,    Fed.    Cas.,    s.    c.    6   Ben.  3  Am.  B.  R.  745 ;  In  re  Heinsfurter, 

150;   In    re   Schuchardt,   No.    12483,  97  Fed.  Rep.  198,  3  Am.  B.  R.  113. 

Fed.  Cas..  s.  c.  8  Ben.  585.  -^^  Turner    v.    Turner,    108    Fed. 

211  B.    A.    1898,    Sec.    63a;    In   re  Rep.  785.  ^  Am.  B.  R.  289. 

Hirschman,  104  Fed.  Rep.  69;  4  Am.  214  Audubon  v.    Shufeldt.    181    U. 

£     R.   715.  S.  575,  5  Am.  B.  R.  829;  Dunbar  v. 

Dunbar,   190  U.   S.  340. 


WHAT    DEBTS    ARE    PROVABLE.  3 19 

be  either  in  trover  or  assumpsit.-^"'  That  is,  if  a  person  has 
his  election  of  two  remedies,  and  may  bring  either  trover  or 
any  other  action,  the  possibility  of  his  not  electing  to  bring 
trover  does  not  prevent  his  proving  his  debt  if  he  will  waive 
the  tort.  Thus,  a  patentee  was  there  held  entitled  to  prove 
for  the  amount  of  profits  made  by  an  infringement  of  his 
patent  as  money  had  and  received.'"^  But  under  the  act  of 
1867  the  same  rule  was  applied  with  reference  to  patents  in 
in  re  Boston  &  Fair  Haven  Iron  Works.-'^  But  this  case  was 
reversed  on  appeal  to  the  circuit  court. -^'^ 

Under  the  act  of  1898  it  is  well  settled  that  where  a  claim 
arises  ex  delicto,  but  is  also  of  such  a  character  as  to  constitute 
a  claim  on  the  theory  of  a  quasi  contract  the  debt  is  provable  in 
bankruptcy  under  Sec.  63,  clause  4.-^" 

§  129.     Debts  barred  by  the  statutes  of  limitations. 

The  courts  of  the  United  States  recognize  generally  the 
statutes  of  limitations  of  the  several  states."'"  Courts  of  bank- 
ruptcy recognize  such  statutes  of  limitations.  A  debt  other- 
wise provable  may  be  barred  by  a  state  statute  of  limitations 
so  that  the  debt  is  not  allowable,  but  is  such  a  debt  as  will  be 
released  by  a  discharge."'' 

In  order  to  be  barred  in  l)ankrui)tcy  a  del)t  must  be  barred 
by  the  statute  of  the  state  in  which  the  petition  in  bankruptcy 
is  filed.'''-     The  reason  for  this  is,  that  a  statute  of  limitation 

2"  Johnson  v.  Spiller,  i  Douglass,  ---In  re  Resler,  95  Fed.  Rep.  804, 

168;  Parker  v.  Norton,  6  T.  R.  695.  2  Am.  B.  R.  602;  In  re  Lipman,  2 

See  also  In  re  Schwartz,  No.  12502,  Am.   B.   R.  46 ,  94   Fed.    Rep.  35.3 ; 

Fed.  Cas.,  s.  c.  14  Blatch.  196.  Hargadine-McKittrick    Dry    Goods 

218  Watson  V.  Holiday,  20  L.   R.  Co.  v.  Hudson  (C.  C.  A.,  8th  Cir.), 

Chan.   D.   780.  lO  Am.   B.   R.   225.    122   Fed.    Rep. 

217  29  Fed.  Rep.  783.  232;  In  re  Hardin,  No.  6048,  Fed. 

218  23  Fed.  Rep.  880.  Cas.,  s.  c.  i  Hask.  163;  In  re  Kings- 
2i»/n  rt'  Filer,  125  Fed.  Rep.  262;  ley,    No.    7819,    Fed.    Cas.,    s.    c.    i 

In  re  Hildebrant,  10  Am.  B.  R.  184;  Low.  216;   In  re   Reed,   No.   11635, 

/h  re  Hirschmann,  104  Fed.  Rep.  69,  Fed.   Cas.,  s.  c.  6   Biss.   250;   In   re 

4  Am.  B.  R.  715.  Doty,  No.  4017,  Fed.  Cas.,  .s.  c.    16 

220  Bauserman  v.  Blunt,  147  U.  S.  N.  B.  R.  202;  In  re  Cornwall,  No. 
652,  and  cases  there  collated.  3250,  Fed.  Cas.,  s.  c.  9  Blatch.  114; 

221  Hargadine-McKittrick  Dry  In  re  Noesen,  No.  10288,  Fed.  Cas., 
Goods  Co.  V.  Hudson  fC.  C.  A..  8th  s.  c.  6  Biss.  443. 

Cir.),  TO  Am.  B.   R.  225,   122  Fed.  In  re  Ray.  No.   11589.  Fed.  Cas., 

Rep.   232.  s.  c.  2  Ben.  53,  it  was  held  that  the 


320  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

affects  the  remedy  and  not  the  riglit.  If  the  debt  is  not 
barred  at  the  time  the  petition  is  filed  it  is  a  provable  debt, 
because  bankruptcy  stops  the  running  of  the  statute. ^'^^ 

It  may  be  observed,  however,  that  a  claim  may  be  barred 
by  limitations  contained  in  the  bankrupt  act,  which  provides 
that  claims  shall  not  be  proved  against  a  bankrupt  estate  subse- 
quent to  one  year  after  the  adjudication;  or  if  they  are  liqui- 
dated l)y  litigation  and  the  final  judgment  therein  is  rendered 
within  thirty  days  before  or  after  the  expiration  of  such  time, 
then  within  sixty  days  after  the  rendition  of  such  judgment."* 

The  failure  of  a  lien  claimant  to  present  his  claim  or  lien 
for  recognition  or  enforcement  within  the  i>eriod  limited  by 
this  provision  bars  such  claim  as  effectually  as  an  omission 
to  prove  any  other  debt,  provided  such  lien  is  determined  to 
be  incomplete  or  invalid.^^^  In  such  case  the  debt  may  be 
proved  in  bankruptcy  if  presented  within  the  time  limited  by 
this  provision. 

debt  must  be  barred  throughout  the  224  g     a.    1898,    Sec.    57n;   In   re 

limits  of  the  United  States.  Rhodes,  105  Fed.   Rep.  231,  5  Am. 

223 /„  re  McBryde,  99  Fed.  Rep.  B.  R.  197,  3  N.  B.  N.  112;  Bray  v. 

686,  3  Am.   B.   R.   729;  In  re  Mc-  Cobb,  100  Fed.  Rep.  270,  3  Am.  B. 

Kinney,    15    Fed.    Rep.    912;    In   re  R.  788,  2  N.  B.  N.  586;  In  re  Lei- 

Waties  &   Co.,   39   Fed.    Rep.   264 ;  bowitz,    108   Fed.    Rep.   617 ;   In   re 

Trustees  v.    Bosseiux,  3   Fed.   Rep.  Moebius,  116  Fed.  Rep.  47,  8  Am. 

817;  In  re  Eldridge,  No.  4331,  Fed.  B.  R.  590. 

Cas.,    s.    c.    2    Hughes,   256 ;    In   re  As  to  the  effect  of  amendment  of 

Wright,  No.   18068.  Fed.  Cas.,  s.  c.  proof  of  claim  after  one  year,   see 

6  Biss.  317;   In  re   Graves,  9  Fed.  Hutchinson  v.  Otis,  190  U.  S.  552, 

Rep.    816.      But   see    contra,   In   re  10  Am.  B.  R.  135. 

Shepard,  No.  12753,  Fed.  Cas.,  s.  c.  225  /„    ,.^    Brunquest,    No.    2055, 

I  N.  B.  R.  439 ;  Nicholas  v.  Murray,  Fed.  Cas.,  s.  c.  7  Biss.  208. 
No.   10223,  Fed.   Cas.,   s.  c.  5   Saw. 
320. 


HOW    TO    PROVE    DEBTS.  32 1 


CHAPTER  XIV. 

HOW  TO  PROVE  DEBTS. 

§  130.     Necessity  of  proof. 

No  creditor  is  entitled  to  participate  in  the  distribution  of 
a  bankrupt's  estate  or  to  obtain  a  dividend  upon  any  claim 
until  such  claim  or  debt  has  been  proved  and  allowed.  The 
proof  must  be  made  in  the  manner  prescribed  by  the  statute 
and  general  orders.'  It  is  immaterial  what  may  be  its  form. 
whether  it  consists  of  a  contract,  account,  promissory  note. 
bond  or  judgment.  Secured  and  unsecured  creditors  stand 
upon  the  same  footing  as  regards  proof  of  their  debts.* 

The  fact  that  the  debts  are  contained  in  the  debtor's  sched- 
ule is  not  proof  sufficient  to  entitle  a  party  to  participate  in 
the  distribution  of  the  estate.  It  may  be  stated  fraudulently, 
or  it  may  not  exist,  or  there  may  be  payments,  or  counter- 
claims, or  set-ofFs.  The  reason  for  requiring  proof  is  no*- 
merely  to  give  the  creditors  a  standing  in  court,  but  to  pro- 
tect the  estate  against  fraudulent  and  excessive  claims.  Even 
the  claims  of  petitioners  in  involuntary  proceedings  must  be 
proven  and  allowed  like  other  claims.'     The  trustee  and  the 

'  B.   A.    1898,  Sec.  57 ;   Gen.  Ord.  act  of  bankruptcy,  i.s  conclusive  up- 

21  ;    Official    Forms    Nos.   31    to   37,  on  the  assignee  and  creditors,  so  as 

see   Forms  54  to  60,  post.  to  dispense  with  proof  of  the  debt 

^  Davis  V.  Anderson,  No.  3623,  of  the  petitioning  creditor  upon  the 
Fed.  Cas.,  s.  c.  6  N.  B.  R.  145,  ap-  distribution  of  the  estate.  It  is  con- 
proved  In  re  Anderson,  23  Fed.  elusive  so  far  as  necessary  to  up- 
Rcp.  500:  In  re  Davis,  No.  3618,  hold  the  adjudication  of  bankruptcy. 
Fed.  Cas.,  s.  c.  2  N.  B.  R.  391.  But  but  no  further.  It  may  still  be 
'.ee  Rights  of  Secured  Creditors,  questioned,  in  part  or  in  whole. 
Sec.  202.  upon     the     proof    subsequently     re- 

^  In  re  Cleveland  Ins.  Co.,  22  Fed.  quired  and  taken,  so  that  it  might 
Rep.  204,  Mr.  Justice  Matthews  oh-  consistently  happen  that  a  claim 
serves :  "  It  can  not  be  admitted  which  has  been  found  to  exist,  for 
that  the  finding  that  the  petitioning  the  purpose  of  adjudging  bank- 
creditors  has  a  valid  provable  claim  ruptcy  against  the  defendant,  might 
to  the  amount  of  $250,  which  is  all  afterwards  be  held  not  to  exLst  for 
that  is  necessary  as  a  predicate  ffir  the  purpose  of  participating  in  the 
the    adjudication    upon    the   alleged  distribution  of  the  estate.     The  as- 


322  LAW    AM)    l'R(H^EEDINGS    IN    15ANKRri'Ti:V. 

Other  creditors  have  a  right  to  question  the  debt  in  part  or  in 
whole  upon  proof  subsequently  required  to  be  taken.  They 
therefore  have  the  right  to  demand  that  all  the  statements 
required  by  the  statute  shall  be  full  and  complete  in  making 
out  a  prima  facie  case  of  the  validity  of  the  claim  and  the 
good  faith  of  the  claimant. 

§  131.     Who  may  make  the  proof. 

The  proof  of  a  debt  against  a  bankrupt's  estate  should  be 
made,  if  possible,  by  the  creditor  testifying  of  his  own  knowl- 
edge.^ The  statute  and  the  general  orders  prescribed  by  the 
supreme  court  contemplate  proof  by  an  agent  or  attorney  of 
the  creditor.-  When  the  proof  is  made  by  an  agent  or  attor- 
ney the  reason  the  deposition  is. not  made  by  the  claimant  in 
person  must  be  stated.'^  What  reason  is  sufficient  to  excuse 
the  creditor  and  to  entitle  an  agent  or  attorney  to  make  the 
proof  is  not  stated  in  the  act  or  general  orders.  The  act  of 
1867  provided  for  proof  by  an  agent  in  two  cases  only,  firsts 
when  the  claimant  was  absent  from  the  United  States,  and, 
second^  when  he  was  prevented  by  some  good  reason  from 
testifying.^ 

A  debt  due  a  partnership  may  be  proved  by  one  of  the 
partners,  but  it  must  appear  on  oath  that  the  deponent  is  a 
member  of  the  partnership.^  A  debt  due  a  corporation  may 
be  proved  by  the  treasurer  or  by  the  officer  whose  duties  cor- 
respond most  nearly  to  those  of  the  treasurer.*  This  rule 
applies  to  municipal  and  political  corporations.^ 

signee  and  the  creditors  cannot  be  ^  B.  A.  1898,  Sec.  570. 

bound  as  to  their  own  interests  by  23     a     1898,    Sec.    i,    clause   9; 

the    acts    or    default    of    the    bank-  Gen.  Ord.  21. 

rupt,    resulting    in    a    judgment    to  ^  Gen.  Ord.  21;  Official  Form  No. 

which  they  were  not  and  could  not  35,  Form  No.  58,  post. 

be    parties,    except    so    far   as    that  *  R.   S.   Sec.   5078;  In  re  Whyte, 

judgment   determines  the  status  of  No.   17606  Fed.  Gas.,  s.  c.  9  N.  B. 

the   bankrupt.     But    in   the   present  R.  267;  In  re  Watrous,  No.   17270 

case,  the  claim  of  the  Globe  Insur-  Fed.  Gas.,  s.  c.  14  N.  B.  R.  258. 

ance  Company,  as  presented  to  the  '"'  Gen.  Ord.  21 ;  Official  Form  No. 

register  for  allowance,  was  not  set  34,  Form   No.   57,  post. 

forth  in  the  petition  nor  passed  on  «  Qgn.  Ord.  21 ;  Official  Form  No. 

by  the  court."  2>?>,   Form   No.   56,  post. 

But    see    Ulfeldcr    Clothing    Co.,  "^  Corn  Exchange  Bank,  No.  3243 

98  Fed.  Rep.  409,  3  Am.  B.  R.  425.  Fed.  Gas.,  s.  c.  15  N.  B.  R.  216. 


HOW    TO    PROVE   DEBTS,  323 

A  father  who  has  a  debt  may  prove  against  the  estate  of  his 
son.*  Where  a  wife  can  contract  debts  under  the  laws  of  a 
state,  she  may  prove  against  her  husband's  estate.''  Judgment 
creditors  whose  hens  are  invahdated  by  bankruptcy  proceed- 
ings are  entitled  to  prove  their  claims  as  other  creditors.^''  An 
assignee  for  the  benefit  of  creditors  is  entitled  to  prove  for  serv- 
ices rendered  in  the  state  proceedings  prior  to  and  after  bank- 
ruptcy so  far  as  they  were  beneficial  to  the  estate.^^  Where  a 
creditor  has  recovered  judgment  against  two  co-defendants 
and  has  levied  upon  the  property  of  one  of  them,  and  the  other 
has  been  adjudged  bankrupt,  the  judgment  creditor  may  prove 
his  whole  claim  against  the  bankrupt  as  an  unsecured  claim,^^ 
A  creditor  of  a  corporation,  who  is  also  a  subscriber  for  its 
corporate  stock,  may  prove  his  claim  against  the  estate  of  the 
corporation  in  bankruptcy.^^  A  customer  of  a  stock  broker, 
between  whom  and  the  broker  there  is  a  running  account, 
may  prove  his  claims  against  the  broker's  estate  as  any  other 
creditor,^*  A  person  who  is  secondarily  liable  for  a  debt  of  a 
bankrupt,  as  endorser  or  surety  may  prove  provided  the  prin- 
cipal creditor  fails  to  prove  his  debt,^°  He  is  subrogated  to  no 
greater  right  to  prove  than  his  principal  has.^"  A  secured 
creditor  may  prove  for  balance  due  on  a  secured  claim  after  the 
security  has  been  exhausted,  although  he  may  have  previously 
proved  unsecured  claims  against  the  same  estate." 

The  trustee  of  one  bankrupt  estate  may  prove  claims  of 
the  estate  which  is  being  administered  in  bankruptcy  against 

"  In  re  Rider,  96  Fed.  Rep.  811,  3  Co.,  96  Fed.  Rep.  949 ,  3  Am.  B.  R. 

Am.  B.  R.  192.  200. 

" /n    re    Neiman,    109    Fed.    Rep.  ^*/»   re   Gaylord,    113    Fed.    Rep. 

113,  6  Am.  B.  R.  329;  In  re  Chap-  131,   7   Am.    B.    R.   577. 

man,  105  Fed.  Rep.  901 ,  5  Am.  B.  ^•'  B.  A.   1898,  Sec.  57/;  sec  Sec, 

R    570.  116,  ante. 

^°  In  re  Richard,  94  Fed.  Rep.  633,  i"  Livingston  v.  Heineman  (C.  C. 

2  Am.   B.   R.   506.  A.    6th    Cir.),    120    Fed.    Rep.    786, 

11  Randolph  v.  Scruggs,  190  U.  S.  10  Am.   B.  R.  39;  In  re  Lyon    (C, 

533,  10  Am.  B.  R.  I  ,  overruling  In  C.  A.  2d  Cir.),  121  Fed.  Rep.  723, 

rr   Peter   Paul  Book   Co.,   104  Fed.  10  Am.  B.  R.  25 ;  Swarts  v.  Fourth 

Rep.  786;  Steam  v.  Flick,  103  Fed,  Nat.  Bank  (C.  C.  A.  8th  Cir.),  117 

Rep.  919,  4  Am.  B.  R.  723.  Fed.    Rep.    i.    8    Am.    B.    R.    673; 

12 /n    re    Headley.   97    Fed.    Rep.  Swarts    v.    Siegel     (C,    C.    A.    8th 

765,  3  Am.   B.  R.   272.  Cir.),  117  Fed.  Rep.    13,  8  Am.  B. 

^^  In  re  Weiner  &  Goodman  Shoe  R.  689. 

"In  re  Ball,  123  Fed.  Rep.  164. 


;^J4       l-^^^'  -^ND  PROCKKniNCS  IN  BANKRUPTCY. 

any  like  estate  in  the  same  manner  and  njjon  the  Hke  terms 
as  the  claims  of  other  creditors.'''  ^Vdministrators,  executors, 
receivers  and  other  persons  who  are  assignees  by  mere  oj)era- 
tion  of  knv  may  prove  in  the  same  manner  as  the  parties 
whom  they  represent  could  have  done.^" 

W'liere  a  claim  has  been  assigned  in  good  faith  and  for  a 
valuable  consideration  the  assignee  may  prove  it  whether  the 
assignment  was  made  before  or  after  the  petition  is  filed. 
When  the  assignment  was  made  before  the  commencement  of 
the  proceedings  the  proof  is  made  by  the  assignee,  and  need 
not  be  supported  or  accompanied  by  the  affidavit  of  the  as- 
signor.^" Claims  which  have  been  assigned  after  the  petition 
is  filed  and  before  proof  must  be  supported  by  a  deposition  of 
the  owner  at  the  time  of  the  commencement  of  the  proceed- 
ings, setting  forth  the  true  consideration  of  the  debt,  and 
that  it  is  entirely  unsecured,  or,  if  secured,  what  the  security 
is  as  required  in  proving  secured  claims."^  Where  a  person 
has  procured  an  assignment  of  claims  by  fraud  he  will  not  be 
allowed  to  prove  them.^^  An  assignee  will  not  be  entitled  to 
have  a  claim  allowed  which  could  not  be  proved  and  allowed  in 
favor  of  his  assignor."^ 

The  claims  of  persons  contingently  liable  for  the  bankrupt 
may  be  proved  in  the  name  of  the  creditor  when  known  by 
the  party  contingently  liable.  When  the  name  of  the  cred- 
itor is  unknown,  such  claim  may  be  proved  in  the  name  of 
the  party  contingently  liable.^* 

Creditors  who  have  received  preferences  may  prove  claims, 
but  are  not  entitled  to  have  them  allowed,  unless  such  creditors 
shall  surrender  their  preferences.'^ 

The    United    States    may    prove    their   debts   in   the   same 

i«  B.  A.  1898,  Sec.  57»!.  No.   3586   Fed.    Cas.,   s.   c.    i    Low. 

I''  In    re    Republic    Ins.    Co.,    No.  384. 

11705  Fed.  Cas.,  s.  c.  8  N.  B.  R.  197;  -^  Gen.  Ord.  21,  par.  3. 

Ex  parte  Norwood,  No.  10364  Fed.  -^  In  re   State   Ins.   Co.,   16   Fed. 

Cas.,  s.  c.  3  Biss.  504.  Rep.  756. 

-'>  Gen.    Ord.    21  ;    par.    3 ;    In    re  -''  In  re  Wiener  &  Goodman  Shoe 

Murdock,  No.  9939  Fed.  Cas.,  s.  c.  Co.,  96  Fed.  Rep.  949,  3  Am.  B.  R. 

I  Lx)w.  362 ;  In  re  Frank,  No.  5050  200. 

Fed.  Cas.,  s.  c.  5   Ben.   164;  In  re  -*  Gen.  Ord.  21. 

Strachan,  No.  13519  Fed.  Cas.,  s.  c.  25  g   a.  1898,  Sec.  S7R,  as  amend- 

3    Biss.    181 ;   Ex   parte   Davenport,  ed  Fed.  5,  1903 ,  32  Stat,  at  L.  797. 

See  also  Sec.  135,  post. 


HOW    TO    PROVE    DEBTS.  325 

manner  as  other  creditors."*^  But  the  United  States  are  not 
required  to  prove  their  claims  in  bankruptcy.-^  A  state  or 
municipahty  is  not  required  to  prove  its  claim  for  taxes  as  an 
ordinary  creditor  must  do.'"* 

§  132.     The  time  within  which  debts  may  be  proved. 

Proof  of  claims  may  be  filed  at  any  time  after  the  com- 
mencement of  bankrupt  proceedings.  A  claim  may  be  filed 
and  proved  prior  to  the  first  creditors'  meeting. ^^  In  practice 
no  claims  are  generally  proved  until  the  first  creditors'  meet- 
ing. Proof  of  claims  may  be  made  subsequent  to  the  first 
creditors'  meeting  at  any  time  within  one  year  after  the  ad- 
judication.^" But  claims  can  not  be  proved  against  a  bankrupt 
estate  subsequent  to  one  year  after  the  adjudication;  or  if  they 
are  liquidated  by  litigation  and  the  final  judgment  therein  is 
rendered  within  thirty  days  before  or  after  the  expiration  of 
such  time,  then  within  sixty  days  after  the  rendition  of  such 
judgment:  Provided,  that  the  right  of  infants  and  insane 
persons  without  guardians,  without  notice  of  the  proceedings, 
may  continue  six  months  longer.^" 

It  lias  uniformly  been  held  that  the  language  of  section  57H, 
"  that  claims  shall  not  he  proven  against  a  bankrupt  estate  sub- 
sequent to  one  year  after  the  adjudication,"  is  more  than  a 
limitation,  that  it  is  prohibitory  and  that  the  court  has  no  power 
or  discretion  to  extend  it.^^    If  the  proof  of  a  claim,  made  with- 

2«  In  re  Boiisfield  &  Poole  Manu-  fact   tliat   litigation    ensues   between 

facturing  Co.,   No.    1704   Fed.   Cas.,  the  creditor  and  the  surety  of  the 

s.  c.  17  N.  B.  R.  153.  bankrupt  to  determine  the  surety's 

"  Lewis  V.   United   States,  92  U.  liability,    does   not   make   the   claim 

S.    618,    affirming    No.    15595    Fed.  of  the  surety  against  the  bankrupt 

Cas.,  s.  c.  13  N.  B.  R.  32, ;  U.  S.  v.  estate    one    "  liquidated    by    litiga- 

Herron,  20  Wall.  251  ;  Harrison  v.  tion  "    within    the   meaning   of    this 

Sterry.   5    Cranch.   289;    R.    S.    Sec.  exception.     In  re  Thompson's  Sons. 

3466:  In  re  Vetterlcin,  20  Fed.  Rep.  123    Fed.    Rep.    174.    10   .Am.    B.    R. 

109;  U.  S.  V.  Murphy,  15  Fed.  Rep.  581. 
589,   and   note.  ai  Bray  v.  Cobb,  3  Am.  R.  R.  788. 

"/«    re    Harvey,    122    Fed.    Rep.  100     Fed.    270;     In     re     Shaffer,     4 

745.    10   .'\m.    R.    R.    567.  Am.     R.     R.     72?^,     104     Fed.     982; 

2"  In  re  Patterson,  No.  10814  Fed.  In  re  Rhodes,  5  .\m.  B.  R.  197,  105 

Cas.,  s.  c.  I   Ben.  448.  Fed.  231  :  In  re  Lcibowit^,  6  Am.  B. 

3"  B.  A.  1898.  Sec.  57«-  K.    268,    108    Fed.    Rep.   617:    In    re 

Where  the   amotmt   of  the   bank-  Moebius,  8  Am.  B.  R.  590,  116  Fed. 

rupt's  debt  is  not  in  controversy,  the  47. 


326  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

ill  ihc  year,  is  defective,  it  may  be  amended  after  the  expiration 
of  the  year."'-  but  where  the  proof  of  claim  is  withdrawn  and  a 
like  claim  for  a  different  amount  filed  it  can  not  be  treated  as 
an  amendment. '"'■^  Where  a  creditor  has  been  prevented  from 
])roving-  his  claim  within  the  year  by  the  fraud  of  the  debtor  he 
may  jirove  after  the  expiration,  but  all  creditors  who  have  duly 
proved  their  claims  are  to  be  paid  in  full  before  he  can  receive 
anything.^* 

Where  a  composition  has  been  effected  a  creditor  can  not 
prove  a  claim  more  than  one  year  after  the  date  of  adjudica- 
tion.^" 

§  133.     The  manner  of  making  the  proof. 

A  claim  or  debt  is  proved  by  a  statement  under  oath,  in 
writing,  signed  by  a  creditor  setting  forth  the  claim,  the  con- 
sideration therefor,  and  whether  any.  and,  if  so,  what  secur- 
ities are  held  therefor,  and  whether  any,  and,  if  so,  what, 
payments  have  been  made  thereon,  and  that  the  sum  claimed 
is  justly  owing  from  the  bankrupt  to  the  creditor.^^ 

This  statement  is  referred  to  in  the  general  orders  and 
forms  as  a  deposition. ^^  It  seems  to  be  in  the  nature  of  an 
affidavit.  The  word  "  deposition"  was  used  in  the  statute  of 
1867.^^*  In  construing  this  word  it  was  said  that  "  a  deposition 
by  a  creditor  proving  his  claim  against  the  estate  of  a  bank- 
rupt is  neither  an  affidavit  nor  a  deposition,  as  known  in  the 
ordinary  practice  of  law.  It  is  the  result  of  an  examination 
of  the  creditor  made  by  the  officer  of  the  law  authorized  to 
make  it.  .  .  .  In  no  other  court  of  justice  is  such  testi- 
mony required  for  due  proof  of  debt,  but  it  is  evident  that  con- 
gress intended  that  the  court  and  its  officers  should,  by  a  careful 
examination  of  the  creditor  (which  examination  is  frequently 
in  the  absence  of  the  debtor),  purge  his  conscience  and  ascer- 
tain the  real  nature  of  his  claim,  and  that  no  fraud  or  combi- 

32  Hutchinson  v.  Otis,  190  U.   S.  ^^'  In   re    Brown,    10    Am.    B.    R. 

552;  10  Am.  B.  R.  135.  588. 

33 /n    re    Thompson's    Sons,    123  ^c  b.   A.   1898,  Sec.  570;  compare 

Fed.  Rep.  174,  10  Am.  B.  R.  581;  R.   S.   Sec.  5077- 

In  re  Stevens,    107  Fed.  Rep.  243 ,  ■"•^  Gen.    Ord.    21 ;    Official    Forms 

5  Am.  B.  R.  806.  Nos.  31  to  36,  see  Forms  Nos.  54  to 

3*  In    re    Towne,    10   Am.    B.    R.  S9,  po^^- 

284.  "*R-  S.   Sec.  5077- 


HOW    TO    PROVE    DEBTS.  327 

nation,  either  for  or  against  the  bankrupt,  existed."  ^^  The 
statement  required  by  the  present  act  is  Httle  more  than  such 
a  verification  as  is  required  by  the  laws  of  many  states  to  the 
claim  of  a  creditor  of  an  estate  of  a  decedent  or  of  a  person 
who  has  made  a  voluntary  assignment  for  the  benefit  of  his 
creditors. 

The  supreme  court  has  prescribed  a  form  of  proof  of  an 
unsecured  debt,^^  of  proof  of  a  secured  debt,*"  of  proof  of  a 
debt  due  a  corporation,*^  of  proof  of  a  debt  by  a  partnership, *- 
of  proof  of  a  debt  by  an  agent  or  attorney,*^  of  proof  of  a 
secured  debt  by  an  agent.**  These  forms  should  be  observed 
and  used  with  such  alterations  as  may  be  necessary  to  suit  the 
circumstances  of  any  particular  case.*^ 

A  deposition  to  prove  a  claim  against  a  bankrupt  estate 
must  be  correctly  entitled  in  the  court  and  in  the  cause.*®  It 
should  set  forth  the  name  and  residence  of  the  deponent.  It 
should  give  one  full  Christian  name  of  the  creditor,  as  well 
as  his  surname.*^  It  should  state  the  amount  of  the  debt, 
which  should  not  include  the  interest,  but  sufficient  data  so 
that  the  computation  of  interest  may  be  made;  *^  that  the  debt 
was  due  at  the  time  of  filing  the  petition  and  is  still  due;  that 
no  part  of  it  has  been  paid,  or  if  payments  have  been  made 
such  fact  should  appear;  and  that  there  are  no  set-offs  or 
counterclaims,  or,  if  any,  such  as  there  are  should  be  stated. 

The  statement  or  deposition  must  set  forth  the  consideration 
of  the  debt  or  claim.*"  Neither  the  statute  nor  the  general 
orders  and  forms  prescribe  any  form  of  stating  the  considera- 
tion.    The  principal  object  of  this  requirement  is  undoubtedly 

'"  In  re  Strauss,   No.    13532  Fed.  *^  Official  Form  No.  35  ,  see  Form 

Cas.,  s.  c.  2  N.  B.  R.  48;   see  also  No.  58,  post. 

In  re  Stevens,  107  Fed.  Rep.  243,  5  ■•■'Official  Form  No.  36,  see  Form 

Am.  B.  R.  806 :  but  see  In  re  Mer-  No.  59,  post. 

rick,  No.  9463  Fed.  Cas.,  s.  c.  7  N.  "  Gen.  Ord.  38. 

B.    R.   459.  "0  Gen.   Ord.   21  ;  In  re  Walther, 

•""•Official  Form  No.  31  ,  see  Form  No.  17126  Fed.  Cas.,  s.  c.  14  N.  B. 

No.  54,  post.  R.  273. 

■♦•^  Official  Form  No.  32,  see  Form  '''■  In  re  Valentine,  No.  16812  Fed. 

No.  55.  post.  Cas.,  s.  c.  4  Biss.  317. 

*^  Official  Form  No.  ZZ  >  see  Form  *^  In   re   Port    Huron    Dry   Dock- 
No.  56,  post.  Co.,  No.  1 1293  Fed.  Cas.,  s.  c.  14  N. 

*2  Official  Form  No.  34 ,  see  Form  B.  R.  253. 

No.  57,  post.  •*»  B.    A.    i8<>S.    Sec.    57a ;    In    re 


T,2S  LAW    AND    PROCEIlDINGS    IN    BANKRUPTCY, 

to  prevent,  or  at  least  check,  the  proof  of  fraudulent  and  ficti- 
tious claims,  as  well  as  to  show  that  the  claim  is  founded  upon 
a  leg-al  consideration  which  will  snpix)rt  the  demand,  and  to 
afford  means  for  comparing  the  books  of  the  bankrupt  with  the 
proof.  The  deponent  should  therefore  give  such  a  particular 
and  definite  statement  of  the  consideration  as  will  enable  other 
creditors  to  trace  out,  discover  and  expose  any  fraud  or  illegal- 
ity of  the  claim,  if  any  exist.  If  the  statement  of  the  considera- 
tion is  so  general  and  indefinite  as  to  afford  no  aid  to  the  credi- 
tors in  their  inquiries  as  to  the  fairness  and  legality  of  the  claim 
it  does  not  fulfill  the  object  for  which  it  is  required,  and  should 
be  held  insufficient.  A  judgment  duly  rendered  in  a  state  court 
can  not  be  impeached  collaterally,  nor  can  the  consideration 
upon  which  it  is  founded  be  inquired  into  in  the  absence  of 
fraud.""  A  promissory  note  is  prima  facie  evidence  of  a  con- 
sideration, and  an  instrument  under  seal  always  imports  a  con- 
sideration. It  would  therefore  seem  that  a  reference  to  a  judg- 
ment, promissory  note  or  an  instrument  under  seal,  when  these 
writings  are  attached  to  the  proof  as  exhibits,  would  be  a  suf- 
ficient statement  of  consideration.  The  creditors  are  entitled 
to  show  that  there  was  no  consideration  of  a  promissory  note,^^ 
and  the  decisions  intimate  that  the  creditor  ought  to  state  the 
consideration  of  a  note  in  his  proof  of  the  debt.^^  Where  the 
consideration  of  a  debt  is  goods,  wares  and  merchandise  sold 
and  delivered,  a  general  statement  is  not  sufficient.  The  kind 
of  goods,  the  quantity,  the  price  and  the  time  of  delivery,  if 
delivered  at  one  time,  or  if  delivered  continuously  through  a 
period  of  time,  that  period  should  be  stated.  This  is  fre- 
quently done  by  an  itemized  statement  of  such  goods,  wares 

Stevens,  107  Fed.  Rep.  243,  5  Am.  sion    of    this    question    in    proving 

B.  R.  806;  In  re  Blue  Ridge  Pack-  judgment  debts,   Sec.  — . 

ing  Co.,  125  Fed.  Rep.  619,  11  Am.  ^^ /n   re    Stevens,    107    Fed.    Rep. 

B.  R.  2(>-  243,   5  Am.   B.  R.   806;   In  re   De- 

In   re    Scott,   93   Fed.    Rep.    418:  Metz,    No.    3781    Fed.    Cas. ;    In    re 

"  For  legal   services "   was  held   an  Eider,   No.  4326  Fed.   Cas.,  s.  c.    i 

insufficient  statement.  Saw.  y^i  \  In  ^^  Loder,  No.  8456  Fed. 

50  Ex    parte    O'Neil,     No.     10527  Cas.,  s.  c.  4  Ben.   125,  it  was  held 

Fed.  Cas.,  s.  c.  i  Low.  163 ;  McKin-  that  an   omission  to  state  the  con- 

sey  v.  Harding,  No.  8866  Fed.  Cas.,  sideration    of   a    note   and    whether 

s.  c.  4  N.  B.  R.  38;  see  also  discus-  any  payments  had  been  made  on  it 

rendered  the  proof  defective. 


HOW    TO    PROVE    DEBTS.  329 

and  merchandise  attached  as  an  exhibit  to  the  proof  of  claim, 
proper  reference  being  made  in  the  statement  of  the  consid- 
eration to  such  exhibit.  Where  the  claim  is  for  contribution 
by  a  partner,  the  amount  paid  by  him  for  the  debt  on  account 
of  which  a  claim  is  made  must  be  set  forth.^" 

The  assignee  of  a  chose  in  action  must  state  the  considera- 
tion that  passed  between  the  original  parties.^^  But  the  holder 
of  a  promissory  note,  or  other  negotiable  paper,  who  took  it  for 
value  in  good  faith  before  the  maturity  thereof,  need  not  state 
the  consideration  which  he  gave  for  it.^^ 

In  all  cases  of  mutual  debts  or  mutual  credits  between  the 
estate  of  a  bankrupt  and  a  creditor  the  account  must  be  stated, 
and  one  debt  shall  be  set  off  against  the  other,  and  the  balance 
only  shall  be  allowed  or  paid.^* 

Depositions  to  prove  debts  existing  in  open  account  shall 
state  when  the  debt  became  or  will  become  due;  and  if  it  con- 
sists of  items  maturing  at  different  dates  the  average  due  date 
shall  be  stated,  in  default  of  which  it  shall  not  be  necessary 
to  compute  interest  upon  it.  All  such  depositions  shall  contain  y 
an  averment  that  no  note  has  been  received  for  such  account, 
nor  any  judgment  rendered  thereon."  It  should  be  observed 
that  the  forms  prescril)ed  by  the  supreme  court  do  not  con- 
tain a  clause  that  no  note  has  been  received  for  such  account, 
nor  any  judgment  rendered  thereon.  This  should  be  added  in 
cases  where  it  is  required  by  this  rule. 

The  deposition  should  also  state  that  no  security  has  been 
received  for  the  debt  if  such  is  the  fact.  If  there  have  been 
securities  received  they  should  be  described,  and  it  should 
aj)pear  tliat  there  are  no  other  securities  than  those  men- 
tioned. Where  the  debt  is  proved  by  an  agent  or  attorney 
it  must  appear  in  the  deposition  that  he  is  authorized  to  make 
it. 

The  proof  against  a  firm  should  state  the  firm,  describing 
it  by  the  firm  name  and  the  individuals  that  c()mix>se  it,  and 
should  definitely  show  whether  the  demand  is  a  firm  debt  or 

•'•2  In  re  Stephens,  No.  13365  Fed.  R.   R.  &   Iron   Co.,   No.  7998  Fed. 

Cas..  s.  c.  3  Biss.  187;  see  also  B.  A.  Cas.,  s.  c.  10  N.  B.  R.  76. 

1898,   Sec.  S7»-  "  B.  A.  1898.  Sec.  68a. 

■*' /h  r^  Lake  Superior  Ship  Canal,  •''''' Gen.  Ord.  2t,  par.   i. 


330  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

a  joint  debt  against  individual  jiartners.^"  Where  a  claim  has 
been  assigned  the  proof  slioiild  set  forth  the  date'and  facts  of 
the  transfer  and  the  name  of  the  original  creditor.^^  Two 
distinct  debts  against  different  estates  can  not  be  included  in 
one  proof  or  statement/* 

The  statement  should  be  signed  by  the  claimant  or  his  duly 
appointed  agent.  The  statement  must  be  made  upon  oath/* 
The  oath  may  be  administered  by  a  referee,  any  officer  au- 
thorized to  administer  oaths  in  proceedings  before  the  courts 
of  the  United  States,  or  under  the  laws  of  the  state  where  the 
same  are  to  be  taken,  or  a  diplomatic  or  consular  officer  of 
the  United  States  in  any  foreign  country.""  Any  person  con- 
scientiously opposed  to  taking  an  oath  may,  in  lieu  thereof, 
affirm.  Any  person  who  shall  affirm  falsely  shall  be  punished 
as  for  the  making  of  a  false  oath."" 

\\'henever  a  claim  is  founded  upon  an  instrument  in  writ- 
'  ing,  such  instrument,  unless  lost  or  destroyed,  must  be  filed 
with  the  proof  of  claim."^  If  such  instrument  is  lost  or  de- 
stroyed, a  statement  of  such  fact  and  of  the  circumstances  of 
such  loss  or  destruction  must  be  filed  under  oath  with  the 
claim."-  After  the  claim  is  allowed  or  disallowed  such  instru- 
ment may  be  withdrawn  by  permission  of  the  court,  upon 
leaving  a  copy  thereof  on  file  with  the  claim."^  The  exhibits 
attached  to  the  proof  of  debt  form  one  paper  and  are  a  part 
of  the  deposition.  When  a  party  applies  for  leave  to  with- 
draw such  exhibits  he  must  show  what  interest  he  has  in  it 
and  the  purpose  for  which  he  desires  to  use  it/* 


56  /,j  yg  Walton,  No.  17129  Fed.  <'i  B.    A.    1898,    Sec.    nh;   In   re 

Cas.,  s.  c.  Deady  510.  Blue   Ridge   Packing  Co.,   125  Fed. 

5^/m  re  Fortune,   No.  3586  Fed.  Rep.  619,  11  Am.  B.  R.  36. 

Cas.,  s.  c.  I  Low.  384.  62  B_  a.   1898,  Sec.  57^;   Official 

"^/n  re  Walton,  No.  17129  Fed.  Form   No.   yj ,   see   Form   No.   60, 

Cas.,  s.  c.  Deady  510.  post. 

^0  B.  A.  1898,  Sec.  57a.  6.-!  B.    A.    1898,    Sec.    57&;    In   re 

^'^  B.  A.  1898,  Sec.  20 ;  In  re  Kim-  Emison,  No.  4459  Fed.  Cas.,  s.  c.  2 

ball,  100  Fed.  Rep.  "jy-] ,  4  Am.  B.  N.  B.  R.  595. 

R.  144  ,  2  N.  B.  N.  46,  the  attorney  «*/«   re  McNair,    No.  8908  Fed. 

of    the    creditor    acted    as    notary  Cas.,  s.  c.  2  N.  B.  R.  343. 
public. 


HOW    TO    PROVE    DEBTS.  331 

§  134.     Proof  by  a  secured  creditor. 

A  secured  creditor  can  resort  to  one  of  three  remedies. 
First,  he  may  rely  upon  his  security;  second,  he  may  sur- 
render it  and  prove  the  whole  debt  as  unsecured;  and,  third, 
he  may  be  admitted  only  as  a  creditor  for  the  balance  re- 
maining after  the  deduction  of  the  value  of  the  security.''^  In 
the  first  case  he  makes  no  proof  before  the  referee.  In  the  sec- 
ond case,  after  abandoning  his  security,  he  becomes  a  general 
or  unsecured  creditor,  and  proves  his  claim  in  the  same  man- 
ner as  any  unsecured  creditor. 

It  is,  therefore,  the  third  remedy  of  a  secured  creditor  the. : 
requires  consideration.  A  deposition  according  to  Form  No. 
32  is  proof  of  such  a  claim.  In  such  deposition  proof  is 
made  of  the  whole  debt  as  in  the  case  of  an  unsecured  claim. 
To  this  proof  is  added  a  statement  of  all  the  securities  held 
by  the  deponent  for  the  debt.  In  describing  these  securities 
it  is  proper,  but  not  essential,  to  state  their  estimated  value. 
This  would  seem  to  be  especially  desirable  when  the  proof 
is  to  be  filed  for  the  purpose  of  enabling  the  creditor  'to  par- 
ticipate in  the  proceedings  at  the  first  creditors'  meeting.*'® 
Such  estimates  do  not  determine  the  value  of  these  securities. 

The  value  of  securities  held  by  secured  creditors  are  de- 
termined by  converting  the  same  into  money  according  to 
the  terms  of  the  agreement  pursuant  to  which  such  securities 
were  delivered  to  such  creditors  or  by  such  creditors  and  the 
trustee,  by  agreement,  arbitration,  compromise,  or  litigation. 
as  the  court  may  direct,  and  the  amount  of  such  value  shall 
be  credited  upon  such  claims,  and  a  dividend  shall  be  paid 
only  on  the  unpaid  balance."  Where  a  claim  is  secured  by  a 
mortgage  or  lien  on  property  exempt  under  a  state  statute  the 
secured  creditor  can  prove  only  for  the  balance  of  his  debt  not 
secured  and  can  not  receive  a  dividend  on  his  entire  debt  and 
then  resort  to  his  security  to  satisfy  the  unpaid  balance."^ 

The  proof  of  a  secured  debt  according  to  Form  No.  32 
does  not  invalidate  the  right  of  the  creditor  to  the  securities 


^•^  See  Rights  of  Secured  Credit-  Lantzenheimer,   124  Fed.   Rep.  716; 

ors,  Sec.  202,  post.  In  re  Ball,  10  Am.   P..  R.  564. 

*'•'  B.  A.  i8q8.  Sec.  syc.  '■''  /«  re  Lantzenheimer,  124  Fed. 

«'B.    A.    1898,    Sec.    57//;    In    re  Rep    716. 


332  LAW    AND    PROCEKDINGS    IN     HA  N  KRl' I'TCY. 

which  he  is  found  to  hold.®"  One  owing  a  debt  secured  by  an 
insurance  poHcy  on  the  life  of  the  bankrupt  is  entitled  to 
prove  the  amount  of  the  debt  less  the  surrender  value  of  the 
policy.^"  Where  the  security  is  the  property  of  the  bankrupt 
held  by  an  endorser,  or  a  person  secondarily  liable,  it  has  been 
held  not  necessary  that  the  creditor  should  prove  as  a  secured 
creditor  in  order  to  retain  his  rights  as  against  the  endorser.'^ 
Whenever  a  creditor,  whose  claim  against  a  bankrupt  estate 
is  secured  by  the  individual  undertaking  of  any  person,  fails 
to  prove  such  claim,  such  person  may  do  so  in  the  creditor's 
name,  and  if  he  discharge  such  undertaking  in  whole  or  in  part 
he  is  subrogated  to  that  extent  to  the  rights  of  the  creditor." 

§  135.     Proof  by  creditors  who  have  received  preferences. 

The  statute  provides  that  "  The  claims  of  creditors  who  have 
received  preferences,  voidable  under  section  sixty,  subdivision 
b,  or  to  whom  conveyances,  transfers,  assignments,  or  incum- 
brances, void  or  voidable  under  section  sixty-seven,  subdivision 
e,  have  been  made  or  given,  shall  not  be  allowed  unless  such 
creditors  shall  surrender  such  preferences,  conveyances,  trans- 
fers, assignments,  or  incumbrances."  " 

Prior  to  the  amendment  of  Feb.  5,  1903,^*  a  preference  re- 
ceived by  a  creditor  must  have  been  surrendered,  whether  it 
could  have  been  avoided  or  not.  before  the  claim  could  be  al- 
lowed.^'^  The  effect  of  the  amendment  is  to  require  a  surrender 
of  a   preference,   conveyance,    transfer  or   incumbrance   only 

^^  In  re   Bigelow,   No.   1396  Fed.  '^'^  Pirie     v.     Chicago     Title     and 

Cas.,  s.  c.  2  Ben.  480;  King  v.  Bow-  Trust  Co.,  182  U.  S.  438,  5  Am.  B. 

man,  24  La.  Ann.   506 ;   In   re  Sne-  R.  814 ;  In  re  Abraham   Steers  Co. 

daker,  3  N.  B.  R.  629.  (C.  C.  A.  2d  Cir.),   112  Fed.   Rep. 

^" /n  re  Newland,  No.  10170  Fed.  406,  7  Am.   B.   R.  ^2;   Dickson   v. 

Cas.,  s.  c.  6  Ben.  342;  Consult  hire  Wyman    (C.    C.    A.    ist    Cir.),    iii 

Sauthoff,  No.  12379  Fed.  Cas.,  s.  c.  Fed.    Rep.    726,    7  Am.    B.    R.    186; 

7  Biss.  167.  McKey  v.  Lee   (C.  C.  A.  7th  Cir.), 

"^  Merchants'   Bank  v.  Comstock,  105    Fed.    Rep.   923 ,   5    Am.    B.    R. 

55   N.   Y.  24.  267. 

^2  B.  A.  1898,  Sec.  571;  Gen.  Ord.  That  there   was  no   four  months' 

21,  par.  4.  limit  to  preferences,  which  must  be 

^3  B.  A.  1898,  Sec.  S7S>  os  amend-  surrendered  prior  to  the  amendment 

ed  Feb.  5,  1903 ,  32  Stat,  at  L.  797.  of   Feb.    5,    1903,    see   In   re   Busby, 

''*  Act  of  Feb.  5,  1903,  32  Stat,  at  124  Fed.  Rep.  469. 
L.  797- 


HOW    TO    PROVE    DEBTS.  333 

when  it  may  be  avoided  b}-  the  trustee,  in  order  to  entitle  the 
creditor  to  an  allowance  of  his  claim.  The  test  now  is  can  the 
trustee  avoid  such  preference,  conveyance,  transfer  or  incum- 
brance, if  so,  it  must  be  surrendered :  if  not  the  creditor  may 
retain  what  he  has  received  and  have  his  claim  allowed  for  the 
balance  of  the  debt.  What  constitutes  a  preference  or  lien, 
which  may  be  avoided  by  a  trustee,  is  considered  in  another 
place  and  need  not  be  repeated  here.^**  The  amendment  does 
not  effect  the  surrender  of  preferences  in  proceedings  begun 
prior  to  Feb.  5,  1903." 

Where  a  creditor  has  two  separate  and  distinct  debts,  a 
preferential  payment  on  one  of  them  must  be  surrendered  be- 
fore the  other  can  be  allowed."  But  where  the  |)ayment  extin- 
guishes a  debt  it  need  not  be  surrendered  as  a  condition  ])re- 
cedent  to  the  allowance  of  a  subsequent  independent  debt.^" 
Payments  made  on  a  running  account,  where  new  sales  succeed 
payments  and  the  net  result  is  to  increase  the  value  of  the 
estate,  do  not  constitute  preferences  which  must  be  surrendered 
before  a  claim  for  the  balance  due  on  the  account  may  be*  al- 
lowed.«° 

A  creditor  having  a  claim,  on  which  he  has  received  a  prefer- 
ential payment,  should  regularly  prove  his  claim  against  the 
estate  and  the  court  will  then  determine  the  amount  of  his 
preference,  if  any,  and  require  it  to  be  surrendered  before  allow- 
ing his  claim."'     The  "proof"  of  a  claim  must  not  be  con- 

T«  See  Chapter  XVIII.  7   Am.    B.    R.    /CXd;   In   re    Bullock. 

''"'In    re    Docker-Fester    Co.,    123  116    Fed.    Rep.   667,   8   Am.    B.    R. 

Fed.  Rep.  190,  10  Am.  B.  R.  584.  646;   In  re  Wolf  &  Levy,   122  Fed. 

""^  In  re  Meyer,  115  Fed.  Rep.  99"  .  R<"P.  127,  10  Am.  B.  R.  153. 
8    Am.    B.    R.    598;    Livingston    v.  '>"  Jaquith  v.  Alden.  189  U.  S.  78, 

Heineman   (C.  C  A.  6th  Cir. ),   120  9  Am.  B.  R.  773;  Dick.son  v.  Wy- 

Fed.    Rep.   786,    10  Am.    B.   R.  39;  man    (C.   C.  A.    ist  Cir.),   in   Fed. 

Swart.s    V.    Fonrth    National    Bank  Rep.  726,   7  Am.   B.   R.   186;   In  re 

(C.  C.  A.  8th  Cir.),  117  Fed.  Rep.  Sagor  &  Bro.    (C   C.   A.  2d  Cir.), 

I,   8  Am.   B.   R.  673;   In   re  Lyon  121    Fed.    Rep.   658.    9   Am.    B.    R. 

(C.   C.  A.  2d   Cir.),   121    Fed.   Rep.  361;  Gans  v.   Ellison    (C.  C.  A.  3d 

723,  10  Am.  B.  R.  25;  In  re  Delling,  Cir.),  114  Fed.  Rep.  734,  8  Am.  B. 

124  Fed.  Rep.  852.  R    153:   Kimball   v.  Rosenbanm   (C. 

^" /h   re  Abraham   Steers   Lninber  C.   A.  8th  Cir.).   114   Fed.  Rep.  85, 

Co.    (C.    C.    A.    2d    Cir.).    112    Fed.  7  Am.   B.   R.  718. 
Rep.  406.  7  Am.  B.  R.  332.  affirm-  '*''  hi  re  Hornstein.  122  Fed.  Rep. 

iny  no  Fed.  Rep.  738,  6  Am.  V,    R.  2(>C),    10  Am.   B.   R.  308. 
315;  In  re  Seay,  113  Fed.  Rep.  9<'t9 , 


334 


LAW    AM)    l'KOC"i;i:i)IN(;S    IX    BANKRUPTCY. 


fused  with  the  "  allowance  "  of  the  claim.  Those  are  two  dis- 
tinct acts  or  proceeiling-s,  and  the  allowance,  absolute  or  con- 
ditional, may  or  may  not  result  from  and  follow  the  proof  of 
the  claim.*-  This  distinction  has  been  lost  sight  of  in  many 
of  the  cases  reported.  Section  57^'-  does  not  prohibit  the  proof 
of  a  claim  by  a  preferred  creditor  but  merely  the  allowance  of 
it  before  the  creditor  surrenders  a  recoverable  preference. 

§  136.     What  is  a  surrender  of  a  security  or  preference? 

A  secured  creditor  can  not  prove  his  secured  claims  until  he 
has  surrendered  his  security.**^  A  creditor  who  has  received 
a  preference  can  not  have  his  claims  allowed  until  he  has  sur- 
rendered  his   preference.***     The  question,   therefore,   will   be 


82  In  Hargadine-McKittrick  Dry 
Goods  Co.  V.  Hudson  (C.  C.  A.  8th 
Cir.),  122  Fed.  Rep.  232,  10  Am.  B. 
R.  225,  the  court  said :  "  Debts  are 
not  the  less  provable,  within  the 
meaning  of  the  bankrupt  act,  be- 
cause the  statute  of  limitations  may 
be  successfully  pleaded  against  their 
allowance.  As  well  say  that  a  debt 
was  not  suable  because  the  statute 
of  limitations  might  be  pleaded  to 
an  action  upon  it." 

In  re  Hornstcin,  122  Fed.  Rep. 
266,  10  Am.  B.  R.  308,  Judge  Ray 
uses  this  language :  "  It  will  be 
noted  that  the  proof  of  a  claim  is 
one  thing,  and  the  allowance  of 
such  claim  is  quite  another  thing. 
Claims  may  be  proved,  but  not  al- 
lowed. They  may  be  provable,  but 
not  allowable.  They  may  be  prov- 
able, and  then  allowed  in  part  only, 
or  on  condition  only.  The  statute 
does  not  say  that  the  claims  of 
creditors  who  have  received  prefer- 
ences shall  not  be  proved ;  but  it 
does  say  that  such  claims  shall  not 
be  allowed,  unless  or  until  the  cred- 
itor surrenders  his  preference.  By 
plain  implication  the  proof  of  the 
claim  is  permitted.  The  claim  of 
a  creditor  who  has  received  a  pref- 


erence may  be  proved ;  but  it  cannot 
be  allowed,  unless  he  shall  surren- 
der the  preference.  Strange,  in- 
deed, is  that  construction  of  this 
law,  in  the  face  of  those  provisions, 
which  will  prevent  a  creditor  from 
coming  into  court  and  proving  his 
claim,  having  the  amount  of  the 
preference  received  by  him,  if  any 
(and  that  may  be  a  serious  and 
necessary  question  for  determina- 
tion, both  as  to  the  fact  of  prefer- 
ence and  its  amount),  determined 
by  the  court,  and  then  having  his 
proved  claim  allowed  on  surrender- 
ing the  preference.  Any  creditor 
has  the  right  to  come  into  court  for 
that  very  purpose.  To  hold  other- 
wise will  logically  prevent  a  cred- 
itor who  has  in  fact  received  a 
preference,  by  way  of  lien  or  other- 
wise, for  only  a  small  part  of  his 
claim,  coming  into  cnnrt  and  prov- 
ing his  claim,  anci  tlun  having  it 
allowed  on  surrendering  the  prefer- 
ence —  a  mode  of  procedure  the 
statute  expressly  permits." 

^^  See  Proof  by  Secured  Cred- 
itor, Sec.  134.  ante,  and  Rights  of 
Secured  Creditors,  Sec.  :?02,  post. 

8*  B.  A.  1898,  Sec.  57g. 


HOW    TO    PROVE    DEBTS.  335 

frequently  presented,  what  constitutes  a  surrender  and  how  is 
it  to  be  made  ? 

There  can  be  no  question  of  the  intention  of  a  creditor 
who  files  in  the  court  or  with  the  referee  a  written  statement 
expressly  surrendering  his  securities  or  preferences. 

Where  a  creditor  in  proving  his  debt  fails  to  mention  his 
security  he  will,  as  a  general  rule,  be  deemed  to  have  elected 
to  prove  as  an  unsecured  creditor  and  to  have  surrendered  his 
security.^^  The  courts  have  frequently  permitted  such  a  cred- 
itor to  amend  his  proof  to  change  it  from  unsecured  to  se- 
cured.*® It  would  therefore  seem,  unless  mention  is  made  of 
the  security  in  the  proof  as  originally  filed  or  amended,  that 
proving  as  an  unsecured  creditor  operates  as  a  surrender  of  the 
security.  It  has  been  held  that  proving  without  mentioning 
the  security  does  not  operate  to  discharge  a  mortgage  security ; 
that  while  a  creditor  is  prevented  from  setting  up  the  same 
against  the  trustee,  no  one  but  the  trustee  can  avail  himself  of 
the  fact." 

The  preferred  creditor  regularly  surrenders  his  preference 
to  the  trustee.  Property  fraudulently  transferred  belongs  to 
the  bankrupt's  estate.  Preferential  security  is  also  to  be  re- 
leased for  the  benefit  of  the  creditors  of  the  bankrupt.  The 
trustee  holds  the  title  to  all  the  bankrupt's  property. 

The  statute  does  not  detennine  the  manner  in  which  the 
surrender  should  be  made.  It  is  usually  done  by  a  formal 
transfer  of  property  or  release  of  security,  either  voluntarily  or 
upon  a  judgment  of  recovery  obtained  by  the  trustee.     An 

'^^  In  re  Bloss,  No.  1562  Fed.  Cas.,  creditors  and  voted  for  and  elected 

s.  c.  4  N.  B.  R.  147;  In  re  Brand,  a   trustee,   who    reduced    the   estate 

No.  1809  Fed.  Cas.,  s.  c.  2  Hughes  to    money.     Thereafter    these    lien- 

334;  In  re  Granger,  No.  5684  Fed.  holders    perfected    their    liens    and 

Cas.,  s.  c.  8  N.  B.  R.  30;  Heard  v.  were     permitted     to     amend     their 

Jones,   15  N.   B.   R.  402;   Hatch   v.  prof)f  of  claims  and  assert  their  se- 

Seely,   13   N.   B.   R.  383 ;  Ex  p'artc  curity    and    were    awarded    priority 

Downs,  I   Rose  96.  over   mortgagees   under  a  mortgage 

"" /h  re  Falls  City  Shirt  Mfg.  Co.,  subordinate  to  the   mechanic's  lien. 

08  Fed,  Rep.  592,  3  Am.  R.  R.  437;  Judge  Thompson  affirmed   this  rul- 

/;;   re  Wilder.   loi   Fed.  Rep.   104,  3  ing  of  the  referee  August  21,   1900 

.•\m.    R.    R.    761  n.  (not  reported). 

In  re  Cathcart   (southern  district  «^  Cook  v.  Farrington,  104  Mass. 

of     Ohio)      mechanics'     lienholders  212. 
proved    their    claims    as    unsecured 


336  LAW    AND    PROCEi:niNGS    IN    BANKRUPTCY. 

agreeincnl  that  other  creditors  may  share  in  the  proceeds  of 
a  sale  of  property  which  constitutes  a  preference  may  be 
treated  as  a  surrender.'*'* 

It  has  been  held  that  the  surrender  must  be  voluntary,  and 
that  if  the  trustee  is  compelled  to  proceed  to  a  judgment  the 
creditor  has  not  made  a  surrender,  and  is  therefore  not  en- 
titled to  have  his  claim  allowed.'*"  But  a  surrender  may  fee 
made  voluntarily  at  any  time  before  judgment  is  entered.®" 
This  rule  of  construction  was  applied  under  the  act  of  1867 
prior  to  the  amendment  of  1874."^  By  this  amendment  a  cred- 
itor, who  had  received  a  preference  could  not,  "  in  cases  of 
actual  fraud  on  his  part,"  be  allowed  to  prove  for  more  than  a 
moiety  of  his  debt."  ""  This,  it  was  held,  by  implication  per- 
mitted the  creditor  to  prove  for  the  full  amount  of  his  debt  in 
the  absence  of  actual  fraud.  Thereafter  it  was  held  that  a 
creditor  could  prove  his  claim  after  his  preference  was  set  aside 
by  a  judgment  for  constructive  fraud  in  the  absence  of  actual 
fraud.**^^ 

Having  in  mind  the  construction  given  the  act  of  1867  prior 
to  the  amendment  of  1874  it  is  contended  with  much  force 
that  congress,  by  omitting  any  clause  similar  to  that  contained 
in  the  amendment  of  1874,  must  have  intended  the  same  con- 
struction to  be  given  the  surrender  clause  in  the  act  of  1898, 
It  may  be  observed  that  neither  the  supreme  court  nor  a 
circuit  court  of  appeals  has  passed  upon  this  question  either 
under  the  act  of  1867  or  the  present  statute,  and  that  the  de- 

88 /h    re    Detert,    No.    3829    Fed.  s.  c.  i  Dill.  544;  In  re  Leland,  No. 

Cas.,  s.  c.  II  N.  B.  R.  293.  8230   Fed.    Cas.,    ,s.   c.    7    Ben.    156; 

8»/n  re  Greth,  112  Fed.  Rep.  978,  /;;    re    Stephens,    No.     13365    Fed. 

7   Am.   B.    R.    598 ;   In    re   Owings,  Cas.,     s.    c.    3     Biss.     137 ;    In    re 

109   Fed.    Rep.   623 ,   6   Am.    B.    R.  Graves,    9    Fed.    Rep.    816 ;    In    re 

454.  Drummond,    No.    4094    Fed.    Cas., 

See   also   In   re  Richard,  94   Fed.  s    c.  4  Biss.   149. 
Rep.  633,  2  Am.  B.  R.  506;  In  re  "-Sec.   12  of  the  act  of  1874,  18 

Keller,  109  Fed.  Rep.  118,  6  Am.  B.  Stat,  at  L.   181. 
R.  334.  ""'  In    re    Cad  well,    17    Fed.    Rep. 

90 /w  re  Riordan,  No.   11852  Fed.  693;  In  re  Reed,  3  Fed.  Rep.  798; 

Gas.,  s.  c.  14  N.  B.  R.  332;  Burr  v.  In   re   Black,    No.    1459   Fed.    Cas., 

Hopkins,  No.  2192  Fed.  Cas.,  s.  c  6  s.  c.  17  N.  B.  R.  599;  Burr  v.  Hop- 

Biss.  345.  kins.  No.  2192  Fed.  Cas.,  s.  c.  6  Biss. 

"Wh  re  Lee,  No.  8179  Fed.  Cas.,  .345:    In    re    Newcomer,    No.    10148 

s.  c.   14  N.  B.   R.  89 :   In  re  Rich-  Fed.  Gas.,  s.  c.  18  N.  B.  R.  85. 
ter's    Estate,    No.    11803    Fed.    Gas., 


HOW    TO    PROVE    DEBTS.  2iZ7 

cisions  of  the  bankruptcy  courts  were  not  uniform  in  their 
construction  of  the  former  legislation.  This  precise  question 
is  now  pending  in  the  supreme  court  and  cannot  be  considered 
settled  until  its  decision  is  announced.^* 

It  should  be  noted  that  the  word  "  surrender  "  does  not  in 
itself  imply  a  voluntary  giving  up.  A  general  surrenders  when 
he  has  to  do  so.  A  creditor  may  honestly  believe  that  he  has 
received  no  preferences,  which  he  is  required  by  the  act  to 
surrender  as  a  condition  precedent  to  the  allowance  of  his 
claim.  If  he  takes  the  judgment  of  a  court  on  the  point  is  it 
possible  that  congress  intended  him  to  be  debarred  forever 
from  participating  in  the  distribution  of  the  estate?  This 
seems  a  harsh  rule  in  case  the  creditor  has  acted  in  good  faith, 
without  actual  fraud  on  his  part.  The  only  fraud  which  can 
be  charged  against  him,  is  a  constructive  fraud  depending 
upon  the  construction  of  the  bankruptcy  statute,  which  he 
can  not  ask  a  court  to  construe  to  determine  his  rights  without 
danger  of  losing  the  very  right  wliich  he  is  attempting  to  es- 
tablish.    This  certainly  is  a  harsh  rule  to  enforce. 

§   137.     Filing  proofs  of  debts. 

Claims  after  being  proved  may,  for  the  purpose  of  allow- 
ance, be  filed  by  the  claimants  in  the  court  where  the  pro- 
ceedings are  pending  or  before  the  referee  if  the  case  has  been 
referred/"*  They  are  regularly  filed  with  the  referee  after  a 
reference.  Proofs  of  debt  received  by  any  trustee  must  be 
delivered  to  the  referee  to  whom  the  cause  is  referred."" 

The  debt  will  not  be  deemed  proved  and  can  not  be  allowed 
■where  the  creditor  retains  possession  of  his  deposition  and 
does  not  file  it  with  the  referee  or  clerk.'"'*  It  is  the  duty  of  a 
referee  to  receive  a  proof  which  appears  on  its  face  to  have 
been  taken  by  a  proj)er  officer  and  to  bo  correct  in  form  and 
substance."  Upon  receii)t  of  such  proof  the  clerk  or  referee 
must  endorse  thereon  the  day  and  hour  of  filiiig  and  a  brief 

"•  Tn     Keppcl     v.     Tiffin     Savings  "•' Gen.  Orel.  20,  par.  i. 

Bank    on    question    certified    by    the  "o* /„  re  Shepard,  No.  12753  Fed. 

circuit    court    of    appeals    inr    the  Cas.    s.  c.  i  N.  B.  R.  439. 

sixth  circuit.  "7  B.    A.    1898,    Sec.    ^/rf;    In    re 

"5  B.  A.  1898.  Sec.  57r;  Gen.  Ord.  Merrick,  No.  9463  Fed.  Cas.,  s.  c.  7 

20.  N.  B.  R.  459. 


2^8  LAW   'AND   PROCEEDINGS   IN    BANKRUPTCY. 

statement  of  its  character."^  No  notice  to  the  other  creditors 
is  required.  Where  a  claim  has  been  duly  proved  it  should 
be  allowed  upon  receipt  by  or  upon  presentation  to  the  judge 
or  referee,  unless  objection  to  its  allowance  shall  be  made  by 
the  parties  in  interest  or  its  consideration  be  continued  for 
cause  by  the  court  upon  its  own  motion."" 

The  referee  is  entitled  to  a  fee  of  25  cents  for  every  proof  of 
claim  filed  for  allowance,  to  be  paid  from  the  estate,  if  any, 
as  a  part  of  the  costs  of  administration.^"" 

§  138.     Amendments  and  withdrawal  of  proof. 

The  judge  or  referee  has  power,  in  his  discretion,  to  allow 
proofs  of  debt  to  be  amended  or  withdrawn.^"^  In  cases  of 
mistake  or  ignorance,  whether  of  act  or  of  law,  the  judge  or 
referee  will  exercise  that  power  in  the  absence  of  fraud,  and 
w'hen  all  parties  can  be  placed  in  the  same  situation  they 
would  have  been  in  if  the  error  had  not  occurred,  and  where 
justice  seems  to  demand  that  it  should  be  done."^  There  are 
cases,  however,  which  hold  that  neither  the  debt  nor  the  dep- 
osition can  be  withdrawn,  but  the  party  ought  to  be  allowed 
and  required  to  amend  his  proof,"^  but  the  better  authority- 
seems  to  be  as  stated  above.  Where  the  proceeding  is  in  any 
manner  tainted  with  fraud,  or  where  a  creditor  has  gained  any 
permanent  advantage  by  the  omission,  or  the  estate  has  been 
permanently  injured  thereby,  the  creditor  guilty  of  such 
omission  will  be  left  where  his  own  act  has  placed  him.^"'' 

The  referee  may  require  an  amendment,"*  or  the  party  may 
apply  for  leave  to  correct  or  withdraw  his  proof.  A  creditor 
may  be  permitted  to  amend  his  proof  to  correct  a  clerical 

«8Gen.  Ord.  2.  102 /„  ^e  Lowree,  No.  8577  Fed. 

»9  B.  A.  1898,  Sec.  S7d-  Cas.,  s.  c.  i    Ben.  406 ;  In  re  Emi- 


100 


B.  A.  1898,  Sec.  40,  as  amend-  son,  No.  4459  Fed.  Cas.,  s.  c.  2  N. 

ed  Feb.  5,  1903;  32  Stat,  at  L.  797.  B.    R.    595;    In   re    Mcintosh,    No. 

101  Hutchinson  v.  Otis,  190  U.  S.  8826  Fed.  Cas.,  s.  c.  2  N.  B.  R.  506. 

552,  10  Am.  B.  R.  135;  In  re  Scott,  "3  Stewart  v.  Isidor,  5  Abb.   Pr. 

93   Fed.    Rep.   418;    In  re   Stevens,  (N.  S.)    (N.  Y.)  68;  /n  r*?  Jaycox, 

107   Fed.    Rep.   243,   5   Am.    B.    R.  No.  7242  Fed.  Cas.,  s.  c.  8  N.  B.  R. 

806 ;    In   re    Myers,    99    Fed.    Rep.  241 ;  In  re  Parkes,  No.  10754  Fed. 

691,  3  Am.  B.  R.  760;  In  re  Wil-  Cas.,  s.  c.  10  N.  B.  R.  82. 

der,  loi  Fed.  Rep.  104  ,  3  Am.  B.  R.  i"*  In    re    Elder,    No.    4326    Fed. 

761,  note,  Cas.,  s.  c.  i  Saw.  T2>. 


HOW    TO    PROVE   DEBTS. 


339 


omission  or  formal  defect/"^  or  to  change  his  proof  in  form 
from  unsecured  to  secured/"''  or  to  enlarge  or  diminish  the 
amount  of  the  debt/""  or  withdraw  his  proof  for  the  purpose 
of  proceeding  against  a  dormant  partner  of  the  bankrupt/"^ 
The  power  to  permit  amendments  extends  to  all  matters  con- 
tained in  the  proof.  After  the  claim  is  allowed  or  disallowed 
a  written  instrument  attached  to  the  proof  as  an  exhibit  may 
be  withdrawn  by  permission  of  the  court,  upon  leaving  a  copy 
thereof  on  file  with  the  claim."'* 

An  amendment  may  be  permitted  after  the  expiration  of  the 
year  within  which  claims  may  be  proved.^"  Where  in  other 
respects  a  creditor  would  be  entitled  to  amend  his  proofs,  the 
mere  prior  receipt  of  dividends  is  no  objection,  as  they  can  be 
restored  to  the  trustee.^^^  Amendments  have  been  frequently 
allowed  on  terms  of  repayment  of  dividends  already  received.^^- 

Where  a  creditor  by  proof  of  his  debt  has  taken  part  in  the 
meetings  of  creditors  and  controlled  the  action  of  others  in 
the  choice  of  a  trustee,  or  influenced  the  question  of  the  bank- 
rupt's discharge,  he  has  been  held  precluded  from  any  subse- 
quent change   in   his  proof.' ^•'     But  the  simple   fact  that   he 


105  j^i  j.^  Myrick,  No.  loooo  Fed. 
Cas.,  s.  c.  3  N.  B.  R.  156;  Hutchin- 
son V.  Otis,  190  U.  S.  552,  10  Am. 
B    R.   135. 

io«/m  re  Falls  City  Shirt  Mfg. 
Co.,  98  Fed.  Rep.  592 ,  3  Am.  B.  R. 
437 ;  In  re  Wilder,  loi  Fed.  Rep. 
104,  3  Am.  B.  R.  76111. 

In  re  Cathcart  C  southern  district 
of  Ohio)  mechanics'  licnholders 
proved  their  claims  as  unsecured 
creditors  and  voted  for  and  elected 
a  trustee,  who  reduced  the  estate 
to  money.  Thereafter  these  lien- 
holders  perfected  their  liens  and 
were  permitted  to  amend  their  proof 
of  claims  to  assert  their  security 
and  were  awarded  priority  over 
mortgagees  under  a  mortgage  su- 
bordinate to  the  mechanics'  lien. 
Judge  Thompson  affirmed  this  rul- 
ing of  the  referee  August  21,  1900 
(not  reported). 

'"^  In  re  Montgomery,  No.  7929 
Fed.  Cas.,  s.  c.  3  Ben.  566. 


10"  In  re  Hubbard,  No.  6813  Fed. 
Cas.,  s.  c.  I  Low.  190. 

10'-'  B.  A.  1898,  Sec.  57^.  See  also 
/;•  re  McNair,  No.  8908  Fed.  Cas., 
s.  c.  2  N.  B.  R.  343 ;  In  re  Emison, 
No.  4459  Fed.  Cas.,  s.  c.  3  N.  B.  R. 
595- 

1^'*  Hutchinson  v.  Otis,  190  U.  S. 
552,  10  Am.  B.  R.  135. 

m  Ex  parte  Baxter,  12  Fed.  Rep. 
72;  In  re  Parkes,  No.  10754  Fed. 
Cas..  s.  c.  10  N.  B.  R.  82. 

11=  In  re  Parkes,  No.  10754  Fed. 
Cas.,  s.  c.  10  N.  B.  R.  82 ;  In  re 
Baxter,  12  Fed.  Rep.  72;  Ex  parte 
Capot,  I  Atk.  218;  Ex  parte  Biclby, 
13  Ves.  70;  Ex  parte  Waring,  19 
Ves.  345,  quoted  in  full  in  Powles  v. 
Ilargreaves,  3  DcGex,  A.  M.  &  G. 
445 ;  Ex  parte  Bolton,  2  Rose  389 ; 
In  re  Barned's  Banking  Co.,  10  L. 
R.  Chan.  Ap.  198,  s.  c.  5  H.  L.  157. 

11.1  New  Bedford,  etc.,  v.  Fair- 
ham,  etc.,  9  Allen  (Mass.)  175,  180; 
Ex    parte    Solomon,    i    Glyn.    &    J. 


340  LAW    AND    rKOCEEDINGS    IN    BANKRITTCY. 

participated  in  the  election  of  the  trnstee,  when  there  is  no 
evidence  that  he  gained  any  advantage  thereby,  or  that  the 
other  crecHtors  have  been  in  any  wise  prejuchced  in  conse- 
quence of  it,  or  that  he  was  influenced  by  any  fraudulent 
intent,  will  not  preclude  a  claimant  from  making  his  proof 
of  debt."* 

Mere  formal  amendment  may  be  made  in  the  original 
proofs.  Where  a  change  is  made  by  adding  a  statement  of 
new  matter  or  facts  the  proof  must  be  resworn  after  such 
change."^  Where  the  amendment  sought  to  be  made  relates 
to  a  new  and  different  claim  from  any  of  those  embraced  in 
the  existing  proof  of  debt  the  proper  course  is  for  the  creditor 
to  prove  his  newdy  discovered  debt  independently."* 

§  139.     Allowance  of  claims. 

The  formal  proof  of  the  debt  makes  out  a  prima  facie  case 
whch  entitles  the  claimant  to  have  his  claim  allowed/"  The 
statute  provides  that  "  claims  which  have  been  duly  proved 
shall  be  allowed,  upon  receipt  by  or  upon  presentation  to  the 
court,  unless  objection  to  their  allowance  shall  be  made  by 
parties  in  interest,  or  their  consideration  be  continued  for 
cause  by  the  court  upon  its  own  motion."  "®  A  trustee  is  a 
party  in  interest."*^ 

If  the  proof  of  claim  is  defective  the  referee  should  not 
allows  the  claim.  He  may  permit  it  to  be  filed  with  leave 
to  amend.  Where  an  objection  is  interposed  at  a  creditors' 
meeting  by  parties  in  interest  it  is  the  duty  of  the  referee  to 
determine  the  controversy  at  once,  if  possible,  and  if  not,  as 
soon  as  he  conveniently  can  do  so.'^"  Where  the  referee  has 
a  substantial  doubt,  resulting  from  judicial  consideration  of  the 


25;    Stewart  v.   Isidor,   5   Abb.    Pr.  "« /n   re  Montgomery,    No.   9731 

(N.  S.)  (N.  Y.)  68,  s.  c.  I  N.  B.  R.  Fed.  Cas.,  s.  c.  3  N.  B.  R.  430. 

485; /nr^  Bloss,  No.  1562  Fed.  Cas.,  '^^/m    re    Shaw,    109    Fed.    Rep. 

s.  c.  4  N.  B.  R.  147.  780 ,  6  Am.  B.  R.  499- 

11* /h    re    McConnell,    No.    8712  ii«  B.  A.  1898,  Sec.  57<^- 

Fed.  Cas.,  s.  c.  9  N.  B.  R.  387 ;  King  ""Atkins    v.    Wilcox    (C.    C.    A. 

V.  Bowman,  24  La.  Ann.  506;  In  re  5th  Cir.),   105  Fed.  Rep.  595.  3  N. 

Cathcart,  reported  in  note  106.  ante.  B.  N.  497. 

^^'- In  re  Walthcr,  No.  17126  Fed.  '^"B.  A.  1898,  Sec.  57/. 
Cas.,  s.  c.  14  N.  B.  R.  273. 


HOW    TO    PROVE    DEBTS.  34 1 

inquiry  as  to  the  validity  of  the  claim  or  to  the  creditor's  right 
to  prove  it,  he  may  continue  the  allowance  upon  his  own 
motion/^^ 

If  a  party  in  interest  objects  to  the  allowance  of  a  claim 
the  burden  of  proof  is  on  the  creditor  to  establish  his  claim/" 
Witnesses  may  be  examined  orally  or  by  depositon  and  the 
hearing  may  be  postponed  for  the  purpose  of  obtaining  evi- 
dence in  relation  to  the  claim/-^  Where  a  respondent  denied 
the  alleged  indebtedness  to  a  petitioning  creditor  and  evidence 
is  offered  and  the  court  finds  the  allegations  of  the  petition  true 
and  makes  an  adjudication  the  same  question  cannot  be  tried 
upon  the  petitioning  creditor  making  proof  of  his  claim. ^-■' 

The  allowance  or  disallowance  of  a  claim  is  largely  in  the 
discretion  of  the  referee  and  his  decision  on  the  question  of  fact 
will  not  be  reversed  by  a  judge  unless  manifestly  contrary  to 
the  weight  of  the  evidence. ^"^ 

In  practice  objections  are  not  frequently  made  at  the  time 
of  filing  the  proof.  The  statute  and  general  orders  provide 
for  a  reexamination  of  a  claim,  which  has  already  been  al- 
lowed.^*" It  is  under  these  provisions  that  objections  to  cred- 
itors being  allowed  to  participate  in  the  distribution  of  the 
bankrupt's  estate  are  usually  filed.^" 

A  claim  to  which  no  objection  is  made  and  no  cause  ap- 
pears for  postponing  the  allowance  is  regularly  allowed  when 
it  is  filed  with  the  referee.  He  should  endorse  upon  the 
claim  "  filed  and  allowed."  together  with  the  date  and  hour 
of  the  filing.^^^  At  the  close  of  the  first  creditors'  meeting  he 
should  file  in  his  record  a  list  of  creditors  who  have  proved 

121  In  re  Northern  Iron  Co.,  No.  68i  ;  In  re  Drcebcn,  loi   Fed.   Rep. 

10322  Fed.   Cas.,  s.  c.   14  N.   B.  R.  no,  4  Am.   B.  R.   146;  In  re  Kal- 

356;  In   re  Jackson,  No.  7123  Fed.  denberg,   105  Fed.  Rep.  232,  5  Am. 

Cas.,  s.  c.  7  Biss.  280;  see  also  dis-  B.  R.  6. 

cussion    of    this    question    at    pages  '24/,,    y^    Ulfelder    Clothing    Co., 

108-9,  ante-  98    Fed.    Rep.    409,    3    Am.    B.    R. 

122 /m  re  Wooten,    118  Fed.   Rep.  425. 
670,  9  Am.   B.  R.  247;  In  re  Kal-  '^r./,,  ,.^  Rider,  96  Fed.  Rep.  811; 

dcnl>crg,  105  Fed.  Rep.  232,  5  .^m.  3  Am.  B.  R.  192,  3  N.  B.  N.  187. 
B.  R.  6;  but  see  In  re  Sumner,  loi  ^^o  g    y\    1898,  Sec.  57A;  and  Sec. 

Fed.  Rep.  224,  4  Am.  B.  R.  123,  2  2,  clause  2:  Gen.  Ord.  21,  par.  6. 
N.  B.  N.  68t.  '2^    See  Reexamination  of  Claims, 

'"  In   re   Sumner.    loi    Fed     Rep.  Sec.   140.  post. 
224.  4   Am.    B.   R.    123.  2   N.    B.    N.  '^T.rn    Ord.  2. 


342  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

their  ilebts  at  the  first  meeting,  together  with  their  resi- 
dences and  the  amount  of  each  creditor's  debt/-**  A  similar 
hst  is  subsequently  made  u])on  which  to  base  dividends.^"""^ 

§   140.     Reexamination  of  claims. 

Claims  which  have  been  allowed  may  be  reconsidered  for 
cause  and  reallowed  or  rejected  in  whole  or  in  part,  according 
to  the  equities  of  the  case,  before  but  not  after  the  estate  has 
been  closed/''^ 

When  the  trustee  or  any  creditor  shall  desire  the  reexam- 
ination of  any  claim  filed  against  the  bankrupt's  estate,  he 
may  apply  by  petition  to  the  referee  to  whom  the  case  is 
referred  for  an  order  for  such  examination.""  Where  a  trus- 
tee has  been  appointed  he  must  file  the  petition  for  reexamina- 
tion of  a  creditor's  claim  and  not  another  creditor."^  Where 
no  trustee  has  been  appointed  the  bankrupt  may  move  for  a 
reexamination  and  expunction  of  a  claim  proved  and  allowed 
against  his  estate."*  The  referee  thereupon  makes  an  order 
fixing  a  time  for  hearing  the  petition,  of  which  due  notice  must 
be  given  by  mail  addressed  to  the  creditor."^  If  the  creditor 
is  unable  to  attend  at  that  time  he  should  take  Steps  tO'  procure 
a  ]X)stponement.  Where  he  fails  to  appear  the  claim  may  be 
expunged  or  diminished  by  default.^^®  In  case  it  shall  be  made 
to  appear  that  any  creditor  whose  debt  is  contested  can  not  per- 
sonally attend  to  be  examined  in  the  district  where  the  proceed- 
ings are  pending  without  hardship  to  him,  owing  to  the  dis- 
tance of  his  residence,  or  other  similar  reason,  the  court  will 

129  Official  Form  No.  19,  see  Stoever,  105  Fed.  Rep.  355,  5  Am. 
Form  No.  38,  post.  B.  R.  250. 

130  Official  Form  No.  40 ,  see  ^^e  /„  yg  Lount,  No.  8543  Fed. 
Form  No.  98,  post.  Cas.,  s.  c.  11  N.  B.  R.  315. 

131  B.  A.  1898,  Sec.  S7k.  In  re  Docker-Foster  Co.,  123  Fed. 

132  Gen.  Ord.  21,  par.  6;  In  re  Rep.  190,  10  Am.  B.  R.  584,  the 
Russell,  105  Fed.  Rep.  501 ,  5  Am.  court  said :  "  The  petition  is  not 
B.  R.  566.  before  me  and   I  am,  therefore,  un- 

133 /„   re   Lewensohn    (C.    C.    A.  able  to  say   whether  its   averments 

2d  Cir.),  121  Fed.  Rep.  538,  9  Am.  on    the    subject    of    insolvency    are 

B.  R.  368.  sufficiently    precise    and    definite    to 

13* /«   re  Ankeny,   100  Fed.   Rep.  be  taken  as  true,  or  whether  they 

614,   4  Am.  B.   R.  72,  2  N.  B.   N.  require  proof  to  be  offered  by  the 

249.  petitioner.     This  matter  can  be  de- 

135  Gen.  Ord.  21,  par.  6;  In  re  termined  by  the  referee  and  his  rul- 
ing reviewed,  if  necessary." 


HOW    TO    PROVE    DEBTS.  343 

provide  by  order  for  the  taking  of  his  examination  before  a 
referee  of  the  district  in  which  he  resides."' 

A  trustee  has  been  held  to  be  barred  by  laches  to  petition  for 
a  reexamination  of  a  claim  once  allowed."^ 

The  referee  may,  upon  application  of  the  trustee  or  any 
creditor,  require  any  designated  person  who  is  a  competent 
witness  under  the  laws  of  the  state  in  wdiich  the  proceedings 
are  pending  to  appear  before  him  to  be  examined."^  But  no 
person  shall  be  required  to  attend  as  a  witness  before  a  ref- 
eree at  a  place  outside  of  the  state  of  his  residence,  and  more 
than  one  hundred  miles  from  such  place  of  residence,  and 
only  in  case  his  lawful  mileage  and  fee  for  one  day's  attend- 
ance shall  be  first  paid  or  tendered  to  him.^***  The  creditor  is 
not  entitled  to  witness  fees  for  attendance. ^*^  Witnesses  are 
summoned  by  a  subpoena  issued  out  of  court  under  the  seal 
thereof  and  tested  by  the  clerk.^*"  Blanks,  with  the  signature 
of  the  clerk  and  seal  of  the  court  may  be  furnished  to  ref- 
erees."^ The  subpoena  may  be  served  upon  a  witness  living 
without  the  district  but  within  one  hundred  miles  of  place  of 
testifying.^"  A  person  who  disobeys  the  subpoena  may  be 
punished  for  contempt.^" 

At  the  time  apix)inted  the  hearing  is  had  for  the  purpose 
of  examining  the  creditor  and  any  witnesses  that  may  be 
called  by  either  party."^  The  testimony  before  a  referee  is 
usually  taken  orally.  The  examination  of  witnesses  may  be 
conducted  by  the  party  in  person  or  by  his  counsel  or  at- 
torney, and  the  witnesses  shall  be  subject  to  examination  and 
cross-examination,  which  shall  be  had  in  conformity  with 
the  mode  now  adoi)te(l  in  courts  oi  law.'^"     A  witness  is  not 

i-""^  In    re    Kyler,    No.    7956    Fed.  ^*^  In  re  Paddock,  No.  10658  Fed. 

Cas.,  s.  c.  2  Ben.  414;  In  re  Carley,  Cas.,  s.  c.  6  N.  B.  R.  396. 

106   Fed.    Rep.   862,    5   Am.    B.    R.  i"  Gen.    Ord.    3;    Official    Form 

554.  No.  30,  .see  Form  No.  49,  post. 

^^''In  re  Hinckcl   Brew.  Co.,  123  i*"'  R.  S.  Sec.  876;  B.  A.  1898,  Sec. 

Fed.  Rep.  942,  10  Am.  B.  R.  484.  ^ra :   In    re   Woodwa-d,    No.    18000 

139B.   A.   1898,   Sec.  21   and   Sec.  Fed.  Cas.,  s.  c.  8  Ben.  112. 

41a.  '■«*B.  A.  1898,  Sec.  41  and  Sec.  2, 

^*'^  B.   A.    1898.    Sec.   41a.     As   to  clause     16.     See     Contempt,     Chap, 

who    must    advance    such    fees,   see  XXII. 

Gen.  Ord.    10.  1*^  Gen.  Ord.  21,  par.  6. 

1"  Gen.  Ord.  22. 


344  LAW    AND    PROCKKniNCS    IN    BANKRUPTCY. 

entitled  to  be  attended  or  represented  by  counsel  during  his 
examination.^*^ 

The  referee  is  required,  upon  application  of  any  party  in 
interest,  to  preserve  the  evidence  taken  or  the  substance  there- 
of as  agreed  uj^on  by  the  parties  before  them  when  a  stenog- 
rapher is  not.  in  attendance.^*** 

The  evidence  taken  l:»efore  a  referee  is  usually  taken  down 
in  writing  by  him  or  under  his  direction  in  the  form  of  nar- 
rative, unless  he  determines  the  examination  shall  be  taken  by 
question  and  answer."**  Upon  the  application  of  the  trustee 
the  referee  may  authorize  the  employment  of  a  stenographer 
at  the  expense  of  the  estate  at  a  compensation  not  to  exceed  ten 
cents  per  folio  for  reporting  and  transcribing  the  proceedings.^^" 
When  a  deposition  is  completed  it  should  be  read  over  to  the 
witness  and  signed  by  him  in  the  presence  of  the  referee.^"^' 
The  referee  must  note  upon  the  deposition  any  question  ob- 
iected  to,  with  his  decision  thereon ;  and  the  court  may  deal 
with  the  costs  of  incompetent,  immaterial,  or  irrelevant  deposi- 
tions, or  parts  of  them,  as  may  be  just.^®^ 

Depositions  may  be  taken  when  witnesses  are  beyond  the 
reach  of  process.  The  right  to  take  depositions  is  determined 
and  enjoyed  according  to  the  United  States  laws  relating  to 
die  taking  of  depositions,  except  as  otherwise  provided  by  the 
statute.  Notice  of  taking  depositions  must  be  filed  with  the 
referee  and  also  served  upon  the  claimant. ^^^ 

Where  a  creditor  appears  he  need  only  offer  himself  for 
•  examination,  for  the  burden  of  proof  is  upon  the  trustee  or 
the  other  creditors  who  are  contesting  his  proof.^^*     The  claim- 
ant is  entitled  to  call  witnesses  and  produce  counter  proofs  in 
support  of  his  claim. 

Upon  consideration  of  the  evidence  the  referee  makes  his 

i-*^ /n  re  Comstock,  No.  3080  Fed.  As    to    right   of   referee   to   limit 

Cas.,  s.  c.  3  Saw.  517.  time     for     taking     depositions,     see 

1*8  B.  A.  1898,  Sec.  39,  clause  9.  Dressel  v.  North  State  Lumber  Co., 

^*9  Gen.  Ord.  22.  119    Fed.    Rep.   531,   9   Am.    B.    R. 

150  B.  A.  1898,  Sec.  38,  clause  5.  54i- 

151  Gen.  Ord.  22.  i5*/n  re  Robinson,  No.  1 1938  Fed. 
i'2  B.    A.    1898,    Sec.   2\h;    R.    S.  Cas.,  s.  c.  8  Ben.  406;  In  re  Lount, 

Sees.   863   to   867 ;    Ex   parte   Fisk,       No.  8543  t'ed.  Cas.,  s.  c.  1 1  N.  B.  R. 
113  U.  S.  71.3-  315- 

153  B.  A.  1898,  Sec.  21C. 


HOW    TO    PROVE    DEBTS. 


345 


order.  The  claim  may  be  re-allowed  or  rejected  in  whole  or 
in  part  and  the  referee  may  order  the  claim  to  stand  allowed 
or  to  be  expunged  or  diminished  accordingly.^^^ 

It  has  been  held  that  the  provision  relating  to  the  examina- 
tion of  claims  does  not  apply  to  claims  for  expenses  of  adminis- 
tration such  as  charges  and  expenses  of  a  receiver.^^'*  The 
burden  of  proof  is  upon  the  creditor  asking  the  reexamination 
to  establish  the  facts  which  he  alleges.^"''  An  objection  to  a 
petition  for  reexamination  on  the  ground  that  it  lacks  par- 
ticularity should  be  raised  by  a  motion  to  make  more  definite 
and  certain.^^^     An   inequitable   claim   has  been   expunged.^^* 

Where  the  creditor  by  collusion  with  the  bankrupt  has 
fraudulently  enlarged  his  claim,  both  the  true  and  fictitious 
claims  should  be  disallowed  because  fraud  vitiates  the  whole 
debt."**  A  claim  which  has  been  purchased  with  the  bank- 
rupt's money  will  be  expunged,'"^  but  a  friend  of  the  bank- 
rupt may  purchase  with  his  own  money  in  good  faith  all  the 
claims  against  the  bankrupt  with  the  intention  of  putting  an 
end  to  bankruptcy  proceedings.  If  he  fails  in  such  attempt  he 
may  prove  the  debt  so  purchased  and  assigned  to  him.^"'  The 
claims  of  creditors  who  have  received  preferences  should  be 
disallowed  where  such  creditors  have  not  surrendered  their 
preferences."''  Where  a  secured  creditor's  debt  is  exi)unged 
he  does  not  surrender  his  security.^"*     Whenever  a  claim  shall 


1"  B.  A.  1898,  Sec.  57A-;  Gen.  Ord. 
21,  par.  6.  Official  Forms  Nos.  38 
and  39,  sec  Forms  Nos.  70  and  71, 
post. 

i"*®  In  re  Reliance  Storage  and 
Warehouse  Co.,  100  Fed.  Rep.  619, 
4  .^m.   B.   R.  49. 

"^^  In  re  Howard,  100  Fed.  Rep. 
630 .   4  Am.   B.   R.   69. 

""'  In  re  Ankeny,  100  Fed.  Rep. 
614.  4  Am.  B.  R.  72,  2  N.  B.  N. 
T4R. 

'^■»/«  re  Knox,  98  Fed.  Rep.  585, 
3  Km.  B.  R.  371  ;  see  also  In  re 
Flick.  105  Fed.  Rep.  503 ,  5  Am.  B. 
R.  46.';. 

ifln  /„  yp  Fldcr,  No.  4326  Fed. 
Cas  ,  *;.  c.  I  Saw.  "jt,  :  Marrett  v. 
Atterbury,  No.  9102  Fed.  Cas.,  s.  c. 


3  Dill.  444;  In  re  State  Ins.  Co., 
16  Fed.  Rep.  756;  In  re  Stephens, 
No.  13365  Fed.  Cas.,  s.  c.  3  Biss. 
187. 

'"'  In  re  Lathrop,  No.  8103  Fed. 
Cas.,  s.  c.  3   Ben.  490. 

102 /„  ,.^  Pease,  No.  10880  Fed. 
Cas.,  s.  c.  6  N.  B.  R.  173;  In  re 
Strachan,  No.  135 19  Fed.  Cas.,  s.  c. 
3  Biss.  181. 

i«»B.  A.  1898.  Sec.  S7K;  Pirie  v. 
Chicago  Title  and  Trust  Co.,  182 
U.  S.  438,  5  Am.  B.  R.  814;  In  re 
Busby,  124  Fed.  Rep.  469;  McKey 
V.  Lee  (C.  C.  A.  7th  Cir.),  105  Fed. 
Rep.  923 .  5  Am.  B.  R.  267. 

1"*  Dallas  V.  Flues.  No.  3544  Fed. 
Cas.,  s.  c.  19  ritts.  Leg.  J.  173. 


34^  LAW    AND    PROCEEDINGS   IN    BANKRUPTCY. 

have  been  reconsidered  and  rejected,  in  whole  or  in  part,  upon 
which  a  dividend  has  been  paid,  the  trustee  may  recover  from 
the  creditor  the  amount  of  the  chvidend  received  upon  the 
chiim  if  rejected  in  whole,  or  the  pro^jortional  part  thereof  if  re- 
jected only  in  part/"'° 

§   141.     How  to  review  the  final  allowance  or  rejection  of  a 
claim 

If  the  trustee  or  the  creditor  is  dissatisfied  with  the  ruling 
of  the  referee  he  should  take  proper  steps  to  have  it  reviewed 
by  the  judge. 

Any  creditor  whose  claim  is  rejected  in  whole  or  in  part, 
or  a  trustee  who  is  dissatisfied  with  the  allowance  of  a  claim, 
•may  file  with  the  referee  a  petition  that  the  order  may  be 
reviewed  by  the  judge/*'*'  The  petition  should  be  entitled  in 
the  cause  and  set  forth  the  error  complained  of/**"  It  is  the 
duty  of  the  referee  forthwith  to  certify  to  the  judge  the 
question  presented,  a  summary  of  the  evidence  relating  thereto, 
and  the  finding  and  order  of  the  referee  thereon/"  When 
completed  the  certificate  is  signed  by  the  referee  and  transmitted 
to  the  court. 

If  the  judge  is  not  satisfied  with  the  evidence  certified  by 
the  referee  he  may  allow  further  evidence  to  be  taken  before 
him  or  refer  the  cause  to  the  referee  for  further  proofs.  He 
may  hear  arguments  of  counsel  upon  the  question  certified. 
The  practice  is  for  him  to  give  his  opinion  upon  the  point 
and  direct  an  order  or  judgment  to  be  entered  upon  the  jour- 
nal of  the  court.  If  the  question  is  certified  improperly  the 
court  may  decline  to  give  an  opinion. ^"^ 

The  judgment  of  the  court  allowing  or  rejecting  a  debt  or 
claim  of  five  hundred  dollars  or  over  may  be  reviewed  in  an 
appellate  court  upon  an  appeal  taken  as  in  equity  cases.^®^ 
Such  appeal  must  be  taken  within  ten  days  after  the  judg- 

165  B.   A.    1898,   Sec.   57/.  168  /„  re  Wright,  No.  18069  Fed. 

166  Qen.  Ord.  27.  Cas.,  s.   c.   i    N.   B.   R.  393 ;   In  re 
As  to  the  practice  on  petition  to       Sturgeon,  No.  13564  Fed.  Cas.,  s.  c. 

review    an    order    or    ruling    of    a  i  N.  B.  R.  498. 

referee,  see  Sec.  32a,  ante.  i^'*  B.  A.  1898,  Sec.  25a.     See  Sec. 

16^  Gen.    Ord.    27 :    Official    Form  312,  post. 
No.  56,  see  Form  No.  136,  post. 


HOW    TO    PROVE   DEBTS.  34/ 

ment  has  been  rendered,  and  may  be  heard  and  determined  by 
the  appellate  court  in  term  or  vacation  as  the  same  may  be."** 
An  order  allowing  labor  claims  has  been  reviewed  by  a  circuit 
court  of  appeals  under  section  24b  where  no  one  claim 
amounted  to  $500.'"° 

I'O  In  re  Rouse,  Hazard  &  Co.,  91  Fed.  Rep.  96. 


348 


LAW     AND     I'ROCEKDINC.S    IN     HANKRUPTCY. 


CHAPTER  XV. 


TRirSTEKS. 


§  142.     Appointment  and  qualifications.^ 

The  ofifice  of  trustee  is  created  by  statute."  Trustees  are 
officers  of  the  courts  of  bankruptcy.  One  trustee  or  three 
trustees  are  regularly  a])pointed  l)y  the  creditors  of  the  bank- 
rupt estate  whose  claims  have  been  allowed.^ 

Such  trustees  are  appointed  at  the  first  meeting  of  the  cred- 
itors after  an  adjudication,  or  after  a  vacancy  has  occurred  in 
the  office  of  trustees,  or  after  an  estate  has  been  reopened,  or 
after  a  composition  has  been  set  aside,  or  a  discharge  revoked, 
or  if  there  is  a  vacancy  in  the  office  of  trustee.^  Such  ap- 
pointment by  the  creditors  is  subject  to  be  approved  or  disap- 
proved by  the  referee  or  by  the  judge.*  The  selection  of  a 
trustee  by  the  creditors  will  not  be  disapproved  by  the  court 
unless  it  clearly  imperils  the  fair  and  efficient  administration 
of  the  estate.**     The  referee  can  only  disapprove  of  the  ap- 


^  See  also  Sees.  105  and  106,  ante. 

2  B.  A.  1898,  Sec.  33. 

•■»  B.  A.  1898,  Sees.  44  to  50;  Cred- 
itors' Meetings,  Chap.  XII. ;  In  re 
Eagles,  99  Fed.  Rep.  695,  3  Am.  B. 
R-  137),  2  N.  B.  N.  462 ;  In  re  Lewen- 
sohn,  98  Fed.  Rep.  576,  3  Am.  B.  R. 
299,  2  N.  B.  N.  315. 

In  re  Malino,  118  Fed.  Rep.  368, 
8  Am.   B.  R.  205. 

*  Gen.  Ord.  13 ;  Falter  v.  Reinard, 
104  Fed.  Rep.  292,  4  Am.  B.  R. 
782,  2  N.  B.  R.  1 1 19,  affirmed  (C. 
C.  A.  6th  Cir.),  sub  nom.  In  re 
McGill,  106  Fed.  Rep.  57 ,  5  Am.  B. 
R.  154;  In  re  Henschel  (C.  C.  A. 
2d  Cir.),  109  Fed.  Rep.  861,  In  re 
Rekersdres,  108  Fed.  Rep.  206,  5 
Am.  B.  R.  811;  In  re  Dayville 
Woolen  Co.,   114  Fed.  Rep.  674,  8 


Am.  B.  R.  8s;  In  re  Morton,  118 
Fed.  Rep.  908;  see  also  ante,  Sec. 
106;  compare  R.  S.   Sec.  5034. 

**/n  re  Gill   (C.  C  A.  6th  Cir.), 
106  Fed.  Rep.  57,  5  Am.  B.  R.  154. 

In  Blue  Ridge  Packing  Co.,  125 
Fed.  Rep.  619,  11  Am.  B.  R.  36,  the 
court  said  :  "  After  a  careful  exam- 
ination of  the  whole  situation  I  see 
no  occasion  to  disapprove.  It  is  to 
be  remembered,  in  all  such  cases, 
that  the  choice  of  a  trustee  is  lodged 
by  the  law  with  the  creditors  consti- 
tuting a  majority  in  number  and 
amount,  and  that  their  selection  is 
not  to  be  interfered  with  unless  it 
clearly  imperils  the  fair  and  efficient 
administration  of  the  estate.  I  am 
not  persuaded  that  there  is  any  such 
danger  in   the  present  instance,  and 


TRUSTEES. 


349 


pointment,  the  judge  alone  having  power  to  reject.^  If  the 
creditors  fail  to  appoint  a  trustee  or  trustees  the  judge  or 
referee  must  do  so.'^  The  judge  or  referee  should  exercise  this 
power  only  when  the  creditors  have  had  full  opportunity  to 
elect  a  trustee  and  have  failed  to  do  so.'  The  court  can  not 
appoint  an  official  trustee  or  any  general  trustee  to  act  in  classes 
of  cases.* 

A  trustee  should  ordinarily  be  appointed,  although  no  cred- 
itor appears  to  prove  a  debt,  or  although  there  are  apparently 
no  assets.®  But  if  the  schedule  of  a  voluntary  bankrupt  dis- 
closes no  assets,  and  if  no  creditor  appears  at  the  first  meeting, 
the  court  may,  by  order  setting  out  the  facts,  direct  that  no 
trustee  be  appointed ;  but  at  any  time  thereafter  a  trustee  may 
be  appointed,  if  the  court  shall  deem  it  desirable.^" 

Any  individual  who  is  competent  to  perform  the  duties  and 
resides  or  has  an  office  in  the  judicial  district,  or  a  corpora- 
tion authorized  by  its  charter  or  by  law  to  act  in  such  capac- 
ity and  having  an  office  in  the  judicial  district,  may  be  a  trus- 
tee." A  creditor  of  a  bankrupt  or  the  attorney  of  the  creditor 
is  competent.^'  But  a  near  relation,  an  attorney,  or  a  confi- 
dential clerk  of  the  bankrupt  is  not  competent  to  serve  as  trus- 
tee.^''    Under  the  bankrupt  law  of  1867  a  preferred  creditor 


if  it  should  prove  otherwise,  the  ob- 
jecting creditors  have  their  remedy 
by  an  application  hereafter  to  re- 
move." 

'^  In  re  Hare,  119  Fed.  Rep.  246, 
9  Am.  B.  R.  520;  In  re  Mackellar, 
116  Fed.  Rep.  547;  Gen.  Ord.   13. 

«B.  A.  1898,  Sec.  44;  Sec.  2, 
clause  17,  and  Sec.  i,  clause  7;  Offi- 
cial Form  No.  24 ,  see  Form  No. 
43,  fost;  In  re  Kuffler,  97  Fed.  Rep. 
187,  3  Am.  B.  R.  162,  2  N.  B.  N. 
29 ;  In  re  Brooke,  100  Fed.  Rep. 
432.  4  Am.  B.  R.  50.  2  N.  B.  N. 
680;  In  re  Lewensohn,  98  Fed.  Rep. 
576.  3  Am.  B.  R.  299,  2  N.  B.  N. 

315- 

"  In  re  Hare,  119  Fed.  Rep.  246,  9 
Am.  B.  R.  520;  In  re  Mackellar. 
1 16  Fed.  Rep.  547 ;  In  re  Lewen- 
sohn, 98  Fed.  Rep.  576,  3  Am.  B.  R. 
299. 


8  Gen.  Ord.  14. 

^  In  re  Cogswell,  No.  2959  Fed. 
Cas.,  s.  c.  I  Ben.  388 ;  Anonymous, 
No.  457  Fed.  Cas.,  .s.  c.  i  N.  B.  R. 
122. 

i"Gen.  Ord.  15;  In  re  Levy.  lOi 
Fed.  Rep.  247 ,  4  Am.  B.  R.  108. 

11  B.  A.  1898,  Sec.  45.  See  In  re 
Havens,  No.  6231  Fed.  Cas.,  .s.  c.  t 
N.  B.  R.  485. 

i-/h  re  Barrett,  No.  1043  Fed. 
Cas.,  s.  c.  2  Hughes  444:  hi  re 
Clairmont.  No.  2781  Fed.  Cas.,  s,  c. 

1  N.  B.  R.  276;  In  re  Lewensnlin, 
98  Fed.  Rep.  576,  3  Am.  B.  R.  299. 

2  N.  B.  N.  315;  In  re  Lazoris,  120 
I-'ed.  Rep.  716,  10  Am.  B.  R.  31 ;  In 
re  Blue  Ridge  Packing  Co..  125  Fed. 
Rep.  619,  II  Am.  B   R.  36. 

'•■' /n  re  Powell,  No.  ii3S4  Fed 
Cas.,  s.  c.  2  N.  B.  R.  45 ;  In  re  Zinn, 


350  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

was  not  eligible  to  be  an  assignee.^*     The  present  act  has  no 
such  restriction. 

It  is  the  duty  of  the  referee  immediately  upon  the  appoint- 
ment and  approval  of  the  trustee  to  notify  him  in  person  or 
by  mail  of  his  appointment/^  The  notice  must  require  the 
trustee  forthwith  to  notify  the  referee  of  his  acceptance  or 
reiection  of  the  trust,  and  shall  contain  a  statement  of  the 
penal  sum  of  the  trustee's  bond.^"'  When  the  trustee  accepts 
the  trust  he  must  qualify  by  giving  a  bond  to  the  United 
States  within  ten  days  after  his  appointment,  or  within  such 
further  time,  not  to  exceed  five  days,  as  the  court  may  per- 
mit.^" If  he  declines  to  accept  the  trust  a  vacancy  occurs, 
which  must  be  filled  at  the  next  meeting  of  the  creditors." 

§  143.     Bonds  of  trustees. 

Before  entering  upon  the  performance  of  his  duty  a  trustee, 
within  ten  days  after  his  appointment,  or  within  such  further 
time,  not  to  exceed  five  days,  as  the  court  may  permit,  shall 
enter  into  bond  to  the  United  States,  conditioned  for  the 
faithful  performance  of  his  duties.^^ 

The  amount  of  the  bond  is  fixed  by  the  creditors.'®  If  they 
fail  to  fix  the  amount  of  the  bond  the  court  shall  do  so.'*" 
Joint  trustees  may  give  joint  or  several  bonds.-'  A  separate 
bond  must  be  given  in  each  case."  If  the  trustee  fails  to  give 
bond  within  the  time  prescribed  he  is  deemed  to  have  declined 
the  appointment,  and  there  is  a  vacancy  in  his  office." 

There  must  be  at  least  two  sureties  upon  each  bond,  who 
shall  qualify  in  a  sum  equal  at  least  to  the  amount  of  the  bond."* 
The  court  must  require  evidence  as  to  the  actual  value  of  the 
property  of  sureties."**  Corporations  organized  for  the  pur- 
pose of  becoming  sureties  on  bonds  are  authorized  by  law  to 

No.  18216  Fed.  Cas.,  s.  c.  4  N.  B.  R.  ^'  B.  A.  1898,  Sec.  44. 

3J'0;    In   re    Whetmore,    No.    17466  "  b_  a.  1898,  Sec.  50&. 

Fed.  Cas.,  s.  c.  16  N.  B.  R.  514 ;  In  re  !»  B.  A.  1898,  Sec.  50c. 

Mallory,  8990  Fed.  Cas.,  s.  c.  4  N.  20  3.  A.  1898,  Sec.  50c. 

B.  R.  153.  21  B.  A.  1898,  Sec.  50/. 

"  R.  S.  Sec.  5035.  22  In  re  McFadden,  No.  8785  Fed. 

15  Gen.  Ord.  16.  Cas.,  s.  c.  3  N.  B.  R.  104. 

16  B.   A.    1898,    Sec.   50&;   Official  23  b.  A.  1898,  Sec.  50*. 
Form    No.   25 ,    see   Form   No.   44,  2*  b.  A.  1898,  Sec.  s^e,  f. 
post.  24*  b.  a.  1898,  Sec.  sod. 


TRUSTEES.  351 

do  SO,  and  may  be  accepted  as  sureties.-^  The  court,  judge 
or  referee,  must  require  evidence  as  to  the  actual  vakie  of  the 
property  of  the  sureties.""  The  sureties  are  approved  by  the 
judge  or  referee."*"' 

Such  bonds  should  be  filed  of  record  in  the  office  of  the 
clerk  of  the  court,  and  may  be  sued  upon  in  the  name  of  the 
United  States  for  the  use  of  any  person  injured  by  a  breach 
of  their  conditions."'  Such  suits  must  be  brought  within  two 
years  after  the  estate  has  been  closed."'^  A  pending  suit  is  not 
abated  by  the  death  or  removal  of  a  trustee.'^ 

Trustees  shall  not  be  liable,  personally  or  on  their  bonds,  to 
the  United  States,  for  any  penalties  or  forfeitures  incurred  by 
the  bankrupts  under  this  act,  of  whose  estates  they  are  re- 
spectively trustees."*** 

§   144.     Duties  of  a  trustee. 

The  duties  of  a  trustee  in  a  general  way  are  similar  to 
those  of  a  receiver  appointed  by  a  circuit  court  in  a  cred- 
itor's suit.  He  is  an  officer  of  the  court. ^^  It  is  his  duty  to 
take  the  property  of  the  bankrupt,  reduce  it  to  money  and  dis- 
tribute the  proceeds  among  the  creditors  as  directed  by  the 
court. 

As  to  everything  except  fraudulent  conveyances  and  fraud- 
ulent preferences  under  the  bankrupt  law  he  takes  the  prop- 
erty as  a  purchaser  from  the  bankrupt,  with  notice  of  all  out- 
standing rights  and  e(|uities.  Whatever  the  bankrupt  could 
do -to  make  his  property  available  for  the  general  creditors  the 
trustee  may  do,  but  nothing  more,  except  that  he  may  sue  for 
and  recover  that  which  was  conveyed  in  fraud  of  the  rights  of 
the  creditors,  and  set  aside  all  fraudulent  preferences.  In  this 
he  represents  the  general  or  unsecured  creditors,  and  his  duties 
relate  chiefly  to  their  interests.  Thus  it  is  seen  that  the  trustee 
re])resents  the  bankru])t  for  some  purposes  and  the  unsecured 
creditors  for  other  purposes.'^     He  must  deal  fairly  between 

2"^  B.  A.  i8q8.  Sec.  50^.  ""  McLean  v.  Mayo,  113  Fed.  Rep. 

2"  B.    A.    1898,    Sec.    50/^    and    d.  States  v.  Dewey,  39  Fed.  Rep.  251. 
Official  Form  No.  26,  see  Form  No.  29*  -q   a.  1898,  Sec.  501. 

AS  post.  2»B.    A.    1898,    Sec.    46;    United 

27  B.  A.  1898.  Sec.  30/1.  106.  7  Am.  B.  R.  115. 

'*  B.  A.  1898,  Sec  50»i.  ^^  See   Dudley   v.   Easton,   104   U. 


3S2  LAW     AMI    rR(Hi:i:i)lN'(".S    in     HANKRII'TCY. 

them.  Where  the  estate  is  lai-i;e  and  cimiphcated  and  some  of 
the  creditors  seem  to  be  acting  in  collusion  with  the  bankrupt, 
the  court  will  not  i^ermit  the  trustee  to  be  governed  by  any 
creditor  or  group  of  creditors  but  will  direct  him  to  report  at 
a  meeting  of  all  the  creditors  and  be -governed  by  them  and 
will  appoint  indei)endent  counsel  to  advise  him.^^ 

Immediately  upon  entering  his  duties  the  trustee  should 
prepare  a  complete  inventory  of  all  the  property  of  the  bank- 
rupt that  comes  into  his  possession.^^  He  must  make  a  report 
to  the  court  within  twenty  days  after  receiving  the  notice  of 
his  appointment  of  the  articles  set  off  to  the  bankrupt  by  him, 
according  to  the  provisions  of  the  forty-seventh  section  of  the 
act,  with  the  estimated  value  of  each  article,  and  any  cred- 
itor may  take  exceptions  to  the  determination  of  the  trustee 
within  twenty  days  after  the  filing  of  the  report.^*  The  referee 
may  require  the  exceptions  to  be  argued  before  him,  and  shall 
certify  them  to  the  court  for  final  determination  at  the  request 
of  either  party.^^ 

The  trustee  must  keep  regular  accounts  showing  all 
amounts  received  and  from  what  sources,  and  all  amounts  ex- 
pended and  on  what  accounts.^*^  A  trustee  of  a  partnership 
is  required  to  keep  separate  accounts  of  the  partnership  prop- 
erty and  of  the  property  belonging  to  the  individual  part- 
ners."'^ The  trustee  must  report  to  the  court  in  writing  the 
conditions  of  the  estate,  and  the  amount  of  money  on  hand, 
and  such  other  details  as  may  be  required  by  the  courts, 
within  the  first  month  after  his  appointinent.  and  every  two 
months  thereafter,  unless  otherwise  ordered  by  the  court.^* 
All  accounts  of  trustees  are  referred  as  of  course  to  the  referee 
for  audit,  unless  otherwise  specially  ordered  by  the  court. ^'^ 

S.   99;    Chubb   V.   Upton,  95   U.    S.  7   Am.    B.    R.   532;   see  also  In   re 

665;  Glenny  v.  Langdon,  98  U.  S.  Rusch,  105  Fed.  Rep.  607,  5  Am.  B. 

20 ;  In  re  Kansas  City  Mfg.  Co.,  No.  R.   565- 

7610.    Fed.    Cas.,    s.   c.   9   N.    B.    R.  ■''•'«  Gen.  Ord.  17. 

76;  Buckingham  v.  McLean,  3  Mc-  •'**  Gen.  Ord.  17.  Form  of  trus- 
Lean  185,  s.  c.  13  How.  151  ;  Brad-   •    tee's   return,   see   Official   Form   No. 

shaw  V.  Klein,  No.   1790  Fed.  Cas.,  47.  see  Form  No.  91,  post. 

s.  c.  2  Biss.  20;  Bristol  v.  Sandford,  ^^  Gen.  Ord.  17. 

No.  1893  Fed.  Cas.,  s.  c.  12  Blatch.  •''«  B.  A.  1898.  Sec.  47,  clause  6. 

34!  :  In  re  Price,  92  Fed.  Rep.  987  ^^  B.  A.  1898.  Sec.  srf. 

at  r>89 .  I  Am.  B.  R.  606  at  609.  ^«  B.  A.  1898,  Sec.  47,  clause  10. 

•'2/n  re  Arnett,  112  Fed.  Rep.  770,  •''»  Gen.  Ord.   17. 


TRUSTEES.  353 

The  trustee  must  within  thirty  days  after  the  adjudication, 
file  a  certified  copy  of  the  decree  of  adjudication  in  the  office 
where  conveyances  of  real  estate  are  recorded  in  every  county 
where  the  bankrupt  owns  real  estate  not  exempt  from  execu- 
tion, and  pay  the  fee  for  such  filing.*" 

In  case  the  trustee  neglects  to  file  any  report  or  statement 
which  it  is  made  his  duty  to  file  or  make  by  the  act  or  by  any 
general  order  in  bankruptcy  within  five  days  after  the  same 
shall  be  due,  it  is  the  duty  of  the  referee  to  make  an  order 
requiring  the  trustee  to  show  cause  before  the  judge,  at  a 
time  specified  in  the  order,  why  he  should  not  be  removed 
from  office/^  The  referee  must  cause  a  copy  of  the  order  to 
be  served  upon  the  trustee  at  least  seven  days  before  the  time 
fixed  for  the  hearing,  and  proof  of  the  service  thereof  to  be 
delivered  to  the  clerk." 

He  must  also  furnish  such  information  concerning  the  es- 
tate of  which  he  is  trustee,  and  his  administration,  as  may  be 
requested  by  the  parties  in  interest.*"  If  he  secretes  or  de- 
stroys any  documents  belonging  to  a  bankrupt's  estate  which 
came  into  his  charge  as  trustee,  he  is  liable  to  imprisonment.*'"' 

As  soon  as  the  trustee  receives  any  money  belonging  to 
the  estate  he  must  (lei)osit  it  in  one  of  the  designated  depos- 
itories.** This  money  is  withdrawn  and  disbursed  only  by 
check  or  draft  on  such  depository.*''  The  courts  of  bank- 
ruptcy designate  by  order  banking  institutions  as  depositories 
of  the  money  of  bankrupt  estates  as  convenient  as  may  be  to 
the  residences  of  trustees,  and  must  require  bonds  to  the 
United  States,  subject  to  their  approval,  to  be  given  by  such 
banking  institutions,  and  may,  from  time  to  time  as  occa- 
sion may  require,  by  like  order  increase  the  number  of  depos- 
itories or  the  amount  of  any  bond,  or  change  any  such  depos- 

*"  B.  A.  1898,  Sec.  47c,  as  amended  and  61 ;  In  re  Cobb,  112  Fed.  Rep. 

l-eb.  5,  1903,  32  Stat,  at  L.  797.  655 ,  7  Am.  B.  R.  202 ;  In  re  Carr, 

*i  Gen.  Ord.   17.  117  Fed.  Rep.  572,  9  Am.  B.  R.  58. 

*2B.  A.  1898,  Sec.  47,  clause  5,  and  See  In  re  Burt,  27  Fed.  Rep.  548; 

Sec.  49.  In  re  Thorp,  No.   14002  Fed.   Cas., 

*8  B.  A.   18^)8,  Sec.  29a.     He  may  s.  c.  2  Ware  294. 

be  prosecuted   in  a  circuit  court  or  '•''' B.   .^.    i8f)8.   Sec.   47,   clause  4; 

.1   court  of  bankruptcy;   B.  A.  1898,  In    re    Cnbb.    112   Fed.    Rep.   655,   7 

Sec    23r,  and   Sec.  2,  clause  4.  Am.  B.  R.  202. 

**  B.    A,    1898,    Sec.   47,   clause   3 


354  LAW    AND    I'UOCEEDINGS    IN    BANKRUPTCY. 

itories.'*  It  is  probable  that  the  court  has  power  to  direct 
the  temporary  investment  of  the  money  belonging  to  such 
estate,  or  to  authorize  the  same  to  l)e  deposited  in  any  con- 
venient bank  upon  interest/^ 

The  trustee  may,  under  the  direction  of  the  court,  submit 
to  arbitration  any  controversies  arising  in  the  settlement  of 
tlie  estate.'"*  He  may  also,  with  the  approval  of  the  court, 
compromise  any  controversy  arising  in  the  administration  of 
the  estate  upon  such  terms  as  he  may  deem  for  the  best  inter- 
ests of  the  estates.***  The  court  will  not  ordinarily  give  the  trus- 
tee direction  as  to  whether  he  should  employ  an  attorney. 
He  must  exercise  his  own  discretion.'^"  The  trustee  will  not 
be  allowed  to  employ  the  same  counsel  that  represents  inter- 
ests in  conflict  with  other  interests  represented  by  the  trustee.^' 
A  trustee  is  not  required  to  litigate  every  question  brought 
to  his  notice  by  a  creditor  nor  can  he  in  every  case  require 
indemnity  for  costs  from  the  creditor.  He  must  act  reason- 
ably and  in  doubtful  cases  apply  to  the  court.^-' 

The  trustee  must  pay  upon  an  order  by  the  court  all  legal 
taxes  due  and  owing  by  the  bankrupt  to  the  United  States, 
state,  county,  district  or  municipality,  in  advance  of  the  pay- 
ment of  dividends  to  creditors,  and  upon  filing  the  receipts 
of  the  proper  public  officer  for  such  payment  he  shall  be 
credited  with  the  amount  thereof.  In  case  any  question  arises 
as  to  the  amount  or  legality  of  such  taxes  the  same  shall 
be  heard  and  determined  by  the  court. ^^ 

It  is  the  duty  of  the  trustee  to  collect  and  reduce  to  money 
the  property  of  the  estate  for  which  he  is  trustee  under  the 
direction  of  the  court,  and  to  close  up  the  estate  as  expedi- 
te B.  A.  1898,  Sec.  610.  ^"  In    re    Abram,    103    Fed.    Rep. 

*''  This   power   was   specially   au-      272 ,  4  Am.  B.  R.  575 ;  see  also  Mc- 
thorized  under  the  act  of  1867,  R.      Lean  v.  Mayo,  113  Fed.  Rep.   106, 
S.  Sec.  5060.     See  also  B.  A.  1898,      7  Am.  B.  R.  115;  In  re  Baber,  119 
Sec.  470,  clause  i,  where  it  is  pro-       Fed.  Rep.  520 ,  9  Am.  B.  R.  406. 
vided  that  the  trustee  shall  account  ^^  In  re  Rusch,  105  Fed.  Rep.  607 , 

for  and  pay  over  to  the  estate  under       5  Am.  B.   R.  565. 
his  control  all   interest  received  by  ^^/»  re  Baird,  112  Fed.  Rep.  960, 

him  upon  property  of  such  estate.  7  Am.  B.  R.  448. 

*«  B.  A.  i8g^,  Sec.  26a;  Gen.  Ord.  •"'■'  B.    A.    i8q8,    Sec.    64a;    In    re 

23.  Tilden,  91  Fed.  Rep.  500. 

♦»B.  A.  1898,  Sec.  27a;  Gen.  Ord. 
Z6- 


TRUSTEES.  355 

tiously  as  is  compatible  to  the  best  interests  of  the  parties  in 
interest.^*  The  duty  of  the  trustee  in  collecting  and  distrib- 
uting the  estate  is  treated  more  fully  in  subsequent  chapters.^'^ 

To  this  end  he  is  authorized  to  prove  a  claim  of  the  estate 
which  he  is  administering  against  any  like  estate  in  the  same 
manner  as  the  claims  of  other  creditors  are  proved  ;^^  to  re- 
claim and  recover  for  the  benefit  of  the  creditors  any  prop- 
erty conveyed,  transferred  or  assigned,  or  incumbered  by  a 
person  adjudged  to  be  a  bankrupt  within  four  months  prior 
to  the  filing  of  the  |>etition  against  the  bankrupt  and  while 
insolvent ;  where  such  conveyance,  transfer,  assignment  or  in- 
cumbrance was  made  with  intent  to  hinder,  delay  or  defraud 
creditors  or  is  void  as  against  creditors  by  the  law  of  the 
state,  territory  or  district  in  which  the  property  is  situate  ^^ 
to  cause  to  be  set  aside  levies,  judgments,  attachments  or  other 
liens  obtained  through  legal  proceedings  against  a  person  who 
is  insolvent  at  any  time  within  four  months  prior  to  the  filing 
of  the  petition  in  bankruptcy,  except  where  a  title  is  acquired 
by  a  bona  fide  purchaser  for  value,  who  shall  have  acquired 
the  same  without  notice  or  reasonable  cause  for  inquiry ;  ^** 
and  to  recover  the  property  or  its  value  in  case  the  bankrupt 
has  given  a  preference  within  four  months  prior  to  the  filing 
of  the  petition,  or  after  the  filing  of  the  petition  and  before 
the  adjudication,  and  the  person  receiving  it  or  to  be  benefited 
thereby,  or  his  agent  acting  therein,  shall  have  had  reasonable 
cause  to  believe  that  it  was  intended  thereby  to  give  a  prefer- 
ence.^" 

The  trustee  is  authorized,  upon  a  petition  filed  by  himself 
or  a  creditor,  to  recover  for  the  benefit  of  the  estate  any  excess 
of  fees  paid  to  an  attorney  in  contemi)lation  of  bankruptcy 
over  and  above  a  reasonable  fee  to  be  determined  by  the 
court."" 

The  trustee  is  subrogated  to  and  may  enforce  the  rights  of 

^*  B.   A.    1898,   Sec.   47.  clause  2 ;  stich  conveyances ;  Crooks  v.  Stew- 

hi  re  Pierce,  in   Fed.  Rep.  516,  6  art,  7  Fed.  Rep.  800;  In  re  Rodgers 

Am.  B.  R.  747.  (C.  C.  A.  7th  Cir.),  125  Fed.  Rep. 

«» Chapters     XXIV     and     XXV,  160  at  180. 

post.  r,8  p,   A.  1898.  Sec.  (^7f. 

^■«  B.  A.  1898.  Sec.  57m.  «>»  B.  A.  1808.  Sec.  (^h. 

"B.   A.    1808.   Sec.   f)7c.     He   has  ««  B.  .\.  1898,  Sec.  6o</. 
all  the  rights  of  creditors  to  attack 


356  LAW    AND    PROCKEDINC.S    IN    BANKRUPTCY, 

a  creditor  for  the  benefit  of  the  estate  where  such  creditor  is 
prevented  from  enforcing-  his  rights  as  against  a  Hen  created 
or  attempted  to  be  created  by  his  debtor,  who  afterwards  be- 
comes a  bankrupt."^ 

The  trustee  must  pay  dividends  within  ten  days  after  they 
are  declared  by  the  referee."-  But  he  is  entitled  to  recover 
from  the  creditor  the  amount  of  a  dividend  received  upon  a 
claim  which  has  been  reconsidered  and  rejected.  He  can  re- 
cover the  whole  dividend  if  the  claim  is  rejected  in  whole, 
or  the  proportional  part  thereof  if  rejected  only  in  part.**"' 
The  trustee  is  required  to  pay  into  court  all  dividends  which 
remain  unclaimed  for  six  months  after  the  final  dividend  has 
been  declared.''* 

When  three  trustees  have  been  appointed  the  concurrence 
of  at  least  two  of  them  will  be  necessary  to  the  validity  of 
any  act  concerning  the  administration  of  the  estate.**^ 

§  145.     Removal  of  trustees. 

Upon  application  of  creditors  trustees  may  be  removed  by 
the  court  for  cause  upon  hearing  after  notice  to  them.*''' 

What  constitutes  sufficient  cause  for  removal  depends  very 
largely  upon  the  circumstances  of  each  particular  case.  He 
may  probably  be  removed  if  he  proves  to  be  incompetent  or 
neglects  his  proper  duties,"^  or  if  his  relationship  to  the  bank- 
rupt is  such  as  to  prevent  a  fair  administration  of  the  trust,®" 
or  if  he  shows  partiality  to  one  class  of  creditors.**^  The  power 
of  removal  is  discretionary  with  the  court.''*' 

^1  B.  A.  1898,  Sec.  67b.  counsel,  but  not  necessarily  for  re- 

62  B.  A.  1898,  Sec.  47,  clause  9.  moving     the     trustee.     See     In     re 

63  B.  A.  1898,  Sec.  57/.  Blodgett,   No.   1552  Fed.  Cas.,  s.  c. 
6*  B.  A.  1898,  Sec.  66a.  5  N.  B.  R.  472. 

60  B.  A.  1898,  Sec.  47&.  '^'^  In   re    Powell,   No.    1 1354   Fed. 

66  B.  A.  1898,  Sec.  2,  clause  17.  Cas.,    s.    c.   2    N.    B.    R.   45 ;   In   re 

6T  Gen.  Ord,  17;  In  re  Morse,  No.  Zinn,   No.   18216  Fed.   Cas.,  s.  c.  4 

9852  Fed.  Cas.,  s.  c.  7  N.  B.  R.  56 ;  N.  B.  R.  370 ;  In  re  Whetmore,  No. 

Ex  parte   Perkins,   No.   10982  Fed.  17466  Fed.  Cas.,  s.  c.   16  N.  B.  R. 

Cas.,  s.  c.  5  Biss.  254;  In  re  Prouty,  514;  In  re  Mallory,  No.  8990  Fed. 

24  Fed.  Rep.  554.  Cas.,  s.  c.  4  N.  B.  R.  153. 

Erroneous  legal  advice,  where  the  69  £^    p-^rte    Perkins,    No.    10982 

errors  are  so  gross  and  frequent  as  Fed.  Cas.,  s.  c.  5  Biss.  254. 

to  be  evidence  of  the  incompetency  ^" /m  re   Blodgett,  No.   1552  Fed. 

of  his   legal   adviser,   may  be  cause  Cas.,   s.   c.   5    N.   B.   R.   472;   In   re 

for  ordering  him   fo   employ   other  Adler,    No.    82    Fed.    Cas.,    s.    c.    2 


TRUSTEES.  357 

The  application  to  remove  a  trustee  must  be  made  to  the 
judge  and  not  to  a  referee/^  The  application  is  made  in  the 
form  of  a  petition.'^-  The  petition  should  be  entitled  in  the 
court  and  cause  and  addressed  to  the  judge.  It  should  state 
the  name  of  the  petitioning  creditor,  and  that  it  is  for  the 
interest  of  the  estate  of  the  bankrupt  that  the  trustee  be  re- 
moved, and  then  set  forth  the  causes  for  which  the  removal 
is  requested  and  pray  that  notice  may  be  served  upon  the 
trustee  to  show  cause  why  an  order  should  not  be  made  re- 
moving him.  The  petition  is  filed  in  the  clerk's  office.  A 
notice  in  the  nature  of  a  rule  to  show  cause  is  issued  by  the 
clerk  in  the  form  prescribed  "^  and  served  upon  the  trustee. 

Upon  the  day  named  in  the  notice  the  trustee  must  appear 
and  answer  the  alleg?.tions  of  the  petition.  If  he  fails  to 
appear  he  may  be  committed  for  contempt.  A  hearing  is 
had,  as  upon  a  rule  to  show  cause,  either  upon  affidavits  or 
testimony  in  open  court,  and  counsel  for  the  creditors  and  for 
the  trustee  are  heard.  The  court  thereupon  makes  an  order 
of  removal  if  a  proper  case  is  made.''*  The  removal  of  a  trus- 
tee rests  in  the  sound  discretion  of  the  court.  It  should  be 
exercised  to  remove  a  trustee  only  when  sufficient  cause  is 
shown  rendering  such  removal  necessary  for  the  best  interests 
of  the  estate.  The  order  for  removal  is  entered  upon  the 
journal  of  the  court.  When  a  party  is  removed  for  cause  the 
court  may  compel  him  to  pay  all  costs  of  the  proceedings,^"^ 
or  direct  in  a  i)roper  case  that  the  costs  be  paid  out  of  the 
estate.'" 

When  a  trustee  has  been  removed  by  order  of  the  court  the 
creditors  of  the  bankrupt  estate  should,  at  their  first  meeting 

Woods  571  ;  In  re  Mallory,  No.  8990  seven  days'  notice  in  case  of  a  re- 

I'cd.  Cas.,  s.  c.  4  N.  R.  R.  153;  In  re  moval  for  negloctinp  to  file  reports. 
Sacchi,  No.  12201   Fed.  Cas.,  s.  c.  6  ■^*  Official  Form  No.  54,  see  Form 

N.  B.  R.  398.  No.  152,  (yost. 

TiGen.    Ord.    13;    In    re    Stokes,  ^r,  3    ^     jgyg^   Sec.    i.   clau.se   18; 

No.    13475  Fed.   Cas.,  s.  c.    i    N.   B.  In  re  Morse,  No.  9852  Fed.  Cas..  s. 

R    489.  c.  7  N.  B.  R.  56;  Official  Form  No. 

•     ■'^Official  Form  No.  52,  see  Form  54,  see  Form  No.   152,  post. 

No.    150,  fast.  ■"•  B.   A.    1898,   Sec.    i,   clanse   18; 

■'•'  Official  Form  No.  53 ,  see  Form  In  re  Mallory,  No.  8990  Fed.  Cas., 

No.    151.  post:   B.   A.    1898,   Sec.   2,  s    c.  4  N.  B.  R.   153;  Official  Form 

clause    17.     Gen.    Ord.    17    requires  No.  54,  see   Form   No.   152,  post. 


358  LAW    AND    I'ROCEEDINGS    IN    BANKRUPTCY. 

after  such  order  has  been  entered,  appoint  a  new  trustee.'^'' 
The  referee  regularly  serves  notice  at  once  for  a  meeting  to 
be  held  for  that  purpose.'^  The  creditors  must  have  at  least 
ten  days'  notice  by  mail  to  their  respective  addresses  as  they 
appear  in  the  list  of  creditors  of  the  bankrupt,  or  as  after- 
wards filed  with  the  papers  in  the  case  by  the  creditors,  un- 
less they  waive  notice  in  writing  of  such  meeting/"  The 
new  trustee  is  elected  in  the  same  manner  as  the  first  one."" 
The  same  memorandum  of  election  should  be  made  as  in  the 
case  of  the  first  election.*^ 

Vacancies  caused  by  death,  or  after  an  estate  has  been  re- 
opened, or  after  a  composition  has  been  set  aside,  or  a  dis- 
charge revoked,  are  filled  in  the  same  manner  as  when  caused 
by  an  order  of  removal.  They  are  appointed  by  the  creditors 
at  a  regular  meeting.  If  the  creditors  do  not  appoint  a  new 
trustee  or  trustees  at  such  meeting  the  judge  or  the  referee 
must  do   so.**"* 

The  death  or  removal  of  a  trustee  does  not  abate  any  suit 
or  proceeding  which  he  is  prosecuting  or  defending  at  the 
time  of  his  death  or  removal,  but  the  same  may  be  proceeded 
with  or  defended  by  his  joint  trustee  or  successor  in  the  same 
manner  as  though  the  same  had  been  commenced  or  was 
being  defended  by  such  joint  trustee  alone  or  by  such  suc- 
cessor.*^ 

Although  there  is  no  special  provision  for  the  resignation 
of  a  trustee,**  the  judge  has  undoubtedly  power  to  accept  the 
resignation  of  a  trustee  and  discharge  him  from  his  trust. 

§  146.     Suits  which  may  be  prosecuted  or  defended  by  trus- 
tees. 

Th£  court  may  order  the  trustee  to  enter  his  appearance 
and  defend  any  pending  suit  against  the  bankrupt.  A  trust- 
tee  may,  with  the  approval  of  the  court,  be  permitted  to 
prosecute  as  trustee   any   suit    commenced   by   the   bankrupt 

"  B.  A.  1898,  Sec.  44.  **^  Official  Farm  No.  22,  see  Form 

78  Official  Form  No.  55,  see  Form  No.  41,  post. 

No.  loi,  post;  Gen.  Ord.  25.  *'  B.  A.  1898.  Sec.  44. 

7»  B.  A.  1898,  Sec.  58a  of  the  act  *'•''  B.  A.   1898.  Sec.  46. 

of  July  I,  1898,  30  Stat,  at  L.  «*  See  R.  S.  Sec.  5038. 

80  See  How  to   conduct   a   credit- 
ors' meeting,  Sec.  106. 


TRL'STEES.  359 

prior  to  the  adjudication  with  like  force  and  effect  as  though 
it  had  been  commenced  by  him."^ 

A  trustee  must  therefore  obtain  leave  of  the  court  of  bank- 
ruptcy to  appear  and  either  prosecute  or  defend  a  suit  pending 
by  or  against  the  bankrupt  at  the  time  of  filing  the  petition 
in  bankruptcy.  Under  the  act  of  1867  the  statute  provided 
expressly  that  the  assignee  might  prosecute  or  defend  any 
pending  action  to  which  the  bankrupt  was  a  party/®  If  the 
trustee  does  not  enter  his  appearance  to  prosecute  or  defend 
such  pending  suits  they  may  proceed  to  final  judgment  or 
decree.*'  The  cases  under  the  act  of  1867  established  the 
doctrine  that  under  that  law  the  validity  of  a  pending  suit  or 
of  the  judgment  or  decree  thereon  was  not  affected  by  the 
intervening  bankruptcy  of  one  of  the  parties ;  that  the  as- 
signee might  or  might  not  be  made  a  party;  and  whether  he 
was  so  or  not  he  was  equally  bound  with  any  other  party 
acquiring  an  interest  pendente  lite.^^  The  same  rule  is  un- 
doubtedly applicable  to  the  law  of  1898,  except  where  the 
case  is  stayed  under  the  first  paragraph  of  section  11.*** 

If  a  suit  in  the  name  of  the  bankrupt  is  settled  and  dis- 
missed after  bankruptcy  proceedings  are  instituted  the  trustee 
may  move  to  have  the  case  reinstated."'^  It  was  held  under 
the  former  acts  that  the  bankrupt  might  sue  out  a  writ  of 
error  or  take  an  api)eal  to  review  a  judgment  or  decree  ren- 
dered  against   him   after   the   commencement   of  bankruptcy 

^"^  B.  A.  1898,  Sec.  lib  and  c;  see  whether    it    will    permit    trustee    to 

Pickens  v.  Dent  (C.  C.  A.  4th  Cir.),  intervene. 

106    Fed.    Rep.    653 .    5    Am.    B.    R.  «**  Thatcher  v.  Rockwell,  105  U.  S. 

644;  affirmed  187  U.  S.   177,  9  Am.  467;  Davis  v.  Friedlander,  104  U.S. 

B.   R.  47 ;    Price  v.   Price,  48   Fed.  570 ;  Dimock  v.  Revere  Copper  Co., 

Rep.  823.  117  U.  S.  565;  Claflin  v.  Houseman, 

*"  R.    S.    Sec.    5047:    Norton    v.  93   U.    S.    134;    Eyster   v.    Gaflf,   91 

Switzer,  93  U.  S.  355;  Hill  v.  Hard-  U.  S.  521. 

ing,    107    U.    S.    631;    Thatclier    v.  ^n  pi^kens  v.  Roy,  187  U.  S.  177, 

Rockwell,   105  U.   S.  467 ;   Boynton  9  Am.  B.  R.  47 ;  Metcalf  v.  Barker, 

v     Bali,    121    U.    S.   457;   Ex   parte  187  U.  S.  165,  9  Am.  B.  R.  36;  In  re 

Stansfield.  No.  13294  Fed.  Cas.,  s.  c.  Gerdes,   102  Fed.   Rep.  318,  4  Am. 

4  Saw.  334;  Kimbcrlinf?  v.  Hartley,  B.  R.  346;  Reed  v.  Equitable  Trust 

I  Fed.  Rep.  571.  (Sup.  Ct.  Ga.),  8  Am.  B.  R.  242. 

"^  In  Nat.  Distilling  Co.  v.  Seidel  ""  Home  Ins.  Co.  v.  Hollis,  53  Ga. 

rWis.").    79   N.    W.    R.   744.   it   was  659.     See  also  Herdnon  v.  Howard, 

held   discretionary  with  state  court  9    Wall.    664;    Knox    v.    Exchange 

Bank,  12  Wall.  379. 


360  LAW     AK1>    I'K(>Ci:i-:niN(;S    IN     HANKRIPTCY. 

proceedings."'  Where  the  jiKli!:meiit  or  decree  is  rendered  be- 
fore the  bankruptcy  proceechnos  are  begun,  the  trustee  is  the 
proper  person  to  prosecute  or  defend  the  suit  in  an  appellate 
court.**- 

In  the  course  of  the  administration  of  an  estate  in  bank- 
ruptcy the  trustee  may  be  obliged  to  resort  to  a  suit  for  the 
purpose  of  collecting  or  reducing  to  money  the  property  of 
the  estate  for  which  he  is  trustee,''^  or  for  the  purpose  of  re- 
claiming or  recovering  property  or  the  value  of  such  property 
as  has  been  fraudulently  conveyed,"  or  to  set  aside  a  fraud- 
ulent preference.''^  That  the  trustee  has  authority  to  bring 
and  prosecute  such  suits  can  not  be  questioned.  It  is  not 
necessary  for  him  to  apply  to  the  court  for  leave  to  institute 
such  suits.  It  is  his  duty  to  invoke  a  court  of  justice  for 
these  purposes  if  he  can  not  obtain  possession  of  the  assets  in 
any  other  way. 

Prior  to  the  amendment  of  February  5,  1903,  the  trustee 
was  compelled  to  resort  to  the  state  courts  for  the  purpose 
of  collecting  and  reducing  to  money  the  property  of  the  estate 
of  which  he  was  trustee,  if  a  suit  was  necessary  for  that  pur- 
pose. Since  the  amendment  a  trustee  may,  at  his  option,  bring 
the  suit  in  a  state  court  or  in  the  court  of  bankruptcy.  This 
subject  has  been  considered  elsewhere.^^ 

Suits  against  the  trustee  begun  after  bankruptcy  proceed- 
ings have  been  instituted  must  be  prosecuted  in  the  court  of 
bankruptcy,  or  in  another  court  only  by  leave  of  the  court  of 
bankruptcy."     The  trustee  is  an  officer  of  the  court,  and  in 

"1  Dormire    v.     Cogly,    8    Blackf.  change  Bank,  124  Fed.  Rep.  992,  10 

(Ind.)    177;    O'Neil    v.    Dougherty,  Am.   B.   R.  343- 

46  Cal.  575;  ColHns  v.  Marshall,  10  "^  White  v.    Schloerb,    178   U.    S. 

Rob.  (La.)  112.  542,  4  Am.   B.   R.    178;    Keegan  v. 

92  Herndon    v.    Howard,   9    Wall.  King,  96  Fed.  Rep.  758  ,  3  Am.  B.  R. 

664;   Knox  V.   Exchange   Bank,    12  79; /n  >r  Russell  (C.  C.  A.  2d  Cir.), 

Wall.  379;  Day  v.  Laflin,  47  Mass.  loi    Fed.    Rep.   248,    3    Am.    B.    R. 

280;  Sandford  v.  Sandford,  58  N.  Y.  658;  In  re  Chambers,  Calder  &  Co., 

67;  Vairin  v.  Edmonson,  9  111.  120;  98  Fed.  Rep.  865,  3  Am.  B.  R.  537; 

Moffit   V.    Cruise,   7   Cold.    (Tenn.)  2  N.  B.  N.  388;  In  re  Corbett,  104 

137.  Fed.   Rep.  872,  5   Am.   B.   R.   224; 

»3  B.  A.  1898.  Sec.  47,  clause  2.  In  re  Emslie  (C.  C.  A.  2d  Cir.),  102 

»*B.  A.  1898,  Sec.  joe.  Fed.  Rep.  291  ,  4  Am.  B.  R.  126.  2 

s-"' B.  A.  T898,  Sec.  60b.  N.   B.   N.  992:  In  re  Whitener    (C. 

96  Sec.   20,    ante;    Pond    v.    Ex-  C.  A.  5th  Cir.),   105  Fed.  Rep.   180, 


TRUSTEES.  361 

this  respect  the  familiar  rule  with  reference  to  suing-  receivers 
applies.  It  is  undoubtedly  a  contempt  of  court  to  sue  a  trus- 
tee without  leave  of  the  court  of  bankruptcy  in  any  otJier 
court. 

A  person  claiming-  to  be  the  owner  of  property  in  the  hands 
of  a  trustee  is  entitled  to  a  jury  trial  and  can  not  be  compelled 
to  submit  his  claims  to  a  reference.'*'* 

A  suit  on  the  bond  of  a  trustee  may  be  prosecuted  in  a  dis- 
trict court ""  or  in  a  state  court.""* 

§   147.     Limitations  of  actions  by  or  against  trustees. 

The  statute  provides  that  "  suits  shall  not  be  brought  by 
or  against  a  trustee  of  a  bankrupt  estate  subsequent  to  two 
years  after  the  estate  has  been  closed."  ^"° 

This  limitation  applies  to  suits  at  law  and  in  equity,"^  and 
to  suits  brought  in  a  state  or  federal  court. ^'''  The  limitation 
applies,  although  the  suit  is  brought  in  the  name  of  the  trustee 
for  the  use  of  another  person. ^"^  The  time  is  to  be  reckoned 
from  the  final  decree.  The  filing  of  a  bill  or  petition,  al- 
though it  is  necessary  to  afterwards  amend  it,  prevents  the 
running  of  the  statute.^"*  But  inability  to  serve  process  on  a 
defendant  has  never  been  deemed  an  excuse  for  not  com- 
mencing an  action  within  the  ])rescribed  period. ^"'^ 

In  order  to  avail  of  the  advantage  of  the  limitation  it  must 
be  i)leaded  in  some  fonn.^""  Where  the  bill  or  petition  shows 
that  the  cause  of  action  is  barred  by  the  statute  it  may  be 
raised  by  demurrer.^"^  Otherwise  it  must  be  set  up  by  plea  or 
answer. 

5  Am.  B.  R.  198,  3  N.  B.  N.  316;  i"!  Baily  v.  Weir,  21  Wall.  342. 

Fisher   v.    Ciishman    (C.    C.    A.    ist  ^"^  Comegys   v.    McCord,    li    Ala. 

Cir.).  103  Fed.  Rep.  867,  4  Am.  B.  932;    Archer  v.   Duval,   i   Fla.   219; 

R.  654.  Fritdlandcr   v.    Holloman,   9   B.    R. 

But    see   McFarlan    Carriage   Co.  331  ;  Pciper  v.  Harmer,  5  B.  R.  252. 
V.  Solanas  (C.  C.  A.  5th  Cir.),  106'        i"'' Pike  v.  Lowell,  32  Me.  245. 
Fed.  Rep.  145.  ^"*  Bank   v.    Sherman,    loi    U.    -S. 

o«/m    re    Russell     (C    C.    A.    2d  405. 
Cir.),  lOi   Fed.  Rep.  248,  3  Am.  B.  i^"*  Amy    v.    Watcrtown    (  \n.    _>). 

R.  658.  130  U.  S.  320. 

»0U.     S.    V.    Union     Surety    and  i""  Gormley  v.   I'.unj'an,   138  U.  S. 

Guaranty  Co.,  9  Am.  B.  R.  114.  623,  630;  Lyon  v.  Betram.  20  How 

""*  Alexander    v.     Union     Surety  149;    Retzer    v.    Wood,    109    U.    S. 

and  Guaranty  Co.   (N.  Y.  Sup.  Ct,  187:  Upton  v.  McLaughlin,  105  U. 

App.  Div.),  II  Am.  B.  R.  32.  S    640. 

i°0B.  A.  1898,  Sec.  lid.  1"^  Harris  v.  Collins,  13  Ala.  388. 


362  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

§   148.     Compensation  and  expenses  of  trustees. 

The  comi^ensation  of  the  trustees  in  suits  which  were  com- 
menced prior  to  Feb.  5,  1903,  is  fixed  by  the  statute  as  fol- 
lows :  ^"^ 

"  Trustees  shall  receive,  as  full  compensation  for  their  serv- 
ices, payable  after  they  are  rendered,  a  fee  of  five  dollars 
deposited  with  the  clerk  at  the  time  the  petition  is  filed  in 
each  case,  except  when  a  fee  is  not  required  from  a  voluntary 
bankrupt,  and  from  estates  which  they  have  administered, 
such  commissions  on  sums  to  be  paid  as  dividends  and  com- 
missions as  may  be  allowed  by  the  courts,  not  to  exceed  three 
per  centum  on  the  first  five  thousand  dollars  or  less,  two  per 
centum  on  the  second  five  thousand  dollars  or  part  thereof, 
and  one  per  centum  on  such  sums  in  excess  of  ten  thousand 
dollars. 

"  In  the  event  of  an  estate  being  administered  by  three 
trustees  instead  of  one  trustee  or  by  successive  trustees,  the 
court  shall  apportion  the  fees  and  commissions  between  them 
according  to  the  services  actually  rendered,  so  that  there  shall 
not  be  paid  to  trustees  for  the  administering  of  any  estate 
a  greater  amount  than  one  trustee  would  be  entitled  to. 

"  The  court  may,  in  its  discretion,  withhold  all  compensa- 
tion from  any  trustee  who  has  been  removed  for  cause." 

The  trustee  must  within  thirty  days  after  the  adjudication, 
file  a  certified  copy  of  the  decree  of  adjudication  in  the  office 
where  conveyances  of  real  estate  are  recorded  in  every  county 
where  the  bankrupt  owns  real  estate  not  exempt  from  execu- 
tion, and  pay  the  fee  for  such  filing,  and  he  shall  receive  a 
compensation  of  fifty  cents  for  each  copy  so  filed,  which,  to- 
gether with  the  filing  fee,  shall  be  paid  out  of  the  estate  of 
the  bankrupt  as  a  part  of  the  cost  and  disbursements  of  the 
proceedings."* 

The  compensation  allowed  to  trustees  by  the  act  is  in  full 
compensation  for  the  services  performed  by  them;  but  does 
not  include  expenses  necessarily  incurred  in  the  performance 
of  their  duties  and  allowed  upon  the  settlement  of  their  ac- 

"8  B.  A.  i8g8,  Sec.  48.  '""  B.  A.  1898,  Sec.  47c;  32  Stat. 

at  L.  797. 


TRUSTEES.  363 

counts.""  Whether  a  trustee  should  be  allowed  a  commission 
upon  claims  of  secured  creditors  which  passed  through  his 
hands  depended  upon  whether  such  payments  were  considered 
dividends  within  the  meaning  of  the  statute.  In  one  case  it 
was  held  to  be  a  dividend  and  a  referee  was  allowed  com- 
missions on  secured  debts."^  The  courts  generally  held  that 
the  referee  and  trustee  were  not  entitled  to  commissions  on 
claims  of  secured  creditors.""  This  question  was  definitely 
settled  by  the  amendment  of  Feb.  5,  1903/"  in  which  it  was 
enacted  that  neither  the  referee  nor  the  trustee  shall  in  any 
form  or  guise  receive,  nor  shall  the  court  allow  them,  any 
other  or  further  compensation  for  their  services  than  that  ex- 
pressly authorized  and  prescribed  by  this  act,"'*  and  Sec.  48a 
was  amended  to  read  : 

"  Trustees  shall  receive  for  their  services,  payable  after  they 
are  rendered,  a  fee  of  five  dollars  deposited  with  the  clerk  at 
the  time  the  petition  is  filed  in  each  case,  except  when  a  fee 
is  not  required  from  a  voluntary  bankrupt,  and  from  estates 
which  they  have  administered  such  commissions  on  all  moneys 
disbursed  by  them  as  may  be  allowed  by  the  courts,  not  to  ex- 
ceed six  per  centum  on  the  first  five  hundred  dollars  or  less, 
four  per  centum  on  moneys  in  excess  of  five  hundred  dollars 
and  less  than  fifteen  hundred  dollars,  two  per  centum  on 
moneys  in  excess  of  fifteen  hundred  dollars  and  less  than  ten 
thousand  dollars,  and  one  per  centum  on  moneys  in  excess  of 
ten  thousand  dollars.  And  in  case  of  the  confirmation  of  a 
composition  after  the  trustee  has  qualified  the  court  may  allow 
him.  as  compensation,  not  to  exceed  one-iialf  of  one  per  centum 
of  the  amount  to  be  ])aid  the  creditors  on  such  composition." 

In  any  case  in  which  the  fees  of  the  trustee  are  not  recjuired 

11'^  Gen.    Ord.    35,   par.    3;    B.    A.  Fielding,  96  Fed.   Rep.  800,  3  Am. 

1898,  Sec.  62;  /;i  rtr  Carolina  Cooper-  B.   R.   135;  In  re  Epstein,   109  I-'cd. 

age  Co..  96  Fed.   Rep.  950,  3  Am.  Rep.  878,  6  Am.   B.  R.   191;  In   re 

B.  R.  154;  2  N.  B.  N.  23.  Hinckcl  Brewing  Co.,  124  Fed.  Rep. 

"1 /n    re    Barber,    97    Fed.    Rep.  702;  In  re  Mammotli   Pine  Lumber 

547.  3  Am.  B.  R.  306.  Co.,  116  Fed.  Rep.  731,  8  Am.  B.  R. 

"^/n    re    Fort    Wayne    Electric  651  ;  .see  also  In  re  Kaiser,  112  Fed. 

Corp.,  94  Fed.  Rep.  109,  i   Am.  B.  Rep.  955 ,  8  Am.  B.  R.  108. 
R.   706;    In    re   Utt    (C.    C.    A.    7th  ''\^2  Stat,  at  L.  797- 

Cir.).  105  Fed.  Rep.  754,  5  Am.  B.  "■»  B.  A.  1898,  Sec.  72,  as  enacted 

R.    383.    2    N.    B.    N.    386:    hi    re  in  32  Stat,  at  L.  797. 


364  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

by  the  act  to  be  paid  by  a  debtor  before  filing  hisi  petition  to 
be  adjudged  a  bankrupt,  the  judge,  at  any  time  during  the 
pendency  of  the  proceecUngs  in  bankruptcy,  may  order  those 
fees  to  be  paid  out  of  the  estate;  or  may,  after  notice  to  the 
bankrupt,  and  satisfactory  proof  that  he  then  has  or  can  ob- 
tain the  money  with  which  to  pay  those  fees,  order  him  to 
pay  them  within  a  time  specified,  and  if  he  fails  to  do  so, 
may  order  his  petition  to  be  dismissed."** 

1^**  Gen.  Ord.  35,  par.  4. 


WHAT    PASSES    TO    THE    TRUSTEE.  365 


CHAPTER  XVI. 

WHAT   PASSES   TO   THE   TRUSTEE. 

§   149.     Title  to  bankrupt's  property. 

The  title  to  the  property  of  tlie  bankrupt,  whatever  it  may 
be,  remains  in  the  bankrupt  until  a  trustee  is  appointed  and 
qualified.^  Thus  where  no  trustee  is  appointed  the  title  of 
the  bankrupt  is  not  divested.^  It  has  been  held  that  after  a 
petition  filed,  and  before  a  trustee  was  appointed,  a  bankrupt 
might  redeem  land  sold  for  taxes.^  So  also  a  bankrupt  has 
been  permitted  to  institute  a  suit  in  his  own  name  for  in- 
fringement of  a  copyright  after  the  filing  of  a  petition  and 
prior  to  the  appointment  of  a  trustee."  But  a  bankrupt  can- 
not maintain  a  suit  in  his  own  name  in  relation  to  his  property, 
not  exempt,  pending  bankruptcy  proceedings  after  the  appoint- 
ment of  a  trustee.'^ 

The  title  of  the  bankrupt  in  the  interval  between  the  ad- 
judication and  the  appointment  of  the  trustee  is  defeasible, 
and  when  the  trustee  is  appointed  is  divested  as  of  the  date 
of  the  adjudication  of  bankruptcy."     During  this  i)eriod  the 

1  Conner  v.  Long,  104  U.  S.  228;  R.  644;  affirmod  suh  tiovi.  Pickens 
Eyster  V.  GaflF,  91  U.  S.  521  ;  Hamp-  v  Roy,  187  U.  S.  177,  9  Am.  B. 
ton    V.    Rouse,    22    Wall.   263,    275 ;       R.  47. 

Sedgwick    v.    Grinnell,    No.     12612  "  B.  A.  1898,  Sec.  70a;  Conner  v. 

Fed.   Cas.,  s.  c.  9  Ben.  429;   March  Long,   104  U.  S.  230.     In  Carpenter 

V    Hcaton,  No.  9061   Fed.  Cas.,  s.  c.  Bros.  v.  O'Connor,  16  O.  C.  C.  526, 

I  Lowell  278;  Robinson  v.  Hall,  No.  an    application    was    made    to    the 

11952    Fed.    Cas.,    s.    c.   8    Ben.   61;  .state  court  for  an  order  directing  a 

Sutherland  v.  Davis,  42  Ind.  26.  receiver    appointed     hy    that    court 

2  Robinson  v.  Hall,  No.  1 1592  Fed.  after  an  adjudication  in  a  court  of 
Cas.,  s   c    8  Ben.  6r.  bankruptcy,   to   deliver   property   of 

■'  Hampton    v     Rouse,    22    Wall.  the  bankrupt  in  his  possession  to  a 

263.  trustee,    sub<;cquontly    appointed    hy 

♦  Myers  v.  Callaghan.  5  Fed.  Rep.  the   creditors   in    the   proceeding   in 

72(^  bankruptcy,  on  the  ground  that  the 

"  Pickens   v.    Dent    (C.   C.    A.   4th  trustee's   title  vested  as  of  the  date 

Gr.),   106  Fed.  Rep.  653,  5  Am.   B.  of    adjudication    and    prior    to    the 


366  LAW    AND    I'ROCKKDINC.S    IN    HANKRUPTCY. 

bankrupt  occupies  a  sort  of  hduciary  relation  to  his  creditors/ 
All  titles  derived  under  and  throug-h  the  bankrupt  originating 
during  this  interval  are,  by  force  of  law  and  without  regard 
to  the  knowledge  or  motive  of  the  claimant,  defeated  by  the 
appointment  of  a  trustee.^ 

Transfers  made  by  the  bankrupt  after  the  filing  of  the  peti- 
tion and  before  the  adjudication  are  to  be  considered  in  the 
same  class  with  those  made  within  four  months  prior  to  the 
commencement  of  the  bankruptcy  proceedings.  A  bona  fide 
sale  for  value  is  valid.  But  as  the  filing  of  a  petition  in 
bankruptcy  is  deemed  notice  to  all  the  world,"  it  would  ap- 
pear that  no  bo)ui  fide  sale  could  be  made  during  this  interval. 
Those  who  deal  with  a  bankrupt  pending  bankruptcy  pro- 
ce^ings  do  so  at  their  peril. ^" 

The  trustee,  or  his  successor,  upon  his  appointment  and 
qualification  is  vested  by  operation  of  law,  without  a  deed  of 
conveyance,  with  the  title  of  the  bankrupt  as  of  the  date  he 
zvas  adjudged  a  bankrupt .^'^  In  this  respect  the  act  of  1898 
differs  from  the  act  of  1867,  which  provided  for  a  deed  of 
conveyance  from  the  register  to  the  assignee,  and  that  such 
assignment  should  relate  back  to  the  commencement  of  the 
proceedings  in  bankruptcy.^^ 

property  coming  into  the  possession  3  Biss.  204;  In  re  Gregg,  No.  5796 

of    the     receiver.     The    application  Fed.  Cas.,  s.  c.  i  Hask.  173. 

was  granted.  ^°  In   re    Corbett,    104    Fed.    Rep. 

^  March  v.  Heaton,  No.  9061  Fed.  872,  5  Am.  B.  R.  224,  it  was  held 

Cas.    s.  c.   I  Lowell  278;   Williams  that  an   agreement  by  an  insolvent 

V    Merritt,  103  Mass.  187.  debtor,   made  after  the  filing  of  a 

*  Bank    v.    Sherman,    loi    U.    S.  petition    in    involuntary    bankruptcy 

403;    Taylor   v.    Robinson,   21    Fed.  against    him    and    in    contemplation 

Rep.  209;  In  re  Randall,  No.  11 552  of  the  filing  of  a  voluntary  petition, 

Fed.  Cas.,  s.  c.   i   Saw.  56 ;  Carpen-  that   his   attorney   should   take   cer- 

ter  Bros.   v.  O'Connor,  16  O.  C.  C.  tain  goods  in  payment  for  his  serv- 

526.  ices,    where    there    was    no    actual 

'  Mueller  v.  Nugent,  184  U.  S.  delivery  or  change  of  possession 
I,  5  Am.  B.  R.  176;  Bank  v.  Sher-  until  after  the  adjudication  upon 
man,  loi  U.  S.  406;  In  re  Wallace,  the  voluntary  petition,  did  not  con- 
No.  17094  Fed.  Cas.,  s.  c.  Deady  stitute  a  transfer  of  the  property  to 
433;  Shawhan  v.  Wherritt,  7  How.  give  the  attorney  title  to  the  prop- 
627;  Mays  V.  Nat.  Bank,  64  Penn.  erty. 

74;    Perley   v.    Dole,    38    Me.    558;  ^^  B.    A.    1898,    Sec.    70a;    In    re 

Oakey  v.  Corry.   10  La.  Ann.  502;  Engle,  105  Fed.  Rep.  893,  5  Am.  B. 

In  re  Lake,  No.  7992  Fed.  Cas.,  s.  c.  R.  372. 

12  R.  S.  Sec.  5044. 


WHAT    PASSES    TO    THE    TRUSTEE.  367 

A  certified  copy  of  the  order  approving  the  bond  of  a  trus- 
tee is  conclusive  evidence  of  the  vesting  in  him  of  the  title 
to  the  property  of  the  bankrupt,  and  if  recorded  imparts  the 
same  notice  that  a  deed  from  the  bankrupt  to  the  trustee  if 
recorded  would  have  imparted  had  not  bankruptcy  proceed- 
ings inter\-ened.^^ 

The  trustee  must  within  thirty  days  after  the  adjudication, 
file  a  certified  copy  of  the  decree  of  adjudication  in  the  office 
where  conveyances  of  real  estate  are  recorded  in  every  coun- 
ty where  the  bankrupt  owns  real  estate  not  exempt  from 
execution,  aiad  pay  the  fee  for  such  filing,  and  he  shall  receive 
a  compensation  of  fifty  cents  for  each  copy  so  filed,  which, 
together  with  the  filing  fee.  shall  be  paid  out  of  the  estate 
of  the  bankrupt  as  a  part  of  the  cost  and  disbursements  of  the 
proceedings.^* 

A  statutory  conveyance  can  have  no  extra  territorial  efifect 
upon  real  estate,  and  will  not,  therefore,  convey  title  to  prop- 
erty situated  in  a  foreign  country. ^^  The  statute,  however, 
provides  that  the  bankrupt  shall  "  execute  to  his  trustee  trans- 
fers of  all  his  projierty  in  foreign  countries."  '"  In  this  way 
the  trustee  becomes  vested  with  the  title  to  all  the  property 
of  the  bankrupt  situated  in  foreign  countries  as  well  as  that 
in  the  United  States. 

The  trustee  is  vested  "  with  the  title  of  the  bankrupt."  ^^ 
He  takes  no  greater  interest  in  or  better  title  to  the  property 
than  the  bankruj)t  had.'''  except  as  to  property  disposed  of  by 

1' B.  A.  1898,  Sec.  2ic;  see  Sliaw-  Am.  B.  R.  129;  Carling  v.  Seymour 

han  V.  Wherrjtt,  7  How.  627 ;  Hern-  Lumber   Co.    (C.   C    A.    sth    Cir.), 

don  V.  Howard,  g  Wall.  664;  Alex-  113    Fed.    Rep.   483,   8   Am.    B.    R. 

ander  v.   McCulloiigh,  32  Leg.   Int.  29;  Donaldson  v.  Farwell,  93  U.  S. 

336;  Cove  V.  Piircell,  56  N.  Y.  649;  631;  In  re  McKay,  No.   11978  Fed. 

Dambmann   v.   White,   48  Cal.   439;  Cas.,  s.  c.    i    Lowell   345;  Ex  parte 

Burk  V.  Winters,  28  Ark.  6;  Rogers  Dalby,   No.   3540   Fed.   Cas.,  s.  c.   I 

V.  Steven.son,  16  Minn.  68;  Zantzin-  Lowell    431;    Allen    v.    Whittcmore, 

ger  V.  Ribble,  36  Md.  32.  No.  241   Fed.  Cas.,  s.  c.  8  Ren.  485; 

i*B.  A.    1898.   Sec.   47f,   .32  Stat.  /;/   rr  Kan.sas  City    Stone   Co.,    No. 

at  L.  797.  7610  Fed.  Cas.,  s.  c.  9  N.  B.  R.  76; 

"■' Oakey  v.  Bennett,  ii  How.  33;  Kelly  v.  Scott,  49  N.  Y.  595;  Rowe 

Barnett  V.  Pool,  23  Tex.  517.  v     Page,   54   N.    H.    195;    Chace   v. 

'"  B.  A.  1898,  Sec.  7,  clause  5.  Chapin,    130  Mass.    128;    Dugan   v. 

^^  B.  A.  1898,  Sec.  70a.  Nichols,    125    Mass.    45;    Tucker   v. 

'*/n  re  Swift.  108  Fed.  Rep.  ?12;  Daly,  7  Grat.   (Va.)  330. 
In    re    Cobb,    96    Fed.    Rep.    821,    3  .As   to  the  effect   of  a   conditional 


308 


LAW    AN'I)    rRt)Cl-:i':DlNGS    IX    BANKRUPTCY. 


the  banki"ui)t  in  fraud  of  the  act.  Hence,  where  the  bankrupt 
would  be  estopped  the  trustee  is  estopi:)ed,  except  when  he  is 
subrogated  to  rights  of  creditors.  So  also  it  has  been  held 
that  where  a  state  statute  gives  to  the  party  paying  usurious 
interest  the  right  to  recover  it,  the  trustee  may  do  so,  ^'■'  but 
not  otherwise.""  Where  a  bankrupt  is  a  beneficiary  subject 
to  the  discretion  of  a  trustee  under  a  will,  he  has  no  interest 
which  may  be  enforced  by  his  trustee  in  bankruptcy.-' 

The  trustee  takes  the  title  of  the  bankrupt  subject  to  all 
equities,  liens  or  incumbrances,  whether  created  by  operation 
or  law  or  by  the  act  of  the  bankrupt,  which  existed  against 
the  property  in  the  hands  of  the  bankrupt,"  except  in  cases  of 
levies,  judgments,  attachments  or  other  judicial  liens  created 
against  the  property  within  four  months  preceding  the  com- 
mencement of  proceedings  in  bankruptcy,  and  except  in  cases 
where  the  disposition  of  property  by  the  bankrupt  is  declared 
by  law  to  be  fraudulent  and  void.  This  principle  is  deduced 
from  the  cases  decided  under  the  act  of  1867,-^  and  is  directly 


sale,  see  Field  v.  Baker,  No.  4762 
Fed.  Cas.,  s.  c.  12  Blatch.  438; 
Woods  V.  Oakman,  116  Mass.  599. 
^^  Moore  v.  Jones,  23  Vt.  739; 
Wheelock  v.  Lee,  10  B.  R.  363 ;  In 
re  Kellogg  (C.  C.  A.  2d  Cir.),  121 
Fed.  Rep.  2,22'  'O  Am.  B.  R.  7, 
affirming  113  Fed.  Rep.  120,  7  Am. 
B.  R.  623. 

20  Tiffany  v.  Boatman's  Savings 
Institution.  18  Wall.  375 ;  Bromley 
V.   Smith,   No.   1922  Fed.   Cas.,  s.  c. 

2  Biss.  511  ;  National  Bank  v.  Gish's 
assignee,  72  Penn.  13 ;  Nichols  v. 
Bellows,  22  Vt.  581  ;  Sparkawk  v. 
Cochran,  No.  13203  Fed.  Cas.,  s.  c. 
30  Leg.  Int.  233. 

21  Nichols  V.  Eaton,  91  U.  S.  716. 

22  In  re  Hanna,  105  Fed.  Rep. 
587,  5  Am.  B.  R.  127,  3  N.  B.  N. 
237;  Chatt.  Nat.  Bank  v.  Rome  Iron 
Co.,  102  Fed.  Rep.  755,  4  Am.  B.  R. 
441  :  In  re  Standard  Laundry  Co., 
112  Fed.  Rep.  126.  7  .^m.  B.  R. 
254 :  In  re  Cohb,  96  Fed.  Rep.  821 , 

3  Am.  B.  R.  129;  In  re  Graff,  117 
Fed.    Rep.   343 .  8  Am.   B.   R.   744 ; 


In  re  Nicholas,  122  Fed.  Rep.  299, 
10  Am.  B.  R.  291  ;  Metcalf  v.  Bar- 
ker, 187  U.  S.  165,  9  Am.  B.  R.  2,6; 
In  re  English,  122  Fed.  Rep.  113, 
10  Am.  B.  R.  133 ;  In  re  Goldsmith, 
118  Fed.  Rep.  763,  9  Am.  B.  R. 
419;  In  re  Mitchell,  116  Fed.  Rep. 
87 ,  8  Am.  B.  R.  324 ;  First  National 
Bank  v.  Penn.  Trust  Co.  (C.  C.  A. 
3d  Cir.),  124  Fed.  Rep.  968;  10  Am. 
B.  R.  — . 

2^  Yeatman  v.  Savings  Institution, 
95  U.  S.  764;  Jerome  v.  McCarter, 
94  U.  S.  734;  Donaldson  v.  Farwell, 
93  U.  S.  631  ;  Cook  V.  Tullis,  18 
Wall.  332 ;  Gibson  v.  Warden,  14 
Wall.  244 ;  Brow^n  v.  Heathcote,  i 
Atk.  160;  Crane  v.  Penny,  2  Fed. 
Rep.  187 ;  Mattocks  v.  Baker,  2  Fed. 
Rep.  455  ;  Mitchell  v.  Winslovv^,  No. 
9673  Fed.  Cas.,  s.  c.  2  Story  630; 
Wind.sor  v.  McLellan,  No.  17887 
Fed.  Cas.,  s.  c.  2  Story  492 ;  Goddard 
V.  Weaver,  Noo.  5495  Fed.  Cas.,  s.  c. 
I  Woods  257 ;  In  re  Puscy,  No. 
1 1477  Fed.  Cas.,  s.  c.  6  N.  B.  R.  40: 
Parker    v.    Muggridge,  ,  No.     10743 


WHAT    PASSES    TO    THE    TRUSTEE. 


369 


recognized  by  more  than  one  provision  of  the  present  statute.'* 
Another  exception  is  w'here,  as  in  unrecorded  conditional  sales 
and  chattel  mortgages,  the  bankrupt's  title  is  not  good  against 
some  third  person  but  because  of  state  laws  is  good  in  favor  of 
creditors.  In  such  cases  the  trustee  is  given  the  right  of  the 
creditors  and  gets  title  to  the  goods. "^ 

Where  property  on  which  there  is  a  valid  lien  is  sold  by  a 
receiver  in  a  foreclosure  suit  brought  by  the  lienor  the  title  to 
the  proceeds  passes  to  the  trustee  after  satisfying  the  lien  and 
costs. 

The  title  remains  in  the  trustees,  unless  conveyed  to  a  pur- 
chaser,-" until  the  estate  is  finally  distributed  by  direction  of 
the  court. 

Upon  the  confirmation  of  a  composition  offered  by  a  bank- 
rupt the  title  to  his  property  revests  in  him.-'  But  wherever 
a  composition  is  set  aside  or  a  discharge  revoked  the  trustee 
is,  upon  his  appointment  and  qualification,  vested  with  the 
title  to  all  of  the  property  of  the  bankrupt  as  of  the  date  of 
the  final  decree  setting  aside  the  composition  or  revoking  the 
discharge.^** 


Fed.  Cas.,  s.  c.  2  Story  334 ;  Fletcher 
V.  Morey,  No.  4864  Fed.  Cas.,  s.  c. 
2  Story  555;  Kelly  v.  Scott,  49 
N.  Y.  595;  Talcott  V.  Dudley,  5  111. 
427. 

"B.  A.  1898,  Sec.  sdb.  Sec.  67^ 
and  /,  and  Sec.  60b. 

2''B.  A.  1898,  Sec.  67a;  In  re 
Garcewich  ( C.  C.  A.  2(1  Cir.),  115 
Fed.  Rep.  87  ,  8  Am.  B.  R.  149 ;  In  re 
New  York  Economical  Printing  Co. 
(C.  C.  A.  2d  Cir.),  110  Fed.  Rep. 
514,  6  .'Vm.  P..  R.  615;  III  re 
Gait,  120  Fed.  Rep.  443,  9 
Am.  li.  R.  682;  Chesapeake  Shoe 
Co.  V.  Seldner  (C.  C.  A.  4th  Cir.), 
122  Fed.  Rep.  593,  10  Am.  B.  R. 
466,  hi  re  Hull,  115  Fed.  Rep.  858, 
8  Am.  B.  R.  302;  Spencer  v.  Du- 
plan  Silk  Co.,  112  Fed.  Rep.  638,  7 
Am.  B.  R.  563 ;  fn  re  Tyler,  104 
Fed.  Rep.  778,  5  .\m.  B.  R.  152; 
/«  re  Leigh,  96  Fed.  Rep.  806;  In  re 


Taylor,  95  Fed.  Rep.  956;  but  see 
In  re  Standard  Laundry  Co.,  1 1 2 
Fed.  Rep.  126,  7  Am.  B.  R.  254;  In 
re  Hinsdale,  III  Fed.  Rep.  502,  7 
Am.  B.  R.  85. 

The  trustee,  however,  takes  the 
title  only  to  the  extent  of  the  claims 
of  those  against  whom  the  title  of 
tlic  third  party  would  not  I)c-  good  : 
In  re  Garcewich  (C.  C.  .\..  2d 
Cir.),  115  Fed.  Rep.  87,  8  Am.  B. 
R.  149;  In  re  N.  Y.  Econ.  Print- 
ing Co.  (C.  C.  A.,  2d  Cir.),  no 
Fed.  Rep.  514,  6  Am.  B.  R.  615. 

20  B.  A.   1898,   Sec.   70c. 

2TB.  A.  1898,  Sec.  7of.  See 
Stevens  v.  Earlcs,  25  Mich.  40. 
See  King  v.  Remington,  36  Minn. 
15;  Herndon  v.  Davenport,  75  Tex. 
462;  Oliver  v.  Sanborn,  60  Mich. 
346. 

28  3.  A.   1898,  Sec.  70d. 


370  LAW    AXn    I'KOCKKDIXGS    IN    BANKRl'PTCY. 

§    150.     The  possession  of  the  bankrupt's  property. 

As  soon  as  a  trustee  is  appointed  and*  qualified  he  is  vested 
with  the  title  to  the  bankrupt's  property.  The  vesting  of  the 
title  gives  him  constructive  possession  of  the  property  the  in- 
stant the  title  passes.  Such  property  is  thereby  brought  into 
the  bankruptcy  court  and  placed  in  its  custody  and  under  its 
protection  as  fully  as  if  actually  brought  into  the  visible  pres- 
ence of  the  court.  Being  in  the  custody  of  the  bankruptcy 
court,  no  other  court  and  no  person  acting  under  any  process 
from  any  other  court  can,  without  permission  of  the  bank- 
ruptcy court,  interfere  with  it,  and  to  so  interfere  is  a  contempt 
of  the  bankruptcy  court.*"  This  is  true,  even  if  the  trustee  is 
not  in  manual  possession  of  the  property.^" 

The  filing  of  a  petition  in  bankruptcy  is  a  caveat  to  all  the 
world  and  in  effect  an  attachment  and  injunction.^^  The 
effect  of  filing  such  a  petition  is  to  place  the  property  of  the 
bankrupt  constructively  in  the  custody  of  the  court  of  bank- 
ruptcy. Especially  if  the  petition  is  subsequently  sustained 
by  the  court.^^  Where  the  petition  is  dismissed  it  may  be 
doubted  if  the  mere  filing  of  a  petition  will  be  held  such  cus- 
tody as  to  render  void  dealings  with  such  property  pending  an 
adjudication. 

29  White   V.    Schloerb,    178   U.   S.  A    trustee    is    an    officer    of    the 

542.     See  also  Sec.  18,  ante.  court,  and  his  possession  is  the  pos- 

In  re  Vogel,  No.  16982,  Fed.  Cas.,  session  01  the  court,  and  the  familiar 

s.    c.   7   Blatch.    18;    In   re   Barrow,  cases  turning  upon  the  relations  of 

No.   1057,  Fed.   Cas.,  s.  c.   i    N.  B.  marshal  and  receivers  are  applicable 

R.    481  ;    Markson    v.    Heaney,    No.  with   equal    force   to   the   protection 

9098,    Fed.    Cas.,   s.   c.    I    Dill.   497 ;  of  the  trustee.     Taylor  v.  Carryl,  20 

In  re  People's  Mail  Steamship  Co.,  How.    583;    Freeman    v.    Howe,    24 

No.    10970   Fed.    Cas.,   s.   c.   3   Ben.  How.  450;  Shields  v.  Coleman,  157 

226;   In  re  Kerosene  Oil   Co.,   No.  U.  S.  168:  Porter  v.  Sabin.  149  U.  S. 

7725  Fed.  Cas.,  s.  c.  3  Ben.  35;  Mc-  473;    McLean    v.    Mayo,    113    Fed. 

Lean   v.   Lafayette   Bank,   No.  8885  Rep.   106,  7  Am.  B.  R.   115. 

Fed.  Cas.,  s.  c.  3  McLean  185 ;  Wat-  3o  See    Sec.    23,    ante,    and    cases 

son  V.  Citizens'  Savings  Bank,  No.  there  cited. 

17279  Fed.  Cas.,  s.  c.  2  Hughes  200;  •"'i  Mueller   v.   Nugent,   184   U.   S. 

In  re  Wallace,  No.  17094  Fed.  Cas.,  i ;  5  Am.  B.  R.  176. 

s.    c.    Deady   433 ;    Jones   v.    Leach,  32  In  re  Weinger,  Bergman  &  Co., 

No.  7475  Fed.  Cas..  s.  c.  i  N.  B.  R.  126  Fed.  Rep.  875.     Consult  White 

595;  Brock  V.  Terrill,  No.  1914  Fed.  y.  Schloerb,  178  U.  S.  542,  4  Am. 

Cas.,  s.  c.  2  N.  B.  R.  643;  Penning-  B.   R.    178;   In  re  Brooks,  91    Fed. 

ton   v.    Sale,    No.    10939   Fed.    Cas.,  Rep.  508.  i  Am.  B.  R.  531;  Wayne 

s.  c.  I  N.  B.  R.  :72;  Hewett  v.  Nor-  Knitting   Mills   Co.  v.   Nugent,   104 

ton,No.  6441  Fed.Cas.,  s.  C.Woods  68.  Fed.  Rep.  5.30,  4  Am.  B.  R.  747,  s. 

c.  184  U.  S.  I. 


WHAT    PASSES    TO    THE    TRUSTEE.  3/1 

It  is  the  duty  of  the  bankrupt  to  prepare,  make  oath  to  and 
file  in  court  within  ten  days,  unless  further  time  is  granted, 
after  the  adjudication,  if  an  involuntary  bankrupt,  and  with 
the  petition  if  a  voluntary  bankrupt,  a  schedule  of  his  prop- 
erty, showing  the  amount  and  kind  of  property,  the  location 
thereof,  its  money  value  in  detail/''  The  bankrupt  should 
surrender  to  the  trustee  the  actual  possession  of  all  of  his 
property,  whether  included  in  the  schedule  or  not.^*  The 
trustee  must  himself  be  active.  He  should  assert  his  right  to 
the  property  if  the  bankrupt  does  not  voluntarily  surrender 
it."  A  certified  copy  of  the  order  approving  his  bond  is  suffi- 
cient authority  for  a  trustee  to  demand  actual  possession.''® 
If  the  bankrupt  fails  or  refuses  to  deliver  any  part  of  the 
property  in  his  possession  the  trustee  may  procure  an  order  of 
court  to  compel  him  to  do  so.^^  The  court  will  enforce  such 
an  order  by  conmiitment  if  necessary.^* 

Where  an  officer  of  a  court  has  i>ossession  of  the  property 
the  court  will  direct  him  to  deliver  it  to  the  trustee  as  soon  as 
he  is  appointed  and  qualified."""* 

§  151.     Trustees  not  bound  to  take  incumbered  interest. 

Since  the  property  passes  to  the  trustee  subject  to  equities 
it  may  be  so  burdened  with  liens  and  incumbrances  as  to  be 
without  value  to  the  estate.  In  such  case  it  can  not  be  con- 
sidered a  real  asset  of  the  bankrupt. 

•■'■■'  B.  A.  1898,  Sec.  7,  clause  8.  property  for  two  months  after  the 
'*/m  r^  Peltasohn,  No.  10912  Fed.  date    of    his    appointment,    but    had 
Cas.,  s.  c.  4  Dill.  107;  In  re  Dresser,  allowed  the  debtor  to  continue  trad- 
No.  4077  Fed.  Cas.,  s.  c.  3  N.  B.  R.  ing  as  before,  was  not  sufficient  to 
557;  In  re  Kempner,  No.  7689  Fed.  destroy    his    right   to   the   prop<>rty. 
Cas.,   s.   c.  6   N.   B.   R.  521  ;   In   re  Ex  parte  Cooper,  39  L.  T.  260. 
Salkey.    No.    12253    Fed.   Cas.,   s.  c.  •"»  B.  A.  1898,  Sec.  2i<-. 
6  Biss.  269;  In  re  Speyer,  No.  13239  ''^ /«  re  How,  No.  6747  Fed.  Cas., 
Fed.  Cas.,  s.  c.  6  N.  B.  R.  255 ;  In  re  s.   c.    18   N.    B.    R.   565. 
How.  No.  6747  Fed.  Cas.,  s.  c.  18  N.  3"  Mueller   v.    Nugent,    184   U.    S. 
B.   R.  565;  In  re  McKenna,  9  Fed.  I,  5  Am.  B.   R.   176;  In  re  Rosser 
Rep.  29;  In  re  Smith,  93  Fed.  Rep.  (C.  C.  A.  8th  Cir.),  loi   Fed.  Rep. 
791,  2  Am.  B.  R.  190;  see  also  In  re  562,  4  Am.  B.  R.  153;  In  re  Wilson. 
Mayer  (C.  C.  A.  7th  Cir.),  108  Fed.  116    Fed.    Rep.    419,   8   Am.    B.    R. 
Rep.  599,  6  Am.  B.   R.    117.  612. 

•'"'•  It    was    held    in    England    that  '"'  Carpenter  Bros.  v.  O'Conner,  16 

tht   mere   fact  that  the  trustee  had  O.   C.   C.   526. 
not   taken  possession  of  a   debtor's 


372  LAW    AND    I'ROCEEDINGS    IN    BANKRUPTCY. 

It  has  long  been  a  recognized  principle  of  bankrupt  law  that 
a  trustee  is  not  bound  to  take  proi^erty  of  an  onerous  or  un- 
profitable character,  or  property  which  will  be  a  burden  instead 
of  a  benefit.'"  A  trustee  in  this  respect  is  regarded  as  being 
in  a  ver>'  different  position  from  that  of  an  executor  of  a  de- 
ceased person.  The  former  takes  the  property  by  operation 
of  law,  but  the  latter  claims  title  through  his  testator,  and  is 
bound  to  perform  his  obligations  to  the  extent  of  his  assets. 
The  trustee  in  such  cases  is  required  to  elect  within  a  reason- 
able time,"  and  if  he  refuses  to  elect  when  required  to  do  so 
it  is  deemed  an  election  to  reject  the  estate.''^  Where  the 
trustee  elects  not  to  take  the  property  or  right  of  the  bankrupt 
and  charge  the  estate  with  it,  the  property  and  right,  whatever 
it  is,  remains  in  the  bankrupt.*^  When  a  trustee  once  rejects 
property  as  onerous  he  can  not  later  claim  it  if  it  turns  out  to 
be  valuable.** 

§  152.     Property  of  other  persons  in  the  possession  o£  the 

bankrupt. 

The  statute  contemplates  that  the  trustee  shall  take  all  the 

property  of  the  bankrupt  at  the  time  of  the  adjudication  which 

may  be  applied  to  the  payment  of  his  debts.     The  trustee 

♦"Sessions  v.  Romadka,  145  U.  S.  39;   Taylor  v.   Irwin,  20  Fed.   Rep. 

39;  Sparhawk  v.  Yerkes,  142  U.  S.  615,  620;   Amory  v.  Lawrence,   No. 

I :  American  File  Co.  V.  Garrett,  no  336    Fed.    Cas.,    s.    c.    3    Clif.    523; 

U.   S.  295 ;  Glenny  v.  Langdon,  98  Oakey  v.  Gardiner,  2  La.  Ann.  1005 ; 

U   S.  30,  31 ;  DuShane  v.  Beall,  161  Lawrence  v.  Knowles,  5  Bing.  N.  C. 

U.    S.    513;    In    re    Chambers,    98  399:   Tuck  v.   Fyson,  6   Bing.  321; 

Fed.  Rep.  865,  3  Am.  B.  R.  537,  2  Graham  v.  Van  Dieman's  Land  Co., 

N.    B.    N.   388;    In   re   Cogley,    107  11  Exch.  loi. 

Fed.    Rep.    72,,   5    Am.    B.    R.    731  ;  *'^  Sparhawk  v.  Yerkqs,  142  U.  S. 

Amory   v.  Lawrence,   No,   336  Fed.  i  .    Taylor   v.    Irwin.   20   Fed.    Rep. 

Cas.,   s.    c.   3    Clif.    523;    Taylor    v.  615;    Smith    v.    Gordon,    No.    13052 

Irwin,  20  Fed.  Rep.  615,  620;  Kim-  Fed.  Cas.,  s.  c.  6  Law  Rep.  313. 

berling  v.  Hartly,  i  Fed.  Rep.  571;  ♦*  Meyers  v.  Josephson  (C.  C.  A. 

Rugely  &  Harrison  v.  Robinson,  19  5th  CiT.),  124  Fed.  Rep.  734,  10  Am. 

Ala.  404;  Glenn  v.  Howard,  65  Md.  B.   R.  — ,   affirming    121    Fed.   Rep. 

40;  Nash  V.  Simpson,  78  Me.   142;  142,    9    Am.    B.    R.    345,    in    which 

National    Bank    v.    State    Bank,    10  case  it  was  also  held  that  a  trustee, 

Bush    CKy.)   367;  Streeter  v.  Sum-  having  rejected  an  insurance  policy 

ner,  31  N.  H.  542.  as   onerous,   although   he   could   nOt 

"  See  Leaseholds,  p.   165,  post.  claim  the  proceeds,  could  claim  the 

*2  Sessions  v.  Romadka,  145  U.  S.  amount  of  the  cash  surrender  value. 


WHAT    PASSES    TO    THE    TRUSTEE.  373 

may,  as  has  been  stated,  decline  to  take  property  which  is  of 
no  value  or  benefit  to  the  estate.'"^ 

Where  property,  lands,  goods  or  money  in  his  possession  can 
be  clearly  identified  to  be  owned  by  a  person  other  than  the 
bankrupt  no  useful  end  can  be  served  by  its  vesting  in  the 
trustee.  It  would  be  absurd  to  say  that  anything  shall  vest 
in  the  trustee  for  no  other  purpose  but  in  order  that  there  may 
be  proceedings  brought  against  him,  by  which  he  shall  be 
obliged  to  refund  and  account  for  such  thing  and  pay  costs 
of  the  proceeding  out  of  the  effects  of  the  bankrupt  which 
ought  to  be  applied  to  the  discharge  of  his  debts.  Such 
property  does  not  vest  in  the  trustee  under  the  bankrupt  act.''" 
But  if  the  property  has  become  mingled  or  confused  with  the 
other  property  in  the  possession  of  the  banknipt,  so  that  it 
possesses  no  hidicia  or  earmarks  by  which  it  may  be  distin- 
guished from  all  other  property  of  the  same  description,  it  is 
conceived  to  be  the  property  of  the  banknipt,  and  as  such 
passes  to  the  trustee.*^  In  such  cases  the  j^erson  who  owns 
the  property  is  interested  onlv  as  a  general  creditor  of  the 
estate. 

It  is  not  infrequently  hard  to  determine  who  owns  the  prop- 
erty in  the  possession  of  the  bankrupt.  When  the  bankrupt 
has  such  property  in  his  possession,  which  may  belong  to  other 
persons,  it  ordinarily  passes  to  the  trustee  until  its  ownership 
is  determined.'"'  The  title  which  the  trustee  takes  to  such 
property  is  the  same  that  the  bankrupt  had,  and  may  be  merely 
a  title  of  jKjssession.  When  the  claimant  establishes  his  title 
to  the  property  it  should  be  delivered  to  him.  If  there  is  a 
controversy  it  is  for  the  court  of  bankruptcy  to  determine  it. 
The  proper  practice  in  cases  where  the  trustee  has  taken  pos- 
session of  property  not  belonging  to  the  bankrujit  is  for  the 
claimant  to  procure  an  order  of  the  court  of  bankruptcy  upon 

♦'^  Sec.    151,   ante.  Fed.  Cas.,  s.  c.  i   Saw.  306;  Rahilly 

♦*  Cook  V.  TuIIis,   18  Wall.   332;  v.  Wilson,  No.  11532  Fed.  Cas.,  s.  c. 

Clark  V.  Iselin,  21   Wall.  360;  Por-  3  Dill.  420. 

ter  V.  Lazear,  109  U.  S.  84 ;  Tennes-  ••**  hi    re    Vogel,    No.    16982    Fed. 

see  etc.,  R.  R.  Co.  v.  East  Alabama  Cas.,  s.  c.  7  Blatch.  18;  In  the  matter 

Ry.  Co.,  75  Ala.  529;  Donaldson  v.  of   Moses,   i    Fed.   Rep.  845;   In   re 

Farwell,  93  U.  S.  631.  Beal,    No.    1156    Fed.    Cas.,    s.   c.    i 

*^  Wood  M.  &  R.  Co.  V.  Broke,  9  Low.  323. 
B.    R.    3Q5 ;    Adams    v.    Meyers,    62 


374  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

petition  and  proofs  to  deliver  such  property  to  him/"  An  at- 
tempt to  obtain  possession  of  such  property  in  the  hands  of 
the  trustee  by  writ  of  replevin,  or  other  process,  issued  by 
another  court  is  as  much  a  contempt  of  the  court  of  bank- 
ruptcy as  if  the  claimant  liad  endeavored  to  take  it  by  force, 
and  in  such  cases  the  sheriff  or  marshal  will  be  ordered  to 
return  the  property."^" 

Where  property  of  another  person  is  in  the  actual  possession 
of  the  bankrupt  after  the  filing  of  the  petition  and  before  the 
trustee  or  other  officer  of  a  court  of  bankruptcy  acquires  actual 
possession  of  it,  the  possession  cannot  be  recovered  by  replevin 
instituted  in  a  state  court.'^^  The  reason  is  that  the  filing 
of  the  petition  is  a  c(Tveat  to  all  the  world  and  in  effect  an 
attachment  and  injunction,  and  a  court  of  bankruptcy  acquires 
constructive  custody  of  all  property  in  the  possession  of  the 
debtor  from  the  time  of  filing  the  petition,  and  the  rule  hereto- 
fore stated  ^^  applies  to  such  property  as  much  as  to  prop- 
erty in  the  possession  of  a  trustee. 

The  question  of  the  right  of  persons  owning  property  in  the 
possession  of  the  bankrupt  to  recover  it  will  become  important 

*»  White   V.    Schloerb,    178   U.   S.  U.   S.   171),  but  under  the  specific 

542,  4  Am.   B.   R.   178,  2  N.  B.   N.  provisions  of  Sec.   2  of  the   bank- 

721  ;  Keegan  v.  King,  96  Fed.  Rep.  ruptcy  act  of   1898." 

758,  3  Am.  B.  R.  79;  In  re  Russell  In  Fisher  v.  Cushman    (C.  C.  A. 

(C.  C.  A.  2d  Cir.),   101   Fed.  Rep.  ist  Cir.),  103  Fed.  Rep.  867,  4  Am. 

248,  3  Am.  B.  R.  658 ;  In  re  Cham-  B.    R.   654,   the   court    said :     "  The 

bers,    Calder   &    Co.,   98   Fed.    Rep.  rule  is  settled  beyond  all  doubt  that 

865,  3  Am.   B.   R.   537,  2  N.   B.   N.  any  person  claiming  an  equitable  or 

388;   In   re   Corbett,    104   Fed.   Rep.  legal  interest  in  a  fund  in  the  regis- 

872,  5  Am.  B.  R.  224;  In  re  Emslie  try  of  a  court  is  entitled  to  inter- 

(C.   C.   A.  2d   Cir.),   102  Fed.   Rep.  vene  in  that  behalf." 

291,  4  Am.  B.   R.   126,  2  N.  B.  N.  ^o  white   v.    Schloerb,    178   U.    S. 

992.  5^V2 ;   In  re  Vogel,   No.    16982   Fed. 

In   re   Whitener    (C.    C.    A.    5th  Cas.,  s.  c.  7  Blatch.  18;  In  re  Ul- 

Cir.),  105  Fed.  Rep.  180,  5  Am.  B.  rick,   No.    14328   Fed.    Cas.,   s.   c.   6 

R.   198,   3   N.   B.   N.  316,  the  court  Ben.     483 ;     In     re     People's     Mail 

said :     "  The   property  being  in   the  Steamship  Co.,  No.  10970  Fed.  Cas., 

custody  of  the  district  court  sitting  s    c.    3    Ben.    226;    In    re   Kerosene 

in  bankruptcy,  that  court  had  juris-  Oil  Co.,  No.  7725  Fed.  Cas.,  s.  c.  3 

diction  to  entertain  the  intervention  Ben.   35  ;   In   re   Atkinson,   No.   606 

filed  by  Ramseur,  claiming  the  prop-  Fed.    Cas.,   s.   c.    7    N.    B.    R.    143 ; 

erty,    and    to    hear    and    determine  Moran  v.  Sturges,  154  U.  S.  256. 

the  issues  presented  by  the  interven-  ^"^  In    re    Weinger,     Bergman    & 

tion,  not  only  on  general  principles  Co.,  126  Fed.  Rep.  875. 

("see  Morgan's  L.  &  T.  R.  &  S.  S.  '^'^  See     cases    cited     in    note    49 

Co.    v.    Texas    Cent.    Ry.    Co.,    137  supra. 


WHAT    PASSES    TO    THE    TRUSTEE.  375 

in  cases  of  fraudulent  sales.  It  will  be  especially  so  in  cases 
of  involuntary  bankruptcy,  where  ten  days  must  elapse  be- 
tween the  filing  of  the  petition  and  an  adjudication.  The 
doctrine  is  now  well  established  by  a  preponderance  of  author- 
ity that  a  party  not  intending  to  pay,  who  has  induced  an  owner 
to  sell  him  goods  on  credit  by  fraudulently  concealing  his 
insolvency  and  his  intent  not  to  pay  for  them,  is  guilty  of  a 
fraud,  which  entitles  the  vendor,  if  no  innocent  third  party 
has  acquired  an  interest  in  them,  to  disaffirm  the  contract  and 
recover  the  goods.^^  To  justify  a  recision  there  should  be 
a  clear  showing  of  deliberate  and  intentional  fraud ;  the  mere 
knowledge  of  insolvency  and  a  failure  to  disclose  it  is  not  suffi- 
cient.'* Mutual  mistake  will  also  justify  a  recision.^^  In 
such  cases  no  title  passes  to  the  bankrupt.  But  if  the  vendor 
does  not  take  steps  to  rescind  the  sale  the  title  passes  to  the 
bankrupt  and  to  the  trustee. 

Property  in  the  possession  of  the  bankrupt  purchased  on 
condition  that  the  title  shall  not  pass  to  him  until  the  goods 
are  paid  for  does  not  pass  to  the  trustee,  where  such  condi- 
tional sale  is  valid  as  against  creditors  under  the  state  law.''^* 
Where  such  property  is  purchased  to  be  resold  in  the  due 
course  of  business  it  passes  to  the  purchaser's  trustee,  as  repre- 
sentative of  the  creditors,  where  such  conditional  sale  would 
be  invalid  as  to  creditors  under  the  state  law."** 

^^  Bloomingdale  v.  Empire  Rubber  666,  7  Am.  B.  R.  428;  hi  re  Roals- 

Co.,  114  Fed.  Rep.  1016,  8  Am.  B.  R.  wick,  no  Fed.  Rep.  639,  6  Am.  B.  R. 

74:  hi  re  Biirkle,  116  Fed.  Rep.  766,  752;  hi  re  Davis,  112  Fed.  Rep.  294, 

8  Am.  B.  R.  542;  Mr.  Justice  Davis,  7   Am.    B.    R.   276;    but   see  In    re 

in   DonaldsDu  v.   Farwcll,  93  U.   S.  Epstein,  6  Am.  B.  R.  60.     In  /n  re 

631    and  cases  there  collated.  Mont-  Patterson  &  Co.,  125  Fed.  Rep.  562, 

gomery  v.  Bucyrus  Machine  Works,  mere    false    statements    of    financial 

92  U.  S.  257;  Dngan  v.  Nichols,  125  condition    knowinply   made    for   the 

Mass.  43;  Davis  v.  Stewart,  8  Fed.  purpose    of    obtaining    credit    were 

Rep.  803;  Jaffrey  v.  Brown.  29  Fed.  held   siirfuicnt    to  justify  a   recision. 

Rep.  476,  and  note  at  the  end  of  the  ^•''  hi    re    Burkle,    116    Fed.    Rep. 

opinion.  766,  8  Am.  B.  R.  542. 

As  to  the  right  of  stoppage  in  ''^*  In  re  Kellogg,  112  Fed.  Rep. 
transitu,  see  In  re  Foot,  No.  4907  52,  7  Am.  B.  R.  270. 
Fed.  Cas.,  s.  c.  11  Blatch.  530;  Su-  ''^•**  In  rr  Carpenter,  125  Fed.  Rep. 
tro  v.  Hoile,  2  Neb.  186;  Tufts  v.  831;  In  re  Garcewich,  115  Fed.  Rep. 
Sylvester,  79  Me.  213;  Benjamin  on  87.  8  Am.  B.  R.  T49;  In  re  How- 
Sales.  Sec.  828,  et  seq.  land,  109  Fed.  Rep.  869,  6  Am.  B.  R, 

^*  In   re  O'Conner,    112  Fed    Rep  405. 


3/6  LAW    AND    PROCliKDINGS    IN     HANKRl'PTCY. 

§   153.     What  property  passes  to  the  trustee  generally. 

It  may  he  stated  as  a  general  rule  that  all  goods,  property 
and  rights  of  action  properly  availahle  for  the  payment  of  the 
bankrupt's  obligations  or  debts  pass  to  the  trustee  in  bankrupt- 
cy. Property  subject  to  exemption  under  the  state  law  does  not 
pass."^"  The  claim  of  a  wife  for  alimony  is  not  a  property 
right  and  property  awarded  her  as  alimony  after  her  bank- 
ruptcy does  not  i)ass  to  her  trustee  in  bankruptcy."'^ 

AX'ith  this  exception  the  statute  enumerates  six  classes  of 
property,"*  the  title  of  which  shall  be  vested  in  the  trustee, 
namely,  to  all,  Urst,  documents  relating  to  his  property;  sec- 
ond, interests  in  patents,  patent  rights,  copyrights,  and  trade- 
marks;  iJiird,  i)Owers  which  he  might  have  exercised  for  his 
own  beneht,  but  not  those  w^hich  he  might  have  exercised  for 
some  other  person ;  fourth,  property  transferred  by  him  in 
fraud  of  his  creditors ;  iiftJi,  property  which  prior  to  the  filing 
of  the  petition  he  could  by  any  means  have  transferred  or 
which  might  have  been  levied  upon  and  sold  under  judicial 
process  against  him ;  and,  sixth,  rights  of  action  arising  upon 
contracts  or  from  the  unlawful  taking  or  detention  of.  or 
injury  to,  his  property. 

These  provisions  relate  only  to  the  ])roperty  of  the  bankrupt 
or  property  in  his  possession,  and  do  not  include  any  other 
property.^"  They  embrace  all  the  real  estate  situated  in  the 
United  States,  but  do  not  include  that  situated  in  foreign 
countries.'""**  A  bankrupt  may  be  compelled  to  execute  a 
transfer  of  his  real  estate  situated  in  foreign  countries.^''  Ves- 
sels upon  the  high  seas  are  deemed  within  the  jurisdiction  of 
the  nation  and  the  proper  court  of  bankruptcy.^'**     All  per- 

^♦^  See  Exemption,  Chap.  XVII.  ^''*  B.  A.   1898,  Sec.  70a. 

B.  A.   1898,  Sec.  6,  provides  that  ^^  Porter  v.  Lazear,  109  U.  S.  84 ; 

"  This   act   shall   not   affect   the   al-  Tennessee,   etc.,   R.   R.   Co.  v.   East 

lowance  to  bankrupts  of  the  exemp-  Alabama  Ry.  Co.,  75  Ala.  529 ;  In  re 

tions    which    are   prescribed   by   the  Angier,  388  Fed.   Cas.,  4   N.   B.   R. 

state   laws   in   force  at    the  time   of  619. 

the  filing  of  the  petition  in  the  state  •''*'*  Oakey  v.  Bennett,  il  How.  22'> 

wherein  they  have  had  their  domi-  Barnett  v.  Pool,  23  Tex.  517. 

cile    for    the    six    months    or    the  ^o  gg^.   7,  clause  5,   of  the  act  of 

greater  portion  thereof  immediately  July  i,   1898,  30  Stat,  at  L. 

preceding  the  filing  of  the  petition."  5«*  Crapo  v.   Kelly,   16  Wall.  610. 

^"^  In  re  Le  Claire,   124  Fed.  Rep. 
654- 


WHAT    PASSES    TO    THE    TRUSTEE.  377 

sonal  property,  wherever  it  is,  passes  under  these  provisions "" 
for  the  reason  that  personal  property  is  deemed  to  follow  the 
domicile  of  the  owner.  Citizens  of  foreign  countries  in  which 
the  personal  property  may  be  situated  are  not  bound  by  the 
bankrupt  law  of  the  United  States.  It  has  no  extra-territorial 
effect.  Although  such  property  passes  to  the  trustee  as  of 
the  date  of  adjudication,  it  may  be  deemed  not  to  have  passed 
to  affect  rights  acquired  by  foreign  creditors  in  foreign  forums 
prior  to  the  actual  possession  of  the  trustee.  This  seems  to 
be  the  rule  in  the  United  States  with  reference  to  foreign  bank- 
ruptcy. The  American  courts  ha\e  upheld  attachments  of 
resident  creditors  of  foreign  bankrupts  upon  property  situated 
in  this  country  against  a  foreign  assignee  who  had  not  actually 
taken  possession  of  such  property.*"'* 

Such  property  passes  to  the  trustee  whether  named  in  the 
schedule  of  the  bankrupt  or  not.**^ 

g   154.     Documents. 

All  documents  relating  to  the  bankrupt's  property  pass  to 
the  trustee."^*  These  include  ""  deeds  or  other  muniments  of 
title,  contracts,  securities  (as  bonds,  mortgages,  etc.),  bills  re- 
ceivable, notes,  bank  books,  bills  of  exchange,  account  books, 
and  all  ])rij)ers  and  books  relating  to  his  business.  While, 
strictly  speaking,  a  document  is  a  written  or  printed  paper, 
it  may  also  include  anything  bearing  a  legible  or  significant 

^  Cannon    v.    Wellford,    22    Grat.  Fox    v.    Adams,    5    Greenl.     (Me.) 

(Va.;   195  ;  Crapo  V.  Kelly,  16  Wall.  245;    JiiRrahan:   v.   Geyor,   13   Mass. 

610;    Seikrig    v.    Davics    &    Salt,    2  146;   Harrison   v.   Stcrry,  5   Cranch 

Dow  230,  s.  c.   2   Rose  97;  decided  289;   Zacher   v.    Fidelity  Trust   and 

by  the  House  of  Lords  in  1814.     For  Safety- Vault    Co.     (C.    C    A.    6th 

an  exhaustive  discussion  of  this  sub-  Cir.),  106  Fed.  Rep.  593. 

ject,  see  Story's   Conflict  of  Laws,  "^  Holbrook  v.  Coney,  25  111.  447; 

Sees.  403  to  421.  Jcwctt  V.  Preston,  27  Me.  400:  Hur- 

""*  Blake    v.     Williams,    6    Pick.  ton  v.  Lockert,  9  .'Vrk.  411;  Jii   re 

(Mass.)   286;   Milne  v.  Moreton,  6  .Schumpert,  No.  12491   Fed.  Cas.,  s. 

Binn.    (Pa.)    353;   Dawes  v.   Boyls-  c.  8  N.  B.  R,  415. 

ton,  9   Mass.  337;   Osgood   v.    Ma-  *'''*  B.   A.   l8<)8,  Sec.  70,  clause  i. 

guire,    61    N.    Y.    529;    Willitts    v.  '^^'I'he  act  defines  a  document  to 

Waite,  25   N.   Y.  583 ;   Abraham  v.  "  include  any  book,  deed,  or  instru- 

Ple.storo,    3    Wend.    CN.    Y.)    538;  ment  in  writing."     B.  A.  1898,  Sec. 

Saunders  v.  Williams.  5  N.  H.  213;  i,  clause  13. 
Bhncliard    v.    Russell,    13    Mass.    1  ; 


3/8  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

inscription,  as  a  stencil  plate  or  marking  and  cancelling  stamp 
or  a  seal.**^ 

Where  a  bankrupt  has  transferred  his  documents  or  any  of 
them  to  another  person  before  bankruptcy  proceedings  were 
instituted,  such  documents  can  not  be  recovered  by  the 
trustee  until  such  transfer  is  shown  to  be  fraudulent  under  the 
act.«* 

§  155.     Patents,  copyrights  and  trade-marks. 

All  interests  in  patents,  patent  rights,  copyrights  and  trade- 
marks pass  to  the  trustee.**^  But  the  trustee  takes  no  greater 
interest  in  these  rights  than  the  bankrupt  had.  Under  this 
provision  the  interest  of  the  bankrupt  as  a  patentee,  assignee 
or  a  licensee  passes  to  his  trustee  in  bankruptcy.  The  title 
passes  by  operation  of  law,  and  no  instrument  need  be  recorded 
in  the  ])atent  office."*'  It  is,  however,  proper  for  a  trustee  to 
record  the  order  approving  his  bond  in  the  patent  office. 

The  trustee  is  not  bound  to  take  the  interest  of  the  bankrupt 
in  the  patents,  copyrights  or  trade-marks  if  it  is  conceived  to 
be  worthless  or  would  prove  to  be  a  burden  or  unprofitable."^ 
If  he  declines  to  take  the  right  it  remains  in  the  bankrupt."^  If 
he  elects  to  take  it,  the  trustee  may  maintain  a  suit  for  in- 
fringement of  the  patent,  copyright  or  trade-mark  in  such 
courts  as  the  bankrupt  could  have  instituted  it,  but  he  is  not 
obliged  to  bring  such  a  suit.**" 

"^  See    Century    Dictionary,    sub-  Royal  Baking  Powder  Co.  v.  Sher- 

ject,  Document.  ell,  93  N.  Y.  334. 

8*  Rogers    v.    Winsor,    No.    12023  *'*'  Prime  v.  Brandon  Manufactur- 

Fed.  Cas.,  s.  c.  6  N.  B.  R.  246;  In  re  ing  Co.,  No.   11421   Fed.  Cas.,  s.  c. 

West,  46  L.  T.  823.  16  Blatch.  453.     Compare  Gordon  v. 

«5  B.  A.  1898.  Sec.  70,  clause  2.  Anthony,  No.  5605   Fed.  Cas.,  s.  c. 

As    to    the    nature    of    creditor's  16  Blatch.  453.     Compare  Gordon  v. 

remedies   for  reaching  book   royal-  105    U.    S.    131 ;    Ashcroft   v.    Wal- 

ties,   see  Lord   v.    Hart,    118   Mass.  worth,  580  Fed.  Cas.,  s.  c.  i  Holmes 

271  ;    Stepliens    v.    Cady,    14    How.  152. 

531.  «'' Sessions  v.  Roniadka,  145  U.  S. 

As  to  trade-marks,  sec  Helmbold  39. 

V.  Helmbold  Manufacturing  Co.,  53  ««  Kittle  v.  Hall,  29  Fed.  Rep.  512. 

How.  Prac.  453  ;  Warren  v.  Warren  where   the  court   said  :     "  It  cannot 

Thread  Co.,   134  Mass.  247;   Soliier  be  maintained  that  it  is  the  duty  of 

V.  Johnson,  in  Mass.  238;  Leather  an  assignee  in  bankruptcy  to  insti- 

Cloth    Co.   V.    Cloth   Co.,    II    H.   L.  tute  suits  for  the  infringement  of  a 

523;  Kidd  V.  Johnson,  100  U.  S.617;  patent  owned  by  the  bankrupt,  and 


WHAT    PASSES    TO    THE    TRUSTEE.  379 

It  has  been  held  that  the  trustee  is  not  entitled  to  patents 
issued  after  an  adjudication,  for  which  application  had  been 
made  prior  to  the  filing  of  the  petition  in  bankruptcy.**"  It  may 
be  observed  that  in  such  cases  the  bankrupt  owns  an  interest  in 
the  future  patent  which  may  be  transferred  before  the  patent 
issues.'"  It  would  therefore  appear  that  the  property  in  the 
I)atent  should  pass  to  the  trustee  under  Sec.  70,  clauses  2  or  5. 
of  the  act.  If  he  elects  to  take  it,  he  should  record  the  order 
approving  his  bond  in  the  patent  office  with  a  request  that  the 
patent  issue  to  him  as  trustee. 

§   156.     Powers  of  appointment,  etc. 

A  power  "^  is  distinct  from  property.  It  is  not  an  interest 
in  property  which  can  be  transferred  to  another  or  sold  on 
execution  or  devised  by  will ;  nor  is  it  a  chose  in  action.  It 
was  therefore  held  under  the  act  of  1867  that  a  power  of 
appointment  did  not  pass  to  an  assignee  in  bankruptcy  of  the 
person  in  whom  the  power  resided."^ 

The  act  of  1898  expressly  i)rovides  that  powers  which  a 
bankrupt  might  have  exercised  for  his  own  benefit  pass  to 
the  trustee.'*  But  those  which  he  might  have  exercised  for 
some  other  person  do  not  i)ass.'''  The  English  bankrupt  laws 
have  for  many  years  contained  a  similar  provision.'''  The  test 
of  whether  the  power  ])asses  or  not  depends  upon  whether  the 
power  may  be  exercised  by  the  bankrupt  for  his  own  benefit. 

that   his   failure   to   do   so   is   ncgii-  parted    withal,    or    could    have    de- 

Rfnce."  stroyed  by  recovery  of  fine,  is  trans- 

"»/«r^  McDonnell,  loi  Fed.  Rep.  ferrcd   under  the  bankruptcy.     And 

239,  4  Am.  B.  R.  92.  the  bankruptcy  act  of   1869,  32  and 

'"R.    S.    Sec.    4895;    Hendrie    v.  33  Vic.  c.  71   s.    15.  par.  4,  enacted, 

Sayles,   98    U.    S.    546;    Walker    on  and  the  act  of  1883,  46  and  47  Vic. 

Patents,  Sec.  171.  c.  52,  s.  44.  provides  that  the  prop- 

^'  As    to    powers    generally,    see  erty  of  the  bankrupt  divisible  among 

Sugden     on     Powers;     Chance     on  his    creditors    shall    comprise    (i    i) 

Powers;     Farwell     on     Powers,     4  "the    cajjacity    to    exercise    and    to 

Kent's  Com.  351,  ct  scq.  take  proceedings    for  exercising  all 

■^2  Jones  V.  Clifton,   loi   V.  S.  225.  such   powers  in  and   over  or  in  re- 

^^  B.  A.  1898,  Sec.  70,  clause  3.  spect    of    property    as    might    have 

''*  The  statutes  13  Eliz.,  s.  c.  7  2,  been  exercised  by  the  bankrupt  for 

21   Jac.   I   c.   19  s.   12,  provided  that  his    own    benefit   at    the   commence- 

every  interest,  power,  or  possibility  ment    of   his    Ixinkruptcy   or   before 

which   the   bankniiit    could   have   dc-  hiv   rlischargc." 


380  LAW    AND    l'U(^CEI':niNC.S    IN    BANKRUPTCY. 

or  whether  he  can  exercise  it  (inly  in  behalf  of  some  other 
person.  In  the  former  case  it  passes  to  the  trustee/"  In  the 
latter  case  it  does  not.  A  power  of  j^eneral  appointment  may 
be  exercised  for  the  benefit  of  himself,  and  therefore  passes.^* 
But  it  seems  that  the  appointment  must  be  exercised  prior  to 
the  death  of  the  bankrupt.^' 

This  provision  in  bankruptcy  law  is  similar  to  a  rule  in 
equity.  The  trustee  for  this  purpose  represents  the  creditors. 
Mr.  Justice  Gray,  in  Clapp  v.  Ingraham,^**  said :  "  It  was  set- 
tled in  the  English  court  of  chancery,  before  the  middle  of  the 
last  century,  that  where  a  person  has  a  general  jx^wer  of  ap- 
pointment, either  by  deed  or  by  will,  and  executes  this  power, 
the  property  appointed  is  deemed  in  equity  part  of  his  assets, 
and  subject  to  the  demands  of  his  creditors  in  preference  to 
the  claims  of  his  voluntary  appointees  or  legatees.  The  rule 
perhaps  had  its  origin  in  a  decree  of  Lord  Somers,  affirmed 
by  the  house  of  lords,  in  a  case  in  which  the  person  executing 
the  power  had  in  effect  reserved  the  power  to  himself  in  grant- 
ing away  the  estate.^"  But  Lord  Hardwicke  repeatedly  ap- 
plied it  to  cases  of  the  execution  of  a  general  power  of  appoint- 
ment by  will  of  property  of  which  the  donee  had  never  had 
any  ownership  or  control  during  his  life;  and,  while  recog- 
nizing the  logical  difficulty  that  the  power  when  executed  took 
effect  as  an  appointment,  not  of  the  testator's  own  assets,  but 
of  the  estate  of  the  donor  of  the  power,  said  that  the  previous 
cases  before  Lord  Talbot  and  himself  (of  which  very  meager 
and  imperfect  reports  have  come  down  to  usj  had  established 
the  doctrine,  that  when  there  was  a  general  power  of  appoint- 
ment, which  it  was  absolutely  in  the  donee's  pleasure  to  execute 
or  not,  he  might  do  it  for  any  purpose  whatever,  and  might 
appoint  the  money  to  be  paid  to  his  executors  if  he  pleased, 
and,  if  he  executed  it  voluntarily  and  without  consideration, 
tor  the  benefit  rif  third  persons,  the  money  should  be  consid- 

'•''  Doe  V.  Britian,  2  B.  &  Aid.  93  ;  Div.  1005 ;  In  re  Wetmore,  102  Fed. 

Badham  v.  Mee,  7  Bing.  695  ;  Coop-  Rep.  290,  4  Am.  B.  R.  335,  3  N.  B. 

cr   V.    Slight,   27    L.    R.    Chan.    Div.  N.  143. 

-65;   Ford  V.   Belmont,  7  Rob.    (N.  ''*<  126  Mass.  2or. 

■^'.)  Q7.  '^"Thompson  v.  Towne,  Prec.  Ch. 

''^  Doe  V.  Britian,  2  B.  &  .A.ld.  93.  52:  s.  c.  2  Vern.  319. 

"^"^  Nichols  V.  Nixey,  29  L.  R.  Chan 


WHAT    PASSES    TO    THE    TRUSTEE  381 

ered  part  of  his  assets,  and  his  creditors  should  have  the  benefit 
of  it."""  The  doctrine  has  been  upheld  to  the  full  extent  in 
England  ever  since."  " 

§   157,     Property  fraudulently  transferred  by  the  bankrupt. 

The  bankrupt  statute  vests  in  the  trustee  and  authorizes  him 
to  recover  property  fraudulently  transferred.  A  transfer,  as 
defined  by  the  act,  includes  "  the  sale  and  every  other  and  dif- 
ferent mode  of  disposing-  of  or  parting  with  property,  or  the 
possession  of  property,  absolutely  or  conditionally,  as  a  pay- 
ment, pledge,  mortgage,  gift,  or  security."  -^ 

Transfers  which  are  deemed  fraudulent  in  bankruptcy  may 
be  classified  as  follows:  First,  tliose  which,  independently  of 
any  legislative  system  of  bankruptcy,  would  have  been  fraudu- 
lent at  common  law,  or  under  a  statute  of  frauds.**^  Second, 
those  which,  in  the  absence  of  a  legislative  system  of  bank- 
ruptcy, would  have  been  unobjectionable,  but  are  made  void  by 
the  bankrupt  act,  as  against  its  manifest  policy  of  equal  and 
speedy  distribution. 

With  reference  to  this  latter  class,  the  bankrupt  statute  pro- 
vides that  transfers  made  l)y  the  bankrupt  within  four  months 
before  the  filing  of  the  petition  shall  be  void  in  three  classes  of 
cases.  First,  conveyances  and  transfers  whereby  a  creditor  is 
enabled  to  obtain  a  preference  of  his  claim  over  the  other  cred- 
itors;'"* second,  conveyances  and  transfers  which  are  intended 
to  hinder,  delay  or  defraud  creditors,  or  any  of  them;'*'*  and. 
third,  conveyances  and  transfers  whicli  are  null  and  void  as 
against  creditors  under  the  local  laws  of  the  several  states.''' 
In  order  to  avoid  a  transfer  fraudulent  under  the  act  it  must 
fall  within  the  provisions  of  the  bankrupt  statute.'**'  These 
transfers  will  be  treated  in  the  next  few  sections. 


*"' Townshend     v.      Windham,     2  ed.),   27;    I-lciTiiriK'    v.    P.iichann         | 

Ves.   Sen.   i,  9,   10;   Ex  parte   Cas-  DcG.,  M.  &  G.  976;  In  re  Har\. 

wall,    I    Atk.   559,   560;    Bainton    v.  Estate,  13  L.  R.  Chan.  Div.  216. 

Ward,  7  Ves.  503,  note;  s.  c.  cited  »2  b.  A.  1898.  Sec.  i,  clause  25. 

2  Ves.    Sen.   2.   and    Belt's    Supplt.  •'■^  B.  A.  1898,  Sec.  70,  clause  4. 
243;  2  Atk.  172:  Pack  V.  Bathurst,  "  g    \    ,Sq8_  gee.  60. 

3  Atk.  269.  «n  B    \    ^^    Sec.  eye. 

"1  Chance    on    Powers.    Chap.    15,  «» Tiffany  v.  Lucas,  15  Wall.  410. 
Sec.   2;   2   Sugden   on    Powers    (7th 


382 


LAW    AXn    PROCKKDlXdS    I X    BANKRUPTCY. 


g   158.     Transfers  in  fraud  of  creditors. 

All  property  transferred  by  the  bankrupt  in  fraud  of  his 
creditors  vests  in  the  trustee."^'  There  is  no  four  months'  lim- 
itation on  this  class  of  transfers.**^ 

This  provision  includes  fraudulent  conveyances,  which  are 
so  by  common  law,  by  statute  law  and  by  any  other  recognized 
rule  of  law,  other  than  the  special  provisions  of  the  bankrupt 
statute.^®  They  are  for  the  most  part  made  fraudulent  and 
void  by  statutes  founded  upon  the  statute  of  13  Elizabeth, 
chap.  5,  enacted  in  1570,  and  perpetuated  in  29  Elizabeth,  chap. 
5,  passed  in  isS/.""     This  statute  is  merely  a  legislative  declar- 


**^  B.  A.  1898,  Sec.  70,  clause  4. 
Consult  Sec.  157,  ante,  for  the  dif- 
ferent clauses  of  fraudulent  trans- 
fers, and  Sees.  159  to  161  for  further 
treatment  of  same. 

88 /«  re  Gray  (N.  Y.  Sup.  Ct. 
App.  Div.),  3  Am.  B.  R.  647. 

^^  Allen  V.  Massey,  17  Wall.  351 ; 
Pearsall  v.  Smith,  149  U.  S.  231  ; 
Bradshaw  v.  Klein,  No.  1790  Fed. 
Cas.,  s.  c.  2  Biss.  20;  Hyde  v.  Son- 
tag,  No.  6974  Fed.  Cas.,  s.  c.  1 
Saw.  249;  Allen  v.  Montgomery,  48 
Miss.  loi  ;  Southard  v.  Benner,  72 
N.  Y.  424;  Knowlton  v.  Moseley, 
105  Mass.  136;  Cady  v.  Whaling, 
No.  2285  Fed.  Cas.,  s.  c.  7  Biss. 
4.30. 

In  Smith  v.  Ely,  No.  13044  Fed. 
Cas.,  s.  c.  10  N.  B.  R.  553,  the  court, 
speaking  of  the  act  of  1867,  said: 
"  Although  no  transfer  made  more 
than  six  months  (four  months  un- 
der the  present  statute)  before  the 
filing  of  the  petition  can  be  made 
the  ground  of  adjudicating  the 
debtor  a  bankrupt,  it  in  no  sort  fol- 
lows that  when  the  debtor  has,  upon 
lawful  ground  therefor,  been  de- 
creed a  bankrupt,  the  assignee  can- 
not impeach  any  conveyance  and 
recover  any  property  which,  were 
there  no  bankrupt  law.  the  cred- 
itors (having  first  obtained  judg- 
ment) might  impeach  and  recover 
on  the  ground  that  it  was  conveyed 


or  transferred  to  defraud  them.  On 
the  contrary,  the  14th  section  ex- 
pressly, and  the  general  rules  of 
equity  with  equal  certainty,  do  per- 
mit it." 

For  transfers  void  under  the 
bankrupt  act  if  made  within  four 
months,  see  Sees.  159,  160  and  i6i, 
post. 

""Although  this  statute  of  Eliza- 
beth is  usually  referred  to  as  the 
foundation  statute  for  avoiding 
fraudulent  conveyances,  the  same 
principles  are  to  a  greater  or  less 
extent  embodied  in  earlier  statutes. 
The  act  of  50  Edward  III.,  Chap.  6 
(1376),  provided  that  "Divers  peo- 
ple ..  .  do  give  their  tenements 
and  chattels  to  their  friends,  by  col- 
lusion to  have  the  profits  at  their 
will,  and  after  do  flee  to  the  fran- 
chise of  Westminster  of  St.  Martin- 
Ic-Grand  of  London,  or  other  such 
privileged  places,  and  there  do  live 
a  great  time  with  an  high  counte- 
nance of  another  man's  goods  and 
profits  of  the  said  tenements  and 
chattels,  till  the  said  creditors  shall 
he  bound  to  take  a  small  parcel  of 
their  debt  and  release  the  remnant, 
it  is  ordained  and  assented,  that  if 
it  be  found  that  such  gifts  be  so 
made  by  collusion,  that  the  said 
creditors  shall  have  execution  of 
the  said  tenants  and  chattels  as  if 
no  such  gift  had  been  made."     See 


WHAT    PASSES    TO    THE    TRUSTEE.  383 

ation  of  the  principles  of  the  common  law  on  this  subject.''^ 
*'  It  declared  all  gifts  or  conveyances  of  goods  and  chattels  as 
well  as  of  lands  and  tenements  made  in  fraud  of  creditors  to 
be  void  as  against  them."  ^^  Speaking  of  this  statute,  Judge 
Stor}^  observed  that  it  has  been  "  universally  adopted  in  Amer- 
ica as  the  basis  of  our  jurisprudence  on  the  subject."  ^'^  It  is 
not  within  the  province  of  this  work,  however,  to  determine 
what  conveyances  are  in  fraud  of  creditors  under  the  various 
statutes  and  recognized  rules  of  law.  The  reader  is  referred 
to  general  works  on  that  subject.''* 

An  action  to  recover  property  fraudulently  conveyed  by  the 
bankrupt  must  be  instituted  by  the  trustee."*^  The  trustee  for 
this  purpose  represents  the  general  or  unsecured  creditors.  The 
fraudulent  debtor  has  no  right  to  set  aside  a  conveyance  made 
by  him  in  fraud  of  his  creditors.  It  is  valid  between  the  par- 
ties. By  operation  only  of  the  express  terms  of  the  act  the 
right  which  before  the  adjudication  in  bankruptcy  belonged 
to  the  creditors  was  taken  from  them  and  given  to  the  trustee.'*" 
When  he  asserts  such  rights  he  claims  under  them  and  not 
under  the  bankrupt.""  The  negligence  or  refusal  of  a  trustee 
to  bring  a  suit  to  set  aside  such  a  conveyance  is  not  sufficient  to 
entitle  a  creditor  to  maintain  a  suit  in  his  own  name."^     The 

also  statute  of  2  Richard  II.,  Chap.  veyances ;    Worthington    on    Fraud- 

3    (1379)  ;   3   Henry   VII.,   Chap.   4  ulent  Conreyances. 

(1487)-  '•^Trimble   v.    Woodhead,    102   U. 

"'  In  Cadogan  v.  Kennett,  2  Cow-  S   647 ;  Glenny  v.  Langdon,  98  U.  S. 

per,     434,     Lord     Mansfield     said:  20;  Allen  &  Co    v.  Montgomery,  48 

"The    principles    and    rules    of    the  Miss.   loi  ;  In  re  Meyers,   No.  9518 

common    law,    as    now    universally  Fed.   Cas.,  s.  c.  2  Ben.  424 ;  Thur- 

known     and     understood,     are     so  mond   v.   Andrews,   10   Bush    (Ky.) 

strong      against      fraud      in      every  400;   In  re  Gray   (N.   Y.),  47  App. 

shape  that  the  common  law  would  Div.  554,  3  Am.  B.  R.  647 ;  Faico  v. 

have  attained  every  end  proposed  by  Kaupisch    Creamery   Co.    (Ore),   70 

the  statutes   13  El.  c.   5  and  27  El.  Pac.  Rep.  286. 

c.  4."     The  same  rule  is  laid  down  "*  Crooks  v.   Stuart,  7   Fed.   Rep. 

in  Clements  v.  Moore,  6  Wall.  312.  800;   Jones  v.   Smith,  38   Fed.    Rep. 

^2  Mr.   Justice  Gray,  in   Drake  v.  380;  Trinibk-  v.   Woodhead,   102  U. 

Rice,   130  Mass.  412.  S   647;  Dudley  v.  Easton,  104  U.  S. 

*'' Story's  Eq.  Jur.,  Sec.  253.  99;   In   re   Metzgcr.   No.   9510   Fed. 

**  As    to    what    constitutes    such  Cas.,  s.  c.  2  N.  B.  R.  355 ;  Pratt  v. 

fraudulent     conveyances     generally,  Curtis,  No.   11375  Fed.  Cas.,  s.  c.  2 

see    Wait    on    Fraudulent    Convey-  Lowell  87. 

ances  ;    Bump   on    Fraudulent    Con-  "^  Moyer  v.  Dewey,  103  U.  S.  301 ; 


384  LAW    AND    PROCEKOINGS    IN     HANKRliPTCY. 

proper  remedy  in  such  a  case  is  an  a])plication  to  the  court  to 
compel  the  trustee  to  take  recjuisite  steps  for  the  full  and  com- 
plete protection  of  the  rights  of  his  creditors.'"* 

Fraud  is  a  necessary  element  to  give  the  trustee  in  bank- 
ruptcy a  right  of  action.  Insolvency  of  itself,  or  the  fact  that 
the  property  conveyed  constituted  more  in  value  than  the 
grantor  could  rightfully  withdraw  from  the  reach  of  cred- 
itors, does  not  vest  such  a  right  of  action  in  the  trustee.^" 
The  statute  provides  that  the  transfer  shall  be  in  fraud  of  his 
creditors.^"" 

"  The  trustee  may  avoid  any  transfer  by  the  bankrupt  of  his 
property  which  any  creditor  of  such  bankrupt  might  have 
avoided,  and  may  recover  the  property  so  transferred,  or  its 
value,  from  the  person  to  whom  it  was  transferred,  unless  he 
was  a  bona  fide  holder  for  value  prior  to  the  date  of  the  adjudi- 
cation. Such  property  may  be  recovered  or  its  value  collected 
from  whomever  may  have  received  it,  except  a  bona  fide  holder 
for  value."  '"' 

It  seems,  therefore,  that  a  trustee  may  pursue  the  property 
or  proceeds  of  property  to  whomever  may  have  received  it  until 
he  reaches  a  bona  Me  purchaser."^  Thus  if  A,  in  fraud  of  his 
creditors,  transfers  the  property  to  B,  who  afterwards  sells  it 
to  C.  with  notice,  who  afterwards  sells  it  to  D,  a  botia  Me 
purchaser  for  value,  the  trustee  in  bankruptcy  of  A  may  hold 
C  liable  in  damages  for  the  value  of  the  property.  The  trustee, 
however,  has  no  greater  rights  in  this  respect  than  the  cred- 
itors would  have  under  the  state  laws.^**^ 

Where  a  fraudulent  transferee  and  the  trustee  rescind  the 
transaction  and  the  transferee  turns  the  property  over  to  the 

Glenny   v.   Langdon,   98   U.    S.   20;  As  to  what  constitutes  a  bona  Me 

King   V.    Dietz,    12    Penn.    St.    156;  holder,  see  Marsh  v.  Armstrong,  20 

Lane  v.  Nickerson,  99  111.  284.  Minn.  81  ;   Murray  v.  Jones,  50  Ga. 

»8  See  Glenny  v.  Langdon,  98  U.  109;  Harrell  v.  Beal,  17  Wall.  590; 

S.  20.  Sedgwick  v.  Place,  No.   12621   Fed. 

»9  Warren   v.    Moody,    122   U.    S.  Gas.,  s.  c.  12  Blatch.  163. 

133;   Adams   v.    Collier,    122  U.    S.  102  Sedgwick  v.   Place,  No.   12621 

382;    Metropolitan    National    Bank  Fed.  Gas.,  s.  c.  12  Blatch.  163. 

V.   Rogers,   53   Fed.   Rep.  776,  s.   c.  i"'* /n   re   Mullen,    loi    Fed.   Rep. 

3  G.  G.  A.  666.  413,  4  Am.  B.  R.  224,  2  N.  B.  N. 

10"  B.  A.  i8q8.  Sec.  70,  clause  4.  701. 

101  B.  A.  1898.  Sec.  7oe. 


WHAT    PASSES    TO    THE    TRUSTEE. 


385 


trustee  the  trustee  takes  the  title  the  bankrupt  had  and  does 
not  take  as  the  grantee  of  the  fraudulent  transferee.^^* 

When  a  fraudulent  conveyance  or  transfer  is  set  aside  the 
court  will  order  the  property  turned  over  to  the  trustee  in 
bankruptcy/"^  but  will  preserve  rights  under  the  local  exemp- 
tion laws/**® 


§   159.     Transfers  to  prefer  creditors. 

The  act,  as  amended  Feb.  5,  1903,  provides  that  a  person 
shall  be  deemed  to  have  given  a  preference  if,  being  insolvent, 
he  has,  within  four  months  before  the  filing  of  the  petition, 
or  after  the  filing  of  the  petition  and  before  the  adjudication, 
made  a  transfer  of  any  of  his  property,  and  the  effect  of  such 
transfer  will  be  to  enable  any  one  of  his  creditors  to  obtain 
a  greater  percentage  of  his  debt  than  any  other  of  such  cred- 
itors of  the  same  class.  Such  period  of  four  months  shall  not 
expire  until  four  months  after  the  date  of  the  recording  or 
registering  of  the  transfer,  if  by  law  such  recording  or  regis- 


i«*/>i  re  Kellogg  (C.  C  A.  2d 
Cir.),  121  Fed.  Rep.  333,  10  Am. 
B.  R.  7,  affirming  113  Fed.  Rep.  120, 
7  Am.  B.  R.  623. 

^"^  In  Keating  v.  Keefer,  No.  7635 
Fed.  Cas.,  s.  c.  5  N.  B.  R.  133,  the 
court  said : 

"  The  circumstances  of  this  case 
are  such  as  to  force  the  conviction 
upon  my  mind  that  the  transfers 
to  defendant,  and  the  placing  of 
the  title  to  the  land  in  question  in 
her  name  were  made  and  done 
with  intent  to  hinder,  delay  and  de- 
fraud not  only  the  then  existing 
creditors  of  Henry  M.  Keefer,  but 
his  future  creditors  also.  A  decree 
must  be  entered  in  accordance  with 
the  foregoing  conclusions,  and  de- 
claring the  said  farm,  together  with 
all  the  stock,  grain  and  other  per- 
sonal property  upon  it,  except  such 
as  the  law  excepts,  assets  of  the 
said  bankrupt,  Henry  M.  Keefer, 
and  subject  to  be  disposed  of  and 
H'^tribiKcd  under  the  bankrupt  act 
for   the   payment    of   his    debts   and 


the  expenses  of  the  bankruptcy  pro- 
ceedings, and  for  delivery  and  sur- 
render up  to  the  complainant  as 
assignee  of  the  said  bankrupt,  of 
the  possession  of  all  said  property, 
except  as  aforesaid,  for  the  account- 
ing by  the  defendant  of  all  per- 
sonal property  on  said  farm  at  the 
time  the  bankruptcy  proceedings 
were  commenced  (adjudication), 
sold,  disposed  of  or  converted  by 
her,  other  than  for  the  necessary 
keep  of  the  live  stock,  and  for  the 
preservation  of  said  property,  and 
requiring  the  defendant  to  execute 
and  deliver  all  conveyances,  re- 
leases, assignments,  transfers  or  ac- 
quittances necessary  to  carry  said 
decree  into  full  force  and  effect,  and 
for  costs  to  the  complainant." 

See  also  Sands  v.  Codwise,  4 
Johns    (N.  Y.)    536. 

'""  B.  A.  1898,  Sec.  70;  McFar- 
Innd  v.  Goodman.  No.  8789  Fed. 
Cas.,  s.  c.  6  Biss.  iii;  In  re  De- 
f ert.  No.  3829  Fed.  Cas.,  s.  o.  11  N. 
B.  R.  293. 


386 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


tering;  is  roiiuircd.  If  a  bankrupt  shall  have  given  a  prefer- 
ence and  the  person  receiving  it,  or  to  be  benefited  thereby,  or 
his  agent  acting  therein,  shall  have  had  reasonable  cause  to 
believe  that  it  was  intended  thereby  to  give  a  preference,  it  shall 
be  voidable  by  the  trustee,  and  he  may  recover  the  property  or 
its  value  from  such  person.^"' 

Before  the  amendment  the  act  made  any  transfer  by  an  in- 


10"  B.  A.  1898,  Sec.  60,  32  .Stat,  at 

L.   797. 

In  Bean  v.  Brookmirc,  No.  1168 
Fed.  Cas.,  s.  c.  i  Dill.  25,  speaking 
of  a  similar  provision  (5  R.  S.  Sec. 
5128)  under  the  act  of  1867,  Mr. 
Justice  Miller  said:  "It  is  very 
certain  that  such  a  preference  may 
consist  with  the  highest  ohligations 
of  morality,  and  under  circumstances 
which  any  one  can  imagine  it  may 
be  the  dictate  of  the  purest  justice 
ir,  reference  to  all  concerned.  The 
careful  and  diligent  framers  of  the 
bankrupt  act  were  fully  aware  of 
all  that  has  just  been  said. 

"  But  they  were  about  to  frame 
a  system  of  laws,  one  main  feature 
of  which  was  to  provide  for  the 
distribution  of  the  property  of  an 
insolvent  debtor  among  his  cred- 
itors. But  they  found  that  this  gen- 
the  general  and  pervading  rule  of 
distribution,  equality  among  cred- 
itors. But  they  found  that  this  gen- 
eral principle  could  not  without 
hardshiip  be  made  of  universal  ap- 
plication. When  a  creditor  had  ob- 
tained by  fair  means  a  lien  on  any 
property  of  the  bankrupt,  that  lien 
ought  to  be  respected.  If  he  had 
so  obtained  payment  of  the  whole 
or  a  part  of  his  debt,  the  payment 
ought  to  stand.  These  exceptions 
to  the  general  rule  of  distribution 
were,  however,  liable  to  be  abused, 
and  might  be  used  to  defeat  the 
purposes  of  the  bankrupt  law.  The 
bankrupt,  knowing  that  he  must 
soon  be  helpless,  would  desire  to 
oav    or    secure    favorite    creditors. 


They  knowing  his  inability  to  pay, 
and  his  liability  to  be  called  into  a 
bankrupt  court,  would  naturally 
desire  to  secure  themselves  at  the 
expense  of  other  creditors. 

"  In  this  dilemma,  congress  said 
we  cannot  prescribe  any  rule  by 
which  a  preference  would  be  held 
to  be  morally  right  or  wrong ;  and 
it  would  be  fatal  to  the  adminis- 
tration of  the  law  of  distribution  to 
permit  such  a  question  to  be  raised. 
We  will  therefore  adopt  a  conven- 
tional rule  to  determine  the  validity 
of  these  preferences. 

"  In  all  cases  where  an  insolvent 
pays  or  secures  a  creditor  to  the  ex- 
clusion of  others,  and  that  creditor 
is  aware  that  he  is  so  when  he 
receives  it,  he  shall  run  the  risk 
of  the  debtor's  continuance  in  busi- 
ness for  four  months.  If  the  law, 
which  requires  equal  distribution,  is 
not  called  into  action  for  four 
months,  the  transaction,  if  other- 
wise honest,  shall  stand;  but  if  by 
the  debtor  himself,  or  any  of  his 
creditors,  that  law  is  invoked  within 
four  months,  the  transaction  shall 
not  stand,  but  the  money  or  prop- 
erty received  by  the  party  shall  be- 
come a  part  of  the  common  fund 
for   distribution." 

See  also  Matthews  v.  Westphal, 
48  Fed.  Rep.  664;  Anibal  v.  Hea- 
cock,  2  Fed.  Rep.  169;  Gibson  v. 
Warden,  14  Wall.  244 ;  Toof  v.  Mar- 
tin, 13  Wall.  40;  Wager  v.  Hall,  16 
Wall.  584 ;  Shawhan  v.  Wherritt,  7 
How.  627;  Locke  v.  Winning,  3 
Mass.  325. 


WHAT    PASSES    TO    THE    TRUSTEE.  387 

solvent,  the  effect  of  which  was  to  enable  any  creditor  to  obtain 
a  greater  percentage  of  his  debt  than  any  other  creditor  of  the 
same  class,  a  preference,  and  allowed  the  trustee  to  avoid  a 
preference  made  within  four  months  of  the  filing  of  the  petition 
if  the  person  receiving  it  had  reasonable  cause  to  believe  a 
preference  was  intended.  Since  the  amendment  the  transfer 
must  be  made  within  four  months  of  the  filing  of  the  petition 
in  order  to  be  a  preference,  and  the  trustee  may  avoid  any 
preference  if  the  person  receiving  it  had  reasonable  cause  to 
believe  a  preference  was  intended.  In  regard  to  the  recovery 
of  property  by  the  trustee  the  effect  is  the  same. 

This  provision  evidently  refers  to  property  transferred  to 
or  for  the  benefit  of  a  creditor  for  the  purpose  of  creating  a 
preference.  Though  a  preference  of  creditors  by  a  transfer 
or  assignment  of  property  by  an  insolvent  may  sometimes  be 
unjust  to  the  other  creditors,  it  was  not  forbidden  by  the  com- 
mon law  and  is  not  forbidden  by  many  of  the  states.  It  is, 
however,  made  invalid  by  the  bankruj)!  act,  providing  three 
things  concur.^"*  First,  At  the  time  of  the  transfer  the  bank- 
rupt must  be  insolvent.  A  person  is  deemed  insolvent  within 
the  provisions  of  this  act  whenever  the  aggregate  of  his  prop- 
erty, exclusive  of  any  property  which  he  may  have  conveyed, 
transferred,  concealed  or  removed,  or  permitted  to  be  con- 
cealed or  removed,  with  intent  to  defraud,  hinder  or  delay 
his  creditors,  shall  not,  at  a  fair  valuation,  be  sufficient  in 
amount  to  pay  his  debts.^*^^  Second,  The  transfer  must  be  made 
within  four  months  before  the  filing  of  the  petition.^'"  The 
day  on  which  the  transfer  is  made  is  excluded  in  computing 
the  f(jur  months."^     Third,  The  person  to  be  benefited  must 

^"■^  The  section  here  under  consid-  Wall.    414;    Michaels    v.    Post,    21 

eration  corresponds  with  R.  S.  Sec.  Wall.  398;  Judson   v.  The  Courier 

5128,  embracing  a  part  of  Sec.  35  Co.,  8  Fed.  Rep.  422. 

of  the  act  of  1867.    The  two  sec-  i""  B.  A.  1898,  Sec.  i,  clause  15; 

tions  differ  in  some  particulars.  For  In  re  Eggert    (C.   C.  A.  7th   Cir.), 

esses  construing  Sec.  35  of  the  act  102  Fed.  Rep.  735,  4  Am.  B.  R.  449, 

of    1867,    see   Tiffany   v.    Lucas,    15  2  N.  B.  N.  390;  compare  Wagner  v. 

Wall.   410;    Bartholow   v.    Bean,   18  Hall,  16  Wall.  584. 

Wall.  635;   Buchanan  v.   Smith.   16  i'<*/n    re    Kindt,    loi    Fed.    Rep. 

Wall.  277:  Toof  V.  Martin,  13  Wall.  107,  4  Am.  B.  R,  148. 

40;    West    Phila.    Bank   v.    Dickon,  '"  B.  A.  1898.  Sec.  31 ;  Dutchcr  v. 

95  U.  S.   180 ;  Mays  v.  Fritton,  20  Wright,  94  U.  S.  553. 


3«^^ 


LAW    AND    I'KOCEEUiiNGS    iN     BAN KKUPTCY. 


have  had  reasonable  cause  to  believe  that  it  was  intended  there- 
by to  give  a  preference.  The  existence  of  the  required  reason- 
able cause  for  belief  may  be  inferred  from  the  circumstances 
of  the  transaction.^^"  When  these  things  concur  the  trustee  is 
entitled  to  recover  the  property  so  transferred. 

Every  case  of  this  sort  must  be  decided,  however,  on  its  own 
facts,  and  it  will  never  be  possible  to  lay  down  any  general 
formula  applicable  to  all  cases.  The  intent  to  receive  a  prefer- 
ence necessarily  involves  the  idea  of  an  expectation  of  the 
debtor  paying  some  others  less  than  their  whole  debt.""^ 

All  levies,  judgments,  attachments  or  other  liens,  obtained 
through  legal  proceedings  within  four  months  prior  to  the  fil- 
ing of  the  petition  are  void  and  the  property  so  levied  on 
passes  to  the  trustee ;  ^"  but  where  property  levied  on  has  been 
sold  to  an  innocent  purchaser  for  value,  such  purchaser  has  a 
good  title.  The  proceeds  of  such  sale  go  to  the  trustee  and 
not  to  the  judgment  creditor."' 


"2  Tiffany  v.  Lucas,  15  Wall.  410; 
Gattman  v.  Honea,  No.  5271  Fed. 
Cas.,  s.  c.  12  N.  B.  R.  493 ;  Singer 
V.  Sloane,  No.  12898  Fed.  Cas.,  s.  c. 

3  Dill,  no;  Brooks  v.  Scroggins,  11 
B.  R.  258;  Buchanan  v.  Smith,  16 
Wall.  277;  In  re  Gregg,  No.  5797 
Fed.  Gas.,  s.  c.  4  N.  B.  R.  456;  Al- 
derdice  v.  State  Bank,  No.  154  Fed. 
Cas.,  s.  c.  I  Hughes  47  ;  In  re  Eggert 
(C.  C.  A.  7th  Cir.),  102  Fed.  Rep. 
735,  4  Am.  B.  R.  449,  2  N.  B.  N. 
390;  In  re  Blair,  102  Fed.  Rep.  987, 

4  Am.  B.  R.  220,  2  N.  B.  N.  890; 
In  re  Kenney,  97  Fed.  Rep.  554,  3 
Am.  B.  R.  353;  Taft  v.  Fourth 
Nat.  Bank  (Sup.  Ct.  Cincinnati),  2 
N.  B.  N.  1 145;  Hackney  v.  Ray- 
mond Bros.  Co.  (Neb.),  10  Am.  B. 
R.  213;  Stedman  v.  Bank,  117  Fed. 
Rep.  237,  9  Am.  B.  R.  4 ;  Chitten- 
den V.  Barton  (N.  Y.),  5  Am.  B.  R. 
775 ;  Lyon  v.  Clark,  129  Mich.  381  ; 
In  re   Soudan   Mfg.  Co.    (C.  C.  A. 


7th  Cir.),  113  Fed.  Rep.  804,  8  Am. 
B.  R.  45;  Brown  v.  Guichard  (N. 
Y.),  7  Am.  B.  R.  515. 

In  Gattman  v.  Honea,  supra,  the 
court  said :  "  But  this  knowledge 
o^  the  party  may  be  established  by 
circumstantial  evidence,  as  may  any 
other  fact,  even  the  commission  of 
the  highest  crimes  known  to  the 
l?w;  and  this  is  especially  so  in 
cases  of  fraud,-  rarely  established  by 
positive  testimony,  the  knowledge 
and  motives  of  men  usually  being 
ascertained  by  their  acts  more  than 
their  words." 

ii''  For  illustration  of  what  consti- 
tutes a  preferential  transfer,  consult 
Preferences,    Chap.    XVHL 

11*  B.  A.  1898,  Sec.  67f;  In  re 
Francis- Valentine  Co.,  93  Fed.  Rep. 
953,  2  Am.  B.  R.  188. 

115  /„  ^^  Kenney,  95  Fed.  Rep. 
427.  2  Am.  B.  R.  494;  In  re  Franks, 
95  Fed.  Rep.  635,  2  Am.  B.  R.  634. 


WHAT    PASSES    TO    THE    TRLSTEE.  389 

§   160.     Property  transferred  to  hinder,  delay  or  defraud  cred- 
itors. 

The  bankrupt  act  provides  "  That  all  conveyances,  transfers, 
assignments,  or  incumbrances  of  his  property,  or  any  part 
thereof,  made  or  given  by  a  person  adjudged  a  bankrupt 
under  the  provisions  of  this  act  subsequent  to  the  passage  of 
this  act  and  within  four  months  prior  to  the  filing  of  the  peti- 
tion, with  the  intent  and  purpose  on  his  part  to  hinder,  delay, 
or  defraud  his  creditors  or  any  of  them,  shall  be  null  and  void 
as  against  the  creditors  of  such  debtor,  except  as  to  purchasers 
in  good  faith  and  for  a  present  fair  consideration ;  and  all 
property  of  the  debtor  conveyed,  transferred,  assigned,  or  en- 
cumbered as  aforesaid  shall,  if  he  be  adjudged  a  bankrupt, 
and  the  same  is  not  exempt  from  execution  and  liability  for 
debts  by  the  law  of  his  domicile,  be  and  remain  a  part  of  the 
assets  and  estate  of  the  bankrupt  and  shall  pass  to  his  said 
trustee,  whose  duty  it  shall  be  to  recover  and  reclaim  same 
by  legal  proceedings  or  otherwise  for  the  benefit  of  the  cred- 
itors." ''" 

This  provision  manifestly  relates  to  cases  where  the  trans- 
action in  question  is  original  and  complete  in  itself  at  the 
time  it  occurred,  and  has  no  reference  for  its  consideration  to 
anything  between  the  parties  which  had  gone  before  it.^'^  It 
includes  any  transfer  which  has  for  its  object  to  hinder,  delay 
or  defraud  creditors,  even  tliough  the  purpose  be  not  to  prefer 
a  creditor,  and  even  though  the  transaction  does  not  fall 
within  the  statute  of  frauds.  A  transfer  fraudulent  under 
the  statute  of  frauds  may  be  set  aside  under  this  section  if 
made  within  the  time  specified,"**  as  well  as  under  the  provi- 
sion relating'  to  transfers  in  fraud  of  creditors."" 

In  order  to  avoid  a  transfer  under  this  provision  three  things 

ii"  B.  A.  1898,  Sec.  firje.    This  sec-  (Sup.  Kan.),  11  Am.  B.  R.  26,  over- 

tion  corresponds  to  U.  S.  Sec.  5129,  riiliiiK   g   Am.    B.    R.    312,  65   Kan. 

embracing  a  part  of  Sec.  35  of  the  610. 

act  of  1867:  Pollock  V.  Jones  (C  C.  "^Gibson    v.    Warden.    14    Wall. 

A.  4th  Cir.),  124  Fed.  Rep.  163,  10  249;    Bean  v.   Brookmire,   No.   1168 
Am.  B.  R.  616;  In  re  Stcininger  Mer-  Fed.  Cas.,  s.  c.  I   Dill.  35. 

ca:itile  Co.   (C.  C.  A.  5th  Cir.),  107  '"Andrews    v.    Graves,    No.    376 

Fed.  Rep.  669.  6  Am.  B.  R.  68;  In  re  Fed.  Cas..  s.  c.  i  Dill.  108. 

Schiillcr.  108  Fed.  Rep.  591,  6  Am.  ''"B.  A.  1898,  Sec  70^.     See  also 

B.  R.   278;    Sherman   v.    Luckhordt  Sec.   158,  ante. 


390  i.Aw  Axn  pRcH^KKinxcs  in  bankruptcy. 

must  concur.  I'irsf,  The  debtor  must  have  been  adjudicated 
a  bankrupt  under  the  provisions  of  this  act.  Second,  The 
transfer  must  have  been  made  subsequent  to  the  passage  of 
the  act  and  within  four  months  prior  to  the  fiHng  of  the  peti- 
tion. The  day  on  which  the  transfer  is  made  is  excluded  in 
computing  the  four  months.'-**  Third,  The  existence  of  an 
intent  and  purpose  on  the  part  of  the  bankrupt  to  hinder, 
delay  or  defraud  his  creditors,  or  any  of  them.  If  any  of 
these  elements  are  wanting  the  transfer  can  not  be  avoided 
under  this  provision. 

Transfers  made  in  good  faith  for  a  present  fair  considera- 
tion and  transfers  of  property  exempt  from  execution  and 
liability  for  debts  by  the  law  of  the  debtor's  domicile  can  not 
be  avoided  under  this  provision.  They  are  expressly  ex- 
cluded in  terms.  The  object  of  this  provision  is  not  to  reach 
property  honestly  sold  for  a  fair  price.  As  Mr.  Justice  Davis,'^^ 
in  construing  a  similar  provision  of  the  act  of  1867,  observed: 
"  Clearly  all  sales  are  not  forbidden.  It  would  be  absurd  to 
suppose  that  congress  intended  to  set  the  seal  of  condemna- 
tion on  every  transaction  of  the  bankrupt  which  occurred 
within  six  [four]  months  of  bankruptcy,  without  regard  to 
its  character.  A  policy  leading  to  such  a  result  would  be  an 
excellent  contrivance  for  paralyzing  business,  and  can  not  be 
imputed  to  congress  without  an  express  declaration  to  that 
effect.  The  interdiction  applies  to  sales  for  a  fraudulent  ob- 
ject, not  to  those  with  an  honest  purpose.  The  law  does 
not  recognize  that  every  sale  of  property  by  an  embarrassed 
person  is  necessarily  in  fraud  of  the  bankrupt  act.  If  it  were 
so,  no  one  would  know  with  whom  he  could  safely  deal,  and, 
besides,  a  person  in  this  condition  would  have  no  encourage- 

^-'>  B.  A.  1898,  Sec.  31  ;  Butcher  v.  /;;  re  Franklin,  No.  5053  Fed.  Cas., 

Wright,  94  U.  S.  553-  s.  c.  8  Ben.  233 ;  In  re  Valligreete, 

See    also    Wood    v.    Owings,     i  No.  16823  Fed.  Cas.,  s.  c.  4  N.  B.  R. 

Cranch   239,   where  a  deed   signed,  307;    In   re   Union    Pacific   R.    Co., 

sealed  and  delivered  May  30,   1800,  No.  14376  Fed.  Cas.,  s.  c.  10  N.  B. 

and    acknowledged    June    14,    1800,  R.  178;  Ex  parte  Potts,  No.  11344 

was   held   to   have   been   made   be-  Fed.    Cas.,    s.    c.    Crabbe    469;    Ex 

fore    the   act    of    1800   took    effect,  parte  Topham,  8  L.  R.  Chan.  App. 

which  was  on  June  i,  1800.  614;  Ex  parte  Craven,  10  L.  R.  Eq. 

121  In  Tiffany  v.  Lucas,  15  Wall.  648;    Ex   parte    Tempest,    6   L.    R. 

421.     See    also    In    re    Pusey,    No.  Chan.  App.  70. 
114/8  Fed.   Cas.,  s.  c.  7  B.  R.  45; 


WHAT    PASSES    TO    THE    TRUSTEE.  391 

ment  to  make  proper  efforts  to  extricate  himself  from  dif- 
ficulty." 

"  The  question  therefore  in  every  case  is  whether  the  act 
done  is  a  bona  fide  transaction  or  whether  it  is  a  trick  and 
contrivance  to  defeat  creditors."  ^" 

General  Assignments  for  the  Benefit  of  Creditors. — 
An  assignment  for  the  benefit  of  creditors  is  a  familiar  exam- 
ple of  a  transfer  voidable  under  this  section.  In  the  absence 
of  actual  fraud  an  assignment  for  the  benefit  of  creditors, 
though  constructively  fraudulent  under  the  bankrupt  act,  is 
not  void  but  voidable,  and  is  voidable  only  at  the  suit  of  the 
trustee  in  bankruptcy.  Where  the  assignment  is  made  within 
four  months  of  the  filing  of  the  petition  it  may  be  set  aside  and 
the  assignee  compelled  to  deliver  the  property  to  the  trustee 
in  bankruptcy.'"'^  The  ground  for  avoiding  such  an  assign- 
ment under  the  present  act  is  that  it  delays  and  hinders  credit- 
ors, for  the  reason  that  it  puts  his  estate  into  a  course  of  dis- 
tribution different  from  that  prescribed  by  the  act. 

Under  the  act  of  1867  this  same  question  was  presented  in 
determining  whether  an  assignment  for  the  benefit  of  cred- 
itors constituted  an  act  of  bankruptcy  on  the  ground  that  it 
hindered,  delayed  or  defrauded  creditors.  There  is  consid- 
erable conflict  in  the  earlier  decisions  on  this  point,  but  it 
may  be  asserted  that  the  decided  weight  of  authority  is  to  the 
effect  that  such  an  assignment  did  constitute  an  act  of  bank- 
ruptcy for  the  reason  stated  above. ^-*     Under  the  present  act 

1-- Lord  Mansfield,  in  Cadogan  v.  C  C.  A.  2d  Cir.,  92  Fed.  Rep.  337; 

Kennctt,   2   Cowper   435.      Sec   also  In   re  Gray    (N.   Y.   Sup.   Ct.   App. 

Wagner    v.    Smith,    13    B.    J.    Lea  Div.),    3    Am.    B.    R.    647:    /«    re 

(Tenn.)    569,  where  the  court  says  Meyer   (C  C.  A.  2d  Cir.),  98  Fed. 

the   test    as    to    whether    a    convey-  Rep.  976,  3   Am.   B.   R.   559 ;   Ran- 

ance  is  fraudulent  or  void  as  to  a  df)lph  v.  Scruggs,  190  U.  S.  533,  10 

creditor   is,    does    it    hinder   him    in  Am.   B.  R.   i. 

enforcing    his    debt?     Docs    it    de-  ^24G|obe  Ins.  Co.  v.  Ins.  Co.,  No. 

prive  him  of  a  right  which  would  5486   Fed.   Cas.,   s.   c.    14   N.    B.   R. 

be   legally   effective    if   the   convey-  311;    Barnes    v.    Retten,    No.    1019 

ance    or    device    had    not    been    re-  Fed.   Cas.,  s.  c.  8  Phila.   133 ;  Cra- 

scrtedto?"  gin    v.    Thompson,    No.    3320    Fed. 

123 /n   re  Gutwillig,  90  Fed.   Rep.  Cas..  s.  c.  2  Dill.  513;  In  re  Frisbce, 

481  :  approved  by  the  supreme  court  No.  5129  Fed.  Cas..  s.  c.  14  Blatch. 

in  West  Co.  v.  Lea,  174  U.  S.  590.  185:  Jones  v.  Sleeper.  2  N.  Y.  Leg. 

2  Am.   B.   R.  463,  and  affirmed   by  Obs.  131,  s.  c.  No.  7496  Fed.  Cas.; 


392 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


such  an  assignment  is  expressly  made  an  act  of  bankruptcy."^ 
An  assignment  for  the  benefit  of  creditors  may  be  set  aside  if 
made  within  four  months  before  the  fiHng  of  the  petition."' 


h:  ri-  Kintzing,  No.  7833  Fed.  Cas., 
s.  c.  3  N.  B.  R.  217;  In  re  Men- 
delsohn, No.  9420  Fed.  Cas.,  s.  c. 
3  Sawy.  342 ;  In  re  Randall,  No. 
1 155 1  Fed.  Cas.,  s.  c.  Deady  557; 
It:  re  Smith,  No.  12974  Fed.  Cas., 
s.  c.  4  Ben.   i. 

This  principle  was  recognized  by 
the  supreme  court  in  Boese  v.  King, 
108  U.  S.  385,  when  they  said: 
"  It  is  equally  clear,  we  think,  that 
the  assignment  by  Locke  of  his  en- 
tire property  to  be  disposed  of  as 
prescribed  by  the  statute  of  New 
Jersey,  and  therefore  independently 
of  the  bankruptcy  court,  constituted 
itself  an  act  of  bankruptcy,  for 
which,  upon  the  petition  of  a  cred- 
itor filed  in  proper  time,  Locke 
could  have  been  adjudged  a  bank- 
rupt, and  the  property  wrested  from 
his  assignees  for  administration  in 
the  bankruptcy  court." 

For  contrary  decisions,  see  Lang- 
ley  V.  Perry,  No.  8067  Fed.  Cas., 
s  c.  2  N.  B.  R.  596;  Sedgwick  v. 
Place,  No.  12622  Fed.  Cas.,  s.  c.  i 
N.  B.  R.  673,  s.  c.  34  Conn.  552. 

^2s  B.  A.   1898,  Sec!  3,  clause  4. 

126  Bryan  v.  Bernheimer,  l8l  U. 
S.  188,  5  .\m.  B.  R.  623;  In  re 
Gray  (N.  Y.  Sup.  Ct.  App.  Div.), 
3  Am.  B.  R.  647;  In  re  Meyer  (C. 
*C.  A.  2d  Cir.),  98  Fed.  Rep.  976,  3 
Am.  B.  R.  559;  Randolph  v.  Scruggs, 
190  U.  S.  533,  10  Am.  B.  R.  I. 

In  In  re  Gutwillig,  90  Fed.  Rep. 
481,  considering  this  question.  Judge 
Brown  said :  "  Aside  from  the 
above  general  considerations,  the 
specific  provisions  of  the  present 
bankrupt  act  afford  to  creditors  such 
important  advantages  over  an  ad- 
ministration of  assets  through  a  vol- 
untary assignee,  under  the  state  law, 
that  such  assignments  must  be  held 


to  be  '  transfers  in  fraud  of  cred- 
itors.' because  they  necessarily  de- 
prive them  of  those  advantages,  viz., 
(a)  The  choice  of  the  trustee,  and 
therewith  the  greater  stability,  su- 
pervision and  control  in  the  disposi- 
tion of  the  assets,  (b)  Liens  by 
attachment,  execution  or  other  pro- 
ceedings at  law  or  in  equity  within 
four  months,  are  voidable  under 
the  bankrupt  law,  but  not  so  under 
a  voluntary  assignment.  This  is  a 
difference  that  is  often  of  extreme 
importance,  (c)  Under  this  assign- 
ment, and  by  the  state  law  applicable 
to  it,  employes  are  preferred,  with- 
out limitation  as  to  amount  or  time  ; 
by  the  bankrupt  law  they  are  lim- 
ited to  $300  each  and  to  claims 
accruing  within  three  months,  (d) 
The  fees  and  commissions  may 
reach  five  per  cent.,  chargeable  un- 
der voluntary  assignments  in  this 
state,  but  are  much  less  under  the 
bankrupt  law. 

"  Whether  the  act  be  considered 
therefore  in  principle  or  in  detail, 
I  must  hold  that  a  voluntary  as- 
signment for  creditors,  which  by  the 
statute  is  made  an  '  act  of  bank- 
ruptcy,' is  voidable  by  the  trustee, 
and  that  the  assets  should  be 
brought  into  the  bankruptcy  court." 

This  case  was  affirmed  (92  Fed. 
Rep.  337),  on  appeal  to  the  circuit 
court  of  appeals  for  the  second  cir- 
cuit, the  court  of  appeals  saying: 
"  We  entertain  no  doubt,  that  a  vol- 
untary general  assignment,  with  or 
without  preferences,  made  by  an  in- 
solvent debtor  within  the  prescribed 
four  months  is  fraudulent  and  in- 
tended by  him  to  '  hinder,  delay 
and  defraud '  creditors  within  the 
m.eaning  of  the  section,  because  its 
necessary  effect  is  to  defeat  the  op- 


WHAT    PASSES    TO    THE    TRUSTEE.  393 

But  if  it  was  made  prior  to  tliat  time  and  is  valid  at  common 

law  it  can  not  be  set  aside.^" 

§   1 6 1.     Transfers  void  as  to  creditors  under  state  laws. 

The  bankrupt  act  provides  that  "  All  conveyances,  transfers, 
or  incumbrances  of  his  property  made  by  a  debtor  at  any  time 
within  four  months  prior  to  the  filing  of  the  petition  against 
him,  and  while  insolvent,  which  are  held  null  and  void  as 
against  the  creditors  of  such  debtor  by  the  laws  of  the  state, 
territory,  or  district  in  which  such  property  is  situate,  shall 
be  deemed  null  and  void  under  this  act  against  the  creditors 
of  such  debtor  if  he  be  adjudged  a  bankrupt,  and  such  prop- 
erty shall  pass  to  the  assignee  [trustee]  and  be  by  him  re- 
claimed and  recovered  for  the  benefit  of  the  creditors  of  the 
bankrupt."  "" 

By  this  provision  congress  has  adopted  the  state  laws  for 
the  purpose  of  determining  whether  a  transfer  is  void  as 
against  creditors.  The  provision  is  not  confined  to  any  par- 
ticular class  of  transfers.  Any  conveyance  or  transfer  of  his 
])roj)erty  made  by  a  bankrupt  within  four  months  before  the 
filing  of  the  i)etition  may  be  held  null  and  void  as  against  the 
creditors  of  the  bankrupt,  i)rovided  it  could  have  been  set 
aside  by  the  creditors  under  the  local  law.  The  failure  to 
register  or  properly  record  a  deed  or  bill  of  sale  or  mortgage, 
as  required  by  the  local  statute,^^"  or  to  give  possession  of 
I>ersf)nal   proi)erty  ''"*  are   familiar  examples.     In  most  states 

eration  of  tlie  bankrupt  act  and  the  In   re    Hull,    115    Fed.    Rep.   858,   8 

rights   of   the   creditors   to   such   an  Am.     B.     R.    302.     See    Sawyer    v. 

administration  ofthe  assets  as  that  Turpin,  91  U.  S.  114;  Bank  v.  Hunt, 

act    is    intended    to    provide.     The  n     Wall.    391;    In    re    Leland,     10 

reasons  for  this  conclusion,  and  the  Blatch.  503,  s.  c.  No.  8234  Fed.  Cas. ; 

authorities  in   support  of  it,  are   so  lu   re   Wynne,   4   N.   B.   R.   23,   No. 

fully  and   satisfactorily  set   forth   in  18117  Fed.  Cas.;  Allen  v.  Massey,  4 

the  opinion  of  Judpc  Brown  in  the  N.  B.  R.  231,  No.  231  Fed.  Cas.  and 

court   below   that    we   do   not   deem  17   Wall.   352;    Harvey   v.   Crane,   5 

it  necessary  to  enlarge  upon  them."  N    B.    R.  218,   s.  c.   No.  6178  Fed. 

It   was  approved   by  the   supreme  Cas..    and    see    note ;    Edmonson    v. 

court  in  West  Co.  v.  Lea.  174  U.  S.  Hyde,   2   Saw.   205,    No.   4285    Fed. 

590.  2  .'\m.  B.  R.  463.  Cas. 

1"  Mayer    v.    Hellman,   91    U.    S.  '""'/«    re     Taylor,    95    Fed.    Rep. 

496.  956;  Spencer  v.  Duplan  Silk  Co.,  112 

i2«  B.  A.  1898,  Sec.  67e.  Fed.  Rep.  638,  7  Am.  B.  R.  563. 

»20/>i  re  Leigh,  96  Fcfl.  Rep.  806; 


394       1  •'^^^'  -^^'f^  rROCKKDINGS  IN  BANKRUPTCY. 

such  a  transfer  is  valid  between  the  parties,  but  nia.y  be  avoided 
where  rights  of  creditors  are  concerned.  In  such  cases  the 
trustees  in  bankruptcy  may  recover  for  the  creditor's  property 
so  transferred,  provided  there  has  been  an  adjudication  of 
bankruptcy. 

Adopting-  the  state  laws  as  a  rule  of  decision  does  not  vio- 
late the  constitutional  provision  with  reference  to  uniformity. 
The  uniformity  required  relates  to  the  national  legislation 
only.  It  is  well  settled  that  the  laws  of  the  several  states 
regT.ilating  exemptions  may  be  left  in  force  so  long  and  to 
such  an  extent  as  congress  may  see  fit."^  The  same  reasoning- 
may  be  applied  to  state  statutes  relating  to  the  rights  of  cred- 
itors. 

§  162.     Real  and  personal  property. 

The  title  to  all  property  which  prior  to  the  filing  of  the 
petition  the  bankrupt  could  by  any  means  have  transferred, 
or  which  might  have  been  levied  upon  and  sold  under  judicial 
process  against  him,  passes  to  the  trusiee.^''^ 

The  test  as  to  whether  property  is  of  such  a  character  as  to 
pass  or  not  depends  upon  whether,  under  the  local  law  wheie 
the  property  has  its  situs,  the  bankrupt  could  have  transferred 
it,  or  whether  it  could  have  been  levied  upon  and  sold  under 
judicial  process  against  him.  If  it  is  of  such  a  character  ;'t 
passes.  If  not,  it  does  not  pass  to  the  trustee.  Such  ques- 
tions are  determinable  only  by  local  law  where  the  property 
has  its  situs.^^''  The  situs  of  real  property  is  the  state  in  which 
it  is  situated.'-'*  The  situs  of  personal  property  is  the  domicile 
of  the  bankrupt.'^* 

The  effect  of  this  provision  is  to  transfer  the  greater  part  of 

131  Darling  V.  Berry,  13  Fed.  Rep.  1^3  Spjndle  v.  Shreve,  iii  U.  S. 
668;  In  re  Beckerford,  No.  1209  546;  Nichols  v.  Levy,  5  Wall.  433; 
Fed.  Cas.,  s.  c.  i  Dill.  45 ;  In  re  Mason  v.  Beebee,  44  Fed.  Rep.  558 ; 
Jordan,  No.  7514  Fed.  Cas.,  s.  c.  8  In  re  McKenna,  9  Fed.  Rep.  27. 
N.  B.  R.  180;  In  re  Jordan,  No.  See  al.so  Nichols  v.  Eaton,  91  U.  S. 
7515  Fed.  Cas.,  s.  c.  10  N.  B.  R.  729;  Reynolds  v.  Hanna,  55  Fed. 
427 ;  In  re  Kean,  No.  7630  Fed.  Cas.,  Rep.  795. 

s.  c.  2  Hughes  322.  i34  0akey  v.  Bennett,  11  How.  ^i. 

132  B.  A.  1898,  Sec.  70,  clause  5;  See   also   In   re   Bugbee,   No.    21 15 
In  re  Burka,   104  Fed.  Rep.  326,  5  Fed.  Cas.,  s.  c.  9  N.  B.  R.  258. 
Am.  B.  R.  12. 


WHAT    PASSES    TO    THE    TRUSTEE.  395 

the  assets  of  the  bankrupt.  They  inckicle  a  large  number  of 
different  classes  of  property,  which  will  be  more  particularly- 
discussed  under  separate  heads. 

§   163,     Interest  in  real  estate. 

The  title  to  all  real  estate  within  the  United  States  held 
by  the  bankrupt  at  the  time  of  filing  the  petition  is  vested  in 
the  trustee.^'^^  But  as  a  title  vested  by  law  can  have  no  extra 
territorial  operations,  lands  situated  in  foreign  countries  do 
not  pass  except  by  deed."^  The  bankrupt  should  therefore 
execute  a  transfer  of  his  real  estate  situated  in  foreign  coun- 
tries.'^® 

Any  interest  in  real  estate  which  is  alienable  or  subject  to 
levy  and  execution  passes  to  the  trustee.  Thus  it  has  been 
held  that  an  equity  of  redemption,"^  property  devised,"**  a 
vested  remainder/'"*  a  reversion  with  rent  incident  thereto,'*"  a 
fee  subject  to  an  easement."'  accretions  to  land  by  alluvion. "'- 
an  estate  of  the  husband  by  courtesy  or  dower  "'■'  a  resulting 
trust  "*  or  any  vested  interest  '"'^  is  such  i)roperty  as  vests  in  a 
trustee.  It  has  been  held  on  the  other  hand  that  a  contingent 
interest  in  an  estate  in  remainder.""  the  income  of  a  life  estate 
under  a  will,"^   or  Indian   lands  under  an  allotment  act  of 

i^^Oakey  v.  Bennett,  11  How.  33;  see  also  Putnam  v.  Story,  132  Mass. 

Barnett  v.  Pool,  23    Tex.  517.  205. 

i''«  B.  A.  1898,  Sec.  7,  clause  5.  ^*'>  Evans   v.   Ilanirick   &    Co,   61 

i-"*^  Barron  v.  Newberry,  No.  1056  Penn.  St.  19. 
Fed.  Cas.,  s.  c.  i  Biss.  149;  Robin-  ^^i  Banks  v.  Ogdcn,  2  Wall.  57. 

son  V.  Denny,  57  Ala.  492.     Sec  also  ^*-  Banks  v.  Ogden,  2  Wall.  57. 

4  Kent's  Com.  160;  Ex  parte  Ames,  ^*^  ht    re    McKonna,  9   Fed.    Rep. 

No.  323  Fed.  Cas.,  s.  c.  i  How.  561;  27;    Hasseitinc    v.    Prince,    95    Fed. 

In  re  Novak,   iii   Fed.  Rep.   161,  7  Rep.  802,  2  Am.  B.  R.  600. 
Am.  B.  R.  27.  ^**  In  re  Dunavant,  96  Fed.  Rep. 

^•■"^  Sandford     v.     Lackland.     No.  542,  3  Am.  B.  R.  41. 
12312  Fed.  Cas.,  s.  c.  2  Dill.  6:  Ex  ^*^  In   re    Hosier,    112    Fed.    Rep. 

parte  Fuller,  No.  5147  Fed.  Cas.,  s.  138,  7  Am.  B.  R.  268. 
c.  2  Story  327.                                    -  1^'i/m  re  Wetmore,  102  Fed.  Rep. 

^3»  In  re  Wood,  98  Fed.  Rep.  972 ,  290,  4  Am.   B.  R.  335,  3  N.  B.   N. 

3  Am.  B.  R.  572,  3  N.  B.  N.   141;  143.   affrrmed    (C.    C.    A.   3d    Cir.), 

In  re  Twaddell,   no  Fed.  Rep.   145,  108  Fed.  Rep.  520;  In  re  Hoadley, 

6  Am.  B.  R.  539;  In  re  ShenbcrRer,  2  N.  B.  N.  704. 
102  Fed.  Rep.  978,  4  Am.  B.  R.  487;  i'^  Monroe  v.   Dewey    (Mass.),  2 

In  re  McHarry  (C.  C  A.  7th  Cir.),  N    B.  N.  840.     But  see  In  re  Bau- 

III  Fed.  Rep.  498,  7  Am.  B.  R.  83;  douine.  96  Fed.  Rep.  536,  3  Am.  B. 

Belcbcr  v.   Burnett,   126   Mass.   230;  R.  55;  /„  yc  St.  Jobn,  105  Fed.  Rep. 


396  LAW    AND    I'ROCKEUINC.S    IN     BANKRUPTCY. 

congress  '***  do  not  pass  to  tlie  trustee.  Whether  an  equitable 
interest  in  real  estate  will  ])ass  to  a  trustee  depends  upon  the 
local  law  where  the  property  has  its  situs."^ 

§   164.     Dower  and  curtesy. 

Real  estate  of  the  bankrupt  passes  to  the  trustee  subject  to 
his  wife's  right  of  dower.  A  right  of  dower  by  a  wife  is  no 
part  of  the  bankrupt's  ])roperty.  and  it  can  not  be  barred  by 
a  sale  by  the  trustee  in  bankruptcy  under  order  of  the  court, ^'^^ 
The  same  rule  is  applied  in  England.^''' 

The  present  statute  recognizes  this  right  of  the  widow  when 
it  provides  that  in  case  of  the  death  of  the  bankrupt  the  widow 
and  children  shall  be  entitled  to  all  rights  of  dower  and  al- 
lowance allowed  by  the  law  of  the  state  of  the  bankrupt's  resi- 
dence.^^^  The  wife  is  not  estopped  to  claim  dower  by  reason 
of  having  joined  her  husband  in  a  deed  which  is  fraudulent 
as  against  creditors,  and  which  for  this  reason  has  been  set 
aside  by  the  trustee. ^^^  In  what  property  the  wife  has  a  right 
of  dower  and  the  nature  of  the  dower  depends  upon  the  local 
law.  The  wife  of  a  bankrupt  has  no  inchoate  right  of  dower 
in  real  estate  which  has  vested  in  a  trustee  as  assets  of  a 
partnership.^^* 

An  estate  by  curtesy  in  a  wife's  property  does  not  pass  to 
the  trustee  of  her  husband  during  her  life.^°^ 

§   165.     Leaseholds. 

A  lease  which  may  be  transferred  by  a  bankrupt  or  levied 
upon  and  sold  under  judicial  process  against  him  prior  to  the 

234,  S  Am.   B.   R.   190,  3  N.  B.   N.  272 ;  Bostick  v.  Jordap,  7  Tenn.  370. 

114.  i-"'!  Smith   V.    Smith,   5    Ves.    189; 

1***  In  re  Russie,  96  Fed.  Rep.  609,  Squire  v.  Compton,  Vin.  Ab.  Dow- 

3  Am.  B.  R.  6.  er  G.  pi.  60. 

1*"  Spindle   V.    Shreve,    in    U.   S.  i"  b.  A.  1898,  Sec.  8. 

542:  In  re  Goldman,  102  Fed.  Rep.  ib.i  Cox  v.  Wilder,  No.  3308  Fed. 

122.  4  Am.  B.  R.    100,  2  N..  B.  N.  Cas.,  s.  c.  2  Dill.  45;  In  re  Detert, 

818.  No.  3829  Fed.  Gas.,  s.  c.   11   N.   B. 

150  Porter  V.  Lazear,  109  U.  S.  84;  R.    293;    McFarland    &    Goodman, 

In  re   Shaeffer,   105   Fed.   Rep.  352,  No.  8789  Fed.  Gas.,  s.  c.  6  Biss.  in. 

5  Am.  B.  R.  92n;  In  re  Slack,  in  i^*  Hiscock   v.   Jaycox,    No.   6531 

Fed.  Rep.  523,  7  Am.  B.  R.  121 ;  In  Fed.  Gas.,  s.  c.  12  N.  B.  R.  507. 

re  Angier,  No.  388  Fed.  Gas.,  s.  c.  i'^  Hesseltine   v.    Prince,   95    Fed. 

4  B.  R.  619;  In  re  Hester,  No.  6437  Rep.  802,  2  Am.  B.  R.  600;  In  re 
Fed.  Gas.,  s.  c.  5  N.  B.  R.  285.     But  McKenna,  9  Fed.  Rep.  27. 

see  Hill  v.  Bowers,  4  Heisk.  (Tenn.) 


WHAT    PASSES    TO    THE    TRUSTEE. 


397 


filing  of  the  petition,  is  not  terminated  by  bankruptcy  but 
passes  to  the  trustee/^*^  Although  the  legal  title  passes,  the 
trustee  is  not  bound  to  take  the  lease  and  charge  the  estate 
with  the  payment  of  rent.  He  may  elect  not  to  take  the  lease 
when  it  would  be  a  burden  and  not  a  benefit  to  the  estate  on 
the  ground  that  it  is  onerous  property.^^^ 

Under  the  statute  of  1867  a  landlord  was  not  entitled  to 
prove  a  debt  for  rent  accruing  subsequent  to  the  filing  of  the 
petition.^^''  But  it  was  held  that  if  the  assignee  in  bankruptcy 
continued  to  occupy  the  leased  premises  that  he  was  bound 
to  pay  rent  for  the  time  he  actually  used  them.^^**     Such  rent 


is»/m  re  Ells,  98  Fed.  Rep.  967, 
3  Am.  B.  R.  564,  2  N.  B.  N.  360, 
Judge  Lowell  said :  "A  lease  re- 
cently examined  was  made  for  a 
term  of  several  hundred  years,  upon 
a  payment  of  $16,000  at  the  begin- 
ning of  the  term,  and  subject  to  a 
future  rent  of  $1  a  year  if  de- 
manded by  the  lessor.  Clearly,  this 
would  be  an  asset  of  a  bankrupt's 
estate  which  the  trustee  would  al- 
most certainly  elect  to  assume,  and  I 
can  find  nothing  in  the  bankrupt  act 
which  would  terminate  tho  lease  and 
entitle  the  landlord  to  possession. 
Many  existing  ground  leases,  also, 
would  certainly  be  assumed  by  a 
trustee  in  bankruptcy  of  the  lessee, 
and  it  would  be  unjust  to  hold  them 
terminated  by  the  adjudication." 

See  also  In  re  Arnstein,  loi  Fed. 
Rep.  706,  4  Am.  B.  R.  246,  2  N.  B. 
N.  106;  In  re  Pennewell  (C.  C.  A. 
6th  Cir.),  iifj  Fed.  Rep.  139,  9  Am. 
B.  R.  490 ;  Lanison,  etc.,  Co.  v.  Bow- 
land  (C.  C.  A.  6th  Cir.),  114  Fed. 
Rep.  639,  Atkins  v.  Wilcox  (C.  C. 
A.  5th  Cir.),  105  Fed.  Rep.  595,  5 
Am.  B.  R.  313.  Contra,  In  re  Jef- 
ferson, 93  Fed.  Rep.  948,  2  Am.  B. 
R.  206;  Bray  v.  Cobb.  100  Fed.  Rep. 
270.  3  Am.  B.  R.  788.  2  N.  V,  N. 
fM:  In  re  Hays,  etc..  Co..  117  I'Vd. 
Rep.  879.  9  Am.  B.  R.  144 

'•'■'  .See  Trustee  not  bound  tri  take 


encumbered  interest.  Sec.  151,  and 
Rent,  Sec.  120. 

In  re  Chambers,  Calder  &  Co.,  98 
Fed.  Rep.  865,  3  Am.  B.  R.  537.  2 
N.  B.  N.  388;  Ex  parte  Whitman, 
not  reported,  but  referred  to  by 
J;;dge  Ware  in  Smith  v.  Gordon, 
No.  13052  Fed.  Cas.,  s.  c.  6  Law 
Rep.  313 ;  In  re  Ten  Eyck,  No.  13829 
Fed.  Cas.,  s.  c.  7  N.  B.  R.  26 ;  Tur- 
ner V.  Richardson,  7  East's  Reports 
336;  Welch  V.  Myers,  4  Campbell 
368:  Thomas  v.  Pemberton  and  Kit- 
tredge,  7  Taunt.  205 ;  Ansell  v. 
Robson,  2  Crompton  &  Jervis.  610; 
Clark  V.  Hume.  Ryan  &  Moody's 
Reports  207 ;  Page  v.  Godden,  2 
Starkic  309;  Hastings  v.  Wilson, 
Holt,  29©;  Wheeler  v.  r.r.nnali,  3 
Campbell  340;  Hill  v.  Dobie,  2 
Moore  .342:  Hill  v.  Dobie.  8  Taunt. 
325  ;  Hanson  v.  Stevenson,  i  Barne- 
wall  &  Alderson  303 ;  Carter  v. 
Warne,  4  Carrington  &  P.iyne 
191  ;  Goodwin  v.  Noble.  8  lillis  & 
Blackburn  587. 

"•'^  R.  S.  Sec.  5071  :  In  re  Webb, 
No.  1 73 15  Fed.  Cas..  s.  c.  (->  N.  H. 
R.  .302;  In  re  HufTnagel,  No.  ()i^_^y, 
s.  c.  12  N.  B.  R.  554;  In  re  P.utler, 
No.  2236  Fed.  Cas.,  s.  c.  6  N.  B.  R. 
501. 

^•■»  /;;  /•<•  HufTnagel.  No.  6837  Fed. 
Cas..  s.  c,  12  N  B.  R.  554:  /„  re 
Dunham,   No.  4145   Fed.  Gas.,  s.  c. 


398 


LAW    AXl)    PROCEEDINGS    IN    BANKRUPTCY. 


was  considered  a  provable  del)t  as  expenses  of  administration.^''' 
This  rule  has  been  api)lied  under  the  present  act/"** 

Under  the  act  of  1841  leases  passed  to  a  trustee,  subject  to 
his  election  to  take  or  reject  them/"^  In  England  leases  have 
passed  to  a  trustee  or  assignee  under  the  earlier  acts,  subject 
to  an  election  to  take  or  refuse  them^"^'  Since  the  act  of  1869 
(32  and  33  Vic.)  leases  have  passed  subject  to  a  statutory  dis- 
claimer, and  no  power  of  election  has  been  recognized.^""     It  is 


27  Leg.  Int.  404;  Buckner  v.  Jewell, 
No.  3060  Fed.  Cas.,  s.  c.  2  Woods 
220-  In  re  McGrath,  No.  8808  Fed. 
Cas.,  s.  c.  5  Ben.  183 ;  In  re  Walton, 
No.  17131  Fed.  Cas.,  s.  c.  i  N.  B.  R. 
557;  In  re  Appold,  No.  499  Fed. 
Cas.,  s.  c.  I  N.  B.  R.  621 ;  In  re 
Hamburger,  No.  5975  Fed.  Cas.,  s.  c. 
12  N.  B.  R.  277 ;  In  re  Ives,  No. 
7116  Fed.  Cas.,  s.  c.  18  N.  B.  R. 
28;  In  re  Yeaton,  No.  18133  Fed. 
Cas.,  s.  c.  I  Low.  420.  See  Rent, 
Sec.  120,  ante. 

16  0  /„  ,.^  Chambers,  Calder  &  Co., 
98  Fed.  Rep.  865,  3  Am.  B.  R.  537, 
2  N.  B.  N.  388;  Bray  v.  Cobb,  100 
Fed.  Rep.  270,  3  Am.  B.  R.  788,  2 
N.  B.  N.  586 ;  In  re  Grimes,  96  Fed. 
Rep.  529,  2  Am.  B.  R.  730. 

i«i  Ex  parte  Whitman,  not  report- 
ed, but  referred  to  by  Judge  Ware, 
in  Smith  v.  Gordon,  No.  13052  Fed. 
Cas.,  6  Law  Rep.  313. 

162  See  Robson  on  Bankruptcy, 
460,  ct  seq. 

In  Wilson  v.  Wallani,  5  Ex.  Div. 
15s,  Judge  Stephen  reviews  the 
English  statutes  upon  this  point, 
and  reaches  the  conclusion  on  page 
163  as  follows :  "  I  think  that  un- 
der the  first  set  of  bankruptcy  laws 
—  those  which  were  consolidated  in 
1824  —  the  power  of  the  trustees  to 
renounce  onerous  leases  arose  from 
the  absence  of  any  legal  enactment 
citing  such  leases  in  them,  and  from 
the  insufficiency  for  that  purpose  (as 
explained  in  Copeland  v.  Stephens, 
I  B.  &  A.  393)  of  a  general  assign- 
ment    Under    the    second    set    of 


bankruptcy  laws,  including  the  act 
of  1849,  the  property  was  actually 
vested  in  them,  but  a  power  to  elect 
whether  they  would  take  it  or  not 
was  confirmed  by  the  express  words 
of  s.  145  of  the  act  of  1849.  This 
act  was  repealed  by  2)2  and  2>?)  Vict. 
c.  83.  Under  the  third  system  es- 
tablished by  the  act  of  1869,  the 
leases  of  the  bankrupt  are  vested 
absolutely  in  the  trustee,  subject  to 
his  right  of  disclaimer,  but  no 
power  of  election  is  given  to  him 
or  recognized  in  him.  It  thus  ap- 
pears to  me  that  the  power  of  elec- 
tion conferred  by  the  act  of  1849, 
being  repealed  by  express  words, 
and  the  estate  being  Vested  in  the 
trustee  by  the  express  words  of  the 
act  of  1869,  he  has  no  power  to  get 
rid  of  it,  except  by  following  the 
express  words  of  s.  23.  I  do  not 
think  this  view  is  inconsistent  with 
the  cases  to  which  I  have  referred. 
They  show  only  that  the  provisions 
ot  the  act  of  1869  are  not  to  be  ex- 
tended by  implication.  I  do  not  in- 
tend to  do  so  by  this  judgment.  I 
think  that  the  position  of  the  trustee 
has  been  altered  by  express  words, 
though  not  by  words  which  express- 
ly state  all  the  consequences  of  the 
alteration.  Upon  the  whole,  I  hold 
that  the  lease  was  vested  in  the 
trustees  on  their  appointment,  and 
that  they  are  personally  liable  upon 
the  covenants,  unless  they  make  a 
valid  disclaimer.  I  think  Ex  parte 
Dressier  (g  Ch.  D.  252)  is  an  ex- 
press authority  as  to  their  personal 


WHAT    PASSES    TO    THE    TRUSTEE.  399 

therefore  evident  that  cases  decided  prior  to  the  act  of  1869 
may  be  useful  in  construing  the  act  of  1898  in  this  respect. 

Assuming  that  a  leasehold  estate  vests  under  the  act  of  1898 
in  the  trustee,  subject  to  his  election  to  take  or  reject  it,  the 
first  inquiry  is  what  is  necessary  to  constitute  such  election? 
The  safer  practice  is  for  the  trustee  to  immediately  serve  a 
written  notice  upon  the  lessor  stating  his  election.  If  he  elects 
not  to  take  he  may  make  a  new  lease  with  the  same  landlord 
with  reference  to  using  the  premises  as  may  be  for  the  best 
interests  of  the  bankrupt's  estate. 

When  the  trustee  does  not  give  a  notice  of  his  election  in 
writing  his  intention  may  be  presumed  from  his  acts.  No 
general  rule  can  be  laid  down  as  to  the  effect  of  remaining 
in  possession  of  the  leased  premises,  or  paying  rent  for  them, 
or  doing  any  other  act  consistent  with  the  supposition  that 
the  trustee  has  not  elected  to  take  the  lease  as  a  part  of  the 
property  of  the  bankrupt.  Each  case  must  be  determined  by 
the  particular  circumstances  belonging  to  it,  and  the  exam- 
ination of  the  decisions  is  only  useful  to  get  at  the  general 
principle  by  which  they  are  governed.  Thus,  ordinarily,  if 
he  takes  any  steps  toward  the  management  of  or  continues  to 
use  the  leased  premises,  he  may  be  presumed  to  have  elected 
to  take  the  lease.^'^^ 


liability,  assuming  the  lease  to  be  Camp.  368,  or  where  he  pays  rent 
vested  in  them  absolutely."  In  this  for  leased  property,  Ansell  v.  Rob- 
case  he  held  that  the  disclaimer  was  son,  2  C.  &  J.  610;  also  Broome  v. 
not  formal,  and  therefore  not  bind-  Robinson,  7  East  339.  Where  the 
ing.  See  also  Titterton  v.  Cooper,  9  trustee  takes  possession  of  lease- 
L.  R.  Q.  B.  Div.  473.  hold  property,  although  the  trustee 

The    act    of    1883,    enacted    since  delivered    up   the   keys   immediately 

this  decision,  also  provides  for  for-  after  the  bankrupt's  effects  are  sold, 

mal  disclaimer.  Hansen    v.    Stevenson,    i    B.    &    A. 

1"^  It  has  been  held  that  it  303 ;  or  where  the  trustee  of  a  bank- 
amounts  to  an  election  for  the  trus-  rupt  lessee  chosen  on  the  15th  of 
tee  to  intermeddle  with  and  assume  November  kept  the  bankrupt  in  the 
the  management  of  a  farm.  Thomas  premises,  carrying  on  the  business 
v.  Pemberton,  7  Taunt.  206;  Brad-  for  the  benefit  of  the  creditors  until 
shaw  V.  Jones,  20  L.  T.  781,  s.  c.  April  following,  although  on  the 
W.  R.  loio;  or  where  the  trustee  23d  of  December  he  disclaimed  the 
allowed  his  cows  to  remain  upon  lease  by  letter  to  the  landlord,  Clark 
the  pasture  land  for  two  days  after  v.  Hume,  R.  &  M.  207;  or  where 
appointment  and  ordered  them  to  be  the  trustee  assigns  the  lease  to  the 
milked    there,    Welch    v.    Myers,    4  owner    as    security    for    advances, 


400 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY, 


He  must  make  an  election  within  a  reasonable  time/"*  If 
he  fails  to  do  this,  or  refuses  when  requested,  he  is  deemed  to 
have  elected  not  to  take  the  lease,  and  it  remains  in  the  bank- 
rupt.'"^ 

Where  the  trustee  elects  to  take  the  lease  he  takes  it  subject 
to  equities.'""  He  thereby  makes  the  estate  and  himself  per- 
sonally liable  for  the  payment  of  rent  for  the  full  term  of  the 
lease  or  until  it  passes  by  assignment  to  another  person.'"^ 
He  may  relieve  himself  of  liability  by  surrendering  the  lease 
to  the  lessor  or  assigning  it  to  a  third  party,  who  may  be  a 
pauper.""*  The  reason  for  this  rule  is  that  the  trustee  holds 
in  privity  of  estate  only,  not  in  privity  of  contract,   between 


Mackey  v.  Pattenden,  30  L.  J.  Q.  B. 
225,  s.  c.  4  L.  T.  285 ;  or  where  the 
trustees  so  act  as  to  make  the  prop- 
erty of  less  value,  Carter  v.  Warne, 
4  C.  &  P.  191 ;  or  where  the  trustees 
sell  a  bankrupt's  estate  and  rever- 
sionary interest  in  the  premises, 
Page  V.  Godden,  2  Stark  309.  See 
also  Hastings  v.  Wilson,  Holt,  290. 
But  it  was  held  not  to  be  an  elec- 
tion to  take  where  trustees  of  a 
bankrupt  having  allowed  his  effects 
to  remain  on  the  premises  occupied 
by  him  nearly  twelve  months  after 
the  bankruptcy  and  paid  the  arrears 
of  the  rent  due,  at  the  same  time 
intimating  to  the  landlord  that  they 
did  not  mean  to  take  the  land  un- 
less it  could  be  advantageously  dis- 
posed of ;  effects  were  soon  after 
sold  and  removed  from  the  prem- 
ises ;  the  land  was  put  up  for  sale 
by  order  of  the  trustees,  but  there 
were  no  bidders ;  they  omitted  to 
return  the  key  to  the  landlord  for 
nearly  four  months  after,  Wheeler 
V.  Bramah,  3  Camp.  340;  or  where 
the  trustee  of  a  bankrupt  lessee  of 
a  hotel,  upon  the  bankruptcy,  closed 
the  hotel  with  the  exception  of  the 
bar,  which  was  occupied  by  a  third 
party,  tenant  to  the  bankrupt  before 
bankriiptcy,  and  he  was  supplied  by 
order  of  the  trustee  with  liquor  at 
a    slieht    advance    over    cost    price, 


Goodwin  V.  Noble,  27  L.  J.  Q.  B. 
204,  s.  c.  8  El.  &  Bl.  587;  or  where 
trustees  were  possessed  of  a  farm, 
part  of  which  he  had  under-let  to 
another,  released  such  under  tenant, 
being  afterwards  asked  by  the  lessor 
to  elect,  refused  to  take  the  original 
lease.  Hill  v.  Dobie,  2  Moore  342, 
s  c.  8  Taunt.  325.  Trustees  may 
likewise  do  reasonable  acts  to  ascer- 
tain the  value  of  property  by  put- 
ting up  farms  to  sell.  See  Turner 
v.  Richardson,  7  East.  336 ;  Hastings 
V.   Wilson,   Holt,  290. 

18*  Clark  V.  Hume,  R.  &  M.  207. 

^^^  See  Sparhawk  v.  Yerkes,  142 
U.  S.  I  ;  Taylor  v.  Irwin,  20  Fed. 
Rep.  615;  Smith  v.  Gordon,  No. 
13052  Fed.  Cas.,  6  L.  R.  313. 

166  £^  parte  Faxon,  No.  4704  Fed. 
Cas.,  s.  c.  I  Low.  404.  See  McFar- 
land  Carriage  Co.  v.  Solanes,  108 
Fed.  Rep.  532. 

1''^  Hansen  v.  Stevenson,  i  B.  & 
A.  307 ;  Thomas  v.  Pemberton,  7 
Taunt.  205 ;  Welch  v.  Myers,  4 
Camp.  368 ;  Ansell  v.  Robson,  2  C. 
&  J.  610;  Carter  v.  Warne,  4  Car. 
&  P.  191 ;  Hastings  v.  Wilson,  Holt, 
290. 

In  Clark  v.  Hume,  R.  &  M.  207.  a 
trustee  in  bankruptcy  was  held  per- 
sonally liable. 

1*"*  Hopkinson  v.  Lovering,  11  L. 
R.  Q.  B.  Div.  92.     As  to  the  right 


WHAT    PASSES    TO    THK    TRUSTEE. 


401 


himself  and  the  landlord,  which  is  the  sole  basis  of  his  lia- 
bility. If  this  is  taken  away  by  assignment  it  destroys  the 
privity,  and  hence  the  liability. 

Following-  the  English  decisions  a  trustee  will  not  be  al- 
lowed to  sell  off  crops,  manure,  hay  or  straw,"'  or  to  remove 
fixtures  ^'^  contrary  to  the,  terms  of  the  lease. 

The  benefit  of  a  contract  or  option  for  a  lease  to  which  the 
bankrupt  is  entitled  will  also  probably  vest  in  the  trustee, 
and  may  be  assigned  by  him.^^^  or  he  may  decline  to  take  such 
contract. ^^^  Where  the  trustee  elects  to  take  such  contract  or 
option  the  lessor  will  not  be  bound  to  grant  a  lease  to  him, 
unless  he  enters  into  the  same  covenants  as  the  bankrupt  must 
have  entered  into  if  solvent.^"  It  may  be  that  the  trustee  can 
not  assign  the  benefit  of  such  a  contract  so  as  to  entitle  the 
assignee  of  it  to  a  lease  without  a  stipulation  to  that  effect.'^* 

The  acceptance  or  rejection  of  the  lease  by  the  trustee  will 
not  release  from  liability  a  surety  for  the  lessee.'^"  The  surety 
will  continue  lial)le  for  breaches  of  covenant  committed  before 
the  lease  is  surrendered. 

A  trustee  has  no  greater  rights  under  a  lease  than  the  lessee. 
A  landlord  may  reenter  and  terminate  a  lease  containing  such 
a  covenant,'^"  or  may  enforce  a  lien  for  rent  under  a  state 
law.^" 


to  pursue  a  bankrupt  after  bank- 
ruptcy proceedings  in  an  action  of 
covenant,  see  Auriol  v.  Mills,  4  T. 
R.   rx). 

"'•" /:.r  f>arte  Maundrcli,  2  Mad. 
315:  fix  parte  Whittington,  I'lick. 
«7 

'^^  See  Stansfield  v.  Portsmouth,  4 
C.  B.  N.  S.  120,  s.  c.  4  Jiir.  N.  S. 
440;  Saint  V.  Piliey.  L.  R.  10  Ex. 
U7,  s.  c.  3.3  L-  T.  93. 

i7>  Buckland  v.  Papilloii,  i  L.  R. 
F.q.  477;  Crosbie  v.  Tooko,  i  M.  & 
K.  421  ;  Morgan  v.  Rhodes,  i  M.  & 
^   4.15- 

^'''- lix  parte  RIakc,  11  Chan.  Div. 
572 :  Ex  parte  Llynvi  Coal  Co.,  7 
Chan.  App.  28. 


"•■»  Powell  V.  Lloyd,  I  t.  &  ]. 
427,  s.  c.  2  Y.  &  J.  372;  Page  v. 
Broom,  3  Beav.  36. 

174  See  Dowell  v.  Dew,  i  W.  &  C. 
Chan.  365 ;  Buckhmd  v.  Papillon,  i 
L.  R.  Eq.  477  ;  Wcatherall  v.  Geer- 
ing,  12  Ves.  504. 

iT'-B.  A.  1898,  Sec.  16;  Inglis  v. 
McDougal,  I  J.  B.  Moore  196;  Tuck 
V.  Fyson,  6  Bing.  321. 

IT"  fn   re  Ells,  98  Fed.   Rep.  967, 

3  Am.  R.  R.  564,  2  N.  B.  N.  360: 
In  re   Arnstcin,  701    Fed.  Rep.   106, 

4  Am.  B.  R.  246,  2  N.  B.  N.  106. 
'77  MrFarland  Carriage  Co.  v.  So- 

lanrs,  108  Fed.  Rep.  532 ;  /«  re 
Mitcli.ll,  1 16  Fed.  Rep.  87.  8  .\m. 
B.   R.  324. 


402  LAW    AND    TROCEEDINGS    IN    BANKRUPTCY. 

§   i66.     Growing  crops,  fixtures  and  good-will. 

Growing  crops  which  are  annually  produced  by  the  culti- 
vator are  considered  emblements,  and  before  their  severance 
from  the  soil  pass  to  the  trustee  as  personal  property/^'*  But 
where  the  crop  is  gathered  after  an  adjudication  by  the  bank- 
rupt he  should  be  allowed  a  reasonable  compensation  for  work 
and  care  from  the  date  of  adjudication/^"  They  do  not  pass 
where  a  mortgagee  is  entitled  to  possession  and  demands  it  in 
pursuance  of  the  terms  of  his  mortgage,^""  or  where  the  bank- 
rupt has  parted  with  his  interest  in  the  crops, ^'^^  or  where  the 
crop  is  planted  by  a  bankrupt  after  the  filing  of  a  petition  in 
bankruptcy/**^ 

Where  the  terms  of  the  lease  permit  a  tenant  to  remove 
fixtures  the  trustee  succeeds  to  his  right,^®^  but  otherwise  not/*** 
The  general  rule  with  reference  to  tenants  is,  that  after  the 
expiration  of  his  tenancy  he  has  no  right  to  remove  fixtures 
which  he  might  have  removed  during  his  lease,^^^  but  that 
they  become  the  property  of  the  landlord/^^ 

Where  goodwill  is  local,  and  not  of  a  personal  nature, 
it  will  pass  to  the  trustee/"  The  reason  for  this  exception 
may  be  readily  understood  when  it  is  considered  that  the 
whole  value  of  a  good-will  may  be  inseparable  from  personal 

"8/„   re   Barrow,   98   Fed.    Rep.  Portsmouth,   4   C.    B.    Rep.    N.    S. 

582,  3  Am.  B.  R.  414,  3  N.  B.  N.  95 ;  118. 

In  re  Daubner,  96  Fed.  Rep.  805,  3  1***  Ex  parte  Ames,  No.  323  Fed. 

Am.  B.  R.  368 ;  In  re  Coffman,  93  Cas.,    s.    c.    i    Low.   561  ;   Ex  parte 

Fed.    Rep.   422,    i    Am.   B.   R.    530;  Thomas,  44  L.  T.  781,  s.  c.  29  W.  R. 

In  re   Rooney,    109  Fed.   Rep.   601;  527;    Ex   parte    Morrow,    No.   985© 

Ir.    re   Schumpert,    No.    12491    Fed.  Fed.  Fed.  Cas.,  s.  c.  i  Low.  386. 

Cas.,  s.  c.  8  N.  B.  R.  415 ;  Ex  parte  ^*^^  See   Lyde   v.   Russell,   i    B.   & 

National  Mercantile  Bank,  16  Chan.  Ad.   394;    Pugh  v.   Arton,   L.   R.  8 

Div.  104.  Eq.  626.     See  also  and  compare  Mc- 

i^»  In  re  Barrow,  98  Fed.  Rep.  582,  Intosh  v.  Trotter,  3  M.  &  W.  184 ;. 

3  Am.  B.  R.  414,  3  N.  B.  N.  95.  Weaton  v.  Woodcock,  7  M.  &  W. 

180  Bagnall    v.    Villar,    12    Chan.  14. 

Div.  812.  "«  See  In  re  Thomas,  29  W.  R. 

^81  Consult  In  re  Gregg,  No.  5796  527,  s.  c.  44  L.  T.  781. 

Fed.  Cas.,  s.  c.  i  Hask.  173.  ^''^  See  Ex  parte  Punnett,  16  Chan. 

1^*2  7,1  re   Barnett,  No.   1024  Fed.  Div.  226 ;  £jt: /'ar?^  Thomas,  2  Mont. 

Cas.,  s.  c.  3  Pitts.  Rep.  559.  D.  &  DeG.  294,  s.  c.  10  L.  J.  Bank- 

183  See  In  re  Breck,  No.  1822  Fed.  ruptcy  75. 
Cas.,   s.  c.  8   Ben.   93 ;   Stansfeld  v. 


WHAT    PASSES    TO    THE    TRUSTEE.  4O3 

professional  skill,  as,  tor  example,  that  of  a  surgeon  or  lawyer, 
such  being  very  different  in  nature  from  a  commercial  matter. ^^^ 

§   167.     Goods  and  chattels  generally. 

All  the  personal  estate,  merchandise,  stocks,  bonds,  notes, 
money,  plate,  furniture,  etc.,  so  as  to  include  every  sort  of 
personal  property,  except  such  as  is  exempt  by  the  state  law, 
passes  to  and  vests  in  the  trustee. 

Personal  property  belonging  to  the  bankrupt,  which  is  m 
the  possession  of  his  agents  or  factors,  is  considered  in  his 
possession,  and  accordingly  passes  to  the  trustee.  Thus,  grain 
in  a  warehouse  has  been  held  to  vest  in  a  trustee.^^''  But  goods 
in  a  United  States  bonded  warehouse,  on  which  the  duties 
have  not  been  paid,  for  they  are  in  the  possession  of  the  United 
States,  were  held  not  to  pass.^^°  Legacies  or  personal  property 
inherited  prior  to  filing  the  petition  pass  to  the  trustee,^" 
but  such  property  inherited  after  that  date  does  not  pass  to 
the  trustee.^"" 

Where  a  stock  of  goods  was  transferred  for  the  purpose  of 
defrauding  creditors  of  a  firm  and  was  subsequently  retrans- 
ferred  to  the  bankrupts,  the  property  was  held  to  pass  to  the 
trustee.'''^ 

"«  See   Farr  v.    Pearce,  3  Madd.  ruptcy  court,  assuming  that  the  de- 

74-  vice  of  a  conveyance  by  the  partners 

18"  Brook  V.  Scoggins,  No.  1936  to  a  corporation  formed  and  con- 
Fed.  Cas..  s.  c.  II   N.  B.  R.  258.  trolled   by   them    to    take    it    would 

I""/;!   re  Clifford,   No.   2893   Fed.  have  that  effect.     By  the  voluntary 

Cas.,  s.  c.  2  Saw.  428.  reconveyance  of  the  property  by  the 

"1  In    re    Stoner,    105    Fed.    Rep.  Brown-Heath  Company  it  becomes  a 

752,  5  Am.   B.   R.  402,  3  N.  B.  N.  part   of  the  bankrupt  estate,   to   be 

423-  administered  as  such.     The  court  is 

"•=^/«    re    Burka,    104    Fed.    Rep.  not  called  upon  to  set  aside  a  con- 

326,  5  Am.  B.  R.  12.  veyance.     There  is  no  such  effect  at- 

But    see   Ex  parte    Newhall,    No.  taching  to  property  whicli  has  been, 

10159  Fed.  Cas.,  s.  c.  2  Story  360.  at  some  time  prior  to  the  proceed- 

For   a    further  discussion   of   this  ings   in   bankruptcy,    the   subject   of 

question,  see  Sec.  175,  post.  a    fraudulent    transfer,    as    to    pre- 

"s  In  re  Brown,  91  Fed.  Rep.  dude  the  court  of  bankruptcy  from 
358,  the  court  said :  "  Nor  does  it  thereafter  dealing  with  such  prop- 
affect  the  question  that,  at  the  time  erty,  when  the  title  is  in  the  bank- 
the  bankrupt  act  was  passed,  the  rupt.  There  is  no  contention  that 
title  to  the  property  in  dispute  was  the  bankrupt  does  not  have  the 
in  the  Brown-Heath  Company,  the  legal  title,  and  is  not  in  fact  the 
fraudulent  grantee,  and  was  there-  owner  of  this  property." 
fore  beyond  the  reach  of  the  bank- 


404  1-'^'^^       '*^"^"    rK(»CElil)INC;S    IN     BANKKll'lCV. 

Whelher  the  property  of  a  husband  or  wife  passes  to  the 
trustee  in  bankruptcy  of  the  estate  of  the  other  depends  upon 
local  law.''"  If.  under  the  law  of  the  situs,  the  proi)erty  of  a 
wife  or  husband  is  subject  to  the  payment  of  the  debts  of  the 
other  it  passes  to  the  trustee,  if  not,  it  does  not  pass  to  the 
trustee  but  remains  the  separate  property  of  such  husband  or 
wife  not  declared  bankrupt.  Thus  it  has  been  held  that  prop- 
erty of  a  bankrupt's  wife,  engaged  in  business  without  comply- 
ing with  a  statute  to  entitle  her  to  the  privilege  of  a  fcmmc  sole 
trader,  passes  to  the  trustee  of  her  husband.''"^  So  also  where 
the  product  of  the  separate  property  of  the  wife  is  liable  for 
her  husband's  debts  it  passes  to  the  trustee.'""  Where  prop- 
erty has  been  conveyed  to  the  wife  in  fraud  of  creditors  it 
passes  to  the  husband's  trustee.'"'  It  has  been  held  that, 
where  a  wife  is  entitled  to  one-third  of  the  husband's  personal 
property  upon  decree  of  divorce,  the  whole  of  his  property 
passes  to  his  trustee  pending  divorce  proceedings  by  the  wife.''* 

It  has  been  that  a  conditional  sale  of  personal  property 
in  writing  not  acknowledged  or  recorded  vests  in  the  trustee 
and  cannot  be  reclaimed  by  the  vendor.'"® 

It  has  been  held  that  the  interest  of  an  infant  partner  passes 
to  the  trustee  of  the  partnership.'""  But  the  earnings  of  a 
minor  son,  who  has  been  expressly  emancipated  by  his  father, 
are  not  assets  of  the  father's  estate.^"' 

19*  In  re   Rooney,   109   Fed.   Rep.  >"8  Hawk  v.  Hawk,  102  Fed.  Rep. 

601 ;  In  re  Hammond,  98  Fed.  Rep.  679,  4  Am.  B.  R.  463,  2  N.   B.  N. 

845,  3  Am.  B.  R.  466 ;  In  re  Fowler,  940. 

93  Fed.  Rep.  417,  i  Am.  B.  R.  555  I  '""^w  re  Legg,  96  Fed.  Rep.  326; 

Greensf elder  v.    Corbett     (Sup.   Ct.  In    re    Garcewich     (C.    C    A.,    2d 

111.),    3    N.    B.    N.    825;    Hawk    v.  Cir.),  115  Fed.  Rep.  87,  8  Am.  B.  R. 

Hawk,  102  Fed.  Rep.  679,  4  Am.  B.  149;  In  re  N.  Y.  Economical  Print- 

R.  463,  2  N.  B.  N.  940.  ing  Co.    (C.   C.   A.,  2nd   Cir.),    no 

i«»/m  re  Hammond,  98  Fed.  Rep.  Fed.    Rep.    514,  6  Am.   B.   R.  615; 

845,  3  Am.  B.  R.  466.  Chesapeake  Shoe  Co.  v.  Seldner  (C. 

lee/n   re   Rooney,    109  Fed.   Rep.  C.  A.,  4th  Cir.),  122  Fed.  Rep.  593, 

601.  10  Am.  B.  R.  466. 

197  In    re    Fowler,    93    Fed.    Rep.  200  /„   re   Duguid,    100  Fed.    Rep. 

417,   I    Am.  B.   R.  555;   Feflows  v.  274,  3  Am.  B.  R.  794.  2  N.  B.  N.  607. 

Freudenthal,    102   Fed.   Rep.    Ji"^,  4  ^oi /„  re  Dunavant,  96  Fed.  Rep. 

.\m.    B.    R.    490;    Greensfelder    v.  542,  3  Am.  B.  R.  41. 
Corbett   (Sup.  Ct.  III.),  3  N-  B.  N. 
825. 


WHAT    PASSES    TO    THE    TRUSTEE.  405 

A  diamond  stud  worth  $250,-"^  a  gold  watch  ^""^  and  a  Ma- 
sonic uniform  ^"^  have  been  held  not  to  pass  to  the  trustee 
but  may  be  held  by  a  bankrupt  as  wearing  apparel. 

§   168.     Shares  of  stock. 

Questions  with  reference  to  shares  of  stock  will  arise  in  bank- 
ruptcy proceedings  in  two  relations,  first,  where  the  share 
is  owned  by  the  bankrupt,  and.  second,  when  a  bankrupt  cor- 
poration may  enforce  subscriptions  for  shares  of  stock. 

First,  Shares  of  stock  in  incorporated  companies,  standing 
in  the  name  of  a  bankrupt,  pass  to  his  trustee  subject  to  his 
election  to  take  or  reject  them.-"*  Where  the  stock  stands  in 
the  name  of  a  fictitious  person,  but  belongs  to  the  bankrupt, 
tlie  court  may  direct  the  corporation  to  erase  the  name  of  the 
fictitious  person  and  insert  the  bankrupt's  name  on  their 
books. -"^  Stock  delivered  as  security  for  a  bona  fide  debt,  with 
power  of  attorney  to  have  transfer  made  on  books  of  the  com- 
pany, does  not  pass.^""  The  trustee,  however,  may  redeem  such 
stock  by  paying  the  debt  which  it  secures.  Nor  does  stock 
pass  which  was  honestly  purchased  with  a  wife's  separate 
property  years  before  the  commencement  of  bankruptcy  pro- 
ceedings.^'^ 

Where  the  assignee  elects  to  take  stock  he  is  entitled  to 
have  it  transferred  on  the  books  of  the  corporation.""*  The 
trustee  thereupon  becomes  a  stockholder  in  the  corporation. 
and  may  attend  meetings  of  the  cor])oration  and  vote  the 
stock,"'""'  and  is  liable  for  assessments  upon  such  stock.     Where 


202  /„  y^  Smitli,  96  T'>fl.  Rtp.  832,  As  to  stock  standing  in  the  name 

3  Am.  H.  R.  140.  of  the  wife  of  a  bankrupt  but  which 

2»-'«  In  re  Jones,  97  Fed.  Rep.  yy^,  was  purchased  with  joint  funds  see 

3   Am.   P..   R.   259.  2  N.   B.   N.  296;  Fellows    v.    Freudenthal,    102    Fed. 

Sellers  v.  Bell   (C.  C.  A.,  5th  Cir.),  Rep.  7.31.  4  Am.  B.  A.  490. 

94  Fed.  Rep.  801,  2  Am.  B.  R.  529.  -"*>  Dickinson  v.  Central   National 

2"«  American     File     Company     v.  Bank,  129  Mass.  279. 

Garrett,   1 10  U.   S.  286 ;   Graham  v.  ""^  Glover  v.  Love,  26  Coop.  Sup. 

The    Van    Diemen's    Land    Co.,    11  Court   Rep.  657. 

Ex.  Rep.   loi  ;   South  Straffordshire  ^''s  Wilson    v.     Atlantic,    etc.,     R. 

Ry.  Co.  v.  Burnside,  5  Ex.  Rep.  128.  Co.,  2  Fed.  Rep.  459. 

2or,  r.reen    v.    The    Bank   of    Eng-  200  American   File  Co.  v.   Garrett, 

land.  },  Y.  &  C.  y22.  110  U.   S.  294-5. 


4O0  LAW    AND    PROCEEDINGS    IN    BAxXKRUPTCY. 

he  elects  not  to  take  the  stock,  neither  he  nor  the  bankrupt's 
estate  is  hable  for  such  assessments."^** 

Stxond,  A  trustee  of  a  bankrupt  corporation  is  entitled  to 
recover  unpaid  subscriptions  upon  stock  in  such  company  as 
assets  of  the  bankrupt  company."'^  And  the  directors  can 
not  relieve  the  stockholders  by  refusing  to  make  the  call.^^^ 
Nor  can  the  shareholder  make  the  defense  of  false  and  fraud- 
ulent representations  inducing  such  subscription,  especially 
when  the  subscriber  has  not  been  vigilant  in  discovering  such 
fraud  and  repudiating  his  contract."^''  nor  the  defense  of  irreg- 
ular organization  of  the  corporation."^'*  Such  assessments  are 
considered  a  trust  fund  for  the  creditors,  and  a  stockholder 
indebted  to  the  bankrupt  corporation  for  unpaid  shares  of  stock 
can  not  set  off  against  this  fund  a  debt  due  him  by  the  cor- 
poration."^^ 

§   169.     Membership  in  exchanges,  franchises  and  privileges. 

Membership  in  an  exchange  vests  in  the  trustee,  subject  to 
the  rules  of  the  exchange.^^"  The  trustee,  however,  may  elect 
not  to  take  such  certificate  of  membership.^"  In  such  case  the 
certificate  of  membership  remains  in  the  bankrupt,  and  can 
not  be  taken  from  him  afterwards  by  the  trustee  if  it  becomes 
valuable."" 

A  franchise  or  privilege  which  might  have  been  transferred 

'i**  American  File  Co.  v.  Garrett,  How.    380;    Sawyer    v.    Hoag,    17 

no  U.  S.  288.  Wall.  610. 

211  Rathbone  v.  Ayer,  82  N.  Y.  214  Chubb  v.  Upton,  95  U.  S.  667. 
Supp.  235;  In  re  Morris  Arc  Lamp  215  Sawyer  v.  Hoag,  17  Wall.  610. 
Co.,  10  Am.  B.  R.  569;  Payson  v.  210  p^gg  y.  Edmonds,  187  U.  S. 
Stoever,  No.  10863,  Fed.  Cas.,  s.  c.  596,  9  Am.  B.  R.  277;  In  re  Gay- 
2  Dill.  427;  Payson  v.  Withers,  No.  lord,  in  Fed.  Rep.  717,  7  Am.  B.  R. 
10864,  Fed.  Cas.,  s.  c.  5  Biss.  269 ;  195 ;  In  re  Neimann,  124  Fed.  Rep. 
Payson  v.  Brooke,  No.  10857,  Fed.  738 ;  Hyde  v.  Woods,  94  U.  S.  523 ; 
Cas.,  s.  c.  I  Weekly  Notes,  89;  In  In  re  Werder,  15  Fed.  Rep.  789;  In 
re  Republic  Insurance  Co.,  No.  re  Warder,  10  Fed.  Rep.  275 ;  In  re 
1 1 704,  Fed.  Cas.,  s.  c.  3  Biss.  452;  Ketchum,  i  Fed.  Rep.  840.  But  see 
Upton  V.  Hansbrough,  No.  16801,  in  re  Sutherland,  No.  13637,  Fed. 
Fed.  Cas.,  s.  c.  3  Biss.  417.  Cas.,  s.  c.  6  Biss.  526. 

212  Rathbone  v.  Ayer,  82  N.  Y.  217  Sparhawk  v.  Yerkes,  142  U.  S. 
Supp.  235.  I.     See   also    Meyers    v.    Josephson 

213  Upton  V.  Tribilcock,  91  U.  S.  (C.  C.  A.,  5th  Cir.),  124  Fed.  Rep. 
45;  Webster  v.  Upton,  91  U.  S.  65;  734,  affirming  121  Fed.  Rep.  142,  9 
Ogilvie  V.  Knox  Insurance  Co.,  22  Am.  B.  R.  345. 


WHAT    PASSES    TO    THE    TRUSTEE.  407 

by  the  bankrupt  or  levied  upon  and  sold  under  judicial  process 
ag-ainst  him  before  the  filing  of  the  petition  will  pass  to  the 
trustee  as  an  asset  of  the  bankrupt's  estate.  Thus  it  was  held 
that  a  permit  to  occupy  a  stand  in  market,  revokable  at  the 
pleasure  of  the  comptroller  and  transferable  only  with  his 
permission,  but  which  was  ordinarily  bought  and  sold  for 
money,  passes ;  *^*  so  also  a  license  to  take  toll  for  crossing  a 
bridge,"^®  or  a  license  to  sell  liquor.-""  But  a  franchise  to  take 
toll  on  a  turnpike,  being  personal  in  its  nature,  was  held  not  to 
pass  to  the  trustee."^  So  also  where  a  lease  to  a  public  house 
was  determinable  on  the  bankruptcy  of  the  lessee,  and  contained 
a  covenant  by  the  lessee  upon  the  termination  of  the  term  to 
assign  the  licenses  to  the  lessor,  it  was  held  that  no  interest  in 
the  licenses  passed  to  the  trustee,  but  the  lessor  was  entitled  to 
have  the  licenses  delivered  up  to  him  upon  the  bankruptcy  of 
the  lessee. ^^^ 

§   170.     Negotiable  instruments. 

All  bills  of  exchange,  promissory  notes  and  other  negotiable 
instruments  belonging  to  the  bankrupt  vest  in  the  trustee. '-^^ 
The  bankrupt  is  no  longer  able  to  sue  on  such  instruments,, 
or  to  convey  any  perfect  title  to  them  by  endorsement  or  other- 
wise. If  the  bankrupt  makes  a  bona  fide  transfer  of  the  in- 
strument without  endorsement  before,  he  may  endorse  it  after 
bankruptcy,  and  such  endorsement  will  enable  the  holder  of 
the  instrument  to  maintain  an  action  upon  it  in  liis  own  name."* 

When  a  bill  of  exchange  or  a  note  is  dishonored  after  the 
bankruptcy  of  the  drawer  or  maker,  notice  of  dishonor  must 

2i«/«  re  Gallagher,  No.  5192,  Fed.  -^i  People  v.  Duncan,  41  Cal.  508. 

Cas.,    s.    c.    16    Rlatch.    410;    In    re  ^-'^  Ex  parte  Royle,  46  L.  T.  Bk, 

Emrich,   loi    Fed.  Rep.  231,  4  Am.  85,  s.  c.  25  W.   R.   560. 
B.  R.  89,  2  N.  B.  N.  656.  223  Kitchen  v.  Bartsch,  7  East,  53; 

2i»  Stewart   v.   Hargrove,   23   Ala.  Gay     v.     Kingsley,    93     Mass.    345; 

429.  Smith  V.   Chandler,  69  Mass.  392. 

220  In  re  Fisher,  98  Fed.  Rep.  89,  224  Hughes  v.  Nelson,  29  N.  J.  Eq. 

affirmed    (C.    C.    A.,    ist    Cir.),    103  547;  Mersey  v.  EllioU,  67  Me.  526; 

Fed.  Rep.  860,  4  Am.   B.  R.  646,  2  Ex   parte    Greening,    13    Vcs.    206; 

N.   B.   N.    221;    In   re   Brodhinc,  93  Watkins  v.   Maule,  2  J.  &  W.  237; 

Fed.  Rep.  643,  2  Am.  B.  R.  53;  In  Ex  parte  Mowbray,  i  J.  &  W.  428; 

re  Becker,  98  Fed.  Rep.  407,  3  Am.  Smith    v.    Pickering,    I    Peak's    N. 

B    R.  412.  2  N.   B.    N.  245 ;  In  re  P.  Rep.  69. 
Olewiiie,  125  Fed.  Rep.  840. 


408  LAW    AND    I'KOt'KliniNGS    IN    BANKRl'I'TCY. 

be  given  as  though  haiiki"U|)tcy  had  not  intervened.*""'*  The 
better  opinion  seems  to  be  that  a  notice  to  the  bankrupt  is  a 
proper  and  sufficient  notice  if  the  trustee  has  not  been  ap- 
pointed. He  is  the  only  person  who  can  be  notified,"^"  If 
immediate  action  is  necessary  against  the  promisor  or  acceptor 
to  save  a  probal)le  loss,  the  bankrupt,  upon  application  to  the 
court,  will  be  permitted  to  prosecute.  After  a  trustee  has 
been  appointed  the  safer  practice  is  to  give  notice  to  him  and 
also  to  the  bankrupt. 

§   171.     Pensions. 

Pensions  of  a  bankrupt  granted  by  the  government  for  mili- 
tary services  are  not  vested  in  the  trustee  in  bankruptcy,  as 
they  are  made  by  statute  inalienable  and  not  subject  to  attach- 
ment."'* It  has  been  held  that  the  bankrupt's  pension  money 
in  his  hands  at  the  time  of  filing  his  petition  as  it  was  received 
and  not  loaned  or  invested  or  changed  in  its  nature  will  not  pass 
to  the  trustee.""*  In  England  the  rule  is  otherwise."""  Sal- 
ary and  pensions  of  the  army  and  navy  and  all  persons  em- 
ployed or  engaged  in  the  civil  service  pass  to  the  trustee  in 
bankruptcy. 

§   172.     Insurance  policies. 

Policies  of  insurance  vest  in  the  trustee,  but  the  bankrupt 
act  provides  "^^  that  "  when  any  bankrupt  shall  have  any  insur- 
ance policy  which  has  a  cash  surrender  value  payable  to  him- 
self,  his  estate,  or  personal   representatives,   he   may,   within 

--^  Ex    parte    Tremont    National  Streeter  v.   Sumner,  11   Foster    (N. 

Bank,  No.   14169,  Fed.   Cas.,  s.  c.  2  H.)    557. 

Low.  409;  Ex  parte  Moline,  19  Ves.  --^  In  re  Bean,  100  Fed.  Rep.  262, 

216;    Esdaile   v.    Sowerby,    11    East.  4  Am.  B.  R.  53. 

114;    Nicholson    v.    Gouthit,    2    H.  229^6  a^id  47  Vict.  Chap.  52,  Sec. 

Black.     609;     Bowes     v.     Howe,     5  52,  which   is  substantially  the  same 

Taunt.  30 ;   Rohde  v.   Proctor,  4  B.  provision  as  that  contained  in  Sees. 

&    Cres.    517;    Donnell    v.    Savings  89   and   90   of   the   bankrupt   act   of 

Bank,  80   Mo.    165;    House   v.    Na-  1869  (32  and  33  Vict.). 

tional    Bank,   43    O.    S.    346;    Cala-  2.30  p.  A.    1898,   Sec.  70,  clause  5- 

han   V.    Bank  of   Kentucky,  82   Ky.  Consult    in    re    Bennett,    No.    1315, 

231.  Fed.  Cas.,  s.  c.  2  N.  B.  R.   181,  as 

22B  Ex    parte    Tremont     National  to    Erben's    case.      In    re    Welling 

Bank,  No.   14169,  Fed.  Cas.,  s.  c.  2  (C.  C.  A.,  7th  Cir.),  113  Fed.  Rep. 

Low.  409.  189,  7  Am.  B.  R.  340. 

227  R.  S.  Sees.  4745  and  4747 ;  see 


WHAT    PASSES    TO    THE    TRUSTEE.  4O9 

thirty  days  after  the  cash  surrender  value  has  been  ascertained 
and  stated  to  the  trustee  by  the  company  issuing  the  same, 
pay  or  secure  to  the  trustee  the  sum  so  ascertained  and  stated, 
and  continue  to  hold,  own,  and  carry  such  poHcy  free  from 
the  claims  of  the  creditors  participating  in  the  distribution 
of  his  estate  under  the  bankruptcy  proceedings,  otherwise  the 
policy  shall  pass  to  the  trustee  as  assets." 

The  status  of  life  insurance  policies  will  give  rise  to  many 
interesting  questions  with  reference  to  whether  such  policies 
pass  to  the  trustee.  Where  such  policies  have  a  cash  sur- 
render value  and  are  payable  to  the  bankrupt,  his  estate  or 
personal  representatives,  they  undoubtedly  pass  to  the  trustee.'"''' 
Policies  without  a  cash  surrender  value  also  pass  provided 
they  have  an  actual  value  "'^"  and  it  has  been  held  that  the 
bankrupt  should  be  permitted  to  pay  that  actual  value  and  re- 
ceive a  conveyance  from  the  trustee  of  all  claims  thereto.'"^'' 
It  is  to  be  observed  that  the  trustee  does  not  take  policies 
(if  insurance  payable  to  the  wife,  children  or  other  kin  of  the 
bankrupt,  but  only  policies,  the  proceeds  of  which  are  payable 
to  the  bankrupt,   liis  estate  or  i)ersonal   representatives. 

The  rule  with  reference  to  insurance  policies  passing  is  well 
illustrated  /;/  re  Steele.^""''  It  was  there  held  that  a  policy  pay- 
able to  the  bankrupt,  his  executors,  administrators  or  assigns. 
became  part  of  the  assets  of  the  bankruj)t's  estate,  unless  he 
availed  liiinself  of  the  right  to  pay  the  surrender  value  to  the 
trustee;  a  policy  issued  on  the  life  of  one  bankru])t,  wiiose  wife, 
another  bankrupt,  was  to  pay  the  premiums  and  receive  the 

2-1  /«     re    Diack,     loO    Fed.     Rep.  -■'-In   re   WclIiiiR    (C.    C.   A.,   7th 

770.  3  Am.   R.   R.  722,,  2  N.    P..    N.  Cir.),  113  1<\-(1.  Rep.   189.  7  Am.  B. 

664;  In  re  Fioardman,  103  Fed.  Rep.  R.  40;  Iti  re  Slinj>;hiff,  106  Fed.  Rep. 

783,  4  Am.   R.   R.  620,  2  N.   B.   N.  154.  5  Am.  R.  R.  76. 

821;   In   re  SlingliifT,   106  Fed.  Rep.  -'.la /„   ,.^  Wellinj?   (C.   C.   A..   7th 

154,  5  Am.  R.  R.  76,  3  N.  R.  N.  254;  Cir.).  113  Fed.  Rep.   189,  7  Am.  R. 

In   re   Lange,   gi    Fed.   Rep.   361,    i  R.  340. 

Am.  B.  R.   186,   I    N.   R.   N.  44-60;  -■'•'98  Fed.  Rep.  78,  3  Am.  B.  R. 

In   re  Becker,   106  Fed.   Rep.   54,  5  549,   2   N.    R.   N.   281.     This  decree 

Am.  R.  R.  438,  3  N.  R.  N.  267;  In  was  reversed  in  Steele  v.   Buel,  104 

re  Steele,  98   Fed.   Rep.  78.  3  Am.  Fed.   Rep.  968,  5  Am.  B.  R.   165,  3 

B.  R.  549.  2  N.  B.  N.  281,  reversed  N.   B.    N.  330.  on   the  ground  that 

on  another  point   in   Steele  v.   Bnel,  the   hankrnpt   was  entitled   to  claim 

104  Fed.  Rep.  968,  5  Am.  !'..  R.  165,  these  policies  as  exempt   under  the 

3  N.  B.  N.  330.  state  law. 


4IO  LAW    AND   PROCEEDINGS    IN    BANKRUPTCY. 

benefit  of  the  policy,  was  part  of  the  estate  of  the  wife ;  another 
poHcy  payable  to  the  executors,  administrators  or  assigns  of 
the  bankrupt,  who  had  by  a  writing  assigned  the  same  to 
his  fiancee,  who  afterwards  became  his  wife,  made  the  policy 
one  payable  to  the  wife  of  the  banlvrupt  and  it  did  not  pass 
to  the  trustee. 

Where  an  endowment  policy  is  payable  to  the  bankrupt  and 
in  case  of  his  death  to  his  wife,  the  bankrupt's  interest  in  the 
surrender  value  of  the  policy  passes  to  the  trustee."'"' 

A  policy  of  insurance  does  not  pass  to  the  trustee  where  it 
has  no  cash  surrender  value  and  no  value  except  upon  the  con- 
tingency of  the  death  of  the  bankrupt,  if  the  premiums  are 
kept  paid,-"  or  where  the  bankrupt  is  the  beneficiary  and 
not  a  contracting  party  and  would  not  be  entitled  to  the  surren- 
der value  of  the  policy."^'  In  other  words  if  the  bankrupt's 
interest  in  the  policy  at  the  date  of  his  bankruptcy  has  no  cash 
value,  nothing  passes  to  the  trustee.  The  measure  of  cash 
value  is  the  surrender  value  of  the  policy  when  the  petition  was 
filed. 

In  the  schedules,  which  the  petitioner  in  bankruptcy  must 
file,  the  amount  and  character  of  insurance  policies  should  be 
stated. 

A  life  insurance  policy,  which  would  otherwise  pass  to  the 
trustee,  has  been  held  not  exempted  by  a  state  law  exempting 


238  In  re  Diack,  lOO  Fed.  Rep.  770,  tained  by  paying  premiums.     In  re 

3  Am.  R.  R.  723,  2  N.  B.  N.  664;  Steel  is  expressly  disapproved  of  in 
In  re  Boardman,  103  Fed.  Rep.  783,  In  re  Welling;  see  also  Haskell  v. 

4  Am.  B.  R.  620,  2  N.  B.  N.  821 ;  Equitable  Life  Assur.  Society,  181 
In  re  Slingluff,  106  Fed.  Rep.   154,  Mass.  341 ;  Pingrey  v.  National  Ins. 

5  Am.  B.  R.  76,  3  N.  B.  N.  254;  Co.,  144  Mass.  374;  Pulsifer  v. 
In  re  Welling  (C.  C.  A.,  7th  Cir.),  Hussey,  97  Me.  434,  9  Am.  B.  R. 
113  Fed.  Rep.  189,  7  Am.  B.  R.  340;  657. 

In  re  Steele,  98  Fed.  Rep.  78.     In  ^^"^  In   re    Buelow,    98    Fed.    Rep. 

re  Slingluff  and  In  re  Steele  seem  86,  3  Am.   B.   R.  389,   2  N.   B.   N. 

to    hold    that    the    entire    interest  230;  In  re  Josephson,  121  Fed.  Rep. 

passes  to  the  trustee  and  that  wife  142,  9  Am.  B.  R.  345,  affirmed  by 

of   the   bankrupt    loses   her   contin-  C.  C.  A.,  5th  Cir.  in  124  Fed.  Rep. 

gent    right.      In    re    Diack,    In    re  734. 

Boardman  and  In  re  Welling  pro-  2.1s  /„    ^^    McDonnell,     loi     Fed. 

tect  the  wife's  contingent  right  and  Rep.  239,  4  Am.  B.  R.  92. 
any  equitable  lien  she  may  have  ob- 


WHAT    PASSES    TO    THE    TRUSTEE. 


411 


it  from  liability  for  debts. "^^     The  opposite  view  is  entertained 
by  others.'*" 

It  has  been  held  that  when  a  trustee  has  once  rejected  a 
policy  as  having  no  surrender  value  and  as  being  onerous  he 
can  not  claim  the  proceeds  if  the  premiums  are  kept  up  and  the 
policy  becomes  valuable  because  of  the  death  of  the  bankrupt, 
but  that  he  can  claim  the  amount  of  the  surrender  value  out 
of  the  proceeds  if  it  later  appear  that  there  was  a  surrender 
value. '^^ 


§   173.     Property  held  by  the  bankrupt  as  trustee. 

Property  which  the  bankrupt  holds  in  trust  for  some  other 
person  does  not  vest  in  the  trustee.^'*"  The  act  of  1867  provid- 
ed that  no  property  held  by  the  bankrupt  in  trust  should  pass.'" 
This  was  a  mere  declaration  of  a  well-settled  principle."**  which 


23»/«  re  Scheld  (C.  C.  A.,  9th 
Cir.)  104  Fed.  Rep.  870,  5  Am.  B. 
R.  102;  In  re  Lange,  91  Fed.  Rep. 
361,-  I  Am.  B.  R.  186,  I  N.  B.  N. 
44-60;  In  re  Holden  (C.  C.  A.,  9th 
Cir. J  114  Fed.  Rep.  650,  113  Fed. 
Rep.  141,  7  Am.  B.  R.  615. 

2*0  Steele  v.  Buel  (C.  C.  A.,  8th 
Cir.),  104  Fed.  Rep.  968,  5  Am.  B. 
R.  165,  3  N.  B.  N.  330;  Pulsifer  v. 
Hiissey,  97  Me.  434,  9  Am.  B.  R. 
657 

-*'^In  re  Josephson,  121  Fed.  Rep. 
142,  9  Am.  B.  R.  345,  affirmed  (C. 
C.  A.,  5th  Cir.)    124  Fed.  Rep.  734. 

"*-  Perry  on  Trusts,  Sec.  345 ;  see 
also  Carpenter  v.  Marnell,  3  B.  & 
P.  40. 

-•••'  R.  S.  Sec.  5053. 

2**  This  rnlc  was  laid  down  as 
early  as  1742  by  Lord  Chief  Jus- 
tice Willes,  in  Scott  v.  Siirman, 
Willcs'  Rep.  400:  "My  notion," 
he  said,  "is  that  assignees  under 
a  commission  of  bankrupt  are  not 
to  be  considered  as  general  assign- 
ees of  all  the  real  and  personal 
estate  of  which  the  bankrupt  was 
seized  and  possessed,  as  heirs  and 
executors  are  of  the  estates  of 
their    ancestors    and    testators ;    but 


that  nothing  vests  in  these  assign- 
ees even  at  law  but  such  real  and 
personal  estate  of  the  bankrupt  in 
which  he  had  the  equitable  as  well 
as  the  legal  interest,  and  which  is 
to  be  applied  for  the  payment  of 
the  bankrupt's  debts.  And  I  foimd 
this  my  opinion  both  on  the  rea- 
son and  justice  of  the  case,  and 
likewise  on  the  several  statutes 
made  concerning  bankrupts  which 
relate  to  this  point.  As  to  the  rea- 
son of  the  case,  I  rely  here  again 
upon  the  rule  concerning  circuity 
of  action ;  for  I  think  it  would  be 
very  absurd  to  say  that  anything 
shall  vest  in  the  assignees  for  no 
other  purpose  liut  in  order  tiiat 
there  may  be  a  bill  in  equity 
brought  against  them  by  which 
they  will  be  obliged  to  refund  and 
account,  and,  according  to  the  case 
of  Burdett  v.  Wiliett,  will  likewise 
have  costs  decreed  against  them ; 
and  so  the  effects  of  the  bankrupt 
which  ought  to  be  applied  to  the 
discharge  of  his  debts  will  be 
wasted  to  .serve  no  purpose  what- 
ever. If,  therefore,  the  bankrupt 
were  seized  of  a  trust  estate  in 
lands,  for  the  reasons  already  men- 


4IJ  LAW    AM)    I'KOCKKDINC.S    TN    BANKRUPTCY. 

will  be  followed  under  the  present  statute.  It  applies  only  to 
naked  trusts,  where  the  trustee  holds  the  legal  title  but  has 
no  beneficial  interest  in  the  subject  of  the  trust.  There  can 
bo  little  difficulty  in  determining-  trust  property  under  an  ex- 
press trust  in  writing.  Clearly  i)ro])erty  held  under  a  deed 
or  will  for  the  benefit  of  some  other  person  is  trust  property, 
ami  consecjuently  does  not  vest  in  the  trustee  in  bankruptcy."^'' 

There  are  cases,  however,  in  which  it  is  hard  to  determine 
whether  property  is  held  in  trust  or  not.  These  are  chiefly 
cases  where  funds  or  money  have  been  entrusted  to  the  bank- 
rupt for  some  specific  purpose.  The  general  rule  in  such 
cases  is  thus  stated  by  Judge  Hall :  "  Money  delivered  to  the 
bankrupt  in  trust,  if  ear-marked  or  separately  kept  and  re- 
tained as  trust  property  to  be  delivered  or  paid  over  in  the 
same  bills  or  coin  in  which  it  was  received  by  the  bankrupt, 
would  not  pass  under  such  assignment,  but  would  be  consid- 
ered as  '  trust  property ' ;  but  an  amount  of  money  due  from 
the  bankrupt  as  a  trustee,  and  which  could  not  be  distin- 
guished from  any  other  moneys  in  his  possession,  or  under 
his  control ;  or  which  was  only  due  from  him  because  he  had 
used  trust  funds  for  his  own  purposes,  or  otherwise  misap- 
plied .them,  could  not  be  considered  as  'property,'  held  by  the 
bankrupt  in  trust."  '*" 

Thus  it  has  been  held  to  be  trust  property  where  a  broker 
keeps  the  bonds  of  his  principal,  or  proceeds  from  the  sale 
of  them,  in  a  particular  envelope  or  box,  separate  and  apart 

tioned    I    should    think    that    it    did  undecided.       That     notion     of     this 

not  vest  in  the  assignees  at  all,  but  learned     and     distinguished     jurist, 

that    the    legal     estate    as     to    that  however,      was      subsequently      fol- 

should  still  remain  in  the  bankrupt  lowed,  and   has   long  since  become 

for    the    benefit    of   the    cestui    que  the   settled   law,    not  only   in   Eng- 

trust."  land  but  in  this  state." 

Speaking  of  the  opinion  of  Lord  See    also    Ludwig    v.    Highley,    5 

Chief    Justice    Willes,     Vice-Chan-  Pa.  St.  132;  Kip    v.  Bank  of  New 

cellor  Whittlesey,  in   Ontario   Bank  York,    10  Johns.    (N.   Y.)    63;   Blin 

V.    Mumford,   5    N.    Y.    Chan.    Rep.  v.   Pierce,  20  Vt.  25. 

616,    after    referring   to    the    quota-  245  p^xoi.    v.    Folvey,    no    Mass. 

tion   above,   said:      "But  as   his  as-  392;  Swcpson  v.  Rouse,  65  N.  C.  34. 

sociates    upon   the   bench    were   not  -•»"  In     Hosmer     v.     Jewett,     No. 

prepared  to  put  the  decision  of  the  6713,  Fed.  Cas.,  s.  c.  6  Ben.  208;  In 

case    then    under   consideration    up-  re    Richard,    T04    Fed.    Rep.    792,    4 

on   that   ground   the   point   was    left  .Xm.  B.   R.  700.  2  N.  B.  N.  1029. 


WHAT    PASSES    TO    THE    TRUSTEE.  413 

from  his  own  property. '■^'  It  is  well  settled  in  such  cases 
that  an  exchange  of  securities  is  not  a  confusion  of  property, 
but  that  such  new  securities  are  held  in  trust  for  his  prin- 
cipal. "*'*  So  assets  of  a  partnership  in  the  hands  of  one  part- 
ner charged  with  the  payment  of  the  debts  of  the  firm  are 
trust  property."*'^  But  where  property  becomes  so  mingled 
with  the  general  assets  of  the  bankrupt  as  not  to  be  capable 
of  identification  it  is  conceived  to  belong  to  the  bankru])t. 
The  relation  between  him  and  the  beneficiary  becomes  that 
of  mere  debtor  and  creditor.  Thus,  where  a  consignee  has 
sold  property  prior  to  his  bankruptcy,  and  has  mingled  the 
proceeds  with  his  general  assets,  such  proceeds  are  not  con- 
sidered trust  property.""  So  also  money  deposited  in  a  bank 
prior  to  its  bankruptcy  passes  to  the  trustee  of  the  insolvent 
bank."''^  but  a  note  deposited  for  collection  and  not  credited  to 
the  account  of  the  depositor  so  that  he  could  check  against  it 
might  be  trust  property.  For  the  same  reason  money  placed 
in  the  hands  of  the  bankrui)t  to  be  invested,  and  he  fails  to 
invest  as  directed,  passes  to  his  trustee  in  bankruptcy."^" 

There  is  likewise  a  sort  of  fiduciary  relation  between  vendee 
and  vendor,  somewhat  resembling  that  of  trustee  and  bene- 
ficiary in  case  of  a  fraudulent  sale  of  goods  when  the  vendor 
elects  to  rescind  the  contract  of  sale  and  reclaim  the  goods. "■'^•' 

Controversies  with  reference  to  whether  property  is  hekl  in 

"T  Cook  V.  TuIIis,  17  Wall.  332;  ^^i  pi,eian      v.      Iron      Mountain 

VoiRht    V.    Lewis,    No.    16989,    Fed.  Bank,  No.   11069,  Fed.  Cas.,  4  Dill. 

Cas.,   s.   c.    14    N.    R.    R.   543.      See  88;    In    re   Bank   of    Madison,    No. 

also  Hugcwitter  v.  Von  Sacks,  No.  890,    Fed.    Cas.,    s.   c.    5    Biss.    515; 

14343,  Fed.  Cas.,  s.  c.  4  Ben.  167.  Bank  of  Commerce  v.   Russell,   No. 

2^"  Cook  V.  Tullis,   18  Wall.  340;  884,    Fed.    Cas.,    s.    c.    2    Dill.    215; 

Clark  V.  Iselin,  21  Wall.  360;  Burn-  Illinois  Trust  and  Savin(i;s  Bank  v. 

hiscl  V.  Turner,  22  Wall.  170;  Saw-  National  Bank,   15  Fed.  Rep.  858. 
ycr  V.  Turpin,  91  U.  S.  114;  Taylor  202 /„  ^^  Janeway,  No.  7208,  Fed. 

V.  Plumer,  3  Maule  &  S.  562.  Cas.,  s.  c.   4  N.   B.   R.    100;    In   re 

2*"  Jones    V.    Newsom,    No.    7484,  Ilosie,  7  B.  R.  601,  s.  c.  No.  671 1, 

Fed.    Cas.,   s.   c.  7    Biss.  321;   Am-  Fed.    Cas.      See    also    Ilosmcr    v. 

sinck  V.   Bean,  22  Wall.  395;  Hoi-  Jcwctt,    No.   6713,    I-Vd.    Cas.,   s.    c. 

land  V.  Fuller,  13  Ind.  195.  6  Ben.  208. 

-'■'> /)!    re    Coan    &    Ten    Broekc  But  see  ex  parte  Ilobbs,  No.  6549, 

Manufacturing  Co.,  No.  2915,  Fed.  Fed.  Cas.,  s.  c.  2  Low.  491. 
Cas.,    s.    c.    6    Biss.    315;    White   v.  ^s.i  c^j.^  properly  of  dtlu-r  persons 

Jones,  No.   17550,  Fed.  Cas.,  s.  c.  6  in   possession  of  the  bankrupt,  Sec. 

N.  B.  R.  175-  '52.  ante. 


414  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

tnist  or  not  are  to  be  determined  by  the  conrt  of  bankrnptcy. 
They  ordinarily  arise  either  uptin  the  appHcation  of  the  trus- 
tee for  possession  of  the  property  or  upon  the  application  of 
the  beneficiary  to  have  the  property  delivered  to  him,  or  the 
value  of  such  property  paid  to  him.  In  either  case  an  order 
of  the  court  will  be  made  only  upon  petition  and  proofs. 

§   174.     Trust  property  in  which  the  bankrupt  has  a  beneficial 
interest. 

Whether  the  beneficial  interest  of  a  bankrupt  in  property 
held  in  trust  passes  to  the  trustee  or  not  depends  upon  whether 
it  is  such  an  interest  that  the  bankrupt  might  have  transferred 
it.  or  it  might  have  been  levied  upon  or  sold  under  judicial 
process  against  him.  If  it  is  so  vested  it  passes.^'^*  If  it  is  not, 
it  will  not  pass  to  the  trustee."^^  Such  questions  are  determin- 
able only  by  the  local  law  of  the  state,  territory  or  district 
where  the  property  has  its  situs."^® 

The  bankruptcy  of  the  beneficiary  ordinarily  puts  an  end 
to  any  discretion  which  the  trustee  under  the  trust  may  have 
in  the  disposition  of  the  trust  funds,  and  vests  the  whole  in- 
terest of  the  cestui  que  trust  in  the  trustee  in  bankruptcy.'" 
But  where  the  bankrupt's  interest  is  terminated  by  his  bank- 

-5*  Sandford     v.     Lackland,     No.  has    proceeded    from,    some    person 

12,312,    Fed.    Cas.,    s.    c.    2    Dill.    6;  other    than    the    defendant    himself, 

Smith  V.  Profitt,  82  Va.  832;  Spar-  and   the   trust   is    declared    l)y    will 

hawk     V.     Cloon,     125     Mass.    263 ;  duly   recorded   or   deed    duly   regis- 

Anderson   v.    Miller,    15    Smedes   &  tered.     Graff  v.  Bonnett,  31   N.  Y. 

M.    (Miss.)   286.  9;    Campbell    v.    Foster,    35    N.    Y. 

255  Spindle   v.   Shreve,   iii   U.   S.  361;   Williams  v.   Thorn,  70  N.   Y. 

542.  270 ;  Nichols  v.  Levy,  5  Wall.  433 ; 

-56  Nichols  V.  Levy,  5  Wall.  433;  Spindle  v.   Shreve,    iii   U.    S.   542- 

Spindle  v.    Shreve,   iii    U.    S.   542.  548,   and    one   branch   of   Potter  v. 

See   also   Nichols    v.   Eaton,   91    U.  Couch,    141    U.    S.    319,    320,    were 

S.  729.  cases     where     statutory     provisions 

In  some  of  the  states,  as  in  New  were  construed  and  applied. 
York,  Illinois  and  Tennessee,  there  -•'"'^  Snovvdon  v.  Dales,  6  Sim.  524; 

are     statutory     provisions     prevent-  Graves     v.     Dolphin,     I     Sim.     66; 

ing   the   alienation   of   trust   estates  Younghusband  v.  Gisborne,   i   Coll. 

or   exempting   the    interests    of   the  400;    Piercy   v.    Roberts,    i    Myl.    & 

beneficiaries    therein    from    liability  K.   4;   Re   Sanderson's  Trust,   3   K. 

for    the    debts    where    the    trust    is  &  J.  497;  Green  v.   Spicer,   i   R.  & 

created  bj%  or  the  property  so  held  M.  395. 


WHAT    PASSES    TO    THE    TRUSTEE.  415 

ruptcy  there  is  nothing  to   pass  to  the  trustee,    because  his 
beneficial  interest  in  the  trust  property  is  ended.'^^^ 

§  175.  After-acquired  property. 
!  Property  acquired  by  a  bankrupt  subsequent  to  the  com- 
mencement of  bankruptcy  proceedings  and  which  does  not  pass 
to  the  trustee  is  called  after-acquired  property.  Such  property 
in  this  country  is  liable  for  his  debts  prior  to  bankruptcy  only 
on  condition  he  does  not  succeed  in  obtaining  a  discharge. 

Under  the  act  of  1841  all  property  vested  in  the  bankrupt, 
at  the  time  of  the  decree  declaring  him  a  bankrupt,  passed 
to  his  assignee  and  only  property  acquired  after  the  adjudi- 
cation was  after-acquired  property."^''  Under  the  act  of  1867 
the  date  of  cleavage  was  the  date  of  filing  the  petition  and  any 
property   acquired   thereafter   was   after-acquired    property. ■'''' 

Section  70  of  the  bankrupt  act  of  1898  provides  that  the 
title  of  the  bankrupt  shall  vest  in  the  trustee  "  as  of  the  date  he 
was  adjudged  a  bankrupt  "  (except  such  as  is  exempt),  to  six 
classes  of  property  there  enumerated.  These  are  first,  docu- 
ments; second,  patents  and  copyrights;  third,  powers;  fourth, 
property  transferred  in  fraud  of  creditors;  fifth,  property  which 
prior  to  the  filing  of  the  petition  he  could  by  any  means  have 
transferred  or  which  might  have  been  levied  upon  and  sold  un- 
der judicial  process  against  him ;  and  sixth,  rights  of  action 
upon  contracts.  The  only  right  or  title  the  trustee  has  to  any  of 
the  bankrupt's  property  is  acquired  under  this  section.""^     If 

^s'*  Nichols  V.  Eaton,  91  U.  S.  716.  crty    is   an   asset   of   the   l)ankrupl's 

2B0  Act  of  1841,  Sec.  3,  5  Stat,  at  estate    (46-7   Vict.,    Chap.    52,    Sec. 

L.    443;     Ex    parte     Newhall,     No.  44,    (i),)    and   has   hecn    so   treated 

10159,  Fed.  Cas.,  s.  c.  2  Story,  360;  from  early  times,  act  of  5  Geo.  II., 

Fisher  v.   Currier,  7  Mat.    (Mass.)  Chap.     30;     Ex     parte     Proudfoot 

427.  O743),  I  Atk.  252;  Ashley  v.  Kell, 

^^o/m  re  Barnett,  No.    1024,  Fed.  2  Stra.  1207;  Wehh  v.  Ward,  7  T. 

Cas.,  s.  c.  3  Pitts.  Rep.  559;  Mays  R.  296;  Kitchen  v.  P.artsch,  7  East. 

V.  National  P.ank,  64  Penn.  St.  74;  53;   Crofton   v.    Poole    (1830),   I    B. 

D^^    V.    Superior    Court,    61     Cal.  &   Ad.   568;    Bankrupt   act   of    1869 

489;    Moshy    V.    Steele   &    Metcalfe,  (32-3  Vict.),  Sec.  15. 

7  Ala.  299;  In  re  Benson,  No.  1328,  2"'  Steele  v.  Buell    fC.  C.  A..  8th 

Fed.   Cas.,  s.  c.  8  Biss.   116;   In   re  Cir.),  104  Fed.  Rep.  968,  5  Am.  B. 

Grant,    No.    5693,    Fed.    Cas.,    s.    c.  R.   165,  3  N.  B.  N.  330;  In  re  Mc- 

2  Story,  312.  Donnell,    loi    Fed.   Rop.   239,  4  Am. 

In    England,   after-acquired   prop-  P..  R.  92. 


4l6  LAW    AND    rROCEEniNGS    IN    BAXKRII'TCV. 

property  of  the  l)ankni|)t  is  not  embraced  in  one  of  the  six  pro- 
\isions  it  does  not  pass  to  the  trustee,  and  if  ac(iuire(l  after  the 
commencement  of  l)ankrnptcy  procee(hnj;s  is  after-acquired 
property.  It  will  be  observed  that  no  date  is  fixed  in  the  first 
four  and  sixth  clauses  other  than  the  date  of  adjudication  to 
determine  what  property  in  those  classes  passes  to  the  trustee. 
It  must  be  the  property  the  title  to  which  is  vested  in  the 
bankrupt  at  the  date  he  is  adjudged  a  bankrupt. 

The  fifth  clause  specifies  particularly  that  it  is  the  property, 
which  was  alienable  or  subject  to  levy  and  execution  at  the 
date  of  filing  the  petition,  which  passes.  This  property  passes 
as  of  the  date  of  the  adjudication  and  only  such  property  passes 
as  was  alienable  or  subject  to  levy  and  execution  at  the  date 
of  filing  the  petition.  Property  acquired  by  the  bankrupt  be- 
tween the  date  of  filing  the  petition  and  the  adjudication  which 
would  otherwise  be  embraced  within  the  fifth  clause  may  be 
considered  after-acquired  property.""'"" 

After-acquired  property  includes  all  property  acquired  in  a 
new  business  in  which  he  may  have  engaged,^"*  money  bor- 
rowed for  the  purpose  of  engaging  in  business,^®^  or  crops 
planted  after  the  adjudication,^*^"  wages  or  salary,  property 
which  may  come  to  him  by  way  of  inheritance  or  devise,  such 
as  he  may  have  obtained  from  a  wife  upon  his  divorce  granted 
after  bankruptcy,^"^  property  acquired  under  an  agreement 
made  subsequent  to  bankruptcy,'"**  and  a  right  to  redeem  lands 
obtained  by  a  waiver  of  a  previous  forfeiture.^*"* 

The  trustee  has  no  interest  whatever  in  after-acquired  prop- 
erty, and  is  not  entitled  to  examine  the  bankrupt  relative  to 
such  property.^^" 

262  Jfi    re    Biirka,    104    Fed.    Rep.  2C8  Cullen    v.    Dawson,   24    Minn. 

326,  5  Am.  B.  R.  12.  66;    In    re   Oleson,    no    Fed.    Rep. 

26</n    re    Rosenfield,    No.    12059,  796,  7  Am.  B.  R.  22. 

Fed.  Cas.,  s.  c.   i   N.  B.  R.  319.  ^ro  Kittridge    v.    McLoughlin,    33 

^'■'S  fn    re    Patterson,    No.    10815,  Me.  327. 

Fed.   Cas.,   s.  c.    i    Ben.  496.  270  /^^    ^^    Patterson,    No.    10815, 

2B6 /„  re  Bamett,  No.   1024,  Fed.  Fed.  Cas.,  s.  c.    i   Ben.  496;  In  re 

Cas.,  s.   c.  3   Pitts.   Rep.    559.     See  Rosenfield,  No.   12059,  Fed.  Cas.,  s. 

In  re  Barrow,  98  Fed.  Rep.  582,  3  c.  i  N.  B.  R.  319;  In  re  Levy,  No. 

Am.  B.  R.  414,  3  N.  B.  N.  95.  8296,  Fed.  Cas.,  s.  c.  i  Ben.  496. 

2<'7  In   re   Benson,   No.   1328,   Fed. 
Cas.,  s.  c.  8  Biss.  116. 


WHAT    PASSES    TO    THE    TRUSTEE.  4I7 

A  court  of  chancery  will  interfere  by  injunction  to  protect 
the  bankrupt  in  the  enjoyment  of  such  property  until  it  can 
be  ascertained  whether  he  will  obtain  his  discharge."^ 

§   176.     Rights  of  action  upon  contracts,  for  injury,  etc.,  to 
property. 

The  bankrupt  act  transfers  and  vests  in  the  trustee  all  rights 
of  action  arising  upon  contracts,  or  for  the  unlawful  taking 
or  detention  of.  or  injury  to.  the  bankrupt's  property.'^'"  This 
l)rovision  is  in  accord  with  the  general  spirit  of  the  act  that 
everything  belonging  to  the  bankrupt  that  can  be  turned  to 
profit  passes  to  the  trustee  for  the  benefit  of  the  creditors. 
The  trustee,  however,  as  in  case  of  property,  may  elect  to 
adopt  or  reject  such  rights  of  action,  according  as  they  are 
likely  to  be  beneficial  or  onerous  to  the  estate.^^^  Where  the 
trustee  does  not  elect  to  exercise  such  a  right  of  action,  it 
remains  in  the  bankrupt.^^* 

This  provision  authorizes  the  trustee  to  maintain  suits  aris- 
ing from  two  distinct  causes  of  actions.  First,  those  arising 
rx  contractu,  and.  second,  those  arising  c.r  dclictu,  so  far  as 
they  affect  property. 

First:     Actions  upon  Contracts. — As  a  general  prop- 

2T1  Mosby   V.    Steele   &    Metcalfe,  bankrupt,    and    that    his    failure    tc 

7  Ala.  299.  do  so  is  negligence." 

272  B.    A.    1898,   Sec.   70,  clause  6.  274  o^ilton  v.  Cabincss,  14  Ala.  447. 

2"3  Gibson   v.   Carrutbcrs,  8  M.  &  In    Clark    v.    Calvert,    8    Taunt. 

W.    326,    Rolfe,    B. ;    Lawrence    v.  742,  an  action   for  trespass  on  land 

Knowles,  5  Bing.   N.  C.  399;   Mor-  before    the    bankruptcy    of    the    as- 

gan  V.  Bain,  L.  R.  10  C.  P.   15;  In  signee     was      maintained      by      the 

re    Phoenix    Bessimer    Steel    Co.,    4  bankrupt     in    bis    own    name.     The 

Chan.   D.    108.     See   also   Sparhawk  court    said     (p.    751):     "  Wc    form 

V.    ^■<•rkes,    142    U.    S.    i  ;    Sessions  our   opinion   on   the   precise    nature 

V.   Romadka,   145  U.  S.  39;   Amer-  of   the   action   and    on    the    ground 

ican   File  Co.  v.  Garrett,   no  U.   S.  that    the    assignees    had    not    inler- 

295 ;     Glenny    v.    Langdon,    98    U.  posed."     See  also  Rogers  v.  Spence, 

S.  30.  I.'    M.   &    W.    571,    alTirmed    in    the 

In    Kittle    V.    Mall,   29   Fed.    Rep.  House  of  Lords,   12  Clark  &  Finn. 

512,   the    court    .said:     "It   can   not  700. 

be    maintained    thai    it    is    the    duty  Consult    also    Sparhawk    v.    Yer- 

of    an    assignee    in    bankruptcy    to  kes,   142  U.  S.    i  ;    I  aylor  v.   Irwin, 

institute     suits     for     the     infringe-  20    Fed.    Rep.    615;    Smith    v.    Gor- 

ment    of    a    patent    owned    by    the  don.    No.    13052,   Fed.   Cas.,   s.   c.   6 

Law    Rep.  313. 


4l8  LAW    AND    TROCEEDINGS    IN    BANKRUPTCY. 

osition  bankruptcy  chies  not  discharge  a  contract."^^  In  no  case 
can  the  party  who  contracted  with  a  bankrupt  set  up  the 
bankruptcy  against  tlie  assignees  as  a  reason  for  not  doing 
what  he  has  agreed  to  do."""  But  where  the  contract  has  not 
been  executed  by  the  bankrupt  he,  or  the  trustee  (if  he  may 
do  the  act),  must  perform  the  condition  which  remains  to  be 
performed  in  order  to  claim  the  benefit  of  the  contract."' 

Cases  arising  upon  contracts  may  be  either  for  the  consid- 
eration of  liquidated  damages  or  for  unliquidated  damages  on 
account  of  a  breach  of  the  covenants  contained  in  the  con- 
tract. All  the  rights  of  action  being  vested  in  the  trustee  by 
the  bankrupt  act,  he,  and  not  the  bankrupt,  must  maintain 
all  suits  upon  contracts  made  with  the  bankrupt,  as  well  for 
unliquidated  "'*  as  for  liquidated  damages,  whether  the  breach 
occurred  before  "^'*  or  after  the  bankruptcy,"^*'  unless  the  trustee 
elects  to  abandon  the  right. 

Thus  the  trustee  is  the  proper  party  to  institute  a  suit  to 
recover  the  value  of  lands  or  goods  and  merchandise  sold  by 
the  bankrupt,'"  or  to  maintain  a  suit  for  damages  for  not  de- 
livering goods  to  the  bankrupt  which  had  been  contracted 
for,"*"  or  a  suit  to  recover  money  had  and  received  from  the 
bankrupt.^^^  So  also  the  trustee,  where  a  right  of  action  exists 
under  the  state  or  federal  law,  may  recover  money  lost  in 
gambling,^**  or  for  usurious  interest  may  bring  a  suit  to  recover 
it.^*^  In  those  cases,  where  the  common  law  prevails  with 
reference  to  wife's  property,  choses  in  action  belonging  to  her 

"5  Brooke  v.  Hewitt,  3  Ves.  253 ;  Ad.    ']2j ;    Gibson   v.    Carruthers,   8 

Carey    v.    Nagel,    No.    2403,    Fed.  M.  &  W.  321. 

Cas.,   s.   c.   2   Biss.   244.  ^ss  Foster  v.  Lowell,  4  Mass.  307. 

2'«  Rolfe,  B.  in  Gibson  V.  Carruth-  284  Mooj-g   y    Jones,   23   Vt.   739; 

ers,  8  M.  &  W.  327.  Brandon  v.   Pate,  2  H.  Black,  308: 

2"  Gibson  V.   Carruthers,  8  M.  &  Brandon   v.   Sands,   2   Ves.   Jr.   514. 

W.  321.  But     see     La  fountain     v.     Savings 

278  Wright  V.  Fairfield,  2  B.  &  Ad.  Bank,  56  Vt.  332. 

727.  285  Wright      V.      First      National 

270  Beckham    v.    Drake,    2    H.    L.  Bank,  No.  18078,  Fed.  Cas.,  s.  c.  8 

579.  Biss.   243;    Bromley    v.    Smith,    No. 

280  Gibson  v.  Carruthers,  8  M.  &  1922,  Fed.  Cas.,  s.  c.  2  Biss.  511; 
W.  321  ;  Schondler  v.  Wace,  l  Monongahela  Bank  v.  Overholt,  96 
Camp.  487.  Penn.   St.  2)'2'T,  Gray  v.  Bennett,  44 

281  Stewne  v.  Aylesworth,  18  Mass.  522.  See  also  Tiffany  v. 
Conn.  244.  Boatman's  Institution,  18  Wall.  375. 

2S2  Wright    V.    Fairfield,    2    B.    & 


WHAT    PASSES    TO    THE    TRUSTEE.  419 

do  not  pass  to  the  trustee,  unless  reduced  to  possession.-^*'  Nor 
does  purely  personal  property  of  the  wife,  as  ornaments,  jew- 
elry, apparel,  etc.,  pass,  even  in  those  states.^'*'^  A  wife's  sep- 
arate property  never  passes  to  the  trustee  of  the  bankrupt 
husband."®* 

Although,  generally,  rights  under  contracts  pass  to  the  trus- 
tee, the  general  rule  is  subject  to  two  important  exceptions. 

First  Exception.  A  right  of  action  where  the  breach  of  a 
contract  involves  injury  to  the  person  or  the  feelings  of  the 
bankrupt,  without  immediate  reference  to  his  rights  of  prop- 
erty, does  not  pass  to  the  trustee.-''''  Such  rights  of  action,  for 
instance,  are  those  for  the  breach  of  a  contract  of  marriage, 
or  for  negligently  carrying  the  bankrupt  by  rail,  coach  or 
vessel,  or  negligently  conducting  a  cure  whereby  his  person 
is  injured,  or  negligently  conducting  a  suit  whereby  he  is 
imprisoned.  Although,  it  is  true,  the  estate  of  the  bankrupt 
is  incidentally  affected  by  the  recovery  or  failure  to  recover 
in  such  actions,  the  gist  of  the  action  is  conceived  to  be  per- 
sonal in  its  nature,  and  therefore  does  not  pass  to  the  trustee. 

Second  Exception.  A  right  of  action  arising  upon  an  exec- 
utory contract,  in  which  the  personal  skill  or  conduct  of  the 
bankrupt  forms  a  material  part,  does  not  vest  in  the  trustee.^**" 

Some  contracts  of  this  nature  are  necessarily  terminated  by 
the  Ijankruptcy  because  it  becomes  impossible  to  perform  the 
condition  thereafter,  A  contract  by  a  bankrupt  to  enter  into 
partnership  is  a  familiar  example.  Manifestly  neither  the 
bankrupt  nor  his  trustee  can  perform  the  part  agreed  or  main- 
tain a  suit  for  the  breach  of  it. 

Other  contracts  of  this   nature   can   l)e   performed   1)y  the 

2^"  Shay    V.    Scssaman,    10    Penn.  S.    84 ;  Driggs  v.  Russell,  No.  4084, 

St.    4.32;    Chilton    V.    Cabiness,    14  Fed.  Cas.,  .s.  c.  3  N.  B.  R.  161;  In 

Ala.  447.  re  Kldred,  No.  4328.  Fed.  Cas..  s.  c. 

'^'*''  In    re   Grant,    No.    5693,    Fed.  3  N.  B.  R.  256;  Glenn  v.  Johnson, 

Cas.,  s.  c.  2  Story,  312;  In  re  Lud-  18  Wall.  476. 

low,  No.  8599,  Fed.  Cas.,  s.  c.  i  N.  '-**"  See  Beckham   v.  Drake,  S   M. 

Y.   Leg.  Obs.  332;  T.  L.  Lexan  v.  &  W.  846;  s.  c.  in  House  of  Lords, 

Wilson,  43  Me.    186;  Carr  v.  Gale,  2  H.  L.  579,  where  this  subject  is 

No.  2434,   Fed.   Cas.,  s.  c.  2  Ware,  elaborately  discussed. 
330;    Backhouse    v.    Jctt,    710,    Fed.  200  Strcctcr  v.   Sumner,  11   Foster 

Cas.,  s.  c.  I   Brock,  500.  (N.   H.)    542.     Sec  also   Gibson   v. 

''"  See   Voohces   v.    Bonesteel,   16  Carruthers,   8    M.    &   W.    321  ;    and 

Wail,  16;   Porter  v.  Lazear,  109  U.  P.cckham  v.  Drake,  2  H.  L.  579. 


420  LAW    AND    PROCEEDINGS    IN    HANKRUPTCY. 

bankrupt,  although  by  no  other  i^erson.  Such  are  contracts 
with  authors,  actors,  musicians,  artists,  etc.  It  may  be 
doubted  if  such  a  contract  may  be  enforced  by  a  trustee  under 
the  present  statute.  It  can  not  at  all  events  be  doubted  that 
where  a  contract  remains  to  be  executed,  and  it  can  not  be 
executed  without  the  cooperation  of  the  bankrupt,  that  the 
trustee  can  not  enforce  the  contract  unless  he  can  procure  the 
bankrupt  to  cooperate  with  him.  Under  the  present  statute 
after-acquired  property  does  not  pass.  The  bankrupt  may 
refuse  to  do  his  part,  and  thereupon  make  a  new  contract  with 
the  same  party  and  receive  the  benefit  of  it  himself. 

Second:  Actions  for  Injury,  etc.,  to  Property. — 
A  right  of  action  ex  delicto  for  the  recovery  of  damages  aris- 
ing from  the  unlawful  taking  or  detention  of,  or  injury  to, 
the  bankrupt's  property  is  expressly  vested  in  the  trustee.-"' 

Such  actions  are  confined  to  those  relating  to  his  real  or 
personal  property.  Thus,  claims  for  an  unlawful  seizure  of 
property  by  a  foreign  government, ^"^  claims  against  the  United 
States  by  a  citizen  '^^  or  a  resident  alien,""*  pass  to  the  trustee. 
It  has  also  been  held  that  the  trustee  and  not  the  bankrupt  is 
the  proper  party  to  institute  a  suit  to  recover  for  improvement 
made  on  government  lands, ""^  or  for  money  obtained  by  deceit 
and  fraud,""*  or  against  a  sherifif  for  not  collecting  the  contents 
of  an  execution,"" 

Actions  for  Personal  Injuries. — A  right  of  action,  how- 
ever, for  the  recovery  of  damages  for  injury  to  the  person 
or  the  personal  feelings  of  the  bankrupt  are  personal  torts, 
and  does  not  vest  in  a  trustee.^"*  Such  are  actions  for  malicious 

201  B.  A.  1898,  Sec.  70,  clause  6.  355,    Judge    DeHaven,    after    quot- 

2»2  Clark  V.  Clark,   17  How.  315;  ing   the    provisions   of   the   act    re- 

Comegys  v.  Vasse,  I  Pet.  193;  Wil-  lating    to    what    property    vests    in 

liams  V.  Heard,  140  U.  S.  529.  the  trustee,  said:     "A  cause  of  ac- 

-»•■*  Erwin  v.  United  States,  97  U.  tion   for  damages  arising  out  of  a 

S.  392.  personal     wrong     suffered     by     the 

2»*  Phelps  v.  McDonald,  99  U.  S.  bankrupt    is    not    embraced    in    the 

298.  foregoing    description    of    property, 

295  French  v.  Carr,  7  111.  664.  the  title  to  which,  by  operation  of 

29«  Hyde  v.  Tufts,  45  N.  Y.  Sup.  law,    vests    in    the    trustee    of    the 

Ct.    56.  bankrupt.     The  right  to  sue  for  a 

-"^  Sullivan    v.    Bridge,    i     Mass.  personal  tort,  such  as  slander,  ma- 

511.  licious   prosecution,    assault,   etc.,   is 

St"*  In   re   Haensell,   91    Fed.    Rep.  strictly  personal.     It  can  not  be  as- 


WHAT    PASSES    TO    THE    TRUSTEE. 


421 


prosecutions,^^*  or  a  trespass  for  seizing  and  selling  the  plain- 
tiff's goods  under  a  false  claim  of  debt,^****  or  slander  or  libel.'"* 
or  an  assault  and  battery,  or  deceit,  arising  out  of  a  fraudulent 
recommendation  of  a  person  to  a  position  of  confidence,  where- 
by property  entrusted  to  him  is  lost,'"" 


signed,  is  not  subject  to  levy  and 
sale  upon  judicial  process,  and  the 
statute  does  not  contemplate  that 
the  bankrupt's  right  to  maintain  an 
action  to  recover  damages  for  such 
wrongs  shall  constitute  any  part  of 
his  estate  in  bankruptcy.  The  law 
follows,  in  this  respect,  section  14 
of  the  bankruptcy  act  of  1867  (14 
U.  S.  Stats.  517),  in  the  construc- 
tion of  which  it  was  uniformly  held 
that  rights  of  action  for  personal 
torts  did  not  vest  in  the  assignee  in 


bankruptcy."     See   also  cases   cited 
in  the  notes  below  in  this  section. 

299  j„  Yf,  Haensell,  91  Fed.  Rep. 
355,  I  Am.  B.  R.  286;  Noonan  v. 
Orton,  34  Wis.  259. 

300  Brewer  v.  Dew,  n  M.  &  W. 
625 ;  Rogers  v.  Spence,  13  M.  &  W. 
571 ;  affirmed  in  the  House  of  Lords, 
12  Clark  &  Fenn.  700. 

»"iDillard  v.  Collins,  25  Grat. 
(Va.)  343. 

302 /„  re  Brick,  4  Fed.  Rep.  804; 
In  re  Crockett,  No.  3402,  Fed.  Cas., 
s.  c.  2  Ben.  514. 


422  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


CHAPTER  XVII. 

EXEMPTIONS. 

§   177,     By  what  laws  exemptions  are  governed. 

No  particular  property  of  the  bankrupt  is  mentioned  in  the 
act  as  exempt  from  being  applied  to  the  payment  of  his  debts. 
Military  uniforms,  arms  and  equipments  are  exempted  by  the 
statutes  of  the  United  States.^ 

The  bankrupt  statute  declares  that  it  "  shall  not  affect  the 
allowance  to  bankrupts  of  the  exemptions  which  are  prescribed 
by  the  state  laws  in  force  at  the  time  of  the  filing  of  the  peti- 
tion in  the  state  wherein  they  have  had  their  domicile  for  the 
six  months  or  the  greater  portion  thereof  immediately  preced- 
ing the  filing  of  the  petition."  ^ 

By  this  provision  congress  evidently  intended  to  adopt  the 
laws  of  the  several  states  and  territories  '*  regulating  exemp- 
tions. A  court  of  bankruptcy  is,  therefore,  to  look  to  the 
exemption  laws  of  the  several  states  and  territories  for  the 
description  of  the  person  who  may  claim  exemption  and  for 
the  amount  and  species  of  the  property  to  be  exempt.''  A 
bankrupt  is  entitled  to  the  same  exemptions  as  if  proceeded 
against  as  a  debtor  under  the  state  laws  and  to  none  other.* 
In  order  to  claim  exemptions  in  bankruptcy  he  must  comply 
with  the  requirements  of  the  state  law.^     If  he  fails  to  bring 

1  R.  S.  Sec.  1628.  3  Richardson  v.  Woodward  (C.  C. 

2B.    A.    1898,    Sec.   6.     Compare  A.,  4th  Cir.),  104  Fed.  Rep.  873,  5 

R.  S.  Sec.  5045.  Am.    B.   R.   94;   In   re   Meriwether, 

Exemptions    in    bankruptcy    and  107  Fed.  Rep.  102,  5  Am.  B.  R.  435 ; 

under    state    laws    compared.      See  Steele  v.  Buel  (C.  C.  A.,  8th  Cir.). 

Holland  v.  Withers,  76  Ga.  667.  104  Fed.  Rep.  968. 

^*B,   A.    1898,    Sec.   I,  clause  24,  *  In   re   Manning,    112   Fed.    Rep. 

provides  that   "  states   shall   include  948,  7  Am.  B.  R.  571. 

the    territories,    the    Indian    Terri-  ^  /^    y^    Farish,    No.    4647,    Fed. 

tory,    Alaska    and    the    District    of  Cas.,   s.  c.  2   N.    B.   R.    168;   In  re 

Columbia."      See    also    in    re    Mc-  Gainey,   No.   5181,   Fed.    Cas.,   s.    c. 

Kercher  and  Pettigrew,  8  N.  B.  R.  2  N.  B.  R.  525 ;  In  re  Jackson,  No. 

409.  7127,    Fed.    Cas.,   s.    c.    2   N.    B.   R. 


EXEMPTIONS.  423 

himself  within  the  conditions  and  requirements  of  such  law, 
the  property  claimed  is  not  exempt  from  the  operation  of  tjie 
bankrupt  law,  and  the  trustee  should  administer  it  for  the 
benefit  of  creditors. 

In  applying  these  exemption  laws  the  bankruptcy  courts 
will  adopt  and  follow  the  construction  of  them  announced  by 
the  highest  court  of  the  state  the  statute  of  which  is  involved.** 
If  the  state  law  has  not  been  construed  by  the  state  tribunals, 
or  if  there  is  a  conflict  of  opinion  as  to  the  meaning  of  a  par- 
ticular provision,  the  courts  of  bankruptcy  are  free  to  decide 
it.  Otherwise  they  are  bound  by  the  interpretation  given  by 
the  state  courts.  These  are  familiar  and  well-settled  rules 
recognized  by  the  United  States  courts  with  reference  to  state 
laws  and  constitutions  generally.'  A  state  law  which  is  in- 
valid or  unconstitutional  under  a  state  or  the  federal  constitu- 
tion is  not  adopted  by  this  provision.-  A  court  of  bankruptcy 
will  not  enforce  such  a  law.  The  law  which  g-overns  any 
particular  case  is  that  prescribed  by  the  state  laws  in  force  at 
the  time  of  the  filing  of  the  petition  in  the  state  wherein  the 
bankrupt  has  had  his  domicile  for  the  six  months,  or  the 
greater  portion  thereof,   immediately  preceding  the  filing  of 

508;    Guise   V.    State,   41    Ark.   249;  visions     [of    the    exemption    statute 

Bripgs  V.  McCullough,  36  Cal.  542;  of   Georgia]    were   not    intended    to 

Griffin  V.  Sutherland,   14  Barb.    (N.  be   wholly    prospective    in    their    ef- 

Y.)  456.  feet.      But    as    we    understand    the 

^  In   re   Stevenson,   93    Fed.   Rep.  supreme  court  of  the  state  has  come 

789;  In  re  Pope,  98  Fed.  Rep.  722;  to   a    different    conclusion    we    shall 

In    re    Waxelbaum,    loi    Fed.    Rep.  not  consider  the  question." 

228,  4  Am.  B.  R.   120;  In  re  Meri-  ^  Morly    v.    Lakeshore    Ry.    Co., 

wether,    107    Fed.   Rep.    102,   5   Am.  146  U.  S.   162;  LeffingwcU  v.  War- 

B.   R.  435;   In  re   Irvin    (C.   C.   A.,  ren,  2  Black.  603;  Randall  v.  Brig- 

8th  Cir.),  120  Fed.  Rep.  733,  9  Am.  ham,  7  Wall.  541  ;   Provident  Insti- 

B.  R.  689;  affirming  in  re  Stone  116  tution    v.     Massachusetts,    6    Wall, 

Fed.  Rep.  35,  8  Am.  B.  R.  416;  In  630;  Bucher  v.  Cheshire  R.  R.  Co., 

re  Woodard,  2  Am.  B.  R.  692;  In  125  U.  S.  582. 

r<?  Wyllie,   No.   181 12.  Fed.  Cas.,  s.  «  See  in  re  Everill,  No.  4579,  Fed. 

c.  2  Hughes,  449;  Goodall  v.  Tuttlc,  Cas.,  s.  c.  9  N.  B.  R.  90;  In  re  Dil- 

No.  SS33,  Fed.  Cas.,  s.  c.  3  Biss.  219.  lard.    No.   3912,    Fed.    Cas.,   s.   c.    2 

The  supreme  court  of  the  United  Hughes  190. 

States      recognized     this     principle.  As  to  when  an  exemption  l.iw  is 

with    reference    to    exemption    laws,  unconstitutional    because    it    impairs 

in    Gunn    v.    Barry,    15    Wall.    621,  the    obligation    of    a    contract,    see 

when    it    said:      "It    may    well    be  Gunn  v.   I'.arry,  15  Wall.  610. 
doubted    whether    both    these    pro- 


424  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

the  petition."  This  will  usually  be  the  law  of  the  state  in 
whicli  the  petition  is  filed.  It  is  not  necessarily  so.  A  per- 
son may  be  adjudged  a  bankrupt  in  a  district  where  he  has 
his  principal  place  of  business  and  which  is  not  the  district 
of  his  domicile.^"  In  such  cases  the  amount  and  the  species 
of  the  property  to  be  exempt  is  determined  by  the  law  of  the 
state  of  his  domicile,  and  not  the  state  in  which  he  has  his 
])rinci]\Tl  ])lace  of  Imsiness,  It  is  not  necessary  or  proper  to 
look  to  the  law  of  the  state  in  which  the  property  is  situated 
to  see  if  it  is  exempt.  If  the  property  is  exempt  under  the 
law  of  the  state  of  the  bankrupt's  domicile,  it  is  exempt 
wherever  it  may  be  situated. ^^ 

It  has  been  held  that  a  statute  exempting  wearing  apparel 
included  a  diamond  stud  worth  $250,^'  a  watch/^  a  masonic 
uniform,^*  and  a  statute  exempting  tools  of  an  artisan  or 
mechanic  include  the  articles  which  a  baker  uses  to  carry  on 
his  trade.  ^^"  hnd  a  watch  where  it  was  necessary  for  the  work- 
man to  know  the  time.^"  Where  growing  crops  are  not  exem])t 
undei;  the  state  law  the  bankrupt  is  not  entitled  to  the  grow- 
ing crops  on  an  exempt  homestead. ^^ 

A  bankrupt  is  not  entitled  to  exemptions  out  of  the  pro- 
ceeds of  the  sale  of  a  license  to  sell  liquor  in  Pennsylvania.^** 

There  is  a  square  conflict  of  authority  as  to  whether  or  not 
an  insurance  policy  exempt  by  the  laws  of  the  bankrupt's 
domicile  is  governed  by  Sec.  70     of  the  Act.^" 

OB.   A.   1898,   Sec.  6;   In   re   Mc-  94  Fed.  Rep.  801,  36  C.  C.  A.  502, 

Cutchen,   100  Fed.   Rep.  779,  4  Am.  2  Am.  B.  R.  529. 

B.    R.   81,   2    N.    B.    N.   636;   In    re  But  see  In  re  Turnbull,  106  Fed. 

Grimes,   94    Fe'd.    Rep.    800;    In    re  Rep.  667,  5   Am.   B.  R.  549. 

Woodard,  95  Fed.  Rep.  260;   In  re  ^*  In  re  Jones,  97  Fed.  Rep.  773, 

Buelow,    98    Fed.    Rep.    96;    In    re  3  Am.  B.  R.  259,  2  N.  B.  N.  296. 

Lynch,    loi    Fed.    Rep.   579,  4   Am.  1^  In   re    Petersen,    95    Fed.    Rep. 

B.    R.   262.      See   in   re    Kerr,    No.  417,  2  Am.  B.  R.  630. 

7729,   Fed.    Cas.,   s.   c.   9   N.    B.    R.  i**  In   re   Osborn,    104    Fed.    Rep. 

566;  In  re  Dillard,  No.  3912,  Fed.  780,  5  Am.  B.  R.  iii;  /m  r^  Coller, 

Cas.,  s.  c.  2  Hughes,  190.  11 1  Fed.  Rep.  503,  7  Am.  B.  R.  131. 

JO  B.  A.  1898,  Sec.  2,  clause  i.  i^  In   re   Coffman,   93    Fed.    Rep. 

JJ  In  re  Stevens,  No.   13392,  Fed.  422,  i  Am.  B.  R.  530. 

Cas.,  s.  c.  2  Biss.  272>-  "  Jn  re  Myers,  102  Fed.  Rep.  869, 

J2  In  re  Smith,  96  Fed.  Rep.  832,  4  Am.  B.  R.  536,  2  N.  B.  N.  1049. 

3  Am.  B.  R.  140.  i»That  Sec.  70  does  apply  see  in 

''^  In  re  Jones,  97  Fed.  Rep.  773;  re  Scheld    (C.   C.   A.,  9th  Cir.)    104 

Sellers  v.  Bell    (C.  C.  A.,  5th   Or.)  Fed.  Rep.  870,  5  Am.  B,  R.   102;  In 


EXEMPTIONS.  425 

The  Domicile  of  a  Bankrupt. — By  domicile  is  meant 
that  residence  from  which  there  is  no  present  intention  to 
remove,  or  to  which  there  is  a  general  intention  to  return. 
The  domicile  of  a  bankrupt  does  not  depend  on  citizenship, 
nor  on  residence,  but  on  the  concurrence  of  two  elements: 
first,  residence  in  a  place,  and,  second,  the  intention  for  the 
present  to  make  that  place  his  home.^**  A  person  can  not 
be  without  a  legal  domicile  somewhere."^  The  domicile 
of  a  person  may  be  changed.  To  constitute  a  new  domicile 
two  things  are  indispensable:  first,  residence  in  a  new  local- 
ity, and,  second,  the  intention  to  remain  there.  The  change 
can  not  be  made  except  facto  et  animo.  Both  are  alike 
necessary.  Mere  absence  from  a  fixed  home,  however  long 
continued,  can  not  work  the  change.  There  must  be  ani- 
mus to  change  the  prior  domicile  for  another.  Until  the 
new  one  is  acquired  the  old  one  remains.--  The  fact  that  a 
man  absconds  to  avoid  arrest,  leaving  his  family  behind,  does 
not  change  his  domicile."^ 

The  domicile  of  a  corporation  can  only  be  in  the  state  by 
which  it  was  created.^*  A  corporation  can  not  change  its 
domicile.^* 

The  domicile  which  determines  what  state  law  of  exemp- 
tions applies  is  the  domicile  which  the  bankrupt  has  had  for 
more  than  three  of  the  six  months  immediately  preceding  the 
filing  of  the  petition.  If  he  has  not  had  a  domicile  for  more 
than  three  months  in  any  one  state  during  this  period,  he  is 
not  entitled  to  exemptions.  The  law  of  no  state  applies  to 
such  a  case.  It  may  be  contended  that  where  a  bankrupt  has 
had  a  domicile  in  one  state  for  more  than  three  months,  and 

re  Holden   (C.  C.  \.,  9th  Cir.),   114  -'  Desmarc    v.    United    States,   93 

Fed.  Rep.  650,  11.3  Fed.  Rep.   141,  7  U.   S.  610. 

Am.  B.  R.  615;  In  re  Lange,  91  Fed.  -'-Morris    v.    Gilincr,    129    U.    S. 

Rep.  361,  I  Am.  B.  R.  186.  .328;    Mitchell   v.    United   States,   22 

Contra   Steele  v.   Buel    (C.  C.  A.,  Wall.    353;    Bouvier's   Die,   subject, 

8th  Cir.),  104  Fed.  Rep.  968,  5  An.  "Domicil." 

B.   R.    165 ;    Piilsifer  v.   Iliissey,  97  2.1  /„  f^  Filer,  108  Fed.  Rep.  209, 

Me.  434,  9  Am.  B.  R.  657.  5  Am.  B.  R.  332. 

2"  Bouvier's     Law     Die,     subject,  -•*  Bank   of    .Xugusta    v.    F.arl,    13 

"Domicil";    Century    Die,    subject.  Pet.    585;    Lafayette    Insurance    Co. 

"Domicile";     Mitchell     v.     United  v.    French,    18   How.   404;    Shaw   v. 

States,    21    Wall.    ^^2-,^^■.    Morris   v.  Quincy  Mining  Co.,  145  U.  S.  4Sa 
Gilmer,  129  U.  S.  328. 


426  LAW    AXn    PROCEEDINGS    IN    BANKRUPTCY. 

lias  then  rcniovcd  his  domicile  into  .'mother  state,  and  within 
three  months  thereafter  a  petition  in  bankrni)tcy  is  filed,  that 
he  has  forfeited  his  right  to  claim  exemptions.  The  statnte 
does  not  seem  to  be  so  limited.  A  bankrupt  can  establish 
only  one  domicile  within  the  six  months  immediately  preced- 
ing the  filing  of  the  petition.  It  would  seem  that  the  law  of 
the  state  in  which  he  had  this  domicile,  whether  it  be  the 
first  or  the  last  part  of  the  six  months,  would  determine  what 
state  law  applies. 

Where  a  person  has  established  a  domicile  in  a  state  the 
burden  is  upon  the  creditor  opposing  claim  to  exemption  on 
the  ground  that  the  bankrupt  has  changed  his  domicile.'^ 

§   178.     Constitutionality  of  clause  providing  for  exemptions. 

It  can  not  be  seriously  urged  against  the  constitutionality 
of  section  6  of  the  act,  adopting  the  state  exemption  laws, 
that  congress  is  without  power  to  grant  exemptions  to  the 
bankrupt. ^^  The  power  of  congress  in  this  respect,  as  with 
reference  to  other  matters  relating  to  the  subject  of  the  bank- 
ruptcies, is  plenary  and  has  no  limitation  but  the  discretion 
of  congress  and  uniformity.^'^ 

Under  the  act  of  1867,  as  amended,^®  there  was  at  one  time 
considerable  discussion  in  regard  to  the  constitutionality  of  a 
clause  allowing  exemptions  under  the  state  laws.^®  The 
ground  of  the  objection  was  that  the  constitution  of  the 
United  States  gave  congress  power  to  establish  a  uniform 
system  of  bankruptcy.  The  exemptions  prescribed  by  the 
various  state  laws  differ  widely  in  the  amount  and  species  of 
property   exempted,    and   also   in   the   requirements.     It  was 

-5  In  re  Grimes,  94  Fed.  Rep.  800,  668 ;    In    re   Beckerford,    No.    1209, 

2  Am.  B.  R.  160.  Fed.    Cas.,   s.   c.    i    Dill.   45;    In   re 

^^In    re    Kean,    No.    7630,    Fed.  Jordan,    No.   7514,    Fed.    Cas.,   s.    c. 

Cas.,    s.    c.    2    Hughes,    322;    In   re  8  N.  B.  R.   180;  In  re  Jordan,  No. 

Smith,   No.    12986,   Fed.   Cas.,   s.   c.  7515,   Fed.   Cas.,  s.  c.    10   N.   B.   R. 

8  N.  B.  R.  401.  427;    In   re   Kean,    No.    7630,    Fed. 

27  U.  S.  Const.,  Art.  I.,  Sec.  8.  Cas.,  s.  c.  2  Hughes,  322;  In  re 
See  Powers  of  congress.  Chap.  II.,  Everitt,  No.  4579,  Fed.  Cas.,  s.  c. 
ante.  9  N.  B.  R.  90. 

28  R.  S.  Sec.  5045.  Contra,  In  re  Deckert,  No.  3728, 

29  Hanover  National  Bank  v.  Fed.  Cas.,  s.  c.  2  Hughes,  183;  In 
Moyses,  186  U.  S.  181,  8  Am.  B.  R.  re  Duerson,  No.  41 17,  Fed.  Cas.,  s. 
i;   Darling  &  Berry,   13   Fed.   Rep.  c.  13  N.  B.  R.  183. 


EXEMPTIONS. 


427 


contended  that  this  occasioned  a  lack  of  uniformity  in  the 
bankrupt  law.  It  may  be  considered,  however,  settled  that 
the  uniformity  required  by  the  constitution  relates  to  national 
legislation  only,  and  therefore  the  laws  of  the  several  states 
regulating  exemptions  may  be  left  in  force  so  long  and  to 
such  an  extent  as  congress  may  see  fit.^® 

§   179.     Title  to  exempt  property. 

As  a  general  rule,  property  exempted  by  the  laws  of  the 
several  states  may  be  divided  into  two  classes:  first,  specific 
lands  or  chattels  where  selection  is  not  required  or  has  been 
exercised,  and.  second,  exemptions  which  consist  of  certain 
articles  to  be  selected  from  many  or  of  property  to  a  certain 
valuation  to  be  set  apart  from  a  large  quantity.  In  some 
states  the  homestead  must  be  selected  and  designated  in  ad- 
vance  of  proceedings  against  the  debtor.  In  such  cases  it 
belongs  to  the  first  class  of  exemptions.  In  case  the  home- 
stead may  be  selected  at  any  time  it  belongs  to  the  second  class. 
The  title  to  exempt  property  does  not  pass  to  the  trustee.^'*. 
Property  which  is  specifically  designated  by  the  state  statute, 
or  which  has  been  set  ai)art  by  the  trustee,  may  be  considered 
exempt  property.  The  title  to  such  property  is  in  the  bank- 
rupt.'"'^ He  may  sell  it  or  mortgage  it  or  maintain  suits  in 
respect  to  it,  as  for  the  recovery  of  it  in  specie  or  for  any 
damages  or  wrongs  done  in  respect  to  it.''-  Where  a  transfer 
of  exempt  property  has  been  surrendered  as  a  ])reference  the 
title  is  then  in  the  bankrupt,  and  he  may  claim  his  exemp- 


30  B.  A.  1898,  Sec.  700,  vests  title  Hunt,   No.  6883,  Fed.  Cas., .  s.  c.  5 

in  property,  except  what  is  exempt.  N.   B.   R.   493 ;    Bush    v.   Lester,  55 

In  re  Durham,  104  Fed.  Rep.  231,  Ga.  579;  s.  c.    15   N.   B.   R.  36;  In 

4  Am.  B.  R.  760,  2  N.  B.  N.  iioi;  re  Hester,  No.  6437,  Fed.  Cas.,  s.  c. 

Ill   re  Wells,   T05   Fed.   Rep.   762,  5  5  N.  B.  R.  285 ;  Felker  v.  Crane,  77 

Am.  B.  R.  308,  3  N.  B.  N.  233;  In  Ga.    484;    Wilkinson    v.    Waite,    44 

re  Mayer   (C.   C.  A.  7th  Cir.),   108  Vt.    508;    Simpson    v.    Houston,    97 

Fed.    Rep.   599;   In   re   Scal)olt,    113  N.  C.  344. 

Fed.    Rep.    766.   8    Am.    B.    R.    57;  •'•aWinn  v.   Morse.  59  N.  H.  210; 

Lockwood  V.  Exchange  Nat.  Bank,  Snlling  v.  Gunderman,  35  Tex.  545; 

190  U.  S.  294.  Henly    v.    Lanier,    75    N.    C.     172; 

3^  Schlitz    V.    Schatz,    No.    12459,  Schlitz   v.    Schatz,   No.    12459,   Fed. 

Fed.   Cas.,  s.  c.  2   Biss.  248;  In   re  Cas.,  s.  c.  2  Biss.  248. 


4-'S  LAW    AND    PROCEEDINGS    IN    BANKKUi'TCV. 

Uon  in  it."''     Upon  the  death  of  the  bankrupt  exempt  property 
descends  to  his  heirs  according  to  the  law  of  the  state."'* 

Property  of  the  second  class  can  not  be  considered  exempt 
property  until  it  is  selected  and  set  apart. ■'^'  It  must  neces- 
sarily pass  to  the  trustee."'"  It  may  never  be  selected  nor  set 
apart  as  an  exemption.  It  can  not  be  determined  in  advance 
precisely  what  property,  if  any,  will  be  set  apart.  The  trus- 
tee must  have  temporary  dominion  over  it  in  order  that  the 
exemption  may  be  measured  and  set  apart  by  him.  He  may 
be  said  to  take  a  defeasible  title  to  such  property.  When  it 
is  so  designated  and  set  apart  as  exempt  the  title  of  the  trus- 
tee is  defeated  by  the  superior  title  of  the  bankrupt."  Where 
a  homestead  exemption  is  disputed  and  doubtful  the  title  may 
be  treated  as  in  the  trustee  subject  to  the  determination  of  the 
question,  and  if  it  is  abandoned  by  the  trustee  it  vests  abso- 
lutely in  the  trustee.^®  The  proper  way  to  determine  whether 
or  not  disputed  property  is  exempt  is  for  the  trustee  to  report 
it  to  the  referee  as  exempt  or  not  exempt,  to  which  report  the 
aggrieved  party  should  take  exceptions.'*^ 

§   1 80.     Jurisdiction  of  a  court  of  bankruptcy  over  exempt 
property. 
The  statute  expressly  authorizes  a  court  of  bankruptcy  to 
determine  all  claims  of  bankrupts  to  their  exemptions.*"    It  is 

33 /m  re  Falconer    (C.   C.   A..  8th  3« /m    re    Mayer    (C.    C.    A.,    7th 

Cir.),  no  Fed.  Rep.   in,  6  Am.  B.  Cir.),    108    Fed.    Rep.    599;    In    re 

R.  557;  Bashinski  v.  Talbott   (C.  C.  Friedrich    (C.  C  A.  7th  Cir.),   100 

A.,  5th  Cir.),  119  Fed.  Rep.  337,  9  Fed.  Rep.  284,  3  Am.  B.  R.  801. 

Am.  B.  R.  513,  affirming  In  re  Tal-  .17  /„  ^^  Hatch,  102  Fed.  Rep.  280; 

bott,  116  Fed.  Rep.  417,  8  Am.  B.  R.  ;„  ^^  ^amp,  91   Fed.  Rep.  745;  /« 

427;  but  see  In  re  Long,   116  Fed.  ^^    j^ill,   96   Fed.    Rep.    185;    In   re 

Rep.   113,  8  Am.  B.  R.  591;  In  re  ^^^^^^    ^^   p^^     ^^p    g^^.    j^   ^^ 

Evans,  116  Fed    Rep.  909,  8  Am^  B.  ^         ^^    3 
R.  730;  In  re  White,  109  Fed.  Rep 


R.  308. 
38 /n    re    Mayer    (C    C.    A.,    7th 


635,  6  Am.  B.  R.  451. 

3*/m   re  Hester,   No.   6437,    Fed.  ottjo        ,       <a       tj 

r-                   -   XT    r>    r>      o,      r       ^  Cir.),  108  Fed.  Rep.  599,  0  Am.  B. 

Cas.,   s.  c.   5   N.   B.   R.  285;   In  re  "                        ^    "'^^' 

Lambert,  No.  8026,  Fed.  Cas.,  s.  c.  ^-  "7- 

2  N.  B.  R.  426;  Rix  V.  Bank,  11869,  ^^^"  ^^  ^"^'th,  93  Fed.  Rep.  791, 

Fed.  Cas.,  s.  c.  2  Dill.  367;   Bully-  2  Am.  B.  R.  190;  McGahan  v.  An- 

more    v.    Cooper,    46    N.    Y.    236;  derson    (C.    C.    A.,   4th    Cir.),    113 

Fchley  v.  Barr,  66  Penn.  196.  Fed.  Rep.  115,  7  Am.  B.  R.  641. 

s^Woolfolk    V.    Murray,    44    Ga.  *"  B.   A.    1898,   Sec.  2,  clause   II ; 

137-8.  McGahan   v.    Anderson    (C.    C   A., 


EXEMPTIONS.  429 

the  duty  of  the  bankrupt  to  make  a  claim  for  such  exemptions 
as  he  may  be  entitled  to  in  the  schedule  filed  by  him.*'  A 
voluntary  bankrupt  should  claim  his  exemptions  at  the  time  of 
filing  the  petition.*"  It  devolves  upon  the  trustee,  and  it  is  his 
duty,  to  set  apart  the  bankrupt's  exemptions  and  report  the 
items  and  estimated  value  thereof  to  the  court  as  soon  as 
practicable  after  his  appointment.*^ 

From  this  it  would  seem  that  the  jurisdiction  of  the  court 
of  bankruptcy  in  regard  to  exempt  property  is  limited  to 
determining  the  claims  and  designating  and  setting  apart  such 
property.**  A  state  court  will  not  review  the  decision  of  a 
court  of  bankruptcy  as  to  what  property  is  properly  exempted 
by  the  state  law.*^  When  the  property  is  so  designated  and 
set  apart  it  does  not  pass  to  the  trustee,  nor  is  it  subject  to  be 
administered  by  the  court  as  a  part  of  the  bankrupt's  estate.** 
But  where  no  specific  property  has  been  set  off  to  the  bankrupt 
the  bankruptcy  court  has  jurisdiction  to  determine  all  liens 
claimed.*^ 

Although  the  trustee  never  obtains  title  to  exempt  property, 
he  must  at  least  have  temporary  dominion  over  it  in  order 
that  the  exemption  may  be  measured  and  set  apart  by  him.*^ 
When  the  exemption  consists  of  one  article  to  be  selected 
from  many,  or  of  property  to  a  certain  valuation  to  be  set 
apart  from  a  large  f|uantity,  it  would  seem  that  the  possession 
and  control  must  i)ass  for  the  time  being  to  the  trustee.  In 
case  the  exemption  is  of  some  specific  chattel  or  chattels, 
where  neither  selection  nor  valuation  is  required,  there  is  not 
an  equal  reason  for  the  trustee  to  have  possession. 

4th  Cir. ),  113  Fed.  Rep.  115,  7  Am.  Am.  P..  R.  165 ;  In  re  Hill,  96  Fed. 

B.  R  641.  Rep.  185.  2  Am.  B.  R.  798. 

*i  B.  A.    1898,  Sec.  7,  clause  8.  *^'  .Maxwell    v.    McCnne,   37   Tex. 

*2/m  rr  Fricdrich    (C.  C.   A.,  7th  515;    Wooifolk    v.    Murray,   44   Ga. 

Cir.),   100  Fed.  Rep.  284,  3  Am.  B.  133. 

R.  801;  In  re  Lucius,  124  Fed.  Rep.  ♦*' B.    A.    1898.    Sec.    700.      Lock- 

455.  wood  V.   Exchange  Nat.   Bank,   190 

«3  B.  A.  1898,  Sec.  47,  clause   11;  U.    S.    294.      See    Title    to    exempt 

In  re  Fredrich   (C.  C  A.,  7th  Cir.)  property.   Sec.    179,   ante. 

100  Fed.  Rep.  284.  3  Am.  B.  R.  801.  *''  In  re  Lucius.  124  Fed.  Rep.  455. 

**  Lockwood     V.     Exchange     Nat.  *^  Sheldon    v.    Rounds,    40    Mich. 

Rank,  190  V.  S.  294;  In  re  Swords,  427;   see  Title  to  exempt  property, 

T12  Fed.  Rep.  661,  7  Am.  B.  R.  436;  Sec.   179,  ante. 
In    re    Camp,    91    Fed.    Rep.    745,    i 


430  LAW    AND    PROCEEDINGS    IN    BANKRUTTCY. 

After  the  exempt  property  has  been  designated  and  set 
apart  by  the  trustee  it  has  been  administered  and  has  passed 
out  of  the  possession  and  control  of  the  court.  The  trustee 
and  the  creditors  have  no  further  concern  with  it.  The  court 
has  no  jurisdiction  to  defend  such  property  from  adverse 
claims  or  liens  that  may  or  may  not  be  extinguished  by  the 
bankruptcy  proceedings  *^  nor  to  order  the  sale  of  a  bank- 
rupt's homestead.""'*  It  will  not  entertain  a  proceeding  to 
enforce  a  lien  ui)on  such  property,^"  nor  has  it  jurisdiction 
to  determine  the  effect  of  waiver  notes  and  the  rights  of 
creditors  holding  such  obligations.^"  The  decision  of  the  rights 
of  parties  properly  belongs  to  the  tribunals  of  the  state  under 
the  laws  of  which  they  are  claimed.  The  court  of  bank- 
ruptcy may  postpone  the  granting  of  a  discharge  until  a 
person  who  claims  the  property  as  against  the  bankrupt  can 
settle  his  rights  in  a  state  court  ""^  or  may  restrain  its  own 
officials  or  persons  subject  to  its  jurisdiction  from  interfering 
with  the  exempt  property.  It  will  not,  however,  assist  the 
bankrupt  in  enforcing  his  rights  to  such  property  beyond  pre- 
venting such  interference  with  it.  Such  questions  are,  as  has 
been  stated  above,  left  to  the  state  courts. 

§   i8i.     Liens  on  exempt  property. 

The  object  of  the  bankrupt  statute  in  allowing  exemptions 
to  the  bankrupt  is  to  set  apart  a  portion  of  the  property  in 
the  schedule  of  the  bankrupt  for  his  use  free  from  the  claims 
of  creditors.  The  title  to  property  exempted  by  the  state 
laws  in  specie  can  never  pass  to  the  trustee.  The  bankrupt 
may  deal  with  it  as  he  sees  fit.  All  liens  on  such  property 
remain  unimpaired  and  unaffected  by  bankruptcy  proceed- 
ings.    The  rights  of  lien-holders  are  a  sj^ecial  property  which 

4fLockwood    V.     Exchange    Nat.  Fed.  Rep.  529;  In  re  Hill,  96  Fed. 

Bank,    190    U.    S.    294;    Jeffries    v.  Rep.  185;  In  re  Camp,  91  Fed.  Rep. 

Bartlett,  20  Fed.  Rep.  495.  745,  i  Am.  B.  R.  165. 

*9*  Ingram  v.   Wilson    (C.   C.  A.  But  see  In  re  Sisler,  96  Fed.  Rep. 

8th   Cir.),    125  Fed.   Rep.  913.  402,  2  Am.  B.  R.  760;  In  re  Wood- 
so  Lockwood    V.    Exchange    Nat.  ruff,  96   Fed.   Rep.   317;   2   Am.   B. 

Bank,  190  U.  S.  294;  In  re  Gibbs,  R.  678;  In  re  Garden,  93  Fed.  Rep. 

109    Fed.    Rep.    627;    In    re    Wells,  423. 

105  Fed.  Rep.  762,  5  Am.  B.  R.  308,  ^^  Lockwood    v.    Exchange    Nat. 

3  N.  B.   N.  233;  In  re  Grimes,  96  Bank,   190  U.   S.  294. 


EXEMPTIONS.  431 

the  bankrupt  law  does  not  take  away.  Such  liens  are  en- 
forceable in  the  state  courts  against  such  property.^^  The 
taking  of  exempt  property  upon  execution  before  the  com- 
mencement of  bankruptcy  proceedings  does  not  constitute  a 
valid  lien  and  will  not  prevent  such  property  being  set  off  to 
the  bankrupt." 

Where  property  to  a  certain  valuation,  to  be  selected  by 
the  bankrupt,  is  exempted,  as  a  homestead  or  an  equivalent, 
it  is  set  off  to  the  bankrupt  free  from  all  claims  of  creditors.^* 
.If  the  bankrupt  selects  property  to  be  exempted,  as  required 
by  the  state  law,  it  does  not  pass  to  the  trustee  as  a  part  of 
the  bankrupt's  estate.  But  if  the  bankrupt  does  not  comply 
with  the  requirements  of  the  state  law,  the  property  will  pass 
to  the  trustee  to  be  distributed  among  the  creditors  like  other 
assets  of  the  bankrupt.^^  Where  the  selection  is  properly  and 
duly  made,  the  question  frequently  arises  with  reference  to 
what  effect  liens  on  such  property  may  have.  If  the  property 
of  the  bankrupt  is  encumbered  by  liens  the  court  may  order 
the  property  sold.  The  bankrupt  will  then  be  entitled  to 
claim  exemptions  out  of  the  fund  arising  from  the  sale  of  the 
equity  of  redemption,  or  to  select  the  property  to  the  value 
allowed  by  the  state  law.°®  The  effect  of  liens  on  exempt 
property   and  the  right   to   select   property  to  be  exempted 

52  Rix     V.     Capitol     Bank,     No.  No.    7445,    Fed.    Cas.,   s.    c.   2   Dill. 

11869,  Fed.  Cas.,  s.  c.  2  Dill.  367;  343. 

Schlitz   V.   Schatz,   No.    12459,   Fed.  ^b  /„    yg    Farish,    No.    4647,    Fed. 

Cas.,   s.  c.  2  Biss.   248;   Fowler  v.  Cas.,  s.  c.  2  N.   B.   R.   168;  In  re 

Wood,   26   S.   C.    169;    Haworth   v.  Gainey,    No.   5181,   Fed.    Cas.,   s.   c. 

Travis,  67  111.  301 ;  Jackson  v.  Al-  2  N.  B.  R.  525 ;  In  re  Jackson,  No. 

len,    30    Ark.     no;     dimming     v.  7127,  Fed.  Cas.,  s.  c.  2  N.  B.  R.  508; 

Clegg,     52     Ga.     605;     Hfftcher    v.  In  re  Duffy,    118  Fed.   Rep.  926,  9 

Jones,  53  Ga.   208;  In  re  Lambert,  Am.    B.    R.    358;    In   re   West,    116 

No.  8026,  Fed.  Cas.,  s.  c.  2  N.  B.  R.  Fed.  Rep.  767,  8  Am.  B.  R.  564 ;  In 

426;  Tueslcy  v.  Robinson,  103  Mass.  re   Stephens,    114  Fed.   Rep.    192,  8 

558.  Am.  B.  R.  53;  In  re  Boor.stin,   114 

^^  In   re    Martin,    No.   9152,    Fed.  Fed.  Rep.  696.  8  Am.  B.  R.  89.    See 

Cas.,    s.    c.    2    Hughes,   418;    In    re  Title  to  exempt  property.  Sec.   179, 

Owens,  No.  10632,  Fed.  Cas.,  s.  c.  6  ante. 

Biss.  432.  ^^  In  re  May,  No.  9326,  Fed.  Cas., 

^•» /h    re    Brown,    No.    1980,    Fed.  s.   c.   2    Cin.   Law    Bui.    152;   In   re 

Cas.,  s.   c.  3   N.  B.   R.   250;   In  re  Jones,  No.  7445,  Fed.  Cas.,  s.  c.  2 

May,  No.   9326,   Fed.   Cas.,   s.  c.   2  Dill.   343- 
Cin.    Law    Bui.    152:    In    re   Jones, 


43-  I'AW     A.N'l)    PKlll-KKDINGS    IN    BANKRUPTCY. 

depends  solely  upon  the  law  of  the  state  in  which  the  bank- 
rupt has  his  domicile.  It  may  be  stated  as  a  general  rule 
that  a  mechanic's  lien  for  improvements  and  a  vendor's  lien  ^'^ 
are  superior  to  a  homestead  exemption  in  land,  and  that  other 
liens  are  subordinate  to  it. 

To  illustrate  the  general  rule,  suppose  that  a  bankrupt 
owns  two  lots  of  land,  A  and  B,  and  both  of  them  are  mort- 
gaged; that  upon  the  sale  under  an  order  of  the  court  of 
bankruptcy  there  is  a  surplus  over  and  above  paying  the 
mortgage  debt  on  lot  "  A  " ;  that  lot  "  B  "  does  not  sell  for- 
enough  to  pay  the  mortgage  debt;  and  that  judgments  against 
the  bankrupt  have  attached  as  liens  on  the  land.  The  order 
of  payment  would  be  as  follows :  The  mortgagee  of  lot  "  A  " 
w^ould  be  paid  in  full.  The  mortgagee  of  lot  "  B  "  would 
take  the  proceeds  of  the  sale  and  become  a  general  creditor 
to  the  extent  of  the  balance  of  his  debt.  The  bankrupt 
would  be  entitled  to  his  exemption  from  the  sale  of  the  equity 
of  redemption  in  lot  "  A,"  or  the  balance  of  the  proceeds 
after  paying  the  mortgage  debt.  If  there  be  still  a  balance 
of  proceeds  the  judgment  Hen-holders  should  next  be  paid  in 
order  of  their  priority.  This  illustrates  the  general  rule  with 
reference  to  the  effect  of  liens  upon  exempt  property.  It  is;, 
however,  subject  to  be  varied  by  the  law  of  a  particular 
state. 

§  182.     Who  may  claim  exemptions. 

The  right  to  claim  exemptions  is  personal  to  the  bankrupt 
and  his  family.  The  claim  is  regularly  made  by  the  bank- 
rupt himself.  He  may,  however,  claim  his  exemption  through 
his  agent  or  attorney.^^  In  the  absence  or  disability  of  the 
husband,  the  wife  or  children  may  present  the  claim.^**  No 
other  person  can  assert  the  right  of  exemption  unless  possibly 

'^  In  re  Perdue,   No.   T0975,  Fed.  ^^  Smith  v.  Kehr,  No.  13071,  Fed. 

Cas.,   s.   c.  2   N.   B.   R.    183;   In  re  Cas.,   s.    c.    2   Dill.    50,   affirmed   20 

Whitehead,    No.    17562,    Fed.    Cas.,  Wall.   31;   In  re   Pratt,    No.    11370, 

s.  c.  2  N.  B.  R.  599 ;  Fehley  v.  Barr,  Fed.   Cas.,   s.   c.    i    Flip.  353.     Thi.s 

66  Pa.  196.  is  the  subject  of  special  enactment 

58  Regan    v.    Zteh,    28    Ohio    St.  in  some  of  the  states. 
483;    Wilson    V.    McElroy,    32    Pa. 
St.  82. 


EXEMPTIONS.  433 

a  mortgagee  of  exempted  property  where  the  exemption  is 
waived  in  or  by  the  mortgagee.""  Neither  a  bankrupt  nor  his 
wife  can  claim  exemptions  by  courtesy  or  dower  in  the  hfe- 
time  of  the  other. ''^  It  should  be  borne  in  mind  that  the  court 
is  to  look  to  the  laws  of  the  several  states  and  territories  for 
the  description  of  the  person  who  may  claim  exemptions. 
The  rules  stated  above  will  apply  under  most,  if  not  all,  of 
these  laws. 

§   183.     Waiver  of  exemption. 

The  statute  expressly  makes  it  the  duty  of  the  bankrupt  to 
claim  such  exemptions  as  he  may  be  entitled  to  in  his  sched- 
ule.®" This  he  should  do.  If  the  bankrupt  fails  to  make  a 
claim  for  his  exemptions  in  his  schedule,  does  he  thereby 
waive  his  right  to  claim  them? 

A  bankrupt  can  not  waive  his  right  of  exemption  in  prop- 
erty specifically  set  apart  to  him  by  the  statute  so  that  the 
trustee  can  acquire  title  to  it  for  the  benefit  of  the  estate 
unless  he  expressly  conveys  it  to  the  trustee.  It  does  not 
pass  by  operation  of  law."^  It  may  be  doubted  if,  as  a  general 
rule,  he  will  be  deemed  to  waive  his  right  to  claim  exemp- 
tions out  of  ])roperty  to  be  selected  by  him  by  simply  failing 
to  make  the  claim  in  his  schedule.  If  the  claim  is  not  made 
in  the  schedule  an  amendment  will  usually  be  allowed, ***  but 
not  if  the  avowed  purpose  is  to  pay  creditors  against  whom 
he  has  waived  exemption.*"^  Where  a  bankrupt  claimed  her 
exemptions  in  her  schedules  as  required  by  the  bankrupt  act, 
she  is  entitled  to  them  tliough  she  did  not  claim  them  in  the 
time  ref|uired  by  the  state  law,  and  the  mere  fact  that  mean- 
while the  goods  themselves  have  been  sold  by  a  receiver  under 
direction  of  the  court  as  perishable,  will  not  deprive  her  of  the 
right  to  come  in  upon  the  j)roceeds.'"^*  He  must,  however,  make 

♦">  EfJmonflson  v.  Hyde,  No.  4285,  "213    ^    ,Rq8,  .Sec.  7,  clause  8. 

Fed.  Cas.,  s.  c.  2  .Saw.  205.  "•'»  B.  A.   i8g8,   Sec.  70a. 

In   Wi.sconsin   mortgagee  can  not  "♦  In   re   Falconer    (C.   C.    A.   8th 

claim  siich  exemption.    In  re  Schul-  Cir. ),  110  I'Vd.  Rep.   iii,  6  Am.  B. 

ler,  108  Fed.  Rep.  591,  6  Am.  B.  R.  R.  557. 

278.  "'•  Moran   v.   King,    rii    Fed.   Rej) 

"'  In    re    McKenna,    9    Fed.    Rep.  7.30,  7  Am.  V>.  R.   176. 

27;  Kelly  V.  Strange,  No.  7676,  Fed.  "* /«  re  LeVay,  125  Fed.  Rep.  990. 
Cas.  s.  c.  .3  N.  B.  R.  8. 


434  LAW    AND    TROCEEDINGS    IN    BANKRUPTCY. 

the  claim  in  a  court  of  bankruptcy  before  his  discharge.*"'  He 
will  not  be  permitted  to  assert  such  a  claim  in  a  state  court  sub- 
sequent to  his  discharge.'^'  The  right  to  claim  exemption  has 
been  denied  a  bankrupt  after  being  a  fugitive  from  justice  for 

ten  years."^ 

As  a  general  rule  it  may  be  stated  that  where  a  debtor 
would  be  held  to  have  waived  his  right  to  exemptions  in  a 
proceeding  in  a  state  court  he  will  probably  be  held  to  have 
waived  it  in  a  court  of  bankruptcy.  The  general  doctrine  is 
recognized  in  most  states  that  an  exemption  is  a  personal 
privilege,  and  that  debtors  may  waive  it  by  contract  or  sur- 
render or  by  neglecting  to  claim  it  before  the  sale.*''*  Where 
no  claim  for  an  exemption  is  made  in  the  progress  of  a  case 
and  before  there  is  judgment,  execution  and  a  sale,  the  debtor 
is  usually  deemed  to  have  waived  his  right  of  exemption  in 
the  property  sold.  He  may,  however,  assert  his  claim  at  any 
time  before  the  sale  of  the  property.'^" 

A  waiver  in  favor  of  some  particular  creditors  can  not  be 
made  to  inure  to  the  benefit  of  the  general  creditors.''^  A 
debtor  may  waive  his  exemption  in  favor  of  one  creditor  and 
in<iist  upon  it  as  against  another. 

A  bankrupt  may  forfeit  his  right  to  an  exemption  by  fraud. 

«8 /m  r^  Kean,  No.  7630,  Fed.  Cas.,  Appeal,    21    Pa.    St.    210;    Case    v. 

s.  c.  2  Hughes,  322.  Dunmore,  23   Pa.   St.  93;    Brackett 

67  Steele  v.  Moody,  53  Ala.  418;  v.  Watkins,  21  Wend.  (N.  Y.)  68. 
Gayle    v.     Randall,    71     Ala.    469;  ^o  Bartholomew  v.  West,  No.  1071, 

Woolfolk   V.    Murray,   44   Ga.    133;  Fed.  Cas.,  s.  c.  2  Dill.  290;  Slaugh- 

Maxwell  v.  McCune,  2,7  Tex.  515.  ter    v.    Detiney,    15    Ind.    49;    Mc- 

88 /n  re  Moyer,  15  Fed.  Rep.  SQS.  Clusky  v.  McNeely,  8  111.  578;  Shep- 

69  Consult    Spitley    v.    Frost,    15  herd  v.  Murrill,  90  N.  C.  208.     See 

Fed.  Rep.  304  (this  case  was  revers-  also    Weaver's    Appeal,    18    Pa.    St. 

ed  on  another  point   in   121   U.    S.  307;    Yost    v.    Heffner,   69    Pa.    St. 

552);    Green    v.    Blunt,   50   la.    79;  68;  Toenes  v.  Moog,  78  Ala.  558. 
Pond   V.    Kimball,    loi    Mass.    105;  '^i /n  re  Bolinger,   108   Fed.   Rep. 

Wicker  v.   Comstock,  52  Wis.  315;  374,  6  Am.  B.  R.   171,  3   N.  B.  N. 

People  V.  Palmer,  46  111.  398 ;  Clapp  447 ;  /«  re  Black,  104  Fed.  Rep.  289, 

V.   Thomas,   5    Allen    (Mass.)    158;  4  Am.   B.  R.  776,  3  N.  B.   N.  47; 

Hewes      v.      Parkman,      20      Pick.  In   re   Osborn,    104  Fed.   Rep.    780, 

(Mass.)    90;   McKinney  v.   Reader,  5  Am.  B.  R.   iii;  In  re  Camp,  91 

6  Watts,  34;  Hutchinson  v.  Camp-  Fed.  Rep.  745,  i  Am.  B.  R.  165;  but 

bell,  25   Pa.    St.   273;   Lauck's   Ap-  see  In  re  Garner,  115  Fed.  Rep.  200, 

peal,   24    Pa.    St.   426;    Hammer   v.  8  Am.  B.  R.  263. 
Freese,    19    Pa.    St.    255;    Bowyer's 


EXEMPTIONS. 


435 


Thus  where  a  bankrupt  gave  a  deed  of  trust  as  security  of 
money  then  loaned  to  him  and  for  future  advances,  and 
afterwards  declared  a  homestead  on  one  of  the  lots  so  con- 
veyed in  trust,  and  subsequently  obtained  further  advances 
without  disclosing  the  fact  that  he  had  declared  a  homestead 
on  the  premises,  he  was  not  allowed  to  claim  his.  exemption.'^^ 
Where  a  bankrupt  conceals  a  great  part  of  his  property  and 
takes  it  out  of  the  jurisdiction  he  can  not  claim  exemptions 
out  of  his  remaining  property."  A  bankrupt  can  not  while 
insolvent  build  a  house  with  money  derived  from  goods  not 
paid  for  and  then  claim  it  as  a  homestead.'"'  A  bankrupt  is 
not,  however,  deprived  of  his  right  to  a  homestead  exemp- 
tion merely  because,  while  insolvent,  he  moved  into  the  house 
for  the  purpose  of  claiming  it  as  exempt.'^ 

When  there  are  no  other  assets  the  bankrupt  must  pay  costs 
out  of  exempt  property."*^ 

§   184.     Waiver  to   exemption  in  property  fraudulently   con- 
veyed. 

Does  a  bankrupt  waive  his  right  to  claim  an  exemption  in 
property  which  he  had  conveyed  in  fraud  of  creditors  prior 
to  the  commencement  of  bankruptcy  proceedings,  and  which 
the  trustee  subsequently  recovered  for  the  benefit  of  the  estate? 
There  is  a  conflict  of  authority  on  this  point.  The  better 
reason  seems  to  support  the  rule  that  the  bankrupt  does  not 
waive  his  right  to  claim  a  homestead  exemption  in  lands  so 
conveyed  and  recovered.'^ 

"/n    re    Haake,    No.    5883,    Fed.  " /n  re  Irvin  (C.  C  \.  8th  Cir.), 

Cas.,  s.  c.  2  Saw.  231.  120  Fed.  Rep.  7^3,  9  Am.  B.  R.  689, 

"/n    re    'laylor,    114    Fed.    Rep.  affirming  /«  r^  Stone,  116  Fed.  Rep. 

607,  7  Am.  B.  R.  410.  35,  8  Am.  B.  R.  416;   Huenergardt 

^^McGalian    v.    Anderson    CC.    C.  v.  Brittain  Dry  Goods  Co.  (C.  C.  A. 

A.  4th  Cir.),   113  Fed.   Rep.   115,  7  8th  Cir.),  116  Fed.  Rep.  31.  8  Am. 

Am.    B.    R.    641.      See    also    In    re  B.  R.  341. 

Schechter,  9  Am.  B.  R.  729:  Cannon  to /„  y^  Hines,  117  Fed.  Rep.  790; 

V.   Dexter,  etc.,  Co.    (C.   C.   A.  4th  hi   re   CoHier,  93   Fed.   Rep.    191,    i 

Cir.),   120  Fed.  Rep.  657,  9  Am.  B.  Am.  B.  R.  182;  In  re  Bean,  100  Fed. 

R.    724;    In   re   Campbell,    124    Fed.  Rep.  262,  4  Am.  B.  R.  53. 

Rep.   417:    hi    re    Butler,    120    Fed.  "  McFarland    v.    Goodman,    No. 

Rep.   TOO,  9  Am.  B.   R.  539.     These  8789,   Fed.   Cas.,  s.   c.   6   Biss.    in; 

cases    depend    largely    on    the    con-  Cox  v.  Wilder,  No.  3308,  Fed.  Cas., 

struction    of    State    statutes.  s.  c.  2  Dill.  45,  reversing  No.  3309, 


436  LAW     AM)    I'KOCEEDINGS    IN    BANKRUPTCY. 

The  argument  in  favor  of  this  rule  may  be  briefly  stated. 
Homestead  hiws  are  favorably  construed  by  the  courts  in  the 
interest  of  tlie  debtor's  family.  It  is  true  that  the  debtor  may 
have  conveyed  his  homestead  right  and  would  l)e  estoi)ped  to 
claim  it  as  against  his  grantee  or  any  person  claiming  under 
him.  The  trustee  does  not  claim  under  the  deed  of  convey- 
ance, but  in  hostility  to  it.  The  property  is  recovered  by  the 
trustee  as  representative  of  the  creditors.  When  so  recovered 
the  deed  is  declared  to  be  null  and  void  as  between  the  bank- 
rupt and  the  trustee.  Surely  the  trustee  can  not  claim  to  be 
subrogated  to  any  rights  of  the  grantee.  His  rights  are  the 
same  that  they  would  have  been  had  the  deed  never  been 
made.  H  the  bankrupt  had  the  right  of  exemption  as  against 
creditors  before  the  deed  was  made,  he  is  not  estopped,  as 
against  the  trustee,  to  claim  the  right  to  the  homestead  or  the 
value  to  the  extent  given  by  the  statute.  It  does  not  make 
the  estate  any  less  than  if  the  fraudulent  conveyance  had  not 
been  made.  An  opposite  view  would  give  the  creditors  a 
profit  out  of  the  attempted  fraud  at  the  expense  of  the  bank- 
rupt's family. 

There  are  cases,  how^ever,  which  hold  that  the  bankrupt 
waives  his  right  to  an  exemption  in  property  fraudulently 
conveyed  by  him.^*  The  argument  in  favor  of  this  position 
is  substantially  as  follows:  The  deed  is  valid  between  the 
bankrupt    and    his    grantee.      He    thereby    extinguishes    his 

Fed.    Cas.,   s.   c.    5    N.    B.    R.   443;  ii9  Fed.  Rep.  337,  9  Am.  B.  R.  513, 

Smith  V.  Kehr,  No.  13071,  Fed.  Cas.,  affirming    In    re    Talbott,    116    Fed. 

s.    c.    2    Dill,    so;    Bartholomew    v.  Rep.  417,  8  Am.  B.  R.  427. 

West,  No.   1071,  Fed.  Cas.,  s.  c.  2  As  to  the  effect  of  a   fraudulent 

Dill.    290;    Penny    v.    Taylor,    No.  conveyance  upon  the  right  of  dower, 

10957,  Fed.  Cas.,  s.  c.   10  N.  B.  R.  see  Scribner  on  Dower,   Chap.   IX. 

200;  In  re  Poleman,  No.  11247,  Fed.  ''^ /n  re  Graham,   No.   5660.   Fed. 

Cas.,  s.  c.  5  Biss.  526;  In  re  Detert,  Cas.,   s.  c.  2  Biss.  449;   Keating  v. 

No.  .3829,  Fed.  Cas.,  s.  c  11   N.  B.  Keefer,  No.  7635,  Fed.  Cas.,  s.  c.  5 

R.  293;  Vogler  v.  Montgomery,  54  N.  B.  R.   133;  Cox  v.  Wilder,  No. 

Mo.  577;  In  re  Park,  102  Fed.  Rep.  3309,  Fed,  Cas.,  s.  c.  5  N.  B.  R.  443- 

602,  4  Am.   B.   R.  432,  2   N.   B.   N.  which   was    reversed   by   the   circuit 

981;   In   re   Tollett    (C.    C.    A.   6th  court   in   No.  3308,  Fed.   Cas..  s.  c. 

Cir.),  106  Fed.  Rep.  866,  5  Am.  B.  2  Dill.  45;  In  re  Long,  116  Fed.  Rep. 

R.  404,  3  N.  B.  N.  454;  In  re  Fal-  113,  8  Am.  B.  R.  591 ;  In  re  Evans, 

coner  (C.  C  A.  8th  Cir.).  no  Fed.  116  Fed.  Rep.  909,  8  Am.  B.  R.  730; 

Rep.  Ill,  6  Am.  B.  R.  557;  Bashin  In  re  White,   109  Fed.  Rep.  635.  6 

ski  V.  Talbott   (C.  C.  A.  5th  Cir.),  Am.  B.   R.  45i- 


EXEMPTIONS. 


437 


homestead  interest.  Whatever  passed  to  the  grantee  remains 
subject  to  the  creditors'  demands.  The  grantee  can  not  hold 
against  adjudged  fravid.  The  grantor  can  not  reclaim  his 
grant.  The  annihilation  of  the  homestead  by  the  bankrupt 
leaves  the  premises  like  any  other  realty  owned  by  the  grantor 
to  which  no  pretense  of  a  homestead  interest  ever  obtained. 
It  inures  to  the  benefit  of  the  creditors  whom  it  was  sought 
to  defraud. 

There  seem  to  be  two  principal  objections  to  this  rule. 
First,  The  creditors  are  benefited  by  a  provision  of  a  deed 
which  must  be  held  invalid  as  between  the  bankrupt  and  the 
creditors  in  order  that  the  property  may  be  recovered  at  all 
by  the  trustee:  and.  second,  because  it  gives  the  creditors  a 
profit  out  of  the  attempted  fraud  at  the  expense  of  the  family, 
for  whose  benefit  the  exemption  is  mainly,  if  not  wholly, 
provided.  If  the  law  gave  to  a  single  man  the  right  to  this 
exemption,  it  might  accord  with  the  natural  desire  to  punish 
fraud  to  visit  a  penalty  upon  him ;  but  to  denounce  a  for- 
feiture of  the  homestead  where  there  is  a  family  subverts  the 
I)olicy  on  which  the  exemption  is  provided  and  allowed. 

A  bankrupt  will  not  usually  be  deemed  to  have  waived  his 
right  to  a  homestead  exemption  by  previously  waiving  his 
homestead  rights  in  mortgaged  property  in  favor  of  a  particu- 
lar creditor.^"  The  reason  for  this  is  that  the  waiver  only 
applies  to  persons  claiming  under  the  instrument  in  which 
the  waiver  was  made,  and  does  not  inure  to  the  benefit  of  the 
trustee  in  bankruptcy  for  the  creditors. 

§   185.     Dower. 

The  bankrupt  statute  expressly  provides  that  in  case  of  the 
death  of  the  bankrupt  the  widow  and  the  children  are  entitled 
to  all  rights  of  dower  and  allowances  i\\e(\  by  the  laws  of  the 
state  of  the  bankrupt's  residence.'"*     The  effect  of  this  provi- 

''" /«  re  Poleman,  No.  11247,  Fed.  such  provision.  The  act  of  August 
Cas.,  s.  c.  5  Biss.  526;  Rix  v.  Capitol  19,  1841,  Sec.  2  (5  Stat,  at  L.),  con- 
Rank,  No.  1 1869,  Fed.  Cas.,  s.  c.  2  (ained  a  provision  similar  to  the 
Dill.  367.  See  In  re  Garner,  115  present  act,  viz.:  "Nothing  in  this 
Fed.  Rep.  200,  8  Am.  P..  R.  263.  act  contained  shall  he  constrned  to 
>"'  B.  A.  1808,  Sec.  8.  annul,  destrny  or  impair  any  lawful 
The    act     nf     1867    contained     no  rights    of    married     women,     which 


438  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

sion  is  to  preserve  the  right  of  dower  in  the  bankrupt's  estate 
after  the  title  lias  passed  from  the  bankrupt  to  the  trustee.*^ 
It  is  a  mere  declaration  of  a  well-recognized  principle  of  law 
and  of  the  construction,  which  the  bankrupt  act  of  1867  re- 
ceived without  any  such  proviso. '*- 

Whether  the  contingent  or  inchoate  right  of  dower  attaches 
to  property  in  hands  of  the  trustee  depends  upon  the  law  of 
the  state  of  the  bankrupt's  residence.  This  becomes  impor- 
tant if  the  trustee  has  occasion  to  convey  any  real  estate, 
either  for  the  purpose  of  reducing  it  to  money  or  to  free  it 
from  mortgage  or  other  liens  and  charges,  or  for  any  purpose 
whatever.  How  may  the  trustee  make  such  a  conveyance  as 
to  pass  title  to  real  estate  free  of  all  claims  of  dower?  The 
general  rule  in  this  respect  may  be  thus  stated : 

In  those  states  in  which  the  wife  is  entitled  to  dower  only 
in  lands  of  which  her  husband  died  seized  the  trustee  may 
convey  any  lands  held  by  him  free  of  dower  during  the  life- 
time of  the  bankrupt.*^  The  wife's  right  of  dower  will  attach 
only  to  such  real  property  as  remains  in  the  hands  of  the 
trustee  at  the  time  of  the  death  of  the  bankrupt.  She  has 
no  contingent  right  of  dower  in  lands  of  the  bankrupt  prior 
to  that  time.  The  bankrupt  could  have  sold  them  free  of 
dower,  and  the  trustee  is  in  the  same  position.  The  wife  has 
no  greater  claims  against  the  trustee  than  she  would  have 
against  her  husband  had  bankruptcy  proceedings  not  inter- 
vened. 

In  those  states  in  which  the  wife  is  entitled  to  dower  in  all 

may  be  vested   by   the   laws   of  the  sale    of    other    real    estate    in    the 

states    respectively,    and    which    are  hands  of  the  trustee  in  bankruptcy. 

not  inconsistent  with  the  provisions  ^-  Porter  v.  Lazear,  109  U.  S.  89. 

of  the  second  and  fifth  sections  of  affirming  87  Pa.  St.  513;  Speake  v. 

this    act."      See    also    Worcester    v.  Kinard,  4   S.   C.   54:   /«  re   Angier, 

Clark,  2  Grant  (Pa.)  84.  No.  388,  Fed.  Cas.,  s.  c.  4  N.  B.  R. 

*i  In   re   Shaeffer,    105    Fed.    Rep.  619 ;    In   re    Bartenbach,    No.    1068, 

352,  5  Am.  B.  R.  92M.  Fed.    Cas.,   s.    c.    11    N.    B.    R.    61; 

In  re  Buckingham,  102  Fed.  Rep.  Dwyer    v.    Garlough,    31    Ohio    St. 

972.      A    widow    had    waived    her  158;  Warford  v.  Noble,  2  Fed.  Rep. 

right    to    homestead    exemption    in  202;    Worcester   v.    Clark,   2    Grant 

certain    property    and    the    property  (Pa.)  84. 

was  sold.     She  was  allowed  subse-  s^  Kelly  v.  Strange,  No.  7676,  Fed. 

quently   to  claim   a   homestead   ex-  Cas.,  s.  c.  3  N.  B.  R.  8. 
emption  out  of  the  proceeds  of  the 


EXEMPTIONS.  439 

lands  owned  by  her  husband  during  coverture  the  trustee  may- 
proceed  to  sell  free  of  dower  only  when  the  wife  consents  to 
the  sale  and  asks  to  have  an  equivalent  of  her  contingent 
right  of  dower  set  off  to  her  in  money.  In  such  case  the 
trustee  may  convey  lands  free  of  dower.**  The  value  of  her 
contingent  interest  or  inchoate  right  of  dower  is  computed 
usually  by  tables  for  finding  the  present  value  of  such  inter- 
est.*°  If  the  wife  refuses  to  consent  the  property  can  be  sold 
only  subject  to  her  right  of  dower.*® 

Dower  and  homestead  rights  are  governed  by  substantially 
the  same  rules  and  principles."  What  has  been  said  with 
reference  to  exemptions  in  this  chapter  will  assist  in  answer- 
ing many  questions  which  may  arise  with  reference  to  dower.**® 

§   1 86.     How  to  set  apart  exemptions. 

The  bankrupt  statute  provides  means  for  setting  apart 
exemptions  to  the  bankrupt  and  his  family.  It  is  made  the 
duty  of  the  bankrupt  to  claim  such  exemptions  as  he  may  be 
entitled  to  in  his  schedule.***  It  devolves  upon  the  trustee, 
and  it  is  his  duty,  to  set  apart  the  bankrupt's  exemptions 
and  report  the  items  and  estimated  value  thereof  to  the  court 
within  twenty  days  after  receiving  notice  of  his  appointment. "°' 
The  trustee  has  no  discretion  with  reference  to  what  property 
shall  be  exempt.  The  right  of  the  bankrupt  is  absolute  and 
fixed  by  the  law  of  the  state  in  which  he  has  had  his  domicile 

8*  In  re  Bartenbach,  No.  io68,  Fed.  A  bankrupt  was  refused  leave  to 

Cas.,  s.  c.  II  N.  B.  R.  6i.  amend    in    In   re    Moran,    105    Fed. 

*'5  Consult    Giauque    &    McClure's  Rep.  901,  5  Am.  B.  R.  472.    He  was 

Present  Value  Tables.  permitted  to  amend  his  schedule  in 

♦"*  Porter  v.  Lazear,  109  U.  S.  84.  this  respect  in  In  re  Tollett  (C.  C. 

8TB.    A.    1898,    Sec.    6;    Cox    v.  A.  6th  Cir.),  106  Fed.  Rep.  866;  5 

Wilder,   No.   3309,   Fed.   Cas.,   s.   c.  Am.    B.    R.   404,   3    N.    B.    N.   454; 

5    N.    B.    R.    443,    reversed    in    No.  In  re  Falconer  (C.  C.  A.  8th  Cir.), 

3308,  Fed.  Cas.,  s.  c.  2  Dill.  4.=;;  Mc-  no  Fed.  Rep.  in,  6  Am.  B.  R.  557. 

Farland  v.  Goodman,  No.  8789,  Fed.  ''"  B.  A.   1898,  Sec.  47,  clause  n; 

Cas.,  s.  c.  6  Biss.   in.  Gen.  Ord.  17;  In  re  Friedrccks   (C. 

»*•  As     to    dower     in     partnership  C.  A.  7th  Cir.),  100  Fed.  Rep.  284; 

property,     consult     Exemptions     in  3  Am.  B.  R.  801  ;  In  re  Hill,  96  Fed. 

partnership  property,  Sec.  187,  post.  Rep.   185,  2  Am.  B.  R.  798;   In  re 

8»B.   A.    1898,    Sec.   7,   clause  8;  Osborn,  104  Fed.  Rep.  780,  5  Am. 

In  re  Friedrich  (C.  C  A.  7th  Cir.),  B.  R.  in  ;  In  re  Park,  102  Fed.  Rep. 

100  Fed.  Rep.  284,  3  Am.  B.  R.  801 ;  602,  4  Am.  B.  R.  432. 
In  re  Lucius,  124  Fed.  Rep.  455. 


440  LAW    AND    TROCEEDINGS    IN    BANKRUPTCY, 

for  the  greater  part  of  the  six  months  immediately  preceding 
the  hhnq-  o\  the  petition."'  The  trustee  regularly  allows  the 
claim  of  the  bankrupt  to  and  sets  apart  such  articles  as  are 
specifically  exempted  by  the  statute  of  that  state,  regardless 
of  their  value  or  the  situation  of  the  bankrupt.  He  should 
also  set  apart  the  homestead,  or  the  value  thereof,  and  such 
articles  as  the  bankrupt  may  be  entitled  to  select  under  the 
state  law.  The  trustee  should,  as  soon  thereafter  as  possible, 
tile  with  tlie  referee  an  itemized  report  of  the  property  thus 
set  apart.""  General  Order  17  requires  the  specification  of  the 
separate  articles  and  their  separate  appraisement."^  His  act 
in  setting  aside  the  exemptions  claimed  is  ministerial,  and  no 
issue  on  the  question  of  the  bankrupt's  right  to  them  is 
raised  until  his  report  is  filed."*  The  creditors  may  then  raise 
this  issue  by  taking  exceptions  to  the  report  within  twenty 
days.""^  A  creditor  who  has  received  notice  of  the  filing  of  the 
I>etition  and  that  he  is  a  scheduled  creditor  is  charged  with 
notice  of  whatever  transpires  in  the  administration  of  the 
estate  and  a  failure  to  contest  the  bankrupt's  claim  for  exemp- 
tions is  such  laches  as  will  deprive  him  of  the  right  to 
reopen  the  matter."^  The  burden  of  showing  that  an  article 
alleged  to  be  exempt  is  within  the  provisions  of  the  statute 
rests  on  the  bankrupt."^  The  referee  may  require  the  excep- 
tions to  be  argued  before  him,  and  shall  certify  them  to  the 
court  for  final  determination  at  the  request  of  either  party. 
In  case  the  trustee  shall  neglect  to  file  any  report  within  five 
days  after  the  same  shall  be  due,  it  is  the  duty  of  the  referee 
to  make  an  order  requiring  the  trustee  to  show  cause  before 
the  judge  at  a  time  specified  in  the  order  why  he  should  not 
be  removed  from  office."^ 

Ordinarily  exemptions  can  not  be  set  off  until  after  the 

01  B.  A.  1898,  Sec.  6.  124  Fed.  Rep.  417;  In  re  Smith,  93 

»2  Official  Form  No.  47;  see  Form  Fed.  Rep.  791,  i  Am.  B.  R.  266. 
N'o.  91,  post.  ^^  In  re  Reese,  115  Fed.  Rep.  99.?. 

*3/n  re  Manning,   112  Fed.   Rep.  8  Am.   B.   R.  411. 
948,  7  Am.  B.  R.  571.  ^'^  In  re  Campbell,  124  Fed.  Rep. 

®* /n  re  Campbell,  124  Fed.  Rep.  417;  In  re  Turnbull,  106  Fed.  Rep. 

417.  667,  5  Am.  B.  R.  549. 

*s  Gen.  Ord.  17;  In  re  Campbell,  "'*  Gen.  Ord.  17.     See  Removal  of 

trustees,   Sec.   145,  ante. 


EXEMPTIONS.  441 

trustee  is  appointed,  but  where  no  creditors  appear  at  the  first 
meeting  and  no  trustee  is  appointed  the  court  can  probably 
allow  the  exemptions  on  satisfactory  proof."** 

If  it  becomes  necessary  to  appraise  exempt  property  for  the 
purpose  of  setting  it  off  it  may  be  appraised  like  other  prop- 
erty of  the  bankrupt  by  three  disinterested  appraisers  ap- 
pointed by  the  court. '^^  In  some  cases  the  trustee  has  appointed 
appraisers  who  have  appraised  the  property  claimed  to  be 
exempt  and  reported  to  the  court.  In  other  cases  the  trustee 
has  followed  the  practice  of  the  state  in  this  respect.  In  one 
case  it  was  held  that  there  was  no  authority  for  an  appraise- 
ment and  that  the  allotment  must  be  made  by  the  trustee 
without  the  assistance  of  appraisers.^"**  When,  however,  a 
homestead  has  been  set  off  under  a  state  law,  the  court  of 
bankrui)tcy  may  adopt  it  without  a  new  appraisement.^"^  When 
the  property  can  not  be  divided  it  may  be  sold  and  the  exemp- 
tion allowed  out  of  the  proceeds.^"-  Where  the  exempted 
property  has  been  sold  by  the  trustee  the  proceeds  may  be 
given  to  the  bankrupt.^"''  If  any  controversy  arises  with  the 
bankrupt  with  reference  to  what  property  is  exempt  the  court 
should  decide  the  controversy.  A  practical  method  for  the 
determination  of  disputes  arising  from  valuation  of  property 
claimed  to  l)e  exempt  is  to  order  the  property  in  question  sold, 
and  the  trustee  to  set  apart  to  the  bankrupt  the  proceeds  to 
the  extent  of  the  amount  allowed  as  exemption  by  the  state 

o"*  !n  re  Smith,  93  Fed.  Rep.  791,  In  re  McBryde,  99  Fed.   Rep.  686, 

I  Am.  R.  R.  266;  In  re  Grimes,  96  3  Am.  B.  R.  729. 

Fed.  Rep.  529,  2  Am.  B.  R.  730.  10-  In   re   Brown,    No.    1980,   Fed. 

»»B.   A.   1898,   .Sec.  70/;.  Cas.,  s.  c.  3  N.  B.  R.  250. 

In  re  McCutchen,   100  Fed.   Rep.  io3 /w    re    Jones,    No.    7445,    Fed. 

779,  the  court  directed  the  apprais-  Cas.,  s.  c.  2  Dill.  343;  In  re  Welch, 

ers  to  be  appointed,  one  to  be  se-  No.   17366,   Fed.   Cas.,  s.  c.   5   Ben. 

lected  by  the  bankrupt,  one  by  the  230;  In  re  Ellis,  No.  4400,  Fed.  Cas., 

trustees  and  one  by  the  creditors.  s.  c.   I   N.   B.  R.   555. 

100  jn  re  Grimes,  96  Fed.  Rep.  529.  In  some  States  where  the  exempt 

1"!  In  re  Hall,  No.  5921,  Fed.  Cas.,  property  had  not  actually  been  set 

s.  c.  2  Hughes,  411;  In  re  Vogler,  aside   before    sale,    the    bankrupt    is 

No.  1^)986.  Fed.  Cas.,  s.  c.  2  Hnnhes,  not  entitled  tn  claim  from   fund.    In 

207;   In   re   Rhodes,    109   Fed.    Rep.  re   Haskin.    109   I'ed.    Rep.    789;    In 

117.  re  Woodward,  95   Fed.   Rep.  955.  2 

\  new  allotment  may  be  ordered.  Am.   B.  R.  692. 


44-  LAW    AND    TROCEEDINGS    IN    BANKRUPTCY. 

laws.^"*  Homesteads  where  practicable  should  be  set  apart 
in  kind,  so  where  the  value  of  the  homestead  is  in  excess  of 
the  exemption  allowed  the  bankrupt  should  be  allowed  to  keep 
the  property  on  paying  the  difference/"'^  The  court  of  bank- 
ruptcy is  expressly  given  power  to  determine  all  claims  of 
bankrupts  to  their  exemptions/*'"  This  would  appear  to  fur- 
nish all  machinery  necessary  for  determining  and  setting  apart 
exemptions  in  the  court  of  bankruptcy  independent  of  the 
state  courts. 

Where  exempt  property  has  been  set  apart  to  the  bankrupt 
the  court  will  not  order  the  bankrupt  to  restore  the  property 
in  order  that  it  may  be  sold  for  the  benefit  of  a  mortgagee."^ 
Where  the  bankrupt  claims  property  as  a  homestead  and 
proceedings  are  taken  before  the  referee  to  subject  it  to  the 
payment  of  a  prior  debt  the  bankrupt  should  be  allowed  an 
opportunity  to  set  up  defenses  against  such  debt/*'^ 

§   187.     What  property  is  exempt  generally. 

No  property  is  si>ecifically  exempted  by  the  bankrupt  stat- 
ute from  being  applied  to  the  payment  of  the  bankrupt's 
debts.  The  property  exempted  is  only  such  as  is  exempted 
in  behalf  of  a  debtor  under  the  law  of  the  state  in  which  the 
bankrupt  has  had  his  domicile  for  the  greater  portion  of  the 
six  months  immediately  preceding  the  filing  of  the  petition."" 
An  abstract  of  the  exemption  laws  of  the  several  states  and 
territories  is  contained  in  the  next  section  following. 

There  are,  however,  several  questions  with  reference  to 
exemptions  generally  which  will  arise  in  bankruptcy  proceed- 
ings. Some  of  these  questions  may  be  briefly  alluded  to  at 
this  point. 

I'J*  In    re    Lynch,    loi    Fed.    Rep.  lo^  /„  ,.^  Manning,  123  Fed.  Rep. 

579,  4  Am.  B.  R.  262 ;  In  re  Richard,  180. 

94    Fed.    633,    2    Am.    B.    R.    506;  io«  B.  A.  1898,  Sec.  2,  clause  11. 

In  re   Osborn,    104   Fed.    Rep.    780,  lo^  In    re    Hatch,    102    Fed.    Rep. 

5  Am.   B.   R.   hi;  In  re  -Bolinger,  280,  4  Am.  B.  R.  349. 

108  Fed.  Rep.  374,  6  Am.  B.  R.  171,  los  /,j  y^  Bean,  100  Fed.  Rep.  262, 

3   N.   B.    N.   447;   In  re   Park,    102  4  Am.   B.   R.   53. 

Fed.  Rep.  602,  4  Am.  B.  R.  432,  2  i^o  b.  A.  1898,  Sec.  6\  In  re  Dur- 

N.    B.    N.   981 ;    In   re   Brown,    100  ham,   104  Fed.   Rep.  231,  4  Am.   B. 

Fed.    Rep.    441;    In   re   Diller,    100  R.  760,  2  N.  B.  N.  noi. 
Fed.   Rep.    931. 


EXEMPTIONS. 


443 


In  Property  Fraudulently  Conveyed. — The  inquiry 
may  be  made  as  to  whether  a  bankrupt  is  entitled  to  claim 
an  exemption  in  property  which  was  conveyed  or  encumbered 
with  liens  in  fraud  of  creditors  prior  to  the  commencement 
of  bankruptcy  proceedings,  and  which  the  trustee  has  subse- 
quently recovered  for  the  benefit  of  the  estate.  There  is  a 
conflict  of  opinion  on  this  point.  The  better  rule  seems  to 
be  that  he  may  claim  a  homestead  exemption  in  such  lands.^^** 

In  Property  Purchased  on  the  Eve  of  Bankruptcy. — 
So  also  the  decisions  are  conflicting  as  to  whether  property 
which  would  ordinarily  be  exempt  from  seizure  on  attach- 
ment or  execution  is  liable  to  be  administered  for  the  pay- 
ment of  the  debts  of  the  bankrupt  when  such  property  was 
purchased  on  the  eve  of  bankruptcy  with  the  proceeds  of 
other  property  not  exempt. ^^^  Qnarre,  Does  the  same  rule  apply 
to  property  purchased  after  the  petition  is  filed  and  before 
the  adjudication,  since  the  title  remains  in  the  bankrupt  until 
that  time? 

In  Partnership  Property. — The  general  rule  is  that  there 
is  no  separate  exemption  to  the  individual  members  of 
a  firm  out  of  undivided  partnership  property.""     The  exemp- 


m>  See  Waiver  to  exemption  in 
property  fraudulently  conveyed,  Sec. 
184,  and  cases  there  cited  in  the 
notes. 

'"  Holding  that  the  bankrupt  is 
not  entitled  to  his  exemption  in 
such  property,  see  In  re  Boothroyd, 
No.  1652,  Fed.  Cas.,  s.  c.  14  N.  B. 
R.  223;  In  re  Parker,  No.  10724, 
Fed.  Cas.,  s.  c.  5  Sawy.  58;  In  re 
Wright,  No.  18067,  s.  c.  3  Riss.  359; 
Rrackett  v.  Watkins,  21  Wcnfl.  68; 
Pratt  V.  Burr,  No.  11372,  Fed.  Cas., 
s.  c.  5  Biss.  36;  In  re  Lammcr,  No. 
8031,  Fed.  Cas.,  s.  c.  7  Biss.  269; 
ht  re  Sauthoff,  No.  12380,  Fed.  Cas., 
s.  c.  8  Biss.  35;  Long  v.  Murphy,  27 
Kan.  375. 

Contra,  In  re  Henkcl,  No.  6362, 
Fed.  Cas.,  s.  c.  2  Sawy.  305;  Kelly 
V.  Sparks,  54  Fed.  Rep.  70;  Corn- 
stock  V.  Bechtel,  63  Wis.  656;  Ja- 
coby  V.  Distilling  Co.,  41  Minn.  227, 


at  p.  230;  O'Donnell  v.  Segar,  25 
Mich.  366.  See  also  In  re  Irwin 
(C.  C.  A.  8th  Cir.),  120  Fed.  Rep. 
733,  9  Am.  B.  R.  689.  affirming 
In  re  Stone,  116  Fed.  Rep.  35; 
Huenergardt  v.  Brittain  Dry  Goods 
Co.  (C.  C.  A.  8th  Cir.),  116  Fed. 
Rep.  31,  8  Am.  B.  R.  341. 

112 /jf  re  Beauchamp,  lOi  Fed. 
Rep.  106,  4  Am.  B.  R.  151 ;  In  re 
Lentz,  97  Fed.  Rep.  486,  2  N.  B.  N. 
190;  In  re  Mosicr,  112  Fed.  Rep. 
138.  7  Am.  P..  R.  268;  In  re  De- 
marest,  no  hed.  Rep.  638,  6  Am. 
B.  R.  232;  In  re  Blodgett,  No. 
1555,  Fed.  Cas.,  s.  c.  10  N.  B.  R. 
145;  In  re  Tonne,  No.  14095,  Fed. 
Cas.,  s.  c.  13  N.  B.  R.  170;  In  re 
Cwrbctt,  No.  3220,  Fed.  Cas.,  s.  c. 
5  Sawy.  206;  In  re  Price,  No.  11410, 
Fed.  Cas.,  s.  c.  6  N.  B.  R.  400;  hi  re 
Croft,  No.  3404,  Ff-d.  Cas.,  s.  c.  8 
Biss.  188;  /w  w  Handlin,  No.  6018, 


444  ^■^^'^'    *^'^''*    I'ROCKEDINGS    IN    BANKRUPTCY. 

tion  is  several,  personal  and  individual,  as  well  in  regard  to 
the  property  to  which  it  applies  as  to  the  right  conferred. 
The  impracticability  of  granting  the  exemption  out  of  undi- 
vided partnership  property  grows  out  of  the  nature  of  such 
property  and  the  relations  of  partners  to  each  other  and  to 
the  creditors.  Property  belonging  to  a  firm  can  not  be  said 
to  be  the  separate  property  of  any  member  of  it.  One  part- 
ner has  no  exclusive  interest  in  it.  It  belongs  to  the  other 
partner  or  partners  as  much  as  it  does  to  him,  and  can  not  in 
whole  or  in  part  be  appropriated  (so  long  as  it  remains  undi- 
vided) to  the  benefit  of  his  family.  It  may  be  wholly  con- 
tingent and  uncertain  whether  any  of  it  will  belong  to  him 
in  the  winding  up  of  the  business  and  the  settlement  of  his 
separate  account. 

In  some  states  separate  exemptions  to  individual  partners  are 
allowed  out  of  the  firm  property  under  state  law.  In  such 
states  the  bankruptcy  courts  will  allow  similar  exemptions.^** 

J;    1 88.     Exemption  laws  of  the  .several  states  and  territories. 
The  court  of  bankruptcy  must  look  to  the  laws  of  the  sev- 
eral states  and  territories  for  the  description  of  the  person  who 

Fed.  Cas.,  s.  c.  3  Dill.  290;  In  re  In  Burns  v.  Allen,  67  N.  C.  140, 
Hughes,  No.  6842,  Fed.  Cas.,  s.  c.  it  was  held  that  an  exemption  might 
8  Biss.  107;  Pond  v.  Kimbal,  lOl  be  claimed  by  one  partner  out  of 
Mass.  105 ;  In  re  Stewart,  No.  13420,  partnership  property  with  the  con- 
Fed.  Cas.,  s.  c.  13  N.  B.  R.  295;  sent  of  the  co-partners,  but  not 
In  re  Boothroyd,  No.  1652,  Fed.  without  such  consent. 
Cas.,  s.  c.  14  N.  B.  R.  223.  ^^^  In  Wisconsin.   In  re  Friedrich, 

See    contra,    In    re    Young,    No.  100  Fed.  Rep.  284,  s.  c.  40  C.  C.  A. 

18148,   Fed.   Cas.,  s.  c.  3   N.   B.  R.  378,  affirming  95  Fed.  Rep.  282.    In 

440;   In   re  Richardson,  No.    11776,  North  Carolina.    In  re  Wilson,  loi 

Fed.  Cas.,  s.  c.  11  N.  B.  R.  114;  In  Fed.    Rep.   571,   4   Am.   B.   R.   260; 

re  Rupp.  No.  12141,  Fed.  Cas.,  s.  c.  In  re  Steven.son,  93  Fed.  Rep.  789, 

4  N.  B.  R.  95.     But  In  re  Rupp  was  2  Am.  B.  R.  230;  In  re  Duguid,  100 

overruled  In  re  Corbett,  supra;  In  Fed.    Rep.    274,   3   Am.    B.    R.    794; 

re   Camp,  91    Fed.   Rep.  745,  under  In  re  Grimes,  94  Fed.   Rep.  800,  2 

the  law  of  Georgia.  Am.  B.  R.   160;  In  re   Seabolt,  113 

See  also  In  re  Parks,  No.  10765,  Fed.  Rep.  7^,  8  Am.  B.  R.  57.     In 

Fed.  Cas.,  s.  c.  9  N.  B.  R.  270,  where  Georgia.     In  re  Camp,  91  Fed.  Rep. 

a  house  was  built  with  partner.ship  745,  i  Am.  B.  R.  165. 

funds    set    apart    for    that    purpose.  See   also   last   note   above. 
See    also    In    re     Meriwether,     107 
Fed.  Rep.   102,  5  .\m.  B.  R.  435. 


EXEMPTIONS.  445 

may  claim  exemption  and  for  the  amount  and  species  of  the 
property  to  be  exempted.  For  the  convenience  of  attorneys 
an  abstract  of  the  exemption  laws  in  the  several  states  and 
territories  has  been  made  from  the  several  statutes.  The 
exemptions  to  which  a  bankrupt  is  entitled  in  the  several 
states  and  territories  are  as  follows  : 

Alabama.^" — The  homestead  of  every  resident  of  the  state, 
with  the  improvements,  not  exceeding  in  value  $2,000  and 
in  area  160  acres,  during  his  life  and  occupancy,  and  after 
his  decease  during  the  life  of  his  widow  and  minority  of  his 
children,  is  exempt  from  levy  or  sale  under  process  for  collec- 
tion of  debts  contracted  after  the  23d  day  of  April.  1873."" 

Liens  of  any  laborer,  mechanic,  material  man  for  work  or 
labor  done  or  materials  furnished,  or  in  favor  of  any  vendor 
for  unpaid  purchase  money,  attach  to  the  homestead."*'  The 
provisions  of  section  2033  do  not  affect  any  deed,  mortgage 
or  lien  on  the  homestead  lawfully  created."^ 

The  burial-place  of  a  resident  of  the  state  for  himself  and 
family  and  a  church  pew  occupied  by  him  for  the  use  of  him- 
self and  family  are  exempt  from  levy  and  sale  under  execu- 
tion or  any  other  process."" 

Personal  property  of  a  resident  of  the  state,  to  be  selected 
by  liim.  to  the  amount  of  $1,000,  and  in  addition  thereto 
necessary  and  proper  wearing  apparel  for  himself  and  family, 
family  pictures  and  books  used  in  the  family,  are  exempt 
from  levy  and  sale  under  execution  or  other  process  for  the 
collection  of  debts  contracted  after  the  23d  day  of  April, 
1873.'" 

The  wages,  salaries  or  other  compensation  of  laborers  resi- 


11* The    exemption    laws    of    this  ""Civil  Code  of  Ala.,  Sec.  2035; 

State  arc  dealt  with  in  In  re  Tune,  Const.,  Art.  X,  Sees.  2  and  4. 

IIS  Fed.  Rep.  906.  8  Am.  B.  R.  285;  ^'^  civil  Code  of  Ala.,  Sec.  2035; 

/«  re  Moore,  112  Fed.   Rep.  289,  7  Const.,  Art.  X,  Sees.  2  and  4. 

Am.  B.  R.  28s;  Sellers  v.  Bell   (C.  "8  Qvil  Code  of  Ala.,  Sec.  2036. 

C.  A.  5th   Cir.),  94  Fed.   Rep.  801,  ii»  Civil  Code  of  Ala.,  Sec.  2037; 

2  Am.  B.  R.  529;  In  re  Garden.  93  Con.st.,   Art.    X,   Sec.    t;    Sellers   v. 

Fed.   Rep.  423,  i   Am.   B.  R.  582.  Bell    (C.   C.   A.  5th   Cir.).  94    Fed. 

"t*  Civil  Code  of  Ala.,  .Sec.  2033;  Rep.  Soi.  2  Am.  B.  R    5j<j 
Const.,  Art.  X,  Sees.  2  and  3. 


446  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

dent  ill  the  state  for  personal  service  to  the  amount  of  $25 
per  month  are  exempt  under  writs  of  garnishment.*'" 

Partnership  property  is  not  the  subject  of  homestead  or 
exemption  as  against  copartners  or  partnership  creditors.*'' 

Property  of  counties  and  municipal  corporations  is  exempt.*" 

Growing  or  ungathered  crops  are  exempt  from  execution 
or  other  legal  process,  except  such  as  are  levied  for  the  pur- 
pose of  enforcing  liens  on  the  crop  for  rent,  advances  or  labor, 
as  prescribed  by  law.^^^ 

Damages  recovered  by  a  servant  or  employee  are  not  subject 
to  payment  of  debts. '"^ 

Insurance  on  life  of  husband  or  father,  the  annual  pre- 
miums on  which  do  not  exceed  $500  per  year,  are  exempt 
from  liability  from  his  debts. '^^ 

Proceeds  of  life  insurance  are  exempt  from  creditors,  both 
of  the  assured  and  the  beneficiary.*-" 

The  interest  of  resident  members  of  mutual  aid  associations 
therein  and  of  resident  beneficiaries  is  exempt  from  all  process 
for  the  collection  of  debts  or  the  enforcement  of  liabilities."^ 

No  property  owned  by  a  defaulter  in  not  working  a  public 
road  is  exempt  from  execution  issued  on  a  judgment  found 
on  such  default."^ 

There  is  no  exemption  from  levy  and  sale  for  payment  of 
taxes.'^^ 

The  statute  provides  for  exemptions  from  administration 
and  payment  of  debts  of  a  decedent.*''" 

Any  person  may  by  an  instrument  in  writing  waive  his 
right  to  an  exemption.*^* 

Alaska. —  Books,  pictures  and  musical  instruments  to  the 
value  of  $75  ;  necessary  wearing  apparel  to  the  value  of  $100, 
and  $50  additional  for  each  member  of  family;  tools,  imple- 
ments, team   (team  is  construed  to  mean  not  more  than  one 

120  Civil  Code  of  Ala.,  Sec.  2038;  128  Civil  Code  of  Ala.,  Sec.  2486. 
Laws  of  1898-9.  p.  37.                                    ^29  Civil   Code  of  Ala.,  Sec.  4013. 

121  Civil  Code  of  Ala.,  Sec.  2039.  i-'"'  Civil  Code  of  Ala.,  Sec.  2104. 

122  Civil  Code  of  Ala.,  Sec.  2040.  i"  civil  Code  of  Ala.,  Sec.  2069- 
^2'5  Civil  Code  of  Ala.,  Sec.  1891.      2077;    In    re   Tunc,    115    Fed.    Rep. 

124  Civil  Code  of  Ala.,  Sec.   1751.  906,  8  Am.  P..  R.  285;  In  re  Moore, 

125  Civil  Code  of  Ala.,  Sec.  2535.  112  Fed.  Rep.  289,  7  Am.  P..  R.  285; 

126  Civil  Code  of  .Ma.,  Sec.  2607.  In  re  Garden,  93   Fed.   Rep.  423,   I 
-2"  Civil  Code  of  Ala.,  Sec.   1121.  Am.  Pj.  R.  582. 


EXEMPTIONS.  447 

yoke  of  oxen  or  span  of  horses  or  mules),  harness  or  Hbrary 
necessary  for  trade  or  profession  to  value  of  $400,  and  suffi- 
cient food  to  support  team  for  sixty  days ;  if  owned  by  house- 
holder, ten  sheep  with  year's  fleece  or  yarn  or  cloth  manu- 
factured therefrom ;  two  cows,  five  swine,  household  goods 
and  utensils  to  the  value  of  $300,  also  sufficient  food  to  sup- 
port such  animals  three  months  and  family  for  six  months; 
seat  or  pew  of  family  in  place  of  public  worship,  and  all  prop- 
erty of  the  territory  or  any  county,  incorporated  city,  town 
or  village  therein  or  municipal  corporation  of  like  character. 
No  article  of  property  or  article  received  in  exchange  there- 
for is  exempt  from  execution  issued  on  judgment  for  its 
price.^^- 

There  is  no  homestead  law  in  this  territory.^''^ 

Arizona. — Personal  property  not  to  exceed  in  value  the 
sum  of  $500.  to  be  selected  by  the  head  of  the  family,  is 
reserved  to  every  family  exempt  from  process  for  the  pay- 
ment of  debts. ^^* 

If  the  debtor  refuse  to  make  a  selection  the  goods  may  be 
sold  and  the  sale  is  valid  against  any  claim  for  exemption. ^^^ 

The  earnings  of  the  debtor  for  personal  services  for  30  days 
next  preceding  the  date  of  the  levy,  when  it  appears  that  such 
earnings  are  necessary  for  the  use  of  a  family  supported  in 
whole  or  part  by  his  labor,  are  exempt."" 

The  property  of  counties  and  municipal  corporations  held 
only  for  public  purposes  is  exempt."^ 

Every  person  who  is  the  head  of  a  family  residing  within 
the  territory  may  hold  exempt  from  process  real  property  in 

^"2  Sec.   279,   Civil    Code   of  Ore-  law  of  Oregon  is  embodied   in  the 

gon;    also    Hill's    Ann.    Laws,    Sec.  act  of  February  23,  1893.     This  law 

282.     The  act  of  Congress  of  May  was  not  in  force  at  the  time  of  the 

17,  1884,  Sec.  7,  23  Stat,  at  L.  24,  2  adoption    of    the    Oregon    laws,    as 

Snpp.  432,  provides  "that  the  gen-  the  laws  of  Alaska  on  May  17.  1884. 

eral    laws    of   the    state    of   Oregon  '■■»  Rev.   Stat.   Arizona,   igoi,   Sec. 

now    in    force   are   hereby   declared  2725. 

to  be  the  law  in  said  district  (Alas-  '■'•'•  Rev.   Stat.,  Arizona   1901,  Sec. 

ka)   so  far  as  the  same  may  be  ap-  2727. 

plicable  and  not  in  conflict  with  the  ''"'Rev.   Stat.,  Arizona   1901,  Sec. 

provisions   of    this   act   or   the   laws  2732. 

of  the  United  States."  '-^  Rev.   Stat.,  Arizona   1901,   Sec. 

133  Yhe     Homestead      Exemption  2733. 


448  LAW     AM)    TROrKKDINCS    IN     HAXKRll'TCY, 

one  compact  body,  to  be  selected  by  him  ov  her,  not  exceed- 
ing in  vahie  $2,500,  over  and  above  all  liens  and  encum- 
brances thereon.^"*  The  claim  of  homestead  may  be  made  by 
the  wife  of  tlic  dchtcM-  if  he  fail  to  do  so.  If  the  person  en- 
titled to  the  homestead  fails  or  refuses  to  designate  the  jirop- 
erty  on  being  requested  the  claim  of  homestead  thereon  is 
void.*"'**  A  married  man  shall  not  sell  or  lease  the  homestead 
or  create  anv  lien  thereon  without  being  joined  by  the  wife.''"' 
Land  other  than  that  upon  which  claimant  resided  may  be 
held  as  homestead.'*"  Mortgage  liens  which  have  attached  to 
land  before  it  was  claimed  as  homestead  are  not  afifected  by  a 
subsequent  claim.'*' 

Arkansas.'*" — The  homestead  of  any  resident  of  the  state, 
who  is  married  or  the  head  of  a  family,  is  not  subject  to  any 
judgment  lien  or  sale  under  execution,  or  other  process,  ex- 
cept such  as  may  be  rendered  for  the  purchase  money  or  for 
specific  liens,  laborers'  or  mechanics'  liens  for  improving  the 
same,  or  for  taxes,  or  against  executors,  administrators, 
guardians,  receivers,  attorneys  for  moneys  collected  by  them, 
and  other  trustees  of  any  express  trust  for  moneys  due  from 
them  in  their  fiduciary  capacity."""* 

Homestead  outside  of  any  city,  town  or  village,  owned  and 
occupied  as  a  residence,  shall  consist  of  not  exceeding  160 
acres,  with  improvements  thereon,  to  be  selected  by  the  owner, 
not  exceeding  in  value  $2,500,   and  in  no  event  shall  such 

138  Rev.  Stat.,  Arizona   1901,  Sec.  B.  R.  557;  In  re  Morrison,  no  Fed. 

2714  and  Sec.  2717.  Rep.   734,  6   Am.   B.   R.  488;   In  re 

138*  Rey      Stat.,     .\ri7.0na       1901,  Meriwether,    107   Fed.    Rep.    102,    5 

Sec.  2715.  Am.  B.  R.  435 ;  In  re  Durham,  104 

13!)  Rev    Stat.,  .Arizona   1901,  Sec.  Fed.    Rep.   231,    4   Am.    B.    R.    760; 

2716.  In  re   Park,    102     Fed.   Rep.  602,  4 

^^^  Rev.   Stat.,   Arizona   1901,   Sec.  Am.  B.  R.  432. 
2724.  ^■*-'*  Digest.   Stat.,  Ark.,  Sec.   3710; 

^■*i  Rev.   Stat..   Arizona   1901,   Sec.  Const.,  Art.  IX,  Sec.  3;  In  re  Meri- 

2723.  wether,    107   Fed.   Rep.    102,   5    Am. 

'■•2  The    exemption    laws    of    this  R.   R.  435;   In   re  Irwin    (C.   C.   A. 

state  are  dealt  with   in   In   re  Irvin  8th  Cir.),  120  Fed.  Rep.  733,  9  Am. 

(C.  C.  A.  8th  Cir.),  120  Fed.  Rep.  B.    R.    689,   affirming   In   re    Stone, 

733-  9  Am.  B.   R.  689,  affirming  In  116  Fed.  Rep.  35,  8  Am.  B.  R.  416; 

re  Stone,    116  Fed.   Rep.  35.  8  Am.  /;;   re  Morrison,   no  Fed.  Rep.  734, 

B.  R.  16;  In  re  Falconer  (C.  C.  A.  6  .\m.  B.  R.  488. 
8th  Cir.),  no  Fed.  Rep.  ni,  6  Am. 


EXEMPTIONS.  449 

homestead  be  reduced  to  less  than  80  acres  without  regard 
to  vahie.^*^ 

Homestead  in  any  city,  town  or  village,  owned  and  occupied 
as  a  residence,  shall  consist  of  not  exceeding  one  acre,  with 
improvements,  to  be  selected  by  the  owner,  not  to  exceed  in 
value  $2,500,  and  in  no  case  to  be  reduced  to  less  than  one 
fourth  of  an  acre  without  regard  to  value."^ 

No  conveyance,  mortgage  or  other  instrument  afifecting  the 
homestead  of  any  married  man  shall  be  valid  except  for  taxes, 
laborers'  and  mechanics'  liens  and  purchase  money  unless 
the  wife  joins  in  the  execution  of  such  instrument  and  acknowl- 
edges it.^*" 

The  right  of  homestead  is  not  forfeited  by  debtor's  com- 
mission to  select  it  as  exempt  before  sale  on  execution;  if  hus- 
band fails  to  claim  homestead  the  wife  may  claim  it;  if  debtor 
does  not  reside  on  his  homestead,  and  has  more  land  than  he 
is  entitled  to  claim,  he  or  his  wife  must  select  same  before 
sale.'*' 

Personal  property  of  any  resident  of  the  state,  unmarried  and 
not  the  head  of  a  family,  in  specific  articles,  selected  by  him, 
not  exceeding  in  value  $200,  in  addition  to  wearing  apparel, 
is  exem^Dt  from  process  for  the  collection  of  any  debt  by  con- 
tract, but  no  property  is  exempt  from  execution  for  debts 
contracted  for  the  purchase  money  therefor  while  in  hands  of 
the  vendee."* 

Personal  property  of  any  resident  of  the  state,  married  or 
the  head  of  a  family,  selected  by  him,  in  specific  articles,  not 
exceeding  $5CX),  in  addition  to  wearing  apparel  and  that  of  his 
family,  is  exempt  from  process  on  debt  by  contract."" 

The  wages  of  laborers  and  mcclianics  for  60  days  are  ex- 
empt if  the  defendant  shall  file  an  affidavit  that  said  wages  are 
less  than  the  amount  exempt  under  the  state  constitution,  and 
he  does  not  own  sufficient  other  personal  property,  which,  to- 

1**  Digest,  Stat.,  Ark.,  Sec.  3711;  »♦«  Dipest,  Stat.,  Ark.,  Sec.  3715; 

Const..  Art.  IX,  Sec.  4.  /n  re   Diirham,    104   J''ed.   Rep.   2.31, 

i^f' Digest.  Stat..  Ark.,  Sec.  3712;  4  Am.    P..   R.    760. 

Const.,  Art.  TX.  Sec.  5.  1*"  Digest.  Stat.,  Ark.,  Sec.  3716; 

i^'' Digest.  Stat.,   Ark.,    Sec.   3713.  /«  re  Falconer  (C.  C.  A.  8th  Cir.), 

J^' Digest,  Stat.,  Ark.,  Sec.  3714.  no  I-'ed.  Kep.  in.  6  Am.  B.  R.  557. 


450  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

gather  with  said  60  clays'  wages,  would  exceed  in  amount  the 
limits  of  said  constitutional  exemption/'^'' 

The  statutes  of  this  state  provide  for  the  homestead  of  widow 
and  children  of  decedents/" 

California/^'"  —  The  homestead  consists  of  the  interest  of 
the  claimant  in  the  dwelling-house  in  which  the  claimant  resides 
and  the  land  on  which  the  same  is  situated,  selected  as  pro- 
vided by  law/^^ 

I  f  the  claimant  be  married  the  homestead  may  be  selected 
from  the  community  property  or  the  separate  property  of  the 
husband,  or  it  may  be  selected  from  the  separate  property  of 
the  wife  with  her  consent;  when  the  claimant  is  not  married, 
but  is  the  head  of  a  family  within  the  meaning  of  section  1261, 
the  homestead  may  be  selected  from  any  property/^*  Home- 
stead can  not  be  selected  from  the  separate  property  of  the 
wife  without  her  consent,  shown  by  her  making  or  joining 
in  making  the  declaration  of  homestead/^^ 

The  homestead  is  exempt  from  execution,  except  as  pro- 
vided by  law/^" 

The  homestead  is  subject  to  execution  or  forced  sale  on 
judgments  obtained  before  the  declaration  of  homestead  was 
filed  for  record  and  which  constitute  liens  upon  the  premises; 
on  debts  secured  by  mechanics',  contractors',  subcontractors', 
artisans',  architects',  builders',  laborers'  of  every  class,  mate- 
rial men's  or  vendors'  liens  upon  the  premises;  on  debts  se- 
cured by  mortgages  on  the  premises,  executed  and  acknowl- 
edged by  husband  and  wife,  or  by  an  unmarried  claimant; 
on  debts  secured  by  mortgages  on  the  premises  executed  and 
recorded  before  declaration  of  homestead  recorded/^^ 

The  homestead  of  a  married  person  is  conveyed  or  encum- 

'•''"  Digest,   Stat.,  Ark.,  Sec.  3717.  In  re  Diller,   100  Fed.  Rep.  931,  4 

151  Digest,  Stat,  Ark.,  Sec.  3694  Am.  B.  R.  45 ;  In  re  Peterson,  95 
and  3695.  Fed.  Rep.  417,  2  Am.  B.  R.  630. 

152  The  exemption  laws  of  this  ^^^  Civil  Code,  Cal.,  Sec.  1237 ; 
state  are  treated  in  In  re  Fly,  no  1901  Laws,  Cal.  398. 

Fed.    Rep.    141,   6  Am.   B.   R.    550;  is*  Civil   Code,   Cal.,   Sec.    1238. 

In  re  Hindman  (C.  C.  A.  9th  Cir.),  iss  Qvil    Code,   Cal.,   Sec.   1239. 

104  Fed.  Rep.  331,  5  Am.  B.  R.  20;  i^"  Civil    Code,    Cal.,    Sec.    1240; 

In  re    Scheld    CC.   C.   A.   9th   Cir.),  190T   Laws,   Cal.  399. 
104  Fed.  Rep.  870,  5  Am.  B.  R.  102 ;  '^'^'^  Civil    Code,    Cal.,   Sec.   1241. 


EXEMPTIONS.  451 

bcred  by  an  instrument  executed  and  acknowledged  by  both 
husband  and  wife/^^ 

The  homestead  may  be  abandoned  only  by  a  declaration  of 
abandonment,  or  a  grant  thereof  executed  and  acknowledged, 
or  by  a  subsequent  declaration  of  homestead,  duly  executed 
and  acknowledged  ( ist)  by  the  husband  and  wife,  if  the  claim- 
ant is  married;  (2nd)  by  the  claimant,  if  unmarried/^'' 

A  declaration  of  abandonment  is  effectual  only  from  the 
time  it  is  filed  in  the  office  in  which  the  homestead  was 
recorded/"" 

The  trustee  in  bankruptcy  may  apply  to  the  superior  court 
of  the  county  in  which  the  homestead  is  situated  for  the  ap- 
pointment of  appraisers  when  a  judgment  has  been  docketed 
against  the  claimant,  and  the  court  will  order  the  homestead 
set  off  and  the  rest  of  the  property  disposed  of/^^ 

Money  paid  to  a  claimant  when  homestead  is  sold  is  en- 
titled for  six  months  thereafter  to  same  protection  against 
legal  process  which  the  law  gives  to  the  homestead.^" ^ 

Homestead  may  be  selected  and  claimed  by  the  head  of  a 
family,  not  to  exceed  $5,000  in  value;  by  any  other  person, 
not  to  exceed  $1,000.^"'^ 

Head  of  a  family  includes  husband,  when  claimant  is  mar- 
ried, and  every  person,  who  has  residing  on  the  premises  and 
under  his  care,  his  or  her  minor  child,  minor  grandchild,  or 
the  minor  child  of  a  deceased  wife  or  husband,  a  minor  brother 
or  sister  or  their  minor  child,  a  father,  mother,  grandfather 
or  grandmother  of  the  claimant  or  of  his  deceased  wife  or  hus- 
band, an  unmarried  sister  or  any  other  relative  mentioned 
above,  who  have  attained  majority  and  are  unable  to  support 
themselves.'"* 

The  selection  of  a  homestead  must  he  executed  and  acknowl- 
edgefl  in  the  same  manner  as  a  grant  of  real  property  and 
filed  for  record. ''"'■'' 

Tlie  declaration  of  homestead  must  contain  a  statement  that 

'•'•'•Civil    Code,   Cal.,    .Sec.    1242.  '"2  civil  Code,  Cal.,  Sec.  1257. 

>f'»  Civil    Code,    Cal.,    Sec.    1243;  i"-*  Civil  Code,  Cal.,  Sec.  1260. 

1901  Laws,  Cal.  399.  i6<  Civil  Code,  Cal.,  Sec.  1261. 

i""  Civil    Code,   Cal.,   Sec.   1244.  !•";  Civil  Code,  Cal,  Sec.  1262. 

'"1  Civil    Code.    Cal..    Sec.    1245- 
1259,   1901   Laws,  Cal.  399. 


45^  i-'^^^      ^M>    I'UOCK.KDINW.S    IX    BANKRUPTCY. 

tlie  i>erson  making  it  is  the  head  of  a  family,  and,  if  the 
claiiuaiit  is  married,  the  name  of  the  spouse;  or,  if  made  by 
the  wife,  tliat  her  husl)and  has  not  made  it,  and  that  she  makes 
it  for  their  joint  beneht ;  that  the  person  making-  it  resides  on 
the  ])remises  and  claims  them  as  homestead,  together  with 
a  description  and  an  estimate  of  the  cash  value. ^*"' 

The  declaration  must  be  recorded  in  the  office  of  the  recorder 
of  the  county  in  which  the  land  is  situated. ^"^ 

A  person  other  than  the  head  of  a  family  may  select  a 
homestead,  but  the  declaration  must  be  executed,  acknowl- 
edged and  recorded  in  the  same  manner  as  deeds  and  must 
contain  everything  required  by  the  2d,  3d  and  4th  subdivisions 
of  section  1263.^®^ 

From  and  after  the  declaration  is  filed  for  record  the  land 
therein  described  is  a  homestead.^"^ 

If  either  the  husband  or  wife  becomes  hopelessly  insane  the 
husband  or  wdfe  may  get  permission  of  the  court  to  mortgage 
or  convey  the  homestead.^"* 

The  following  property  is  exempt  from  execution,  unless 
issued  upon  judgment  recovered  for  its  price,  or  upon  judg- 
ment of  foreclosure  of  mortgage  thereof:  Chairs,  tables,  desks 
and  books,  to  the  value  of  $200;  necessary  household,  table  and 
kitchen  furniture,  including  one  sewing-machine,  stove,  stove- 
pipes, and  furniture,  w^earing  apparel,  beds,  bedding  and  bed- 
steads, hanging  pictures,  oil  paintings  and  drawings,  drawn 
or  painted  by  any  member  of  tlie  family,  family  portraits  and 
their  necessary  frames,  provisions  and  fuel  actually  provided 
for  individual  or  family  use  sufficient  for  three  months,  and 
three  cows  and  their  sucking  calves,  four  hogs  with  their 
sucking  i>igs,  and  food  for  such  cows  and  hogs  for  one  month ; 
also  one  piano,  one  shotgun  and  one  rifle;  farming  utensils 
or  implements  of  husbandry,  not  exceeding  in  value  the  sum 
of  $1,000;  ^^"  also  two  oxen,  or  two  horses,  or  two  mules,  and 
their  harness,  one  cart,  or  buggy  and  two  wagons,  and  food 
for  such  oxen,  horses  or  mules  for  one  month ;  also  seed,  grain 

166  Civil    Code,    Cal.,    Sec.    1263 ;  i*"-"  1901  Laws,  Cal.  400,  Sec.  1267- 

1901   Laws,  Cal.  400.  1269. 

18^  Civil   Code,   Cal.,   Sec.    1264.  i'^o/m  re  Fly,    no  Fed.  Rep.   141, 

i«'' Civil    Code,    Cal.,    Sec.    1266;  6  Am.  B.  R.  55a 
1901  Laws,  Cal.  400. 


EXEMPTIONS.  453 

or  vegetables  actually  provided,  reserved  or  on  hand,  for  the 
purpose  of  planting  or  sowing  at  any  time  within  the  ensuing 
six  months,  not  exceeding  in  value  the  sum  of  $200 ;  seventy- 
five  bee-hives,  and  one  horse  and  vehicle  belonging  to  any 
person  who  is  maimed  or  crippled,  where  the  same  is  necessary 
in  his  business ;  the  tools  or  implements  of  a  mechanic  or  artisan 
necessary  to  carry  on  his  trade ;  "^  the  notarial  seal,  records 
and  office  furniture  of  a  notary  public ;  the  instruments  and 
cliest  of  a  surgeon,  physician,  surveyor  or  dentist  necessary  to 
the  exercise  of  his  profession,  with  his  professional  library 
and  necessary  office  furniture;  the  professional  libraries  of  at- 
torneys, judges,  ministers  of  the  gospel,  editors,  school  teach- 
ers and  music  teachers,  and  their  necessary  office  furniture, 
including  one  safe  and  one  typewriter;  also  the  musical  instru- 
ments of  music  teachers  actually  used  by  them  in  giving  in- 
structions, and  all  the  indexes,  abstracts,  books,  papers,  maps 
and  office  furniture  of  a  searcher  of  records  necessary  to  be 
used  in  his  profession  ;  also  the  typewriters  or  other  mechanical 
contrivances  employed  for  writing  in  type,  actually  used  by 
the  o.wner  thereof  for  making  his  living;  also  one  bicycle, 
when  the  same  is  used  by  its  owner  for  the  purpose  of  carry- 
ing on  his  regular  business  or  when  the  same  is  used  for  the 
purj)ose  of  transporting  the  owner  to  and  from  his  place  of 
business ;  the  cabin  or  dwelling  of  a  miner,  not  exceeding  in 
value  the  sum  of  $500;  also  his  sluices,  pipes,  hose,  windlass, 
derrick,  cprs.  pumps,  tools,  implements  and  appliances  neces- 
sary for  carrying  on  any  mining  o|>erations,  not  exceeding  in 
value  .$500.  and  two  horses,  mules  or  oxen,  with  their  har- 
ness, and  ff)od  for  such  liorsos.  mules  or  oxen  for  one  month, 
when  necessary  to  be  used  in  any  whim,  windlass,  derrick,  car. 
pump  or  hoisting  gear,  and  also  his  mining  claim,  actually 
worked  by  him,  not  exceeding  in  value  the  sum  of  $1,000;  '" 
two  horses,  two  oxen  or  two  mules,  and  their  liarness.  and  f)ne 
cart  or  wagon,  one  dray  or  truck,  one  coupe,  one  hack  or 
carriage,  for  one  or  two  horses,  by  the  use  of  which  cartmen, 
draymen,  tnickmen,  hucksters,  peddlers,'"  hackmen,  teamsters, 

•Ti  /,;    rr    Peterson.   95    Ferl.  Rep.  '^.t /„   ^,.   j  Undnian    (C.   C.   A.  Qth 

417.  -2  Am.   P..  R.  630.  Cir.),   104   l'>fl.   Rep.  .^31.  5  Am.   B. 

'^-' /»;     ir    Diller,     too    Fed.  Rep.       R.   20 
031.  4   Am.    15.   R.  45. 


454  LAW    AND    i'ROCEEDINGS    IN    BANKRUPTCY, 

or  other  laborer,  hal)ilually  earn  their  hviiii;-.  and  one  horse, 
with  vehiele,  harness,  ete.,  used  by  a  physieian,  surgeon,  con- 
stable or  minister  of  the  gospel  in  the  legitimate  practice  of  his 
profession  or  business,  with  food  for  the  same  for  one  month ; 
one  fishing-boat  and  net,  not  exceeding  the  total  value  of  $500, 
the  property  of  any  fisherman,  by  lawful  use  of  which  he 
earns  a  livelihood ;  poultry  not  exceeding  in  value  $75  ;  sea- 
men's and  sea-going  fishermen's  wages  and  earnings  not  ex- 
ceeding $100.  The  earnings  of  the  judgment  debtor  for  his 
personal  services  rendered  at  any  time  within  thirty  days  next 
preceding  the  levy  of  execution  or  attachment,  when  it  ap- 
pears that  such  earnings  are  necessary  for  the  use  of  his 
family,  residing  in  the  state,  supported  wholly  or  in  part  by 
his  labor;  but  where  debts  are  incurred  by  any  such  person, 
or  his  wife  or  family,  for  the  common  necessaries  of  life,  or 
have  been  incurred  at  a  time  when  the  debtor  had  no  family 
residing  in  the  state  supported  in  whole  or  in  part  by  his  labor, 
the  one  half  of  such  earnings  are  subject  to  execution,  garnish- 
ment or  attachment  to  satisfy  debts  so  incurred.  The  shares 
held  by  a  member  of  a  homestead  association  duly  incorpo- 
rated, not  exceeding  in  value  $1,000,  if  the  person  holding  the 
shares  is  not  the  owner  of  a  homestead  under  the  laws  of  the 
state.  All  the  nautical  instruments  and  wearing  apparel  of 
any  master,  officer  or  seaman  of  any  steamer  or  other  vessel. 
All  fire  engines,  hooks  and  ladders,  with  the  carts,  trucks  and 
carriages,  hose,  buckets.  imi)lements  and  apparatus  thereunto 
appertaining,  and  all  furniture  and  uniforms  of  any  fire  com- 
pany or  department  organized  under  any  laws  of  the  state. 
Arms,  uniforms  and  accouterments  required  by  law  to  be  kept 
by  any  person,  and  also  one  gun  to  be  selected  by  the  debtor. 
All  courthouses,  jails,  public  offices  and  buildings,  lots,  grounds 
and  personal  property,  the  fixtures,  furniture,  books,  papers 
and  appurtenances  belonging  and  pertaining  to  the  jail  and 
public  offices  belonging  to  any  county  of  the  state,  and  all 
cemeteries,  public  squares,  parks  and  places,  i)ublic  buildings, 
town  halls,  markets,  buildings  for  the  use  of  fire  dejiartments 
and  military  organizations,  and  the  lots  and  grounds  thereto 
belonging  and  appertaining,  owned  or  held  by  any  town  or 
incorporated  city  or  dedicated  by  such  town  or  city  to  health, 


EXEMPTIONS.  455 

ornament  or  public  use,  or  for  the  use  of  any  fire  or  military 
company  organized  under  the  laws  of  the  state.  All  material 
not  exceeding  $i,ooo  in  value  purchased  in  good  faith  for  use 
in  the  construction,  alteration  or  repair  of  any  building,  min- 
ing claim  or  other  improvement,  as  long  as  in  good  faith  the 
same  is  about  to  be  applied  to  the  construction,  alteration 
or  repair  of  such  building,  mining  claim  or  other  improve- 
ment.^^*    All  machiner)',  tools  and  implements. 

Colorado.^"  —  Every  householder  in  the  state,  the  head  of 
a  family,  is  entitled  to  a  homestead  not  exceeding  in  vallie 
$2,000  exempt  from  execution  and  attachment  arising  from 
any  debt,  contract  or  civil  obligation  incurred  after  February 
I,  1868.^"*  To  entitle  the  claimant  to  homestead  he  must 
cause  the  word  "  homestead  "  to  be  entered  of  record  on  the 
margin  of  his  recorded  title,  which  entry  shall  be  signed  by 
him  and  attested  by  the  clerk  and  recorder  of  the  county  in 
which  the  ])remises  are  situated,  together  with  the  date;  ^'^ 
provided,  that  where  the  husband  is  the  owner  the  wife  may 
cause  the  entry  to  be  made,  and  where  the  wife  is  the  owner 
the  husband  may  cause  the  entry  to  be  made.^^^  Homestead 
is  exempt  only  when  occupied  by  the  owner  or  his  family."* 
A  surviving  w^idow,  husband  or  minor  child  of  a  decedent  is 
entitled  to  homestead,  but  in  case  there  is  no  surviving  widow, 
husband  or  minor  child  the  homestead  is  liable  for  debts  of 
deceased.""  The  homestead  may  consist  of  any  real  estate  not 
exceeding  in  value  $2,000.^*"  A  homestead  may  be  mortgaged 
or  conveyed,  but  such  mortgage  or  conveyance  does  not  bind 
the  wife  who  is  occupying  same  with  the  husband,  unless  she 
voluntarilv  and  separately  fn»m  ihc  luis1)rui(l  sign  and  acknowl- 
edge the  mortgage  and  be  fully  apprised  of  her  rights.'"*'  Tf 
the  owner  of  the  premises  be  the  wife  of  a  married  man  occu- 
pying the  premises  with  her  no  such  mortgage  or  conveyance 
shall  be  binding  against  liini  nnk-ss  he  sign  and  acknowledge 
the  same.'""     In  case  of  tlie  sale  of  a  homestead  a  subsequent 

17*  Civil  Code  of  Proc,  Cal.,  Sec.  i^o  Ann.  Stat.,  Colo.,  Sec.  2133. 

690;   1901  Laws,  Cal.  21.     See  also  ^''^  1903  Laws,  Colo.  246. 

p.  153.  "8  Ann.  Stat.,  Colo.,  Sec.  2134. 

ITS  The    exemption    law    of    tliis  J^"  Ann.  Stat.,  Colo.,  Sec.  2135. 

state  is  treated  in  In  re  Schcchter,9  ^so  Ann.  Stat.,  Colo.,  Sec.  2136. 

Am.  R.  R.  729.  "^  Ann.   Stat.,  Colo.,  Sec.  2137. 

175*  Ann.  Stat.,  Colo.,  Sec.  2132.  '''=1903  Laws,  Colo.  247. 


45f>  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

homestead  acquired  by  the  jiroceeds  lliereof  is  exempt.^*^ 
Necessar}^  wearing  apparel,  one  bicycle  and  one  sewing-machine 
are  exempt/"''  The  following  property,  when  owned  by  the 
head  of  a  family  residing  with  the  same,  is  exempt :  Family 
pictures,  school-books  and  library,  a  pew  in  a  place  of  worship, 
burial  sites,  household  goods,  necessary  provisions  and  fuel  for 
debtor  and  his  family  for  six  months,  tools  and  implements  or 
stock  in  trade  of  any  mechanic,  miner  or  other  person,  used  and 
kept  for  the  purpose  of  carrying  on  his  trade  or  business,  not 
exceeding  $200  in  value,  the  library  and  implements  of  any 
professional  man,  not  exceeding  $300,  working  animals  to  the 
value  of  $200,  one  cow  and  calf,  ten  sheep  and  necessary  food 
for  six  months,  one  farm  wagon,  cart  or  dray,  one  plough,  one 
harrow  and  other  farming  implements,  including  harness  and 
tackle  for  team,  not  exceeding  $50  in  value. 

Any  chattel  mortgage  upon  and  any  sale  of  household  goods 
used  by  the  family,  and  incumbrance  or  conveyance  of  any 
homestead,  when  given  or  made  by  husband  or  wife  residing 
with  tlie  other,  is  not  to  be  valid  unless  executed  or  made  by 
both  husband  and  wife  jointly/**^ 

There  is  no  exemption  from  sale  for  payment  of  taxes.  No 
article  exempted  by  statute  from  the  payment  of  debts  is  ex- 
empt from  attachment  or  sale  on  execution  for  purchase  money 
for  said  article. 

The  tools,  implements,  working  animals,  books  and  stock 
in  trade,  not  exceeding  $200  in  value,  of  any  mechanic,  miner 
or  other  person  not  the  head  of  a  family,  used  to  carry  on  his 
trade  or  business  while  a  bona  Ude  resident  of  the  state,  is  ex- 
empt.'^'' 

\\1ienever  the  head  of  a  family  dies,  deserts  or  ceases  to 
reside  with  the  same,  the  family  is  entitled  to  all  of  his  ex- 
emptions."" 

A  debtor  removing  property  from  the  state  loses  all  exemp- 
tions, except  those  pertaining  to  necessary  wearing  apparel  or 
beds  and  bedding.^*^ 

183  Ann.  Stat.,  Colo.,  Sec.  2139.  isc  Ann.  Stat.,  Colo.,  Sec.  2562. 

I'^^Ann.    Stat.,    Colo.,    Sec.   2561;  is?  Ann.    Stat.,    Colo.,    Sees.    2563 

1899  Laws,   Colo.    T79.  and  2569. 

1*5  1903  Laws,  Colo.  153.  1^**  .Ann.  Stat.,  Colo.,  Sec.  2565. 


EXEMPTIONS.  457 

Sixty  dollars  of  an  amount  due  for  wages  or  earnings  is  ex- 
empt, provided  the  debtor,  at  the  time  of  the  levy  under  execu- 
tion, attachment  or  garnishment,  is  the  head  of  a  family  or  the 
wife  of  a  head  of  a  family,  and  the  family  is  dependent  in 
whole  or  in  part  on  such  earnings.^-" 

Pension  money  received  by  a  resident  of  the  state  from  the 
U.  S.  Government,  in  possession  or  deposited  or  loaned,  is 
exempt."'' 

The  widow's  special  allowance,  she  residing  within  the  state, 
is  exempt  from  payment  of  husband's  debts.^''^ 

Property  of  cemetery  corporations  and  lots  owned  by  the 
meml^ers  thereof,  used  for  the  purpose  of  sepulture,  are  ex- 
empt, except  for  the  purchase  price  thereof."^ 

Connecticut. —  Any  person  owning  and  actually  occupy- 
ing as  a  dwelling  any  building,  together  with  any  real  estate 
owned,  occupied  and  used  in  connection  therewith,  not  to  ex- 
ceed $i,ooo  in  value,  may  hold  the  same  exempt  from  execu- 
tion. The  declaration  of  homestead  must  be  executed  and 
recorded  like  a  deed  of  land.  Homestead  may  be  released  pro- 
vided the  husband  or  wife  of  the  claimant  join  in  the  release. 
The  release  is  to  be  executed  and  recorded  like  a  deed  of  land. 
After  the  decease  of  the  owner  the  sale  of  the  property  for  any 
debt  except  expenses  for  his  funeral  or  last  sickness  is  sub- 
ject to  the  right  of  occupation  by  the  widow  or  husband  of 
the  decedent  for  life  and  by  his  children  during  minority. 
Such  right  of  occupation  is  exempt  from  execution  for  any 
debt  of  such  widow,  husband  or  children.  The  husband  or 
widow  may  release  this  right  of  occupation  and  the  guardian 
of  a  minor  child  may  do  so  with  the  consent  of  the  probate 
court.  Xo  |)erson  shall  have  a  homestead  exemption  in  more 
than  one  dwelling  at  the  same  time.*"'' 

The  following  property  is  exempt :  Of  the  property  of  anv 
f»ne  [)erson,  his  necessary  apparel  and  1)cdding  and  household 
furniture,  arms,  military  efjuipment,  uniforms  or  musical  in- 
struments owned  by  any  member  of  the  militia  for  military 
purposes,  any  pension  money  received  from  the  United  States 

1^"  Session    Laws.    Colo.,    1.894.   P-  ""  Ann.  .Stat.,  Cnlo..  .Sec.   1534. 

49;  see  Ann.  Stat.  Colo.,  Sec.  2567.  '"^  y\„„    sta^.,  Colo.,  Sec.  654. 

190  Ann.  Stat..  Colo.,  Sec.  2568.  '"•''Gen.  Stat.,  Conn.,  Sec.  4065. 


458  LAW    AND    rUOCEEDINGS    IN    BANKRUPTCY. 

while  in  the  haiuls  of  ilic  ])onsioncr.  implements  of  the  debtor's 
trade,  his  Hhrary.  not  exceeding  $500  in  value,  one  cow,  not 
exceeding  $150  in  value,  ten  sheep,  not  exceeding  in  value 
$150,  two  swine  and  200  lbs.  pork,  poultry,  not  exceeding  $25 
in  value;  of  the  property  of  any  one  person  having  a  wife 
or  family,  25  bushels  charcoal,  two  tons  of  other  coal,  200 
lbs.  wheat  flour,  two  cords  of  wood,  two  tons  of  hay,  200  lbs. 
each  of  beef  and  fish,  five  bushels  each  of  potatoes  and  turnips, 
ten  bushels  each  of  Indian  corn  and  rye  and  the  meal  or  flour 
manufactured  therefrom,  20  lbs.  each  of  wool  and  flax,  or  the 
yarn  or  cloth  made  therefrom;  the  horse  of  any  practicing 
physician  or  surgeon,  not  exceeding  $200  in  value,  and  his 
saddle,  bridle,  harness,  buggy  and  bicycle;  one  boat,  owned 
by  one  person  and  used  by  him  in  the  business  of  planting 
or  taking  oysters  or  clams  or  taking  shad,  together  with  the 
sails,  tackle,  rigging  and  implements  used  in  said  business,  not 
exceeding  in  value  $200 ;  one  sewing-machine,  being  the  prop- 
erty of  any  one  person  using  it  or  having  a  family ;  one  pew, 
being  the  property  of  any  person  having  a  family  who  ordinar- 
ily occupy  it  and  lots  in  any  burying-ground."* 

Husband's  interest  in  wife's  estate  is  exempt  during  life  o-f 
wife  or  child,  the  issue  of  the  marriage,  except  as  to  debts  con- 
tracted for  support  of  such  wife  or  child. ^'**^ 

If  property  exempt  to  a  certain  amount  is  sold,  money  re^ 
ceived  by  debtor  from  such  sale  is  exempt.^"" 

Levy  of  execution  may  be  made  upon  the  body  of  debtor  in 
certain  cases. ^''^ 

Wages,  not  exceeding  $50,  including  wages  due  a  minor 
child  of  debtor,  are  exempt  and  not  liable  to  be  taken  by 
foreign  attachment  or  execution,  but  if  the  debt  is  for  defend- 
ant's personal  board,  wages  are  not  so  exempt.  The  exemp- 
tion provided  for  in  this  section  does  not  apply  to  any  debt  for 
the  debtor's  personal  board.  Benefits  allowed  by  any  asso- 
ciation of  the  state  toward  the  support  of  any  of  its  members 
incapacitated  by  sickness  or  infirmity  from  attending  to  his 
usual  business  are  exempted  and  not  liable  to  be  taken  by 
foreign  attachment  or  execution.     Moneys  due  a  debtor  from 

19*  Gen.  Stat.,  Conn.,  Sec.  907.  i»«  Gen.  Stat.,  Conn.,  Sec.  910. 

"5  Gen.  Stat.,  Conn.,  Sec.  908.  ^^^  Gen.  Stat.,  Conn.,  Sec.  918-920. 


EXEMPTIONS.  459 

an  insurance  company  on  policies  on  exempt  property  are  ex- 
empt to  the  same  extent  as  the  property  so  insured/"® 

A  policy  of  life  insurance  for  the  benefit  of  a  married  woman 
shall  irM.ire  to  her  separate  use,  or  in  case  of  her  death  before 
payment,  to  the  use  of  her  children.  But  if  the  amount  of  the 
annual  premium  exceed  $300  the  amount  of  the  excess  with 
interest  shall  inure  to  the  benefit  of  the  creditors  of  the  person 
paying  the  premium.^**" 

Delaware. —  Biljles,  family  pictures,  wearing  apparel,  tools 
of  trade,  etc.,  to  the  value  of  $75  in  New  Castle  and  to  the 
value  of  $50  in  Kent.  An  additional  exemption  of  $200  in 
New  Castle  to  heads  of  families,  and  in  Kent  an  additional  ex- 
emption of  $150,  to  consist  of  household  goods  only.  No 
exemption  in  Sussex,^*'*' 

District  of  Columbia. —  The  property  of  the  head  of  a 
family  or  a  householder  is  exempt  as  follows:  All  wearing 
apparel  belonging  to  all  persons  and  to  all  heads  of  families 
being  householders ;  all  household  gear,  not  exceeding  $300  in 
value;  provisions  for  three  months;  fuel  for  three  months; 
mechanics'  tools  and  implements  of  debtor's  trade  or  business 
amounting  to  $200  in  value,  and  $200  worth  of  stock  for  carry- 
ing on  business ;  the  library  and  implements  of  a  professional 
man  or  artist  to  the  value  of  $300;  one  horse,  mule,  or  yoke 
of  oxen;  one  cart,  wagon  or  dray,  and  harness  therefor;  farm- 
ing utensils  witli  food  for  such  team  for  three  months,  and 
if  debtor  is  a  farmer,  any  other  farming  tools  of  the  value  of 
$100;  family  pictures  and  the  family  library,  not  exceeding 
$400  in  value ;  one  cow,  one  swine,  six  sheep.  These  exemp- 
tions not  valid  as  against  a  debt  for  wages  of  servants,  com- 
mon laborers  or  clerks,  except  the  exemption  of  wearing 
apparel,  beds  and  bedding,  household  furniture  and  provisions 
for  the  debtor  and  lu's  family.-'*^ 

No  conveyance  r)f  or  incumbrance  upon  exempted  articles 
valid  unless  signed  by  wife  of  married  debtor.^"^ 

Earnings  not  in  excess  of  $100  per  month  of  married  resi- 

1"^  Gen.  Slat.,  Conn.,  Sec.  909.  201  Comp.  .Slat.,  Dist.  Col.,  Chap. 

'""Gen.  Stat.,  Conn..  Sec.  4548.  XXT.  .Sec.  T.r 

200  Rev.     Code.     Del..     1852.     as  202  Com  p.  Stat.,  Dist.  Col.,   Chap, 

amended,  laws  of   1893,  pp.  828,  et  XXI,  Sec.  14. 
seq. 


460  LAW    AND    PROCEEDINGS    IN    BANKRl  PTCY. 

dents  of  the  district,  or  oi  those  wiio  have  to  provide  for  the 
support  of  a  family  in  the  district  for  two  months  next  pre- 
ceding the  issuance  of  process,  are  exempt.*"'' 

Florida. —  A  homestead  to  the  extent  of  160  acres,  or  the 
half  of  one  acre  within  an  incorporated  city  or  town,  owned 
by  the  head  of  a  family  residing  within  the  state,  together  with 
$1,000  worth  of  personal  property  and  the  improvements  on 
the  real  estate,  are  exempt.  Said  real  estate  is  inalienable 
without  the  joint  consent  of  husband  and  wife  when  that  re- 
lation exists.""*  A  homestead  is  obtained  by  making  a  state- 
ment in  writing  containing  a  description  of  the  property 
claimed,  declaring  the  same  to  be  homestead.  Such  statement 
must  be  signed  by  the  person  making  it  and  recorded  in  the 
office  of  the  county  judge. *°^ 

No  property  is  exempt  from  sale  for  taxes  or  assessments, 
or  for  the  payment  of  obligations  contracted  for  purchase  of 
said  property,  or  for  the  erection  or  repair  of  improvements  on 
real  estate  exempted,  or  for  house,  field  or  other  labor  per- 
formed on  the  same. 

Exemptions  in  city  or  town  do  not  extend  to  more  than  the 
residence  and  business  house  of  the  owner.^°° 

Homestead  may  be  selected  after  the  levy  of  an  execution.^" 

A  person  occupying  a  dwelling  on  land  not  his  own  may 
claim  such  house  as  his  homestead.^"** 

Exemptions  extend  to  the  widow  and  heirs  of  the  party  en- 
titled to  exemption.^"" 

The  exemptions  provided  for  in  the  constitution  of  the  state 
adopted  in  1868  apply  to  all  debts  contracted  and  judgments 
rendered  since  the  adoption  thereof  and  prior  to  the  adoption 
of  the  constitution  of  1885."" 

Homestead  may  be  alienated  by  deed  or  mortgage.  The 
■wife  must  join  if  there  is  one.  It  may  be  devised  if  there  are 
no  children.^" 

Homestead  shall  not  be  reduced  in  amount  by  reason  of  its 

203  Comp.   Stat.,  Dist.  Col.,  Chap.  ^"7  Rev.  Stat.,  Fla.,  Sec.  1999. 

XXI,  Sec.  15.  208  Rev.  Stat..  Fla.,  Sec.  2002. 

20*  Const.,  Art.   X,  Sec.   i ;  In  re  209  Const.,  Art.  X,  Sec.  2. 

Carpenter.   109  Fed.   Rep.   558.  210  Const.,  Art.  X,  Sec.  3. 

205  Rev.  Stat.,  Fla.,  Sec.  1998.  211  Const.,  Art.  X,  Sec.  4. 

JO"  Const.,  Art.  X,  Sec.  i. 


EXEMPTIONS. 


40 1 


being  subsequently  included  within  the  limits  of  an  incorpo- 
rated city  or  town  without  the  consent  of  the  owner.^^^ 

Money  or  other  thing  due  for  personal  labor  can  not  be  at- 
tached or  garnished.-" 

Proceeds  of  life  insurance  policy  are  not  liable  to  legal 
process  in  favor  of  creditor  of  decedent  unless  the  policy  de- 
clares it  was  effected  for  his  benefit."^* 

Georgia. ^^^  —  Every  head  of  a  family,  guardian  or  trustee 
of  a  family  of  minor  children,  every  aged  or  infirm  person,  or 
person  having  the  care  and  support  of  dependent  females  of 
any  age,  who  is  not  the  head  of  a  family,  may  hold  exempt 
realty  or  personalty,  or  both,  to  the  value  of  $1,600,  except 
for  taxes,  for  purchase  money,  for  labor  done  thereon,  for 
material  purchased  therefor,  or  for  the  removal  of  encum- 
brances thereon.^^* 

When  a  person  desires  to  exempt  personalty  and  such  per- 
sonalty consists  of  cash  it  must  be  invested,  under  the  direction 
of  the  ordinary,  in  such  articles  of  jjcrsonalty  as  the  claimant 
may  desire. ^^^ 

The  applicant  for  benefit  of  exemption  must  apply  to  the 
ordinary  of  county  of  residence  by  petition. ''*  The  petition 
must  contain  a  minute  and  accurate  description  of  all  the 
claimant's  property.''^'* 


212  Const.,  Art.  X,  Sec.  5. 

21-'  Rev.  Stat.,  Fla.,  Sec.  2008. 

21*  Rev.    Stat.,    Fla.,    Sec.    2347. 

21"  The  exemption  laws  of  this 
state  are  treated  in  In  re  Butler,  120 
Fffl.  Rep.  100,  9  Am.  B.  R.  539; 
Bashinski  v.  Talbott  (C.  C.  A.  5th 
Cir.),  119  Fed.  Rep.  337,  9  Am.  B. 
R.  513,  affirminjc  In  re  Talbott,  116 
Fed.  Rep.  4>7,  8  Am.  B.  R.  427; 
In  re  West,  116  Fed.  Rep.  767,  8 
Am.  B.  R.  564 ;  In  re  Thompson, 
115  Fed.  Rep.  924,  8  Am.  B.  R.  283; 
In  re  Boorstin.  114  Fed.  Rep.  696, 
R  Am,  B  R.  89;  In  re  Williamson, 
114  TVd.  Rep.  190,  8  Am.  B.  R.  42 ; 
/>!  re  Stephens,  114  Fed.  Rep.  192. 
8  Am.  P..  R.  53;  In  re  Swords.  112 
Fed.  Rep.  661,  7  Am.  B.  R.  4.36; 
Woodruff  V.  Cheeves  (C.  C.  A.  5th 


Cir.),  105  Fed.  Rep.  601,  5  Am.  B. 
R.  296,  reversin}^  In  re  Woodruff, 
96  Fed.  Rep.  317.  2  Am.  B.  R.  678; 
In  re  Waxelbaum,  loi  Fed.  Rep. 
228,  4  Am.  B.  R.  120;  In  re  Lynch, 
loi  Fed.  Rep.  579,  4  Am.  B.  R.  262; 
In  vc  Hill,  96  Fed.  Rep.  185,  2  Am. 
B.  R.  798 ;  In  re  Camp.  91  Fed.  Rep. 
745,  I  Am.  B.  R.  165. 

21"  Const,  of  1877,  Art.  IX,  Sees. 
I  and  2 ;  Code  Ga.,  Sec.  2827 ;  In  re 
Lynch,  loi  Fed.  Rep.  579,  4  Am.  B. 
R.  262. 

2>7Code  Ga.,  Sec.   2841. 

2"*  Code  Ga.,  Sec.  2828. 

2'"  Code  Ga.,  Sees.  2828,  2830; 
In  re  West.  it6  Fed.  Rep.  767,  8 
Am.  B.  R.  564;  In  re  Stephens,  114 
l'\d.  Rep.  192,  8  Am.  B.  R.  53;  In 
re   Williamson,    114   Fed.   Rep.    190, 


4t)2  l.AW      AM)    lMU)Ci;i:i)lNGS    IN     BANKRUPTCY. 

Homestead  may  l)e  in  counties  other  than  tht  county  of  the 
residence  of  appHcant.^"" 

When  hushand  and  wife  are  in  a  state  of  separation  and  the 
minor  children  reside  with  or  are  under  the  control  of  wife,  the 
wife  is  the  head  of  the  family."'^ 

If  husband  refuses  to  claim  homestead  exemptions,  wife 
may.""^ 

When  the  beneficiaries  desire,  exempt  property  may  be  sold 
for  reinvestment.""'' 

All  produce,  rents  or  profits  arising  from  homesteads  are 
exempt,  except  as  is  provided  in  the  constitution  of  the  state, 
and  shall  be  for  the  support  and  education  of  the  families 
claiming  the  homesteads."'* 

A  debtor  who  does  not  wish  to  claim  a  homestead  may  take 
advantage  of  section  2866  of  the  civil  code,  but  no  debtor 
who  avails  himself  of  the  benefits  of  said  section  can  claim 
homestead,  nor  can  a  person  who  claims  homestead  avail  him- 
self of  section  2866,  unless  the  homestead  and  exempted  prop- 
erty so  elected  is  lost  by  virtue  of  a  sale  under  an  outstanding 
claim. "^ 

The  applicant  for  homestead  is  permitted  to  select  the  prop- 
erty to  be  exempted,  not  to  exceed  the  amount  allowed  by 
law."*" 

Any  debtor  may,  except  as  to  wearing  apparel  and  $300 
worth  of  household  and  kitchen  furniture  and  provisions, 
waive  the  exemption  given  by  the  constitution  and  laws,  by 
a  waiver,  general  or  specific,  in  writing,  which  waiver  may  be 
stated  in  the  contract  of  indebtedness  or  cotemporaneously  or 
subsequently  in  a  separate  paper."" 

In  case  of  such  waiver  and  a  levy  of  execution  the  debkDr 

8  Am.  B.  R.  42;  In  re  Boorstin,  114  ^-^  Code  Ga.,  Sec.  2854. 

Fed.    Rep.    696,   8    Am.    B.    R.    89;  226  Code  Ga.,  Sec.  2862. 

In  re  Thompson,  115  Fed.  Rep.  924,  227  Code  Ga.,  Sec.  2863;  Woodruff 

8  Am.  B.  R.  283;  In  re  Waxelbaum,  v.  Cheeves  CC.  C  A.  5th  Cir.),  105 

loi  Fed.  Rep.  228,  4  Am.  B.  R.  120.  Fed.  Rep.  601,  5  Am.  B.  R.  296,  re- 

220  Code  Ga.,   Sec.  2829.  versing    /;;    re    Woodruff,    96    Fed. 

221  Code  Ga.,  Sec.  2842.  Rep.  317,  2  .Am.  B.  R.  678;  In  re 

222  Code  Ga.,   Sec.  2843-  Hill,  96  Fed.  Rep.  185,  2  Am.  B.  R- 

223  Code  Ga.,  Sees.  2844,  2847.  798. 

224  Code   Ga.,  Sec.  2848. 


EXEMPTIONS.  4^3 

and  his  wife  may  select  $300  worth  of  household  and  kitchen 
furniture  and  provisions."'' 

The  following  property  of  every  head  of  a  family  is  exempt 
from  process,  nor  can  any  valid  lien  be  created  thereon  except 
as  hereinafter  pointed  out:  Fifty  acres  of  land  and  five  addi- 
tional acres  for  each  child  under  16  years  of  age;  the  land 
shall  include  the  dwelling-house,  if  the  value  thereof  and  im- 
provements does  not  exceed  $200,  provided  the  land  is  not 
within  the  limits  of  a  municipal  corporation  and  does  not  in- 
clude any  cotton  or  woolen  factory,  saw  or  grist  mill  or  any 
other  machinery  propelled  by  water  or  steam,  the  value  of 
which  exceeds  $200,  provided  also  that  said  land  does  not 
derive  its  chief  value  from  other  cause  than  its  adaptation  to 
agricultural  purposes ;  or  in  lieu  of  the  above  land,  real  estate 
in  a  city,  town  or  village,  not  exceeding  $500 ;  one  farm  horse 
or  mule,  or  in  lieu  thereof  one  yoke  of  oxen,  one  cow  and  calf, 
ten  head  of  hogs  and  $50  worth  of  provisions  and  $5  worth 
additional  for  each  child;  50  bushels  corn,  1,000  lbs.  fodder, 
one  one-horse  wagon,  one  table  and  a  set  of  chairs  sufficient 
for  the  use  of  the  family,  and  household  and  kitchen  fur- 
niture, not  to  exceed  $150:  beds,  bedding  and  common  bed- 
steads sufficient  for  the  family ;  one  loom,  one  spinning-wheel, 
two  pairs  of  cards  and  100  lbs.  lint  cotton;  common  tools  of 
trade  of  debtor  and  his  wife;  equipment  and  arms  of  a  militia 
soldier  and  a  trooper's  horse;  ordinary  cooking  utensils  and 
table  crockery;  wearing  apparel  of  debtor  and  family:  family 
bible,  religious  works  and  school  books;  family  portraits;  the 
library  of  a  professional  man  in  actual  jjractice  or  business, 
not  exceeding  $300  in  value,  to  be  selected  by  him;  one 
family  sewing-machine,  this  exemption  to  exist  whether  i)er- 
son  owning  said  machine  is  the  head  of  a  family  or  not,  and 
shall  be  good  against  all  debts  except  the  purchase  money.'"" 

Property  exempt  under  section  2866  of  the  code  is  not  ex- 
empt as  to  the  purchase  money,  or  state,  county  and  municipal 
taxes. '•'"' 

Crops  ])aid  by  a  tenant  to  his  landlord  as  rent  are  dis- 
charged from  the  lien  of  a  judgment,- decree  or  other  process 
against  the  tenant."' 

228  Code  Ga.,   Sec.  2864.  230  Code  Ga.,  Sec.  2873- 

220  Code  Ga.,   Sec.  2866.  231  Qa.  L.,  1884-5,  P-  91- 


4O4  l-AW      AM>    I'ROCKKDIXGS.  I\     HA  N  KRL'PTCY. 

Idaho. —  The  homestead  consists  of  the  dwelling-house  in 
which  the  claimant  resides  and  the  land  on  which  the  same  is 
situated."^* 

A  married  claimant  may  select  homestead  from  community 
jiroperty.  the  separate  property  of  the  husband,  or  from  the 
separate  property  of  the  wife  with  her  consent;  when  claimant 
is  unmarried,  l)ut  the  Iiead  of  a  family,  the  homestead  may 
be  selected  from  any  property.""'^ 

Homestead  can  not  be  selected  from  the  separate  property 
of  a  wife  w^ithout  her  consent,  shown  by  her  making  declara- 
tion.-^* 

The  homestead  is  exempt  from  execution  or  forced  sale, 
except  as  follows :  "^^  On  judgments  before  the  declaration  of 
homestead  was  filed  for  record,  and  which  constitute  liens;  or 
in  action  in  which  an  attachment  was  levied  on  premises  before 
the  filing  of  the  declaration;  on  debts  secured  by  mechanics', 
laborers'  or  vendors'  liens  upon  the  premises ;  on  debts  secured 
by  mortgages  upon  premises  executed  and  acknowledged  by 
husl)and  and  wife  or  by  an  unmarried  claimant;  on  debts  se- 
cured by  mortgage  on  the  premises  executed  and  recorded  be- 
fore declaration  filed  for  record."^*' 

A  homestead  may  be  conveyed  or  incumbered,  but  the  in- 
strument must  be  executed  and  acknowledged  by  both  husband 
and  wife."^^ 

A  homestead  may  be  abandoned  by  a  declaration  of  aban- 
donment, by  a  grant  or  conveyance  by  the  husband  and  wife 
if  claimant  is  married,  by  the  claimant,  if  unmarried.^^^  A 
declaration  of  abandonment  is  effectual  only  from  the  time 
when  it  was  filed  for  record.^'*" 

When  a  homestead  is  sold  for  any  reason  under  legal  pro- 
ceedings, the  money  paid  to  claimant  is  entitled  for  six  months 
thereafter  to  the  same  protection  against  legal  process  which 
the  law  gives  to  homestead."*" 

Homesteads  may  be  selected  and  claimed  by  any  head  of  a 

232  Rev.  Stat,  Idaho,  Sec.  3035.  237  Rgv.  Stat.,  Idaho,  Sec.  3040. 

233  Rev.  Stat.,  Idaho,  Sec.  3036.  ^38  Rev.  Stat.,  Idaho,  Sec.  3041. 

234  Rev.  Stat.,  Idaho,  Sec.  3037-  ^^^Rev.  Stat.,  Idaho,  Sec.  3042. 

235  Rev.  Stat.,  Idaho,  Sec.  3038.  24o  Rev.  Stat.,  Idaho,  Sec.  3055. 
23"  Rev.  Stat.,  Idaho,  Sec.  3039. 


EXEMPTIONS.  465 

family,  not  exceeding  in  value  $5,000 ;  by  any  other  person, 
not  exceeding  in  value  $1,000."*^ 

The  phrase  '*  head  of  a  family  "  includes  husband  or  wife, 
every  person  who  has  residing  with  him  on  the  premises  and 
under  his  care  a  minor  child,  or  the  minor  child  of  a  deceased 
husband  or  wife,  a  minor  brother  or  sister  or  their  minor  child. 
a  father,  mc^ther.  grandfather  or  grandmother  of  himself  or 
of  a  deceased  husband  or  wife,  an  unmarried  sister  or  any 
other  relatives  mentioned  above  who  liave  attained  majority 
and  are  unable  to  support  themselves.-*- 

The  word  "  homestead  "  includes  the  dwelling-house  in 
which  claimant  lives  and  the  land  on  which  the  same  is  located, 
the  proceeds  thereof  in  case  of  a  voluntary  sale,  and  the  insur- 
ance thereon  in  case  of  a  loss.^*^ 

The  following  property  of  an  actual  resident  of  the  state,  in 
addition  to  homestead,  is  exempt :  Chairs,  tables,  desks  and 
books,  to  the  value  of  $200;  necessary  household,  table  and 
kitchen  furniture,  including  one  sewing-machine,  stoves,  stove- 
pipe and  stove  furniture,  beds,  bedding  and  bedsteads,  not 
exceeding  $300  in  value ;  wearing  apparel,  hanging  ])ictures, 
paintings  or  drawings  by  any  member  of  the  family,  family 
portraits.  ])rovisions  fur  family  for  six  montlis;  two  cows  with 
their  sucking  calves,  two  hogs  with  their  sucking  ])igs ;  farm- 
ing utensils  to  the  value  of  $300;  four  oxen,  or  four  horses,  or 
four  mules,  to  be  selected  and  their  harness;  one  cart  or  wagon; 
food  for  said  aiu'mals  for  six  months;  a  water  right,  not  to  ex- 
ceed 160  inches  of  water,  used  for  the  irrigation  of  lands 
actually  cultivated  ;  crops  growing  or  grown  on  50  acres ;  tools 
of  a  mechanic  or  artisan  necessary  to  carry  on  his  trade,  not 
exceeding  $500  in  value ;  notarial  seal  and  records  of  a  notary 
public ;  necessary  instruments  and  chest  of  surgeon,  ])hysician. 
surveyor  and  dentist,  rmd  their  professional  libraries;  the 
professir)nal  libraries  and  oftice  furniture  of  attorneys  at  law 
and  judges,  and  Hbraries  of  ministers  of  the  gospel;  the  cabin 
of  a  miner,  not  exceeding  in  value  $500,  also  his  sluices,  etc.. 
and  tools,  not  exceeding  in  value  $200;  one  saddle  animal. 

-'"  Rev.   Stat.,  Idaho,  Sec.  .1058.  Sess.   Laws,   Idalio,    1897,   p.   9,   and 

^■•2  Rev.  Stat.,  Idaho,  Sec.  3059.  1899,  p.  404. 

■-'•'  Rev.    Stat.,    Idaho.    Sec.    3060. 


466  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

one  pack  animal,  with  ciiuipnients  belonging  to  a  miner  actually 
engaged  in  prospecting,  not  exceeding  in  value  $250;  two 
oxen,  two  horses  or  two  mules  and  their  harness,  and  one 
cart,  wagon,  dray  or  truck,  by  which  the  owner  makes  his 
living;  one  horse,  with  vehicle  and  harness,  etc.,  used  by  physi- 
cian, surgeon  or  minister  of  the  gospel  in  making  ])rofessional 
visits,  with  food  for  such  oxen,  horses  or  mules  for  six  months ; 
the  earnings  of  a  debtor  for  personal  services  rendered  30  days 
next  preceding  the  issuance  of  process,  when  it  appears  that 
such  earnings  are  necessary  for  support  of  family  residing 
in  the  state ;  shares  held  by  a  member  of  a  homestead  or  build- 
ing association  incorporated  under  the  laws  of  the  state,  not 
exceeding  $1,000  in  value,  if  person  holding  same  is  not  the 
owner  of  a  homestead;  proceeds  of  a  life  insurance  policy, 
represented  by  an  annual  premium  not  exceeding  $250;  im- 
plements used  by  fire  company  organized  under  the  laws  of  the 
state  and  the  uniforms  of  members;  arms,  uniforms  and  equip- 
ments required  to  be  kept  by  law  ;  one  gun ;  public  buildings  and 
appurtenances,  furniture,  books,  papers;  cemeteries,  public 
squares,  parks  and  places,  and  the  lots  thereto  appertaining. 
No  property  mentioned  in  this  section  is  exempt  from  execu- 
tion issued  on  a  judgment  recovered  for  its  price  or  upon  a 
mortgage  thereon."** 

No  personal  property  of  either  husband  or  wife,  that  is  ex- 
empt, shall  be  mortgaged  without  the  joint  concurrence  of 
both.=^*' 

Property  of  a  married  woman  is  exempt  from  debts  of  hus- 
band.^**^ 

Illinois. —  A  householder  having  a  family  is  entitled  to  a 
homestead  of  $1,000  in  the  farm  or  lot  of  land  and  the  build- 
ings thereon  owned  or  rightly  possessed  by  lease  or  otherwise 
and  occupied  as  a  residence;  such  homestead  is  exempt  from 
process  for  the  payment  of  debts. '*^ 

Homestead  exemption  continues  after  his  death  for  benefit 
of  surviving  husband  or  wife  so  long  as  he  or  she  continues  to 


2**  Rev.    Stat.,    Idaho,    Sec.  4480,  240  Rgy.  Stat.,  Idaho,  Sec.  4479- 

as  amended,   Sess.  L.,  Idaho,  1899,  247  Starr  &  Curtis'  Ann.  Stat.,  Ill, 

p.  356.  1896,  p.   1865. 

2*5  1899  Laws,  Idaho,  403. 


EXEMPTIONS.  467 

occupy  such  homestead,  and  until  the  youngest  child  becomes 
21  years  of  age;  in  case  husband  or  wife  deserts  the  family, 
the  exemption  continues  in  favor  of  the  one  occupying  the 
premises  as  a  resident.'** 

No  property  is  exempt  from  sale  for  nonpayment  of  taxes 
or  assessments,  or  a  debt  or  liability  incurred  for  the  purchase 
or  improvement  thereof.'*" 

A  release,  waiver  or  conveyance  of  homestead  may  be  made 
in  writing,  subscribed  by  householder  and  his  or  her  husband 
or  wife  and  acknowledged,  as  is  required  in  conveyances  of 
real  estate;  when  said  release,  etc.,  is  taken  as  a  mortgage  or 
security,  the  same  is  operative  only  as  to  such  specific  release, 
etc."'* 

In  case  of  a  divorce  the  court  granting  same  may  dispose  of 
the  homestead  according  to  the  equities  of  the  case.^^^ 

When  a  homestead  is  conveyed  such  conveyance  does  not 
subject  the  premises  to  any  lien  to  which  it  would  not  be  sub- 
ject in  the  hands  of  the  owner,  and  the  proceeds  of  such  sale 
to  the  extent  of  $1,000,  are  exempt  from  i)rocess  for  one  year, 
and  if  reinvested  in  a  homestead,  the  same  is  entitled  to  the 
same  exemption  as  the  original  homestead."'''  Whenever  a 
building  exempt  as  a  homestead  is  insured  and  a  loss  occurs, 
the  proceeds  of  tlie  insurance  ]xjlicy  are  exempt  to  the  same 
extent  as  the  building  would  have  been."^^ 

The  following  personal  proj)erty  is  exempt :  The  necessary 
wearing  apparel.  l)iblcs.  school  books  and  family  pictures  of 
every  person:  $100  worth  of  other  property,  to  be  selected  by 
the  debtor,  and  in  addition,  when  the  debtor  is  the  head  of  a 
family  and  resides  with  the  same.  $300  worth  of  other  ])roperty. 
to  be  selected  by  the  debtor;  such  selection  and  exemption  shall 
not  be  allowed  from  any  money,  salarv  or  wages.""*  Money 
due  debtor  from  sale  of  exempted  personal  property  is  exempt 

2*«  Starr  &  Curtis'  Ann.  Stat.,  111.,  2"  Starr  &  Curtis'  Ann.  Stat.,  111., 

1896,  p.   1871.  i8«)6.  p.  1882. 

2"  Starr  &  Curtis'  Ann.  Stat..  111.,  252  Starr  &  Curtis'  Ann.  Stat..  111., 

1896,  p.   1873.  1896.  p.  1882. 

^••^  .Starr  &  Curtis'  Ann.  Stat.,  111.,  =''3  Starr  &  Curtis'  Ann.  Stat.,  111., 

1896,  p.    1874.  i89<^.   p.    188.1. 

2"  Laws,  111.,  1897,  P-  218. 


4^8  LAW    AM)    I'KOlKKDINC.S    IN     HANKRUTTCY. 

from  process  to  same  extent  as  such  jjropcrty  would  be  exempt 
if  same  had  not  been  sold."^* 

When  tlie  head  of  a  family  dies,  deserts  or  does  not  reside 
w  ith  the  same,  the  family  is  entitled  to  the  same  exemptions  as 
are  conferred  upon  a  head  of  a  family  residing-  with  it.'"'"'' 

No  personal  property  is  exempt  when  the  debt  is  for  wages 
of  laborer  or  mechanic.'^** 

In  actions  brought  to  recover  wages  due  a  laborer  or  servant, 
if  it  api)ears  that  the  horse  or  team  of  such  laborer  or  servant 
was  necessary  to  the  performance  of  said  labor,  said  services 
shall  be  included  in  said  wages  and  become  part  of  judgment 
for  said  wages,  and  from  said  judgment  nothing  is  exempt. "^^ 

The  wages  for  services  of  a  defendant,  the  head  of  a  family 
and  residing  w^ith  the  same,  to  the  amount  of  $8  per  week  are 
exempt  from  garnishment ;  all  above  $8  per  week  is  liable  to 
garnishment  if  the  person  bringing  suit  shall  first  make  a  de- 
mand in  writing  for  the  excess  above  $8.'"^'^* 

The  same  exemption  of  wages  from  garnishment  is  allowed 
to  a  nonresident  as  is  allowed  to  him  by  the  law  of  the  state 
of  his  residence.'^'^" 

Pension  moneys  of  firemen  are  exempt  from  process.""" 

The  money  or  benefit  due  any  certificate  holder,  or  any 
beneficiary  named  therein,  in  an  accident  insurance  company 
is  exempt  from  process.^**^ 

Benefit  and  relief  funds  are  exempt  from  process.^*^ 

The  arms  and  equipments  of  members  of  the  national  guard 
are  exempt.^**^ 

Indian  Territory. —  By  decisions  the  same  exemptions 
apply  as  are  granted  by  the  laws  of  Arkansas. 

Indiana.^"*  —  An  amount  of  property  not  in  excess  of  $6oo 

255  Starr  &  Curtis'  Ann.  Stat.,  111.,  -''•<'  Starr    &    CurtLs'    Ann.    Stat., 

1896.  p.    1892.  1896,    p.    845. 

=^•'•6  Starr  &  Curtis'  Ann.  Stat.,  111.,  2bi  Starr    &    Curtis'    Ann.     Stat., 

1806,   p.    1892.  1896,   p.    2277. 

2"  Starr  &  Cnrtis'  Ann.  Stat,  111.,  202  Starr    &    Curtis'    Ann.     Stat., 

1896.   p.    1894.  1896.   p.   2282. 

25'*  Laws,  111.,  1897,  p.  231.  2fi.i  Starr    &    Curtis'    Ann.     Stat.. 

25»  Starr    &    Curtis'    Ann.    Stat.,       1896,  p.  3816. 
1896,   p.    1895.  ^"^  'The    exemption     law    of    this 

state  is  treated   in   In  re  Reals,   116 
Fed.  Rep.  530,  8  Am.  B.  R.  639. 


EXEMPTIONS.  469 

in  value,  owned  by  any  resident  householder  is  not  liable  to 
sale  on  process  for  any  debt  founded  on  contract  after  the 
taking  effect  of  an  act  as  to  exemptions  in  force  May  31, 
1879.'"' 

The  property,  real  or  personal,  may  be  selected  by  debtor  at 
the  time  he  claims  the  exemption.*"® 

The  wife  may  claim  exemptions  in  the  absence  of  husband. ^*^^ 

No  mortgage  of  exempted  real  estate  executed  by  a  married 
man  is  valid  unless  wife  joins,-*'® 

Exemptions  are  not  allowed  against  laborers*  or  mechanics' 
liens,  nor  against  a  lien  for  the  purchase  money  of  exempted 
real  estate,  nor  is  any  property  exempt  under  exemption  act 
from  taxation.-®" 

The  exemptions  provided  for  in  this  act  do  not  apply  to  any 
debt  or  contract  existing  at  the  time  it  takes  effect.  All  house- 
holders owing  debts  founded  on  contract  existing  at  that 
time  are  entitled  to  exemptions,  provided  for  in  an  act  entitled 
"  An  act  to  exempt  property  from  sale  in  certain  cases,"  ap- 
proved February  17,  1852,  and  the  amendments  and  supple- 
ments thereto.^^** 

Household  goods  not  exceeding  $100  in  value  are  exempt 
from  levy  or  sale  for  payment  of  delinquent  taxes. "^ 

lowA.^^-  —  Homestead  of  every  family  is  exempt  where 
there  is  no  special  statutory  declaration  to  the  contrary.'^'' 

A  widow  or  widower,  though  without  children,  while  con- 
tinuing to  occupy  real  estate  as  a  homestead  at  the  death  of 
husband  or  wife,  shall  be  deemed  a  family,  in  case  of  divorce 


261  Ann.  Intl.  Stat,  Sec.  715.  C.  A.  8th  Cir.),  104  Fed.  Rep.  968, 

2«6  Ann.  Ind.  Stat,  Sec.  716.  5   Am.    B.   R.    165,   reversing  In   re 

2«7  Ann.  Ind.  Stat.,  Sec.  727.  Steele,  98   Fed.   Rep.  78,  .1  Am.   R. 

2«8  Ann.  Ind.  Stat.,  Sec.  728.  R.  549;  In  re  Hatch,  102  Fed.  Rep. 

^Ro  Ann.  Ind.  Stat.,  Sec.  729.  280,  4  Am.   B.  R.  349;  In  re  Pope, 

^""^  Ann.  Ind.  Stat.,  Sec.  730.  98  Fed.  Rep.  722,  3  Am.  B.  R.  525  ; 

"1  Ann.    Ind.    Stat,    Supp..    1897,  In    re   Lan^c,   91    Fed.    Rep.    361,    i 

Sees.  6525  and  65250.  Am.    B.    R.    189;    In    re   Tilden,  91 

"2  The    exemption    laws    of    this  Fed.  Rep.  500,  i  Am.  B.  R.  300. 

state  are  treated  in  In  re  Le  Claire,  27a  Code,   Iowa,   Sec.   2972;   In   re 

124  Fed.  Rep.  654,  10  Am.  B.  R.  — ;  RaflFerty,   7   Am.    B.    R.  415;    In   re 

In   re   Little,    no  Fed.   Rep.  621,  6  Pope,  98  Fed.  Rep.  722,  3  Am.  B.  R. 

Am.  B.  R.  681 ;  Steele  v.  Buel    (C.  525. 


470  LAW    AND    PROCEEDINGS    IN    BANKRUTTCY. 

the  right  of  occupancy  shall  continue  to  the  party  in  whose 
favor  the  divorce  is  granted. ""' 

No  conveyance  or  incumbrance  or  contract  to  convey  or  in- 
cumber a  homestead  is  valid  if  owner  is  married,  unless 
husband  and  wife  join  in  the  execution  of  the  same  joint  in- 
strument."" 

The  homestead  is  subject  to  mechanics'  liens  for  work,  labor 
or  materials  done  or  furnished  exclusively  for  the  improvement 
of  the  same.''^' 

Homestead  is  liable  for  debts  contracted  prior  to  its  acquisi- 
tion and  for  debts  created  by  written  contract  by  persons  hav- 
ing the  power  to  convey,  and  expressly  stipulating  that  it  is 
liable  therefor,  but  in  such  cases  only  for  the  deficiency  re- 
maining in  the  one  case  after  exhausting  the  other  property  of 
debtor  liable  to  execution,  and  in  the  other  case  only  after  ex- 
hausting all  other  property  pledged  by  the  same  contract."" 

Homestead  must  embrace  the  house  used  as  a  home;  if  he 
has  two  or  more  houses  thus  used  he  may  select  the  one  he  will 
retain ;  it  mav  contain  one  or  more  contiguous  lots,  with 
buildings  or  other  appurtenances  habitually  and  in  good  faith 
used  as  part  of  the  same  homestead. -'■ 

If  the  homestead  is  within  a  city  or  town,  it  must  not  ex- 
ceed one  half  acre  in  extent,  otherwise  it  must  not  contain  more 
than  40  acres ;  but  if  in  either  case  its  value  is  less  than  $500, 
it  may  be  enlarged  until  it  reaches  that  amount;  it  must  not 
embrace  more  than  one  dwelling-house  or  any  other  buildings, 
except  such  as  are  appurtenant  thereto,  but  a  shop  or  other 
building  situated  thereon,  actually  used  and  occupied  by  the 
owner  in  the  prosecution  of  his  business  and  not  exceeding 
$300  in  value  is  appurtenant  thereto. "° 

Homestead  should  be  ])latted  and  recorded."" 

The  owner  of  a  homestead  may  from  time  to  time  change 

the  limits  as  well  as  the  plat  and  description  or  vacate  it; 

conveyances  or  liens  prior  to  the  change  are  unaffected ;  the 

rights  of  husband  or  wife  or  children  are  unaffected ;  the  new 

274  Code,  Iowa,  Sec.  2973 ;  In  re  277  Code,  Iowa,  Sec.  2976. 
Le  Gaire,  124  Fed.  Rep.  654,  10  Am.  ^78  Code,  Iowa,  Sec  2977. 
B.  R.  — .  279  Code,  Iowa,   Sec.  2978. 

275  Code.  Iowa.  Sec.  2974.  280  Code,  Iowa,  Sec.  2979. 
2T8  Code,  Iowa,  Sec.  2975. 


EXEMPTIONS.  471 

homestead  is  exempt  to  the  same  extent  as  the  old  one  would 
have  been.'^^ 

Upon  the  death  of  husband  or  wife  the  survivor  may  con- 
tinue to  occupy  the  whole  homestead  until  disposed  of  accord- 
ing to  law ;  the  setting  off  of  the  distributive  share  in  the  real 
estate  of  the  deceased  is  a  disposal;  the  survivor  may  elect 
to  retain  homestead  in  lieu  of  such  share  for  life;  if  there  is 
no  survivor  the  homestead  descends  to  the  issue  according  to 
rules  of  descent,  unless  otherwise  directed  by  will,  and  is  held 
by  such  issue  exempt  from  antecedent  debts  of  their  parents  or 
their  own,  except  those  contracted  by  the  owner  thereof,  con- 
tracted prior  to  its  acquisition."''" 

If  there  is  no  survivor  or  issue  the  homestead  is  liable  for 
debts  as  if  not  held  as  homestead.^®^ 

Homestead  may  be  devised  subject  to  the  rights  of  surviv- 
ing husband  or  wife."''* 

Homestead  purchased  with  proceeds  of  sale  of  homestead 
of  intestate  is  exempt  from  liability  for  all  debts  from  which 
the  former  homestead  would  have  been  exemjit. -*"''' 

Homestead  bought  with  pension  money  is  exempt,  and  such 
exemi)tion  applies  to  debts  of  pensioner  contracted  prior  to 
purchase.  ^®^ 

Public  buildings  or  any  other  public  property  necessary  for 
carrying  on  public  business  is  exempt ;  the  property  of  a  pri- 
vate citizen  can  not  be  taken  to  pay  a  public  debt."^^ 

A  resident  of  the  state  and  the  head  of  a  family  is  entitled 
to  the  following  exemptions:  All  wearing  apparel  of  himself 
and  family  kei)t  fr)r  actual  use  and  suitable  to  their  condition, 
and  the  trunks  and  ntlier  receptacles  necessary  to  contain  tlic 
same;  one  musket,  or  rillc  and  shotgun;  all  private  libraries, 
family  bibles,  portraits,  pictures,  musical  instruments  and  i)aint- 
ings  not  kept  for  the  purpose  of  sale;  a  seat  or  pew  occupied 
])v  tlic  c1c1)tor  or  liis  familv  in  anv  liouse  of  jniblic  worship; 
an  interest  in  a  ])nl)1ir  or  ])rivate  1)m-ying-groun(l.  not  exceed- 
ing one  acre  for  any  defendant;  two  cows  and  two  calves; 

-*^  Code,   Iowa,   Sec.   2981  ;   /»   re  ^84  Code,   Iowa,  Sec.  2987. 

Johnson,  118  Fed.  Rep.  312,  9  Am.  28c  Code,  Iowa,  Sec.  3375- 

B.  R.  257.  2HB  Code,  Iowa,  Sec.  4010. 

2'*2  Code,  Iowa,  Sec.   2985.  287  Code,  Iowa,  Sec.  4007. 

283  Code,  Iowa,  Sec.  2986. 


47-  I'•^^v  •^>^r>  proc-kkdings  in  bankruptcy. 

titty  sheep  ;uul  ihe  wool  therefrom,  and  the  material  manufac- 
tureil  from  sueh  wool;  six  stands  of  bees,  tivc  hogs,  and  all 
]iigs  under  six  months ;  the  necessary  food  for  all  animals  ex- 
emj)!  from  execution  for  six  months ;  one  bedstead  and  the 
necessary  bedding  for  every  two  in  the  family;  all  cloth  manu- 
factured by  the  defendant,  not  exceeding  one  hundred  yards 
in  quantity;  household  and  kitchen  furniture  not  exceeding 
two  hundred  dollars  in  value;  all  spinning-wheels  and  looms, 
one  sewing-machine  and  other  instruments  of  domestic  labor 
kept  for  actual  use ;  the  necessary  i)rovisions  and  fuel  for  the 
use  of  the  family  for  six  months ;  the  proper  tools,  instruments 
or  books  of  the  debtor,  if  a  farmer,  mechanic,  surveyor,  clergy- 
man, lawyer,  physician,  teacher,  or  professor;  if  the  debtor  is 
a  physician,  public  officer,  farmer,  teamster,  or  other  laborer, 
a  team  consisting  of  not  more  than  two  horses  or  mules,  or 
two  yoke  of  cattle,  and  the  wagon  or  other  vehicle,  with  t\vi 
proper  harness  or  tackle,  by  the  use  of  which  he  habitually 
earns  his  living,  otherwise  one  horse;  if  the  debtor  be  a  printer, 
there  shall  also  be  exempt  a  printing-press  and  the  types,  fur- 
niture and  material  necessary  for  tlie  use  of  such  j^rinting-press 
and  a  newspaper  office  connected  therewith,  not  to  exceed  in 
all  the  value  of  twelve  hundred  dollars;  poultry  to  the  value 
of  fifty  dollars;  and  the  same  to  any  woman,  whether  the  head 
of  a  family  or  not ;  and  if  the  debtor  is  a  seamstress,  one  sewing- 
machine.""^ 

Pension  money  received  by  a  resident  of  the  state  from  the 
United  States,  whether  |:)€nsioner  is  the  head  of  a  family  or  not, 
is  exempt.'*^ 

The  earnings  of  a  debtor,  a  resident  of  the  state  and  the 
head  of  a  family,  for  his  personal  services  or  those  of  his 
family,  at  any  time  within  90  days  next  preceding  the  levy, 
are  exempt  from  liability  for  debt.-**'* 

The  word  "  family  "  does  not  include  strangers  or  boarders 
lodging  with  the  family.-''^ 

An  unmarried  person,  not  the  head  of  a  family,  and  nonresi- 
dents, may  hold  exempt  their  own  ordinary  wearing  apparel 
and  trunk  necessary  to  contain  same.^"^ 

288  Code,  Iowa,  Sec.  4008.  201  Code,   Iowa,  Sec.  4012. 

2«9  Code,  Iowa,  Sec.  4009.  292  Code,  Iowa,  Sec.  4013. 

2»o  Code.  Iowa,  Sec.  401 1. 


EXEMPTIONS.  473 

Where  debtor  is  the  head  of  a  family  and  has  started  to  leave 
the  state,  he  can  hold  exempt,  the  ordinary  wearing  apparel 
of  himself  and  family  and  such  other  property  as  he  may  select 
to  the  value  of  $75.  Any  person  coming  into  the  state  with 
intention  of  remaining  is  considered  a  resident.^'"*^ 

Failure  to  claim  exemption  does  not  waive  same  unless  there 
is  a  failure  to  claim  when  it  is  required  in  writing  by  the  officer 
about  to  make  the  levy.'"* 

The  proceeds  of  an  endowment  policy  payable  to  assured 
on  attaining  a  certain  age  is  exempt ;  indemnity  under  an  acci- 
dent policy  is  exempt  to  the  assured,  or  in  case  of  death,  to  the 
husband  or  wife  and  children;  the  avails  of  such  policies  of  life 
or  accident  insurance,  not  in  excess  of  $50,  payable  to  the  sur- 
viving widow,  are  exempt  from  liability  for  debts  of  such  bene- 
ficiary contracted  prior  to  the  death  of  the  assured. '''"'^ 

The  arms  and  equipments  of  members  of  the  national  guard 
are  exempt.*'^® 

The  avails  of  any  life  or  accident  insurance  in  a  mutual  aid 
or  benevolent  society,  upon  the  death  or  disability  of  any  mem- 
ber, are  not  subject  to  debts  of  deceased  except  by  special 
contract ;  damages  recovered  for  death  by  wrongful  act,  if 
deceased  leaves  a  husband,  wife,  child  or  parent,  are  not  liable 
for  payment  of  debts. ""^ 

Exempt  personal  property  of  deceased,  when  there  is  a 
widdw,  after  being  in\-cntoried  and  appraised,  is  set  apart  to 
widow  and  is  exempt  in  her  hands.'"'' 

Any  money  judgment  rendered  in  replevin  proceedings  for 
exempted  property  is  to  the  same  extent  exempt  as  the  prop- 
erty.'"" 

Kansas. —  A  homestead  to  the  extent  of  160  acres  of  farm- 
ing land,  or  of  one  acre  within  an  incorporated  town,  or  city, 
occupied  as  a  residence  by  the  family  <if  the  owner,  together 
with  improvements  thereon,  is  exempt  fmni  jjrocess;  it  can 
not  be  alienated  without  the  joint  consent  of  husband  and 
wife,  where  the  relation  exists.     No  property  is  exempt  from 

2"''  Code.   Towa.    Sec.  4014.  ^nn  Cnric,  Tr)\va.  Sec.    2209. 

2"*  Code,   Iowa,   Sec.   4017.  207  (^ode.  Towa,  Sec.   3313. 

^ff' Code,   Iowa,   Sec.    1H05;    lu   re  ^ns  (^^de,  Iowa,  Sec.  3312. 

Lanpe.  gr  Fed.  Rep.  3f)i,  i  Am.  B.  ^sn  Code.  Icwa.  Sec.  4181. 
R.  i8q. 


474  1-^^^'    '^^^    PROCEEDINGS    IN    BANKRUPTCY. 

sale  for  taxes,  or  from  purcliase  money  for  said  premises  for 
improvements  thereon.  A  lien  thereon  may  be  given  by  con- 
sent of  both  husband  and  wife."'"'' 

Homestead  is  exempt  from  distribution.'*"^ 

Every  person  residing  in  the  state,  and  being  the  head  of  a 
family,  is  entitled  to  the  following  exemptions:  The  family 
bible,  school  books  and  family  library ;  family  pictures ;  musical 
instruments  used  by  the  family ;  a  pew  in  a  church ;  a  lot  in  a 
burying-ground ;  wearing  apparel  of  himself  and  family ;  beds, 
bedsteads  and  l)edding  used  by  hiinself  and  family ;  one  cooking 
stove  and  appendages,  all  other  cooking  utensils  and  all  other 
stoves  and  appendages  necessary  for  the  use  of  himself  and 
family;  one  sewing-machine,  all  spinning-wheels  and  looms, 
and  all  other  implements  of  industry  and  all  other  household 
furniture  not  herein  enumerated,  not  exceeding  in  value  $500 ; 
two  cows,  ten  hogs,  one  yoke  oxen,  one  horse  or  mule,  or  in 
lieu  thereof  a  span  of  horses  or  mules ;  20  sheep  and  the  wool 
from  the  same,  either  in  the  raw  material  or  manufactured 
into  yarn  or  cloth ;  the  necessary  food  for  stock  mentioned 
above  for  one  year ;  one  wagon,  cart  or  dray ;  two  plows,  one 
drag  and  other  farming  utensils,  including  harness  and  tackle 
for  teams,  not  exceeding  in  value  $300 ;  the  grain,  meat,  vege- 
tables, groceries  and  other  provisi(Mis  on  hand,  necessary  for 
the  support  of  the  debtor  and  his  family  for  one  year,  and  also 
all  the  fuel  on  hand  for  one  year ;  the  necessary  tools  and  im- 
plements of  any  mechanic,  minor  or  other  person,  used  and 
kept  for  the  purpose  of  carrying  on  his  trade  or  business,  and 
in  addition  thereto  stock  in  trade,  not  exceeding  $400  in  value; 
the  library,  implements  and  office  furniture  of  any  professional 
man.^"^ 

The  earnings  of  a  debtor  resident  of  the  state  for  his  per- 
sonal services  at  any  time  within  three  months  next  preceding 
the  issuing  of  process  is  exempt,  w'hen  it  appears  that  such 
earnings  are  necessary  in  whole,  or  part,  for  the  support  of  a 
family,  provided  the  debtor  notifies  the  plaintiff  in  writing  at 
the  time  of  filing  the  affidavit."''^ 

^"^  Const.,  Kan.,  Art.  XV.  Sec.  9;  II,  Chap.  lOQ.  Sec.  i,  p.  558.  et  scq. 

Gen.  Stat.,  Kan.,  1897.  Vol.  II,  s^^  Gen.  Stat.,  Kan..  1897,  Vol.  II, 

Chap.  118,  Sec.  i,  p.  608.  Chap.  118,  Sec.  3.  p.  608. 

301  Gen.  Stat.,  Kan.,  1897,  Vol.  ^o.f  Qen.  Stat.,  Kan.,  1897,  Vol.  II. 


EXEMPTIONS.  475 

The  following-  property  of  any  person  residing  in  the  state 
not  the  head  of  a  family  is  exempt :  Wearing  apparel,  pew  in 
a  church,  and  a  lot  in  a  burying-ground ;  the  necessary  tools 
and  instruments  of  any  mechanic,  miner  or  other  person,  used 
and  kept  for  the  purpose  of  carrying  on  his  trade  or  business, 
and  in  addition  thereto  stock  in  trade  as  provided  by  law,  the 
library,  implements  and  office  furniture  of  any  professional 
man.'°* 

There  is  no  exemption  as  against  the  wages  of  clerk,  me- 
chanic, laborer  or  sen^ant.^**^ 

Money  received  by  a  debtor  as  a  pensioner  of  the  United 
States  w^ithin  three  months  next  preceding  issuing  of  process 
when  it  appears  that  such  money  is  necessary  for  the  support  in 
whole,  or  part,  of  debtor's  family.^"*^ 

It  is  unlawful  for  either  husband  or  wiie  to  create  a  lien  by 
chattel  mortgage,  or  otherwise,  on  exempted  personal  property 
without  the  joint  consent  of  both ;  this  not  to  apply  to  mort- 
gages or  liens  existing  on  personal  property  in  force  May  25, 
1889.'"'' 

Kentucky. —  In  addition  to  personal  property  exempted  by 
law,  so  much  land,  including  dwelling-house  and  appurte- 
nances, not  exceeding  in  value  $1,000.  owned  by  debtors  who 
are  actual  bona  fide  housekeepers  with  a  family,  resident  in  the 
commonwealth,  is  exempt  from  process  for  debts  created  since 
June  I,  1866,  except  to  foreclose  a  mortgage  given  by  the 
owner  of  a  homestead  or  for  purchase  money  therefor;  this 
exemption  not  to  apply  to  sales  under  process  if  the  debt 
existed  prior  to  the  purchase  of  tlie  land,  or  for  the  erectio-t 
of  the   improvements  thereon.'"'" 

No  mortgage,  release.  r)r  waiver  of  such  exemption  is  \alid 
unless  the  same  is  in  writing,  subscribed  by  defendant  and 
his  wife  and  acknowledged  and  recorded  in  the  same  manner 
as  conveyances  of  land,  and  such   exemption  continiK-s  after 

Chap.  ri8,  Sec.  4,  p.  610;  Gen.  Stat.,  •''"'■•  Gen.  Stat.,  Kan.,  1897.  Vol.  II. 

Kan.,  1897,  Vol.  II,  Oiap,  95,  Sees.  Giap.    118,   Sec.  8,  p.  612. 

508,    509,   p.    235.  -""'^  Gen.  Stat.,  Kan.,  1897,  Vol.  IT, 

30*  Gen.  Stat.,  Kan.,  1897,  Vol.  II,  Chap,  118,   Sees.  8  and  9,  p.  612. 

Chap.  118,  Sec.  5,  p.  611.  ^"^  Ky.    Stat.,    Sec.    1702;    In    re 

30S  Gen.  Stat,  Kan.,  1897.  Vol.  IT,  rnrinichael,    108    Fed.    Rep.    789,    5 

Chap.  T18.  .Sec.  7,  p.  6ti.  Am.  P..  R.  551,  3  N.  R.  N.  404. 


476  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

the  death  of  the  debtor  for  the  benefit  of  the  widow  and 
children,  but  is  estimated  in  allotting  dower.'"*" 

A  person  with  a  family  resident  in  this  state  has  exempt 
from  execution,  attachment,  distress  for  rent  or  fee-bill, 
two  beasts,  or  one  work  beast  and  one  yoke  of  oxen,  two 
plows  and  gear,  one  wagon  and  set  of  gear,  or  cart  or  dray, 
two  axes,  three  hoes,  one  spade,  one  shovel,  two  cows  and 
calves,  bed,  bedding,  and  furniture  sufficient  for  family  use, 
one  loom,  spinning-wheel  and  pair  of  cards,  all  the  spun 
yarn  and  manufactured  cloth,  manufactured  by  the  family 
necessary  for  family  use,  carpeting  for  all  family  rooms  in 
use,  one  table,  books  not  to  exceed  $50  in  value,  two  saddles 
and  appendages,  two  bridles,  six  chairs,  or  so  many  as  do  not 
exceed  $10  in  value,  one  cradle,  all  poultry  on  hand,  ten 
head  sheep  not  to  exceed  $25  in  value,  wearing  apparel, 
sufificient  provisions,  including  breadstuff  and  anirftal  food,  to 
sustain  the  family  for  one  year ;  if  not  on  hand,  other  per- 
sonal property,  wages,  money  or  growing  crop  not  to  exceed 
in  value  $40  for  each  member  of  the  family,  provender  suit- 
able for  live  stock,  if  there  is  any,  not  to  exceed  in  value 
$70;  if  such  provender  is  not  on  hand,  such  other  ])roperty 
as  shall  not  exceed  such  sum  in  value;  washing  apparatus 
not  to  exceed  in  value  $50,  one  sewing-machine,  all  family 
portraits  and  pictures,  one  stove  and  appendages  and  other 
cooking  utensils  not  exceeding  in  value  $25.'''^*'  The  work 
beast  must  not  exceed  in  value  $150,  a  cow  and  calf  $60.''"  A 
mechanic's  tools  to  the  value  of  $100  are  exempt,  but  he  is 
allowed  only  one  work  beast  if  this  exemption  is  claimed.^" 

The  libraries  of  ministers,  the  professional  libraries  of 
attorneys,  the  professional  libraries  and  instruments  of  physi- 
cians and  surgeons,  not  to  exceed  the  value  of  $500,  are 
exempt,  but  such  persons  shall  be  entitled  to  only  one  work 
beast  and  no  wagon,  cart  or  dray.^^"* 

Wages  not  to  exceed  $50  are  exempt,  but  the  exemption  of 
$50  not  to  apply  to  debts  for  food,  raiment  (fuel,  medicine) 
or  house-rent  for  the  family.^" 

308  Ky.  Stat.,  Sec.  1706.  '"-Ky.  Stat.,  Sec.  1699. 

310  Ky.  Stat.,  Sec.  1697.  3i.-)  Ky.  Stat..  Sec.  1700. 

'"Ky.  Stat.,  Sec.  1698.  3i4  Ky.  Stat..  Sec.  1701. 


EXEMPTIONS.  477 

\\^ages  earned  out  of  the  state  and  payable  out  of  the 
state  are  exempt  where  the  cause  of  action  arose  out  of  the 
state,  and  it  is  the  duty  of  the  garnishee  in  such  cases  to 
plead  such  exemption  unless  the  defendant  is  actually  served 
with   process.^^^ 

Louisiana. —  The  homestead,  bona  Hdc,  owned  and  occu- 
pied by  the  debtor,  consisting  of  lands  not  exceeding  i6o 
acres,  buildings  and  appurtenances,  whether  rural  or  urban, 
of  every  head  of  a  family  or  person  having  a  person  or  per- 
sons dependent  on  him  or  her  for  support.  Also  two  work 
horses,  one  wagon  or  cart,  one  yoke  of  oxen,  two  cows  and 
calves,  25  head  of  hogs  or  1,000  pounds  bacon  or  its  equiv- 
alent in  pork,  whether  these  exempted  objects  be  attached  to 
homestead  or  not,  and  on  a  farm  the  necessary  corn  or  fodder 
for  tlie  current  year  and  the  necessary  farming  implements. 
to  the  value  of  2,000  are  exempt  from  process.  In  case  the 
homestead  exceeds  $2,000  in  value,  the  beneficiary  is  entitled 
to  that  sum  when  sold  under  legal  process  for  more  than  said 
sum.  Xo  husband  can  have  the  l)enefit  of  a  homestead 
whose  wife  owns  and  is  in  the  actual  enjoyment  of  property 
to  the  amount  of  $2,000.  The  benefit  of  the  above  exeni])- 
tions  may  be  claimed  by  the  surviving  spouse  or  minor  chil- 
dren of  a  deceased  Ijcneficiary.''*^" 

Rights  to  homesteads  or  exemptions  under  laws,  contracts, 
or  obligations  existing  at  the  time  of  the  adoption  of  the 
constitution  of  1898  are.  not  affected  by  its  adoption  or  laws 
passed  in  ])ursuance  thereof. ''^^ 

The  exem])tii)ns  jjroxidcd  fnr  in  the  constitution  of  1898 
do  not  ai)ply  to  tlue  f(jllowing  debts:  b'or  the  purchase  price 
of  property,  for  labor,  money  and  material  furnished  for 
building,  repairing,  or  ini])roving  homesteads;  for  liabilities 
incurred  by  any  public  officer  or  liilmiary.  or  attornt y  at  law. 
for  money  collected  or  received  on  deposit;  lor  taxes  or  as- 
sessments; for  rent  which  bears  a  privilege  upon  said  ])r()perty. 
No  court  or  ministerial  officer  of  the  state  shall  enforce  any 
process    against    ])rr)pc'rty    exempt    as    homestead    except    the 

"5Ky.  Stat.,  Sec.   i/OKi.  •"'Const..   La.,   i8(;8,   Art.  245. 

3i«  Const.,  La.,   i8q«.   Art,  244. 


478  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

debts  above  mentioned,  unless  the  property  exempted  exceeds 
$2,000  in   value. •'^'* 

Homestead  may  be  sold,  but  no  sale  shall  impair  the  rights 
of  creditors;  homestead  may  be  waived,  the  wife  joining  if 
she  be  not  separated  "a  mcnsa  et  thoro";  a  written  waiver 
must  be  recorded  in  the  office  of  the  recorder  of  mortgages 
of  beneficiary's  parish.  The  waiver  may  be  general  or 
special,  and  has  effect  from  the  time  of  record.""" 

The  articles  of  the  constitution  of  1898  relating  to  home- 
stead and  exemption  take  effect  January  i,  1899.  In  the 
parish  of  Orleans,  the  homestead  to  be  valid  must  be  re- 
corded.-'*-*'^ 

Maine. —  A  lot  of  land,  dwelling-house  and  out-buildings 
thereon,  the  property  of  a  householder  in  actual  possession 
and  not  the  owner  of  an  exempted  lot  purchased  from  the 
state  are  exempt  from  process  as  provided  by  law.^^^ 

The  householder  must  have  his  claim  for  exemption  re- 
corded in  the  registry  with  a  description  of  homestead,  and 
so  much  thereof  as  does  not  exceed  $500  in  value  is  exempt 
from  debts  subsequently  contracted.'^" 

His  widow  and  children  may  occupy  during  widowhood 
and  minority;  the  homestead  is  not  exempt  from  mechanics' 
liens.^-^ 

The  following  personal  property  is  exempt  from  attach- 
ment and  execution :  First,  The  debtor's  wearing  a])parel, 
household  furniture  necessary  for  himself,  wife  and  children, 
not  exceeding  $100  in  value,  and  one  bed,  bedstead  and  neces- 
sary bedding  for  every  two  such  persons.  Second,  All  family 
portraits,  all  bibles  and  schoolbooks  in  actual  use  in  the 
family,  one  copy  of  the  statutes  of  the  state,  and  a  library  not 
exceeding  $150  in  value.  Third,  All  his  interest  in  one  pew 
in  a  meeting-house  where  he  and  his  family  statedly  worship. 
Fourth,  One  cooking-stove,  and  all  iron  stoves  used  exclu- 
sively for  warming  buildings;  charcoal,  and  not  exceeding 
twelve  cords  of  wood  conveyed  to  his  house  for  the-  use  of 

318  Const.,  La.,  1898,  Art.  245.  322  Rgy.  Stat.,  Me.,  1883,  Chap.  81, 

3"  Const.,  La.,  1898,  Art.   246.  Sec.   64,  p.  684. 

320  Const,  La.,   1898,  Art.  247.  32.3  Rev.    Stat.,    Me.,    1883     Chap. 

321  Rev.  Stat.,  Me.,  1883,  Chap.  81,  81,  Sec.  66,  p.  684. 
Sec.  63,   p.   684. 


EXEMPTIONS.  479 

himself  and  family;  all  anthracite  coal,  not  exceeding  five 
tons ;  all  bituminous  coal,  not  exceeding  fifty  bushels ;  and  ten 
dollars'  worth  of  lumber,  wood  or  bark.  Fifth,  All  produce  of 
farms  until  harvested;  one  barrel  of  flour;  corn  and  grain 
necessary  for  himself  and  family,  not  exceeding  thirty  bushels; 
all  potatoes  raised  or  purchased  for  himself  and  family;  and 
all  flax  raised  on  a  half  acre  of  land  and  all  articles  manu- 
factured therefrom  for  the  use  of  himself  and  family.  Sixth, 
The  tools  necessary  for  his  trade  or  occupation,  and  material 
and  stock  designed  and  procured  by  him  and  necessary  for 
carrying  on  his  trade  or  business,  and  intended  to  be  used 
or  wrought  therein,  not  exceeding  $50  in  value;  and  one 
sewing-machine,  not  exceeding  $100  in  value,  for  actual  use 
by  himself  or  family.  Sci'cnth,  One  pair  of  working  cattle,  or, 
instead  thereof,  one  pair  of  mules  or  one  or  two  horses,  not 
exceeding  in  value  $300.  and  a  sufficient  quantity  of  hay  to 
keep  them  through  the  winter  season.  If  he  has  more  than 
one  pair  of  working  cattle,  or  more  than  one  pair  of  mules,  or 
if  the  two  horses  exceed  in  value  $30.  he  may  elect  which  ])air 
of  cattle  or  mules  or  which  horse  shall  be  exempted.  If  he  has 
a  pair  of  mules  or  one  or  two  horses  so  exempt,  he  may  also 
have  exempt  for  each  of  said  horses  or  mules  one  harness,  not 
exceeding  $20  in  value,  and  one  horse-sled,  not  exceeding  the 
same  value;  but  if  he  has  at  the  same  time  an  ox-sled,  he  may 
elect  which  sled  shall  be  exempt.  Eighth,  Domestic  fowl  not 
exceeding  $50  in  value;  two  swine,  one  cow,  and  one  heifer 
under  three  years  old.  or  if  he  has  no  oxen,  horse  or  mule, 
two  cows,  and  he  may  elect  the  cow  or  cows  and  heitcr  if  he 
has  more  than  are  exempt,  ten  sheep  and  the  wool  from  them, 
and  the  lambs  raised  from  them  until  they  are  one  year  old, 
and  a  sufiicient  rpiantity  of  hay  to  keep  said  cattle,  sheep  and 
lambs  through  tlie  winter  season.  Ninth,  One  plow,  one  cart 
or  truck-wagon,  or  express  wagon,  one  harrow,  one  yoke 
with  bows,  ring  and  staple,  two  chains,  one  ox-sled  and  one 
mowing-machine.  Tenth,  One  boat,  not  exceeding  two  tons 
burthen,  usually  employefl  in  the  fishing  business,  belonging 
wholly  to  an  inhabitant  of  this  state.^" 

"4  Stat,  Me.,  1885-1895.  Free- 
man's Supp.,  Chap.  81,  Sec.  62,  p. 
434. 


480  LAW     AN1>    l'Rl)Ci:i-:i)IN(;S    in     HANKRII'TCY. 

Two  shares  of  each  minor  shareholder  in  loan  and  build- 
ing associations   are   exempt."'*'' 

Money  due  on  life  and  accident  insurance  policies  is  exempt 
from  the  claims  of  creditors  during  the  life  of  the  assured 
when  tiie  annual  premium  does  not  exceed  $150  per  year; 
when  it  exceeds  that  sum  and  the  premium  is  paid  by  the 
debtor,  his  creditors  have  a  lien  on  the  policies  for  such  sum 
over  $150  per  year  as  the  debtor  has  paid  for  two  years,  subject 
to  any  pledge  or  assignment  made  in  good  faith. ''^'' 

Benefits  provided  for  by  life  and  casualty  insurance  com- 
panies organized  on  the  assessment  plan,  are  not  subject  to 
debts  of  a  policy  or  certificate-holder,  or  of  any  beneficiary 
named  therein. ^"^ 

The  property  of  public  cemetery  corporations  and  the  shares 
of  stock  therein  are  exempt  from  attachment.^"^ 

Lands  of  not  more  than  one  fourth  of  an  acre  recorded  and 
appropriated  by  individuals  for  family  burying-ground  are 
exempt   from   attachment   and   execution. ^^^ 

Lots  in  public  or  private  cemeteries  are  exempt  from 
process.^^" 

Maryland. —  One  hundred  dollars'  worth  of  property  is 
exempt  from  execution  issued  on  judgments,  except  on  judg- 
ments for  breach  of  promise  to  marry  or  for  seduction.^^^ 

Each  defendant  in  execution  may  select  property  as  exempt 
to  value  of  $100.^^^ 

All  wearing  apparel,  mechanical  text-books  and  books  of 
professional  men,  tools  of  mechanics,  and  all  tools  or  other 
mechanical  instruments  or  appliances,  moved  or  worked  by 
hand  or  foot,  necessary  to  the  practice  of  any  trade  or  profes- 
sion and  used  in  the  practice  thereof,  are  exempt  from  execu- 
tion, in  addition  to  $100;  but  this  section  does  not  apply  to 


325  Stat.,     Me.,     1885-1895,     Free-  =»^9  Rev.  Stat.,  Me.,  1883,  Chap.  15, 
man's  Supp.,  Chap.  47,  Sec.   150,  p.  Sec.  7,  p.  227. 

284  •^•''"  Rev.  Stat,  Me.,  1883,  Chap.  15, 

326  Rev.    Stat.,    Me.,    1883,    Chap.  Sec.  8,  p.  22-7. 

49,  Sec.  94,  p.  461.  331  Pub.  Gen.  L.,  Md.,   1888.  Art. 

327  Stat.,     Me.,     1885-1895,     Free-  83,  Sec.  8,  p.  1272;  In  re  Beanchamp, 
man's  Supp.,  Chap.  49,  Sec.  9,  p.  320.  loi  Fed.  Rep.  106,  4  Am.  P..  R.  151. 

•■fas  Rev.  Stat.,  Me.,  1883,  Chap.  55,  332  p^b    Gen.  L.,  Md.,   1888,  Art. 

Sec.   II,  p.  506.  83,  Sec.  9,  P-  1272. 


EXEMPTIONS.  481 

any  books,  tools,  mechanical  instruments  kept  for  sale  or 
barter.^^^ 

The  preceding  sections  relating  to  exemptions  do  not  im- 
pair the  lien  of  any  vendor  for  the  purchase  money  of  land, 
nor  of  any  mortgagee,  nor  of  any  mechanic  or  other  person 
for  any  debt  contracted  for  or  in  aid  of  the  erection  of  any 
building,  nor  shall  they  apply  to  any  levy  on  property  for 
nonpayment  of  taxes.^^* 

Exemptions  apply  only  to  actual  bona  fide  residents  of  the 
state.^^^     Claim  for  exemption  may  be  waived.^'"' 

The  following  property  is  exempt  from  distress  for  rent : 
Everv  spinning-wheel,  loom,  sewing-machine,  stove,  piano, 
organ,  or  other  musical  instrument  rented,  hired  or  loaned  to 
the  tenant,  and  every  horse,  carriage  and  harness,  whip  and 
robe,  saddle  and  bridle,  not  the  property  of  the  tenant,  in 
any  livery  stable,  or  which  may  be  stored  wnth  any  keeper  of 
any  livery  stable,  or  in  any  other  place,  outhouse  or  barn  of 
the  tenant ;  and  all  property  of  any  boarder  or  sojourner  at 
any  hotel,  tavern,  public  or  private  boarding-house,  and  any 
vehicle  not  the  property  of  the  tenant  in  any  shop  for  repairs.^^^ 

Massachusetts.^''* —  Every  householder  having  a  family 
is  entitled  to  an  estate  of  homestead  to  the  value  of  $800  in 
the  farm  lot  of  land  and  the  buildings  thereon  owned  or 
rightly  possessed  by  lease  or  otherwise,  and  occupied  by  him 
as  a  residence;  such  estate  is  exempt  from  process  and  from 
the  laws  of  conveyance,  descent  and  devise,  except  as  pro- 
vided by  law.'"'" 

To  acquire  such  estate  it  must  be  set  forth  in  the  deed  by 
which  the  j)rf»perty  is  acfjuircd,  tliat  it  is  to  be  held  as  liome- 
'^tead  ;  homestead  may  be  created  in  proj)erty  already  acquired 
by  a  declaration  to  that  effect,  duly  executed  and  recorded  in 

»"'3  Pub.   Gen.   L.,  Md.,    1888,  Art.           338  7^^    exemption    laws    of    tliis 

83,  Sec.  II,  p.  1272.  state  are  treated  in  In  re  CoIIcr,  iii 

a''^  Pub.  Gen.  L.,  Md.,    1888,   .\rt.       Fed.   Rep.    503.    7   Am.    B.   R.    131  ; 

83,  Sec.  12,  p.  1273.  In  re  And(T'^f)n,   no  Fed.  Rep.   141, 

•■»'"■•  Pub.  Gen.  L.,  Md.,  1888,  Art.      6  Am.   B.   R.  555:   /«   re  Turnbnll, 

83,  Sec.   13.  p.  1273.  106  Fed.  Rep.  667.  5  Am.  B.  R.  549. 

•■«■■"■.  Pub.   Gen.   L..  Md.,   1888,   Art.           •''.•ji.  Rev.   Laws.   Mass.   1902,  Chap. 

83,  Sec.  14.  p.  1273.  1.31,  Sec.   i,  p.   1261. 

3"  Pub.  Gen.  T...  Md..    1888.  Art. 
53.  Sec.  17.  p.  897. 


482  LAW    AND    PROCEEDINGS    IN    BANKRUTTCY. 

the  registry  for  deeds  l\)r  the  county  or  district  where  the 
property  is  situated ;  the  acquisition  of  a  new  estate  of  home- 
stead defeats  any  such  estate  previously  existing.^*" 

Rights  of  homestead  under  former  laws  are  saved ;  no  new 
declaration  necessary ;  no  person  can  hold  property  exempted 
as  homestead  to  the  value  of  more  than  $8oo."'" 

The  homestead  estate  is  not  exempt  from  levy  for  taxes, 
nor  from  levy  for  a  debt  contracted  for  the  purchase  price 
thereof,  nor  for  a  debt  contracted  before  declaration  of  home- 
stead was  recorded,  nor  a  debt  contracted  before  the  home- 
stead was  acquired ;  buildings  on  land  not  owned  by  debtor 
are  liable  for  the  ground  rent.'*'^ 

No  estate  of  homestead  shall  afifect  a  mortgage,  lien  or 
other   incumbrance   previously   existing.^*"' 

A  conveyance  of  property  in  which  an  estate  of  homestead 
exists  does  not  release  homestead  rights,  unless  the  wife  of 
the  owner,  if  he  has  one,  joins  in  the  deed  of  conveyance  for 
the  purpose  of  releasing  such  right;  but  a  deed  without  such 
release  passes  all  interest  beyond  the  estate  of  homestead.^** 

The  homestead  estate  continues  after  the  death  of  a  house- 
holder for  the  benefit  of  the  widow  and  minor  children  until 
the  youngest  child  is  21  years  old  and  until  the  marriage  or 
death  of  the  widow.^*^ 

The  widow  and  the  guardian  of  the  minor  children  may 
join  in  the  sale  of  a  homestead  estate,  or  if  there  are  no 
minor  children  the  widow  may  sell,  or  if  there  is  no  widow 
the  guardian  of  the  minor  children  may  sell  it,  and  the 
purchaser  shall  enjoy  the  premises  for  the  time  the  widow 
and  children,  or  either  of  them,  might  have  enjoyed  it  if 
there  liad  been  no  sale.^*" 

Homestead  estate  may  be  set  off  in  case  of  insolvency  of 
owner. ""^^ 

The  following  articles  of  the  debtor  are  exempt  from  execu- 

3*"  Rev.  Laws,   Mass.  1902,  Chap.  •"■'''*  Rev.  Laws,  Mass.   1902,  Chap. 

131,  Sec.  2,  p.  1261.  131,  Sec.  7,  p.   1262. 

3*1  Rev.  Laws,  Mass.  1902,  Chap.  "'*^  Rev.  Laws,   Mass.  1902,  Chap. 

131,  Sec.  3,  p.  1261.  131,  Sec.  8,  p.   1262. 

^*-  Rev.  Laws,  Mass.  1902,  Chap.  ^*^  Rev.  Laws,  Mass.    1902,  Chap. 

131,  Sec.  4,  p.  1261.  131,  Sec.  10,  p.  1262. 

.-,43  ]^ey    Laws,  Mass.  1902,  Chap.  '■*''■  Rev.  Laws,  Mass.  1902,  Chap. 

131,  Sec.  5,  p.   1261.  131,  Sec.  12,  p.  1262. 


EXEMPTIONS.  483 

tion,  viz. :  The  necessary  wearing  apparel  of  himself,  wife 
and  children ;  ^*^  one  bed,  bedstead  and  necessary  bedding 
for  every  two  persons;  one  iron  stove  used  for  warming  the 
dwelling-house,  and  $20  worth  of  fuel  procured  and  designed 
for  the  use  of  the  family ;  $300  worth  of  other  household  fur- 
niture, necessary  for  him  and  his  family ;  bibles,  schoolbooks, 
and  library  used  by  him  and  his  family,  not  exceeding  $50 
in  value;  one  cow,  six  sheep,  one  swine  and  two  tons  of  hay; 
$100  worth  of  tools,  etc.,  necessary  for  carrying  on  his  trade 
or  business;^*®  $100  worth  of  materials  and  stock,  designed 
and  procured  by  him  and  necessary  for  carrying  on  his  trade 
or  business,  and  intended  to  be  used  or  wrought  therein ;  $50 
worth  of  provisions  for  the  family ;  one  family  pew,  which 
may  be  sold  for  the  nonpayment  of  a  tax  thereon ;  the  boat, 
fishing  tackle  and  nets  of  a  fisherman  actually  used  by  him 
in  the  prosecution  of  his  business,  to  the  value  of  $100;  [the 
uniform  of  an  officer  or  soldier  of  the  militia  and  the  arms 
and  accouterments  required  to  be  kept  by  him ;  '^^^J  rights  of 
burial  and  tombs  while  in  use  as  repositories  for  the  dead ; 
one  sewing-machine,  not  exceeding  $100  in  value,  in  actual 
use  by  debtor  or  his  family ;  shares  in  cooperative  associations 
formed  under  chapter  no,  not  exceeding  $20  in  value  in  the 
aggregate.  ■'''^ 

Money  or  other  benefit  [jrovided  by  an  assessment  insurance 
company  is  exemj)t  from  debts  of  certificate-holder  or  any 
beneficiary  therein. •'■"'- 

Savings  institutions  may  receive  on  deposit  funds  in  trust 
for  parks,  shade  trees,  etc.,  and  such  funds  are  exempt  from 
attachment  or  levy."'^''' 

Money  or  benefits  due  from  fraternal  benefit  associations 
are  not  liable  to  process  to  pay  any  debt  of  a  certificate-holder 
or  any  beneficiary  namctl   llierein."''^'* 

Funds  of  any  railroad   relief  society,   associated   with   any 

3*8 /n  re  Tnrnbnll,    106  Fed.   Rep.  son.  no  I'Vd.  Kcp.   141.  6  Am    I',.  R. 

667,  5  Am.  B.  R.  549.  555. 

3«/«    re    Cnller,    in    Fed.    Rep.  3«  Rev.  Laws,   Mass.    1902,   Chap. 

503,  7  Am.  B.  R.  131.  121.  Sec.  18,  p.   TI.S2. 

»'"'  See    Rev.    Laws,    Mass.    1902,  ana  Rev.  Laws,  Mass.    1902,  Chap. 

Chap.  16,  Sec.  85,  p.  300.  113.  Sec.  42,  p.  1078. 

•■">'  Rev.   Laws,   Mass.   1902,   Chap.  ••"■■<  Rev.  Laws,   Mass.   1902,  Chap. 

177.  Sec.  34.  p.   i.:;98:  fn  re  Ander-  119,  Sec.  17.  p.  11 75. 


484  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

railroad  ciirporatit)!!,  are  iu)t  lial)le  to  process  because  of  any 
debt  of  the  railroad  corporation  or  of  any  member  of  the 
society.-'^'' 

The  property  of  a  married  woman  is  exempt  from  execution 
on  the  debts  of  her  husband.''^'' 

W'ag-es  for  personal  labor  or  services  to  the  amount  of  $20 
if  the  claim  is  not  for  necessaries  and  to  the  amount  of  $10  if 
the  claim  is  for  necessaries,  are  not  subject  to  garnishment.^" 

Michigan. —  A  homestead  not  exceeding  40  acres  and  the 
dwelling-house  thereon  and  its  appurtenances,  to  be  selected 
by  the  owner,  not  included  in  any  recorded  town,  etc.,  plat, 
or,  instead  thereof,  at  the  oi)tion  of  the  owner,  a  quantity  of 
land,  not  exceeding  one  lot,  within  a  recorded  town,  etc., 
plat,  and  the  dwelling-house  thereon  and  appurtenances, 
owned  and  occupied  by  a  resident  of  the  state,  is  not  subject 
to  sale  under  process  for  any  debt  growing  out  of  contract 
made  after  July  3,  1848.  The  homestead  is  exempt  as  long 
as  it  is  occupied  by  the  widow  or  minor  children  of  any  de- 
ceased person  who  was  when  living,  entitled  to  a  homestead, 
not  exceeding  $1,500  in  value. ''^^ 

Such  exemption  does  not  extend  to  any  mortgage  lawfully 
obtained  thereon ;  but  a  mortgage  or  other  alienation  by  the 
owner,  if  a  married  man,  is  not  valid  without  the  signature 
of  the  wife  to  the  same,  unless  such  mortgage  is  given  to 
secure  the  payment  of  purchase  money. ^^'^ 

Any  person  owming  and  occupying  any  house  on  land  not 
his  own,  and  claiming  the  same  as  homestead,  is  entitled  to 
same  as  homestead.'"'" 

The  homestead  is  not  exempt  from  process  for  the  collec- 
tion of  taxes.^" 

The  following  property  is  exempt :  All  spinning-wheels, 
weaving-looms,  with  the  apparatus  and  stoves  put  up  and. 
kept  for  use  in  any  dwelling-house;  a  seat,  pew  or  slip,  oc- 

355  Rev.  Laws,   Mass.  1902,  Chap.       death    of    owner,    see    Sees.    7729a- 

I2S,  Sec.  19,  p.  1214.  7729^,   Supplement. 

^fioRev.  Laws,  Mass.  IQ02,  Chap.          s^o  How.  Ann.  Stat.,  Mich.,  1882, 

153,   Sec.  7,  p.   1360.  Sec.    7722. 

357  Rev.  Laws.  Mass.  1902.  Chap.          •''fio  jjow.  Ann.  Stat.,  Mich.,   1882, 

189,  Sec.  27,  p.  1654.  Sec.  7726. 

•■'58  How.   Ann.   Stat.,  Mich..    1882,          "«'  How.   Ann.   Stat.,   Mich.,   1882, 

Sees.    7721    and    7728.  In    case    of      Sec.  7727. 


EXEMPTIONS.  485 

cupied  by  a  person  or  family  in  a  place  of  worship;  ceme- 
teries, tombs  and  burial  rights  in  use  as  repositories  for  the 
dead ;  arms  and  accouterments  required  to  be  kept  by  law ; 
all  wearing  apparel  of  every  person  or  family;  the  library 
and  schoolbooks  of  every  individual  and  family,  not  exceeding 
$150  in  value,  and  all  family  pictures;  to  each  householder 
ten  sheep,  with  their  fleeces  and  the  yarn  or  cloth  manufac- 
tured therefrom ;  two  cows,  five  swine  and  provisions  and 
fuel  for  comfortable  subsistence  of  such  householder  or  family 
for  six  months;  to  each  householder  all  household  goods, 
furniture  and  utensils,  not  exceeding  $250  in  value;  $250 
worth  of  tools,  implements,  materials,  stock,  apparatus,  team 
and  vehicle,  horses,  harness,  or  other  things  to  enable  any 
person  to  carry  on  the  profession,  trade,  occupation  or  busi- 
ness in  which  he  is  wholly  or  principally  engaged;  food  for 
six  months  for  all  exempted  animals;  mortgages,  bills  of  sale 
or  liens  created  on  exempted  property,  except  tools,  etc.,  used 
in  business,  etc.,  are  void  unless  signed  by  wife  of  party,  if 
married,  making  same.  ^ 

The  word  "team"  means  either  one  yoke,  a  horse  or  a  pair 
of  horses,  as  the  case  may  be.- 

All  property  mentioned  in  subdivision  8  of  section  7686  is 
not  exempt  from  process  on  judgments  rendered  for  the  pur- 
chase money,  and  any  sale  of  such  property  after  commence- 
ment of  a  suit  to  recover  the  purchase  price  after  filing  notice 
is  null  and  void  " 

All  sewing-machines  owned  by  individuals  and  kept  for 
actual  use  of  themselves  or  families,  not  exceeding  one  ma- 
chine for  each  family  are  exempt  from  process;  any  chattel 
mortgage,  bill  of  sale  or  lien  created  on  such  machine  is  void 
unless  signed  by  the  wife  of  party  owning  the  same,  if  he  be 
married/ 

The  following  personal  property  only,  not  exceeding  $500 
in  value,  is  exempt  from  sale  under  execution  upon  a  judg- 
ment obtained  in  a  court  of  the  state  for  work,  labor  or  serv- 
ices other  than  professional  services:   Spinning-wheels,  weav- 

>  How.  Ann.  Stat.,  Midi.,  1.SS2,  •''vSiqjp.  How.  Ann.  Stat.,  Mich., 

Sec.  7686.  iSH^-i.Sgo,    Sec.    7716.      See    also 

2  How.  Ann.  Stat.,  Mich.,  1.S82,  How.  Ann.  vStat.  1882,  Sec.  7716. 

Sec.  7715.  *  Pub.  Acts,  Mich.,  1893,  p.  45. 


486  LAW   AM>  rKi)ci:Ki)ixc;s  in  bankruptcy, 

ing-looms,  with  the  apparatus  and  stoves  put  up  and  kept  for 
use  in  any  dwelling-house;  cemeteries,  tombs  and  rights  of 
burial  in  use  as  repositories  for  the  dead ;  the  library  and 
schoolbooks  of  every  individual  and  family  and  all  family 
pictures ;  one  cow,  and  provisions  and  fuel  for  the  comfort- 
able subsistence  of  every  person  and  family  for  one  month, 
and  household  goods,  furniture  and  utensils.' 

Assignees  of  labor  claims  are  entitled  to  all  the  benefits 
thereof.'' 

Fire  engines  and  apparatus  for  extinguishment  of  fires, 
buildings,  ground,  fixtures  and  waterworks  are  exempt.^ 

The  capital  stock  to  the  extent  of  $25  belonging  to  a  stock- 
holder of  a  cooperative  association  who  is  a  householder  and 
has  a  family  is  exempt.* 

When  under  the  rules  of  a  mutual  benefit  association,  money 
becomes  payable  to  a  member  thereof,  such  money  is  free 
from  all  claims  of  creditors  of  such  person.^ 

Shares  held  by  any  member  of  mutual  building  and  loan 
associations  who  is  a  householder  are  exempt  to  the  extent  of 
$1,000,  provided  the  owner  thereof  has  not  a  homestead.* 

Articles  of  machinery,  materials  for  manufacturing,  or 
manufactured  articles,  belonging  to  any  manufacturing  corpo- 
ration, are  free  from  seizure  by  execution  or  distress  for  any 
debts  or  claims  for  rent  or  services,  except  such  execution  or 
claim  is  against  the  corporation.^ 

The  library  of  literary  and  scientific  associations  is  exempt 
from  execution,  except  for  purchase  money;  no  chattel  mort- 
gage or  other  incumbrance  thereon  is  valid.* 

Land  of  private  cemetery  associations  is  exempt.' 

A  married  woman  may  insure  the  life  of  her  husband  for 
her  own  benefit,  and  the  money  payable  under  such  policy  is 

1  Supp.  How.  Ann.  Stat.,  Mich.,  «  Supp.  How.  Ann.  Stat.,  Mich., 
1883-1890,  Sec.  7717^'.  1883-1890,  vSec.  3981A 

2  Supp.  How.  Ann.  Stat.,  Mich.,  "  Supp.  How.  Ann.  Stat.,  Mich., 
1 883- 1 890,  Sec.  7717/  1 883- 1 890,  vSec.  4161^  i. 

8  How.  Ann,  Stat.,    Mich.,  1882,  ^How.  Ann.  Stat,    Mich.,  1882 

Sec.  3089.  vSec.  4421. 

♦How.  Ann.  Stat.,   Mich.,  1882,  » How.  Ann.  Stat.,    Mich.,  1882, 

Sec.  3938.  Sec.  4789. 

5  Supp.  How.  Ann.   Stat.,  Mich., 
1 883- 1 890,  Sec.  3960^  8. 


EXEMTTIOXS.  48/ 

free  from  claims  of  the  representative  of  her  husband  or  his 
creditors,  provided  the  annual  premium  does  not  exceed 
$300. 1 

No  property,  except  such  as  is  exempted  by  the  constitu- 
tion of  the  state,  is  exempt  from  process  upon  a  judgment 
obtained  before  a  justice  of  the  peace  for  work,  labor  or  serv- 
ices done  or  performed  by  any  woman  when  such  sum  does 
not  exceed  $25.^ 

Money  due  a  defendant,  who  is  a  householder  and  the  head 
of  a  family,  for  personal  labor  to  the  extent  of  $25  is  not  sub- 
ject to  garnishment  proceedings.' 

Funds  due  a  certificate-holder  of  fraternal  benefit  associa- 
tion, or  a  beneficiary  named  therein,  are  not  subject  to  debts 
of  such  holder  or  beneficiary.* 

Minnesota. — A  homestead  consisting  of  any  quantity  of 
land,  not  exceeding  80  acres,  and  the  dwelling-house  thereon 
and  appurtenances,  to  be  selected  by  the  owner,  and  not  in- 
cluded in  the  platted  portion  of  any  incorporated  town,  etc., 
or,  instead  thereof,  at  the  option  of  the  owner,  one  lot  of  the 
original  plat  or  any  subdivision  of  such  plat  as  the  same  exists 
at  the  time  of  commencement  of  suit  or  death  under  which 
homestead  is  claimed ;  or,  in  case  the  buildings  occupy  parts 
of  two  or  more  lots  at  the  time  exemption  is  claimed,  a  quan- 
tity of  land  not  exceeding  in  area  one  of  the  original  lots  in 
the  same  block,  if  within  the  corporate  limits  of  any  incorpo- 
rated village,  etc.,  having  over  5,000  inhabitants;  or  one  half 
acre  if  within  any  platted  part  of  any  incorporated  town,  etc., 
having  a  population  of  less  than  5,000,  and  the  dwelling- 
house  and  appurtenances  thereon,  owned  and  occupied  by 
any  resident  of  the  state,  is  exempt  from  process;  the  home- 
stead is  exempt  during  the  time  it  is  occupied  by  the  widow 
or  minor  children  of  any  person  who  was  entitled  to  homestead 
when  living;  whenever  a  married  man  shall  abscond  from  the 
state  or  desert  his  wife  or  minor  children,  they  may  continue 
to  occupy  such  homestead  with  the  same  right  therein  as  any 
owner  of  a   homestead ;  homestead   is  not  subject  to  process 

1  How.  Ann.  Stat.,    Mich.,  1882.  « How.    Ann.     Stat.,    1882,   Sec. 

Sec.  6300.     See  al.so  Sec.  4238.  8032  and  8096. 

»How.  Ann.  Stat.,  1882,  vSec.  *  Pub.  Act,  Mich.,  1893,  p.  193; 
7091. 


488  LAW      AM)    1'K()CEKI)1X<;S    I  \     I?  A  X  KR  l' I'TCY. 

issued  against  the  husband  or  wife,  or  against  the  husband 
and  wife;  they  have  not  the  right  to  convey  the  homestead.' 

Exemptions  do  not  extend  to  any  mortgage  lawfully  ob- 
tained on  homestead;  a  mortgage  or  alienation  of  homestead 
of  a  married  man  without  the  signature  of  the  wife  is  invalid, 
unless  given  for  purchase  money;  exemption  does  not  extend 
to  any  contract  for  a  lien,  or  upon  which  a  lien  would  arise, 
for  work  done  or  material  furnished  in  the  erection  or  repair 
of  a  dwelling  or  other  building  on  homestead  land.'^ 

Any  person  owning  and  occupying  any  house  on  land  not 
his  own  and  claiming  the  same  as  a  homestead  is  entitled  to 
hold  it  exempt." 

The  owner  of  homestead  may  sell,  convey  or  remove  from 
the  same,  and  such  sale,  conveyance  or  removal  shall  not 
render  such  homestead  liable  to  process  against  the  owner; 
nor  shall  any  judgment  or  decree  be  a  lien  on  the  homestead 
except  judgments  on  foreclosure  of  mortgages.* 

Removal  from  and  ceasing  to  occupy  land  as  a  homestead 
for  a  period  of  more  than  six  consecutive  months  forfeits  the 
right  to  claim  such  land  as  homestead,  unless  the  debtor  shall 
file  in  the  office  of  the  register  of  deeds  of  the  county  wherein 
such  land  is  located  a  notice  executed  as  a  deed,  designating 
and  claiming  such  homestead,  and  in  no  case  can  the  right 
exist  for  a  longer  period  than  five  years  from  the  filing  of 
such  notice,  unless  it  has  been  occupied  as  a  residence  during 
some  portion  of  said  period  by  the  debtor  or  his  family.' 

The  following  property  is  exempt  from  process:  Firsts  the 
family  bible.  Second^  family  pictures,  schoolbooks  or  library 
and  musical  instruments  for  the  use  of  family.  Third,  a  seat 
or  pew  in  any  house  or  place  of  public  worship.  Fourth,  a 
lot  in  any  burial  ground.  Fifth,  all  wearing  apparel  of  the 
debtor  and  his  family;  all  beds,  bedsteads  and  bedding  kept 
and  used  by  the  debtor  and  his  family;  all  stoves  and  append- 
ages put  up  or  kept  for  the  use  of  the  debtor  and  his  family; 
all  cooking  utensils;  all  other  household  furniture  not  herein 
enumerated,  not  exceeding  I500  in  value;  all  money  arising 
from  insurance  on  exempted  property.      Sixth,  three  cows, 

1  Minn.  Stat.,  1894,  Sec.  5521.  *Minn.  Stat.,  1894,  Sec.  5528. 

*Minn.  vStat.,  1894.  Sec.  5522.  'Minn.  Stat.,  1894,  Sec.  5529. 

*Minn.  Stat.,  1894,  Sec.  5526. 


EXEMPTIONS.  4«9 

ten  swine,  one  yoke  of  oxen  and  a  horse,  a  span  of  horses  or 
mules,  20  sheep  and  the  wool  from  the  same,  either  raw  or 
manufactured  into  yarn  or  cloth;  the  necessary  food  for  the 
stock  above  mentioned  for  one  year;  provided,  growing,  or 
both  as  debtor  may  choose ;  one  wagon,  cart  or  dray,  one  sleigh, 
two  ploughs,  one  drag  and  other  farming  utensils,  including 
tackle  for  teams,  not  exceeding  $300  in  value.  Seventh,  the 
provisions  for  the  debtor  and  his  family  for  one  year,  either 
provided,  growing,  or  both,  and  fuel  for  one  year.  Eighth, 
one  watch,  the  tools  and  instruments  of  any  mechanic,  miner 
or  other  person,  used  and  kept  for  the  purpose  of  carrying  on 
his  trade,  and  in  addition  thereto  stock  in  trade,  including 
goods  manufactured  in  whole  or  part  by  him,  not  exceeding 
$400  in  value ;  the  library  and  implements  of  any  professional 
man ;  all  which  articles  hereinbefore  intended  to  be  exempt 
are  to  be  chosen  by  the  debtor,  his  agent,  clerk  or  legal 
representative;  in  addition  to  the  articles  enumerated  in  this 
section,  all  the  presses,  stones,  type,  cases  and  other  tools 
and  implements  used  by  any  copartnership  or  any  printer, 
publisher  or  editor,  or  by  persons  hired  by  him  to  use  them, 
not  to  exceed  in  value  the  sum  of  $2,000,  together  with  stock 
in  trade  not  to  exceed  $400  in  value.  Ninth,  one  sewing- 
machine,  one  bicycle,  and  one  typewriting-machine.'  Tenth, 
necessary  seed  grain  for  one  season,  to  be  selected  by  him, 
ncjt.  however,  in  any  case  to  exceed  the  following  kinds 
and  amounts,  viz.:  100  bushels  wheat,  50  bushels  oats,  100 
bushels  potatoes,  10  bushels  corn  and  100  bushels  barley,  and 
binding  material  sufficient  for  use  in  harvesting  the  crop 
raised  from  the  seed  grain  above  specified."  Ele^cenih,  (he 
wages  f)f  any  laboring  man  or  woman,  or  of  his  or  her  minor 
child,  not  exceeding  $25.  due  for  services  rendered  by  liim  or 
them  for  any  person  for  and  (luring  90  days  preceding  the 
issuing  of  process.''     Twelfth,  the  library.   i)hilosophical  and 


1  L.   Minn.,   1897,  p.  6;  amending  Minn.    Stat.,    Sec.    5459;    L.    Minn, 

Minn.    Stat.,    Sec.    5459;  L.    Minn.  1899,  p.  310. 
1899.   p.    19.  •"•See     Minn.      Stat.,     Sec.     5314; 

-L.  Minn.,   1897,  p.   12;  amending  amending   Minn.   Stat.,   Sec.   5459. 


490  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

chemical  or  other  apparatus  used  in  instruction,  belonging  to 
and  in  use  in  any  university,  college,  seminary  of  learning  or 
school  for  instruction  of  youth  in  the  state  indiscriminately 
open  to  the  public*  Thirteenth,  all  moneys  derived  or  re- 
ceived by  any  surviving  wife  or  child  from  any  form  of  life 
insurance  upon  the  life  of  any  deceased  husband  or  father, 
not  exceeding  $10,000  f  the  exemptions  provided  for  and 
embraced  in  subdivisions  6,  7,  8,  9,  10  and  11  extend  only 
to  debtors  having  an  actual  residence  in  the  state. ° 

No  mortgage,  pledge  or  other  incumbrance  of  property 
which  may  be  held  exempt  under  subdivisions  i,  2,  5  and  9 
given  or  made  by  a  married  man  or  woman,  shall  be  valid 
unless  it  be  by  written  instrument  executed  and  acknowledged, 
and  unless  the  husband  and  wife,  if  both  are  living,  concur 
in  and  sign  and  acknowledge  the  same  joint  instrument.^ 

Property  of  cemetery  associations  is  not  liable  to  be  sold 
in  payment  of  debts  of  individual  proprietors,  so  long  as  the 
property  is  appropriated  to  the  use  of  a  cemetery.** 

The  public  property  of  villages  of  over  3,000  inhabitants 
is  exempt  from  process.** 

The  arms  and  equipment  of  members  of  the  national  guard 
are  exempt.^" 

Funds  set  apart  by  benevolent  associations,  to  be  paid  to 
families  of  deceased  members,  are  exempt." 

The  money  or  other  benefit  to  be  paid  by  a  cooperative  life, 
etc.,  association  is  not  liable  to  process  to  pay  debts  of  mem- 
bers.^^* 

Police  and  fire  department  relief  associations  are  not  subject 
to  garnishee  proceedings  to  collect  debts  of  persons  entitled 


*L.  Minn.,  1897,  p.  262;  amending  10  L.  Minn.,  1897,  Chap.  118,  Sec. 

Minn.  Stat.,  Sec.  5459.  98,  p.  227. 

^L.  Minn.,  1897,  p.  620;  amending  "  Minn.    Stat.,    1894,    Sec.    3295. 

Minn.  Stat,  Sec.  5459.  See  also  L.  Minn.  1903,  p.  526. 

«  Minn.  Stat.,  1894,  Sec.  5459.  12  Mjnn.  Stat.,  1894,  Sec.  3312;  L. 

'^  L.  Minn.,  1901,  p.  13.  Minn.,  1901,  p.  249. 

*  Minn.    Stat.,    1894,    Sees.    3107,  See   in   connection   with   5  and   6 

3134.  an  act  approved  April  25,    1895,  L. 

»  Minn.  Stat.,    1894,  Sec.   1416.  Minn.,  1895,  Chap.  175,  p.  392,  429, 

on  subject  of  exemption. 


EXEMPTIONS.  491 

to  assistance  under  the  articles  of  incorporation  or  by-laws 
thereof. '•' 

The  wages  of  any  person,  or  of  his  minor  children,  in  any 
sum  not  exceeding  $25  due  for  services  rendered  during  30 
days  preceding  the  issuing  of  process  are  exempt/* 

The  earnings  of  any  minor  child  of  any  debtor  within  the 
state  are  not  liable  to  attachment,  garnishment,  etc.,  in  any 
action  against  such  debtor,  except  the  debt  is  contracted  for 
the  special  benefit  of  such  minor.^^ 

Wages  due  a  nonresident  of  the  state,  earned  outside  the 
state,  are  entitled  to  the  same  protection  in  the  courts  of  the 
state,  as  are  accorded  to  the  debtor  by  the  laws  of  the  state 
of  his  residence  ;^^  provided,  that  in  no  case  shall  such  non- 
resident be  allowed  a  greater  exemption  than  is  allowed  a 
resident,  if  the  plaintiff  is  a  resident.^' 

The  property  mentioned  in  section  5459  is  not  exempt  from 
process  in  an  action  for  the  purchase  money  for  the  same 
property.  ^^ 

When  exempted  personal  property  is  wrongfully  seized,  any 
judgment  recovered  therefor  is  exempt.^" 

An  estray,  though  an  exempted  animal,  is  not  exempt  from 
sale  under  process  on  a  judgment  for  necessary  food  and 
attention.^" 

Mississippi. —  Every  citizen  of  the  state,  male  or  female, 
being  a  householder  and  having  a  family,  may  hold  exempt 
from  process  the  land  and  l)uildings  owned  and  occupied  as 
a  residence  by  him  or  licr,  not  exceeding  in  (|uantity  \()0 
acres,  nor  in  value,  exclusive  of  improvements  save  as  here- 
inafter provided,  $2,000.^^ 

Every  citizen  of  the  state  being  a  householder  and  having 
a    family   residing   in   a  city,    etc.,    may   hold   exempt    from 


i^Minn.  State.,  1894,  Sec.  5313.  I'L.  Minn,  1901,  p.  572. 

i*Minn.  Stat.,  1894.  Sees.  5314,  '»  Minn.  Stat.,  1894,  Sec.  S460. 

S49I.  See  Sec.  5459  (11).  "Minn.  Stat..  1894,  Sec.  5462. 

i"'  Minn.  Stat.,  1894.  Sec.  5461.  20  Minn.  Stat..  1894.  Sec.  6804. 

See  Sees.  5459  fii)  and  5314.  21  Coje^  Miss.,  1892,  Sec.  1970. 

"»L.  Minn.,  1895,  Chap.  353,  p 
736. 


492  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

process  land  and  buildings  owned  and  occupied  as  a  residence, 
save  as  hereinafter  provided,  not  to  exceed  in  value  $2,000, 
and  personal  property,  to  be  selected  by  him,  not  to  exceed 
in  value  $250,  or  the  articles  specified  as  exempt  to  the  head 
of  a  family." 

Homestead  is  obtained  by  making  a  declaration  thereof, 
acknowledged  or  proved  as  a  deed,  and  deposited  in  the  office 
of  the  clerk  of  the  chancery  court."^ 

The  declaration  for  not  more  than  160  acres  and  not  ex- 
ceeding in  value  $3,000,  or  if  the  homestead  is  in  a  city,  etc., 
not  exceeding  in  value  $3,000,  after  being  filed,  is  notice  and 
binds  claimant,  his  wife  and  creditors  until  nullified,  and 
entitles  him  to  hold  the  same  exempt  to  the  extent  of  such 
value.^* 

Property  shall  not  be  exempt  from  process  when  the  pur- 
chase money  in  whole  or  part  forms  the  debt  upon  which  the 
judgment  is  founded ;  nor  shall  any  property  be  exempt 
from  sale  for  any  labor  done  thereon  or  materials  furnished 
therefor,  nor  when  the  judgment  is  for  labor  performed  or 
upon  a  forfeited  recognizance  or  bail  bond.^^ 

Ceasing  to  reside  on  homestead  renders  it  liable  for  the 
payment  of  debts,  unless  the  removal  therefrom  is  temporary, 
or  by  reason  of  some  casualty  or  necessity,  and  there  is  an 
intention  to  reoccupy.^* 

The  exempt  property,  real  or  personal,  may  be  disposed  of 
by  the  owner,  but  the  disposal  does  not  render  it  liable  to  the 
debts  of  the  owner;  any  debtor  leaving  the  state  may  take 
with  him  personal  property  exempt  from  execution." 

A  conveyance  of  or  incumbrance  upon  the  homestead  of  a 
married  man,  living  with  his  wife,  is  invalid  unless  signed  by 
the  wife.''' 

When  the  wife  owns  the  homestead  and  occupies  the  same 


"Code,  Miss.,  1892,  Sec.  1971.  ^e  Code,  Miss.,  1892,  Sec.  1981. 

23  Code,  Miss.,  1892,  Sec.  1972.  2^  Code,  Miss.,  1892,  Sec.  1982. 

»*Code,  Miss.,  1892,  Sec.  1973.  2«  Code,  Miss.,  1892,  Sec.  1983. 

**  Code,  Miss.,  1892,  Sec.  1980. 


EXEMPTIONS.  493 

with  her  family,  it  is  exempt  from  process  to  the  same  extent 
as  to  any  other  householder  having  a  family.*** 

And  conveyance  of  or  incumbrance  upon  the  wife's  home- 
stead is  not  valid  unless  signed  and  acknowledged  by  the 
owner  and  husband,  if  living  with  his  wife.^" 

Exemptions  as  to  homestead  are  allowed  in  favor  of  resi- 
dents of  the  state  only.^^ 

The  following  personal  property  is  exempt  from  sei/Aire 
under  execution  or  attachment,  to  wit:  First,  the  tools  of  a 
mechanic,  necessary  for  carrying  on  his  trade.  Second,  the 
agricultural  implements  of  a  farmer,  necessary  for  two  male 
laborers.  Third,  the  implements  of  a  laborer,  necessary  in 
his  usual  employment.  Fourth,  the  books  of  a  student,  re- 
quired for  the  completion  of  his  education.  Fifth,  the  wear- 
ing apparel  of  every  person.  Sixth,  the  libraries  of  all  per- 
sons, not  exceeding  $250  in  value:  the  instruments  of  sur- 
geons and  dentists,  not  exceeding  $250  in  value.  Scirnth, 
the  arms  and  accouterments  of  each  person  of  the  militia  of 
the  state.  Fighth.  all  globes,  books  and  maps,  used  by  the 
teachers  of  schools,  academies  and  colleges. 

The  following  property  of  each  head  of  a  family,  to  be 
selected  by  the  debtor :  Two  working-horses  or  mules  and  one 
yoke  of  oxen,  two  cows  and  calves,  20  head  of  hogs,  20  sheep 
or  goats,  all  poultry,  all  colts  under  three  years  old  raised  in 
the  state  by  debtor,  250  bushels  ccjrn,  10  bushels  wheat  or  rice, 
500  lbs.  pork,  bacon  or  other  meat,  100  bushels  cotton  seed, 
one  wagon,  one  l)uggy  or  cart  and  one  set  harness ;  500  bun- 
dles, of  fodder  and  i  .000  lbs.  hay;  40  gal.  sorghum  or  mo- 
lasses; 1,000  stalks  sugar  cane;  one  sugar  mill  and  equip- 
ments, not  exceeding  $150  in  value;  one  bridle  and  saddle, 
and  one  side  saddle;  one  sewing-machine;  household  and 
kitchen  furniture,  not  exceeding  in  value  $200. 

The  following  property  is  exempt  frr)m  garnishment  or 
other  legal  process,  viz. :     The  wages  of  every  laborer  or  per- 

2«>Code,  Miss.,  1892,  Sec.  1984. 
="'Cnde,  Miss.,  1892,  Sec.  1985. 
^^  Code,  Miss.,  1892,  Sec.  1986. 


494  LAW    AND    PROCF-KDINGS    IN    BANKRUPTCY. 

son  working  for  wages,  being  the  head  of  a  family,  to  the 
nmount  of  $ioo.  and  all  other  persons  to  the  amount  of  $20; 
the  jiroceeds  of  insurance  on  exempted  real  or  personal  prop- 
erty and  the  proceeds  of  the  sale  of  such  property."^" 

The  proceeds  of  life  insurance  policies,  to  the  amount  of 
$10,000,  are  exempt  from  liability  for  the  debts  of  the  in- 
sured.''' 

The  proceeds  of  a  life  insurance  policy,  not  exceeding  $5,- 
000.  payable  to  the  executors  or  administrators,  enures  to  the 
heirs  or  legatees  free  from  liability  for  the  debts  of  decedent; 
but  if  the  life  of  the  deceased  be  insured  for  the  benefit  of 
his  heirs  or  legatees  at  the  time  of  his  death  otherwise,  and 
they  collect  the  same,  the  sum  collected  shall  be  deducted 
from  the  $5,000,  and  the  excess  of  the  latter  only  is  exempt.^* 

The  exemptions  of  personal  property  above  enumerated  are 
allowed  in  favor  of  residents  of  the  state  only.^^ 

Damages  recovered  for  death  caused  by  unsafe  machinery, 
etc.,  are  not  subject  to  the  payment  of  debts  or  liabilities  of 
the  deceased.^" 

Missouri."  —  The  liomestead  of  every  housekeeper  or  head 
of  a  family,  consisting  of  a  dwelling-house  and  appurtenances, 
and  the  land  used  in  connection  therewith,  which  is  used  as 
a  homestead,  is,  together  with  the  rents,  issues  and  products 
thereof,  exempt  from  process;  such  homestead  in  the  country 
must  not  exceed  in  quantity  more  than  160  acres,  in  value 
more  than  $1,500;  in  cities  having  a  population  of  40,000  or 
more  the  homestead  must  not  include  more  than  18  square 
rods,  or  exceed  in  value  $3,000;  in  cities  having  a  populaticm 
of  10.000  and  less  than  40.000,  the  homestead  must  include 
not  more  than  30  square  rods  or  exceed  in  value  $1,500;  in 


»2  Code,  Miss.,   1892,  Sec.  1963.  '"'^  The    exemption    laws    of    this 

33  Code,  Miss.,   1892,   Sec.   1964.  state  are  treated  in  In  re  White,  109 

3*  Code,  Miss.,   1892,  Sec.  1965.  Fed.  Rep.  635,  6  Am.  B.  R.  451 ;  In 

35  Code,  Miss.,  1892,  Sec.  1986.  re  Stout,  109  Fed.  Rep.  794,  6  Am. 

3e  Code,  Miss.,  1892,  Sec.  663 ;  as  B.  R.  505. 

amended.  Chap.  86,  L.  Miss.,  1896, 

Sec.  3,  p.  96. 


EXEMPTIONS.  495 

cities  and  incorporated  towns  and  villages  having  a  popula- 
tion less  than  10,000  the  homestead  must  not  include  more 
than  five  acres  or  exceed  in  value  $1,500.  The  husband 
alone  can  not  sell  or  incumber  homestead  property,  but  it 
may  be  done  by  the  joint  act  of  husband  and  wife.^^ 

Personal  property,  the  product  of  a  homestead,  is  exempt 
from  process.^® 

Homestead  vests  in  the  widow  and  children  of  a  deceased 
owner  thereof,  subject  only  to  debts  legally  charged  thereon 
during  the  life  of  the  owner,  until  the  youngest  child  reaches 
majority  and  until  the  death  of  the  widow ;  the  children  have 
the  right  of  joint  occupancy  with  the  widow  until  they  arrive 
at  majority,  and  the  widow  has  said  right  during  her  life  or 
widowhood,  and  upon  her  death  or  remarriage  it  shall  pass 
to  the  heirs  of  the  husband.**' 

Homestead  is  subject  to  process  arising  out  of  causes  of 
action  arising  at  the  time  of  its  acquisition.*^ 

If  another  homestead  is  acquired,  as  provided  in  section 
5441,  the  prior  homestead  is  liable  for  the  debts  of  the  owners, 
but  the  other  homestead  is  not  liable  for  the  causes  of  action 
to  which  the  prior  homestead  would  not  have  been  liable, 
provided  that  such  other  homestead  has  been  acquired  with 
the  consideration  derived  from  sale  of  such  prior  homestead, 
or  with  other  means  not  derived  from  the  property  of  the 
householder  or  head  of  a  family.*" 

The  following  property,  when  owned  by  the  head  of  a 
family,  is  exempt  from  process :  First,  ten  head  of  choice 
hogs,  ten  head  of  choice  sheep  and  the  product  thereof  in 
wool,  yarn  or  cloth,  two  cows  and  calves,  two  plows,  one  ax, 
one  hoe,  one  set  of  plow  gears,  and  all  necessary  farm  imple- 
ments for  the  use  of  one  man.     Second,  two  work  animals 


»8Rev.  Stat.,  Mo.,  1889,  Sec.  5435,  »»  Rev.  Stat.,  Mo.,  1889,  Sec.  5438 

as  amended,  L.  Mo.,  1895,  p.  185.  and  Sec.  5435. 

As  to  exemption  under  R.  S.  of  *"  Rev.  Stat.,  Mo.,  1889,  Sec.  5439; 

Mo.     1899,     Sec.    3162,    see    In    re  as  amended,  L.  Mo.,  1895,  P-  186. 
White,  109  Fed.  Rep.  635,  6  Am.  B.  *^  Rev.  Stat..  Mo..  1889.  Sec.  5441. 

R.  451.  "Rev.  Stat.,  Mo.,  1889,  Sec  5442. 


40(>  I-AW    A\n    PU()tKi:i)INGS    IN    BANKRUPTCY. 

and  $25  worth  of  feed  for  the  stock  above  exempted.  Third, 
spinning-wheels  and  cards,  one  loom  and  apparatus  necessary 
for  manufacturing  cloth  in  a  private  family.  Fourth,  all  the 
spun  yarn,  thread  and  cloth,  manufactured  for  family  use. 
Fifth,  any  quantity  of  hemp,  flax  and  wool,  not  exceeding  25 
lbs.  each.  Sixth,  all  wearing  apparel  of  the  family,  four 
beds,  with  usual  bedding,  and  such  other  kitchen  and  house- 
hold utensils,  not  exceeding  in  value  $100,  as  may  be  necessary 
for  die  family.  Seventh,  the  necessary  tools  and  implements  of 
trade  of  any  mechanic  while  carrying  on  his  trade.  Eighth, 
all  arms  and  equipments  required  by  law  to  be  kept.  Ninth, 
$100  worth  of  provisions  on  hand  for  family  use.  Tenth,  the 
bibles  and  other  books  used  in  a  family,  lettered  grave  stones, 
one  pew.  Eleve7tth,  lawyers,  physicians,  ministers  of  the 
gospel  and  teachers  may  select  such  books  as  are  necessary  to 
their  profession,  in  lieu  of  property  herein  allowed,  and  doctors 
of  medicine  may  select  their  medicines.' 

The  following  property  owned  by  a  person  other  than  the 
head  of  a  family  is  exempt:  Wearing  apparel  and  the  neces- 
sary tools  and  implements  of  trade  of  any  mechanic,  while 
carrying  on  his  trade. ^ 

Public  buildings  and  the  lots  on  which  they  stand,  and  all 
burying-grounds,  are  exempt  from  process.^ 

Public  fire  engines  and  apparatus  are  exempt.* 

Each  head  of  a  family,  at  his  election,  in  lieu  of  property 
mentioned  in  the  first  and  second  subdivisions  of  section 
4903,  may  select  and  hold  exempt  from  process  any  other 
property,  real,  personal  or  mixed,  or  debts  and  wages,  not 
exceeding  $300  in  value. '^ 

The  wife  may  hold  exempt  the  articles  specified  in  the  first, 
second,  third,  fourth,  fifth,  sixth,  ninth  and  tenth  clauses  of 
section  4903,  when  the  husband  has  absconded  or  absented 
himself  from  his  place  of  abode,  or,  in  lieu  of  the  property 
mentioned  in  the  first  and  second  subdivisions  of  section 
4903,  the  property  enumerated  in  section  4906.* 

No  property  is  exempt  from  sale  under  process,  when  the 
debt,  not   exceeding   in   amount  $90,  is  for  personal  services 

'Rev.  Stat,  Mo..  1889.  Sec.  4903.  '^  Rev.    vStat.,    Mo.,     1889,     Sec. 

*  Rev.  Stat.,  Mo.,  1889,  Sec.  4902.      4906. 

« Rev.  Stat.,  Mo.,  1889,  Sec.  4904.  "Rev.    Stat.,    Mo.,    1889,     Sec. 

*  Rev.  Stat.,  Mo.,  1889,  Sec.  4905.      4908. 


EXEMPTIONS. 


497 


rendered  by  a  house  servant  or  common  laborer,  provided  the 
suit  to  recover  the  same  is  instituted  within  six  months  next 
after  the  last  services  have  been  rendered.  ^ 

Wages  due  laborers  or  house  servants,  to  an  amount  not 
exceeding  Sioo  to  each  employee,  for  work  or  labor  performed 
within  six  months,  are  preferred  claims.^ 

Personal  property  is  in  all  cases  subject  to  an  execution  on 
a  judgment  for  its  purchase  price,  except  when  same  has 
been  sold  to  an  innocent  purchaser  for  value  and  without 
notice.^ 

No  property  or  wages,  declared  by  statute  to  be  exempt,  are 
subject  to  attachment,  except  in  the  case  of  a  nonresident 
defendant  or  of  a  defendant  about  to  remove  from  the  state 
with  intent  to  change  his  domicile.^ 

The  money  or  other  aid  provided  or  rendered  by  any  assess- 
ment insurance  company  is  not  subject  to  process  to  pay  any 
debt  or  liability  of  a  policy  or  certificate-holder  therein,  or  of 
any  beneficiary  named  in  such  policy  or  certificate.^ 

Insurance  money  due  a  married  woman  is  exempt." 

MoxTAX.\. — A  homestead  not  exceeding  i6o  acres  used  for 
agricultural  purposes  and  the  dwelling-house  and  appurte- 
nances, to  be  selected  by  the  owner,  and  not  included  in  any 
town,  etc.,  plot,  or,  instead,  land  not  exceeding  one  fourth  of 
an  acre  being  within  a  town,  etc.,  plot,  with  the  dwell- 
ing-house and  appurtenances,  not  exceeding  $2,500  in 
value,  owned  and  occupied  by  a  resident,  is  not  subject  to 
process." 

Such  exemption  does  not  affect  any  laborer's  or  mechanic's 
lien,  or  extend  to  any  mortgage  lawfully  obtained.  The  alien, 
ation  of  or  incumbrance  upon  any  homestead  of  a  married 
man  is  void  unless  wife  joins  in  the  execution  of  the  convey- 
ance; this  exemption  does  not  apply  to  debts  contracted  prior 
to  the  pa.s.sage  of  this  act,** 

'Rev.    Stat..    Mo.,     1889,    Sees.  s  Rev.    Stat..     Mo.,     iS8c>,     Sec. 

4910  and  4912.  5867. 

^Rev.    Stat.,     Mo.,     1889.    Sec.  "Rev.    Stat.,     Mo.,     1889,     Sec. 

4911-  5851  and  5854. 

3  Rev.    Stat.,    Mo.,     1889.     vSec.  ^  Comp.   Stat.,   Mont.,    1887,  i.st 

4914-  Div.,  Sec.  322. 

♦Rev.  Stat.,  Mo,  1889.  vSec.   539.  ''Comp.   Stat.,    Mont.,    1887.1st 

Div.,  Sec.  323. 


408  I-A\V    AXn    rUOCF.KDTNGS    TN    RANKRITTCY. 

A  person  owning  and  occnpying  a  dwelling-honse  on  land 
not  his  own,  rightfully  possessed  by  him  and  claiming  the 
house  as  homestead,  is  entitled  to  hold  it  exempt.' 

Homestead  is  exempt  after  death  of  owner  from  the  pay- 
ment of  his  debts,  when  his  infant  children  survive  him.* 

A  debtor's  homestead  exemption  is  not  affected  by  removal 
or  sale ;  the  act  does  not  relate  to  judgments  or  decrees  for 
the  foreclosure  of  mortgages.'^ 

The  exemptions  contained  in  Chap.  I,  Title  IX,  ist  Div., 
only  apply  to  married  men  or  the  head  of  a  family.* 

Exemptions  are  as  follows:  All  clothing  of  the  debtor  and 
family,  and  chairs,  tables,  desks  and  books,  to  the  value  of 
$200;  also  all  necessary  household,  table  and  kitchen  furni- 
ture, which  includes  every  article  in  use  for  the  comfort  of 
the  debtor  or  his  family,  and  provisions  and  fuel  actually 
provided  for  individual  or  family  use,  sufficient  for  three 
months;  one  sewing-machine,  not  exceeding  the  value  of 
$100,  in  actual  use  by  the  debtor  or  his  family.  Also  one 
horse,  two  cows,  with  their  calves,  two  swine  and  fifty  domes- 
tic fowl.  In  addition  to  the  above  there  is  exempt  to  a  farmer 
his  farming  utensils,  not  exceeding  $600  in  value,  two  oxen, 
or  two  horses  or  mules,  and  their  harness,  two  cows,  one  cart 
or  wagon,  and  food  for  such  stock  for  three  months;  $200 
worth  of  seed,  grain  or  vegetables,  actually  provided  for  the 
purpose  of  sowing  or  planting.  The  proper  tools,  instru- 
ments, or  books  of  any  mechanic,  physician,  dentist,  lawyer 
or  clergyman.  To  a  miner,  his  dwelling,  not  exceeding  in 
value  $500,  and  all  his  tools  and  machinery  necessary  for 
carrying  on  his  avocation,  not  to  exceed  in  value  $500,  and 
also  one  horse,  mule,  or  two  oxen,  and  their  harness,  with 
their  food  for  three  months,  in  case  such  stock  is  used  neces- 
sarily in  connection  with  any  species  of  hoisting  gear  upon 
the  mine.  One  horse,  mule,  or  two  oxen,  vehicle  and  har- 
ness, by  which  the  debtor  habitually  earns  his  living,  and 
one  horse,  with  vehicle  and  harness,  of  physician  or  clergy- 
man, used  in  making  professional  visits,  with  food  for  such 

iComp.   Stat,  Mont.,   1887,1st  » Comp.   Stat.,   Mont,   1887,1st 

Div.,  Sec.  326.  Div.,  Sec.  328. 

2Comp.  Stat.,  Mont,    1887,  ist  <  Comp.  Stat.,  Mont.,    1887,  ist 

Div.,  Sec.  327.  Div.,  Sec.  330. 


EXEMPTIOXS.  499 

stock  for  three  months;  all  arms,  uniforms,  etc.,  required  by 
law  to  be  kept  by  any  person ;  all  property  generally  held  by 
the  county  or  town  for  the  benefit  of  the  county  or  the  public, 
except  as  against  a  vendor's  lien  or  a  mortgage;  the  wages 
of  the  debtor,  earned  at  any  time  within  the  thirty  days  next 
preceding  the  levy,  provided  they  are  necessary  for  the  use  of 
his  family  residing  in  the  state,  supported  wholly  or  in  part 
by  his  labor.  None  but  bona  fide  residents  can  claim  the 
benefits  of  this  section.' 

None  of  the  property  herein  mentioned  is  exempt  from 
attachment  or  execution  for  the  wages  of  any  clerk,  mechanic, 
laborer  or  servant.^ 

Nebraska. — A  homestead,  not  exceeding  in  value  $2,000, 
consisting  of  the  dwelling-house  in  which  claimant  resides 
and  its  appurtenances,  and  the  land  on  which  the  same  is 
situated,  not  exceeding  160  acres,  to  be  selected  by  the  owner, 
and  not  in  any  incorporated  city  or  village,  or  instead  thereof 
a  quantity  of  contiguous  land  not  exceeding  two  lots  within 
any  incorporated  city  or  village,  is  exempt  from  process.^ 

The  homestead  is  subject,  however,  to  process  in  satisfac- 
tion of  judgments  on  debts  secured  by  mechanics',  laborers' 
or  vendors'  liens  upon  the  premises  and  on  debts  secured  by 
mortgage  on  the  premises  executed  by  husband  and  wife  or 
an  unmarried  claimant.^  If  claimant  is  married,  the  home- 
stead may  be  selected  from  the  separate  property  of  the  hus- 
band or  from  the  separate  property  of  the  wife,  with  her  con- 
sent; when  claimant  is  not  married,  but  is  the  head  of  a 
family,  homestead  may  be  selected  from  any  of  his  or  her 
property.''  The  homestead  of  a  married  person  can  not  be 
conveyed  or  encumbered,  unless  the  instrument  by  which  it 
is  conveyed  or  encumbered  is  executed  and  acknowledged  by 
both  husband  and  wife.''  When  homestead  is  sold  under  legal 
|)roceedings,  the  money  paid  to  the  claimant  is  entitled  to  ex- 
emption for  six  months." 

'  Comp.   Stat.,  .Mont.,    1887,  ist  ^  Comp.  Stat.,  Neb.,    1887,  Sec. 

Div.,  vSec.  321.  3257. 

2  Comp.   Stat..  Mont.,    1887,  ist  ''Comp.  Stat.,  Neb.,    1897.  vSec. 

Div.,  Sec.  330.  3259. 

»Comp.  Stat.,  Neb.,    1897,  Sec.  ?  comp.  Stat.,  Neb.,   1897,  Sec. 

3256.  3268. 

♦Comp.  Stat.,  Neb..   1897,  Sec. 
3358. 


500  l.WV     \\I>    I'ROCF.EDTNnS    TN    BANKRUPTCY. 

The  phrase  "head  of  a  family'"  includes  the  husband  when 
the  claimant  is  a  married  person,  every  person  who  has  re- 
siding on  the  premises  with  him  or  her  and  under  his  care  and 
maintenance,  either  ( i)  his  or  her  minor  child,  or  the  minor 
children  of  his  or  her  deceased  wife  or  husband;  (2)  a  minor 
brother  or  sister,  or  their  deceased  minor  child;  (3)  a  father, 
mother,  grandfather  or  grandmother;  (4)  the  father,  mother^ 
grandfather  or  grandmother  of  a  deceased  husband  or  wife ; 
(5)  an  unmarried  sister  or  any  other  of  the  relatives  men- 
tioned in  this  section  who  have  attained  the  age  of  majority 
and  can  not  support  themselves.' 

Money  realized  from  the  sale  of  a  homestead,  not  exceeding 
the  amount  of  homestead  exemption,  is  exempt  for  six  months. - 
In  case  of  death  of  an  owner  of  a  homestead,  it  is  not  subject 
to  payment  of  debts  contracted  by  or  existing  against  either 
husband  or  wife  previous  to  or  at  the  time  of  death,  except  as 
such  debts  exist  by  virtue  of  chapter  36  of  the  compiled 
statutes.^ 

All   heads  of  families  who  have  no  homestead  may  hold 
exempt  from  process  $500  in  personal  property.  < 

A  person  a  resident  of  the  state  and  the  head  of  a  family 
may  hold  the  following  property  exempt:  The  family  bible, 
family  pictures,  schoolbooks  and  library  for  the  use  of  the 
family  ;  a  pew  in  a  place  of  worship;  a  lot  in  a  burial  ground  ; 
all  necessary  wearing  apparel  of  debtor  and  his  family;  all 
beds,  bedsteads  and  bedding  necessary  for  the  use  of  the 
family;  all  stoves  and  appendages  put  up  or  kept  for  the  use 
of  debtor  and  family,  not  to  exceed  four;  all  cooking  utensils 
and  all  other  household  furniture  not  herein  enumerated,  to 
be  selected  by  the  debtor,  not  exceeding  in  value  ^100;  one 
cow,  three  hogs  and  all  pigs  under  six  months  old;  and  if 
the  debtor  be  at  the  time  actually  engaged  in  the  business  of 
agriculture,  in  addition  to  the  above,  one  yoke  of  oxen,  or 
a  pair  of  horses  in  lieu  thereof;  ten  sheep  and  the  wool  there- 
from, either  in  the  raw  material  or  manufactured  into  yarn 
or  cloth;    the  necessary  food   for  the  stock  mentioned  in  this 

'Comp.   Stat.,   Neb.,    1897,  Sec.  sComp.   vStat.,   Neb.,   1897,  Sec. 

3270-  3272. 

2 Comp.  Stat.,   Neb.,   1897,  Sec.  ••Comp.  Stat.,    Neb.,   1897,  Sec. 

3271-  6111. 


EXEMPTIONS.  5OT 

section  for  three  months;  one  wagon,  cart  or  dray,  two  plows, 
one  drag ;  the  necessary  gearing  for  the  exempted  team ;  other 
farming  implements,  not  exceeding  $50  in  value;  the  provi- 
sions necessary  for  the  support  of  debtor  and  family  for  six 
months,  and  six  months'  fuel ;  tools  and  instruments  of  any 
mechanic,  miner  or  other  person  used  and  kept  for  the  pur- 
pose of  carrying  on  his  trade  or  business;  the  library  and 
implements  of  a  professional  man.  All  the  exempted  articles 
are  to  be  chosen  by  the  debtor.' 

No  property  in  the  state  is  exempt  from  process  for  clerks', 
laborers'  or  mechanics'  wages,  nor  for  money  collected  by  an 
attorney  at  law ;  no  property  of  the  value  of  more  than  $500 
is  exempt  from  any  debt  contracted  for  the  necessaries  of  life 
for  the  debtor  or  his  family,  or  for  anyone  dependent  upon 
him  for  support;  nothing  herein  contained  exempts  in  the 
aggregate  more  than  $500  worth  of  personal  property  to  both 
husband  and  wife.^ 

The  wages  of  mechanics,  clerks  and  laborers,  the  heads  of 
families,  for  sixty  days,  whether  due  or  not,  except  the  wages 
of  persons  who  have  or  are  about  to  abscond,  are  exempt 
from  process." 

In  addition  to  the  exemptions  allowed  by  the  code,  the 
pension  money  of  every  resident  of  the  state,  disabled  while 
a  soldier,  sailor  or  marine  in  the  service  of  the  United  States, 
hereafter  received  or  property  hereafter  purchased  there- 
with, not  exceeding  $2,000  in  value,  is  exempt  from  process.* 

Property  of  cities  governed  by  chapter  12a  is  not  subject 
to  process  for  collection  of  debts. ^ 

Burial  lots  sold  by  cemetery  associations  for  the  sole  pur- 
pose of  interments,  if  used  exclusively  for  such  purpose,  are 
exempt." 

Property  and  appliances  for  the  extinguishment  of  fires, 
kept  and  used  by  incorporated  cities  or  villages,  and  fire  com- 
panies are  exempt  from  pr(jccss;  this  does  not  apply  to  volun- 

'  Comj).  Stat.,   Neb,  iHS;,  Sec.  «  Conip.    Stat,  Xeb.,  1897,     Sec. 

61 16.  61 19. 

«Comp.   Stat.,   Neb.,  1887,  Sec.  '  Conip.  Stat.,  Neb.,  1897,    Sec. 

6117-  742. 

«Comp.  vStat.,  Neb.,  1887,  Sec.  « Comp.  Stat.,  Neb.,  1897,    vSec. 

6118.     See  Sec.  6120.  1725. 


502  LAW    Wn    I'KOCF.EniXGS    IX    BANKRl^PTCY. 

tary  liens  nor  affect  any  remedy  existing  or  judgment  ren- 
dered upon  any  contract  at  time  of  passage  of  the  a      ' 

Public  libraries  are  exempt."  The  property  of  the  hus- 
band is  not  liable  for  the  antenuptial  debts  of  the  wife.'' 

No  property  of  any  convict  is  exempt  from  execution  issued 
for  fines  and  costs  in  criminal  cases,  except  in  cases  where 
such  convict  is  sentenced  to  the  penitentiary  for  more  than 
two  years  or  to  suffer  death,  in  which  cases  he  is  allowed  the 
same  exemptions  as  in  civil  cases.  ^ 

The  money  or  other  aid  due  any  certificate-holder  (or  any 
beneficiary  named  therein)  in  any  fraternal  beneficiary  asso- 
ciation is  not  liable  to  be  seized  to  pay  the  debts  of  such 
person.^ 

Nevada. — The  homestead,  together  with  the  dwelling, 
house  thereon  and  appurtenances,  to  be  selected  by  the  hus- 
band and  wife  or  either  of  them,  or  other  head  of  a  family,  not 
exceeding  $5,000  in  value,  is  exempt  from  process  for  debts 
contracted  after  November  13,  1861,  except  process  to  enforce 
the  payment  of  purchase  money  for  the  premises,  or  for  im- 
provements thereon,  or  for  taxes  thereon,  or  for  the  payment 
of  any  mortgage  thereon  executed  by  both  husband  and  wife, 
when  the  relation  exists;  the  declaration  of  homestead  must 
be  in  writing,  and  when  made  by  married  person  or  persons 
must  state  that  fact,  or,  if  not  married,  that  he  or  she  is  the 
head  of  a  family,  and  that  they,  or  either  of  them,  are  at  the 
time  residing  with  their  family  or  with  the  persons  under 
their  care  on  the  premises;  that  they  claim  the  property  and 
intend  to  use  it  as  a  homestead,  and  a  description  of  the 
premises;  said  declaration  must  be  executed  and  recorded 
like  a  deed  to  land;  from  the  time  of  filing  said  declaration 
of  record  the  husband  and  wife  hold  as  joint  tenants;  if  the 
property  declared  upon  as  homestead  is  the  separate  property 
of  either  spouse,  both  must  join  in  the  declaration ;  if  such 
property  retains  its  character  of  separate  property  until  the 
death  of  one  or  the  other  of  said  spouses,  then  the  homestead 

>  Comp.  Stat.,  Neb.,  1897,    Sec.  •«  Comp.  Stat.,  Neb.,  1897,    Sec. 

3158.  7252. 

2  Comp.  Stat.,  Neb.,  1897,    Sec.  -"^  Comp.   Stat.,  Neb.,  1897,    Sec. 
3589-                                                          3494<?'- 

3  Comp.  Stat..  Neb.,  1897,    Sec. 
3665. 


EXEMPTIONS.  505 

right  ceases,  and  the  property  belongs  to  the  party  (or  heirs) 
to  whom  it  belonged  before  it  was  filed  upon  as  homestead; 
tenants  in  common  may  declare  for  homestead  rights  upon 
their  respective  estates.^ 

Such  exemption  does  not  extend  to  any  mechanic's,  labor- 
er's or  vendor's  lien  lawfully  obtained ;  no  mortgage  or  alien- 
ation made  for  the  purpose  of  securing  a  loan  or  indebtedness 
upon  homestead  property  is  valid  for  any  purpose;  a  mort- 
gage or  alienation  to  secure  purchase  money  is  valid,  if  the 
sis-nature  of  the  wife  is  obtained  to  the  same  and  acknowl- 
edged  separately  from  her  husband ;  homestead  is  not  deemed 
to  be  abandoned  without  a  declaration  thereof  in  writing, 
executed  by  both  husband  and  wife,  or  head  of  a  family,  and 
recorded  as  the  declaration  of  homestead  was  recorded;  the 
acknowledgment  of  the  declaration  of  abandonment  of  the 
wife  must  be  taken  separate  from  the  husband;  if  the  wife 
is  not  a  resident  of  the  state  her  signature  and  acknowledg- 
ment shall  not  be  necessary  to  the  validity  or  alienation  of 
said  homestead  before  it  becomes  the  homestead  of  the  debtor.^ 

When  homestead  is  sold  under  legal  proceedings,  the  money 
paid  to  debtor  is  entitled  to  the  same  protection  against 
process  as  the  original  homestead  premises.^ 

The  homestead  and  other  property  exempt  by  law.  upon 
the  death  of  either  spouse,  is  set  apart  as  the  sole  property  of 
the  surviving  spouse  and  minor  children;  if  there  is  no  sur- 
viving spouse  or  minor  children  the  property  is  subject  to 
administration;  the  exemption  made  by  this  act  does  not 
extend  to  unmarried  persons,  except  when  they  have  the 
care  of  minor  brothers  or  sisters,  or  of  brothers'  or  sisters' 
minor  children,  or  of  a  father,  or  mother,  or  grandparents, 
or  unmarried  sisters  living  in  the  house  with  them;  and  in 
all  such  cases  the  exemption  ceases  when  the  terms  (?n  which 
it  is  granted  cease;  and  ui)on  the  death  of  such  unmarried 
person  the  property  is  subject  to  administration ;  no  exemption 


iGen.  Stat..  Nev.,  1885.  Sec.  539;  "Gen.  Stat.,  Nev.,  1885,  Sec.  540- 

Const.,  Nev.,  Art.  IV,  Sec.  30.  ^  Gen.  Stat..  Nev.,  1885,  Sec.  541- 


504  LAW    AND    PROCEEDINGS    IN    BANKRIPTCY, 

10  the  surviving  spouse  is  allowed  where  the  homestead  declar- 
atit^n  has  been  hied  upon  the  separate  property  of  either  hus- 
band or  wife.* 

Where  the  sum  exempted  is  stated,  the  same  is  so  much 
money   in   gold   coin.'' 

No  conveyance  of  a  homestead  is  valid  unless  executed 
and  acknowledged  by  both  husband  and  wife.*' 

On  the  death  of  the  husband  the  widow  or  minor  children 
are  entitled  to  possession  of  the  homestead.' 

The  following  property  is  exempt  from  execution  except 
upon  a  judgment  for  the  purchase  money  or  upon  a  mortgage 
thereon  :  Chairs,  tables,  desks  and  books  to  the  value  of  one 
hundred  dollars ;  necessary  household  and  kitchen  furniture, 
wearing  apparel,  etc. ;  and  provisions  and  firewood  actually 
provided,  sufficient  for  one  month,  farming  utensils,  or  imple- 
ments of  husbandry,  and  seed  provided  for  planting  within 
the  ensuing  six  months,  not  exceeding  the  value  of  two  hun- 
dred dollars ;  two  horses,  two  oxen,  or  two  mules,  and  two 
cows,  and  food  for  one  month  for  such  animals,  and  one  cart 
or  wagon;  the  tools  of  a  mechanic  necessary  in  his  trade;  the 
instruments  and  li1)raries  of  a  surgeon,  physician,  surveyor 
or  dentist;  the  professional  library  of  an  attorney  and  coun- 
sellor, or  minister  of  the  gospel ;  the  dwelling  of  a  miner,  not 
exceeding  in  value  five  hundred  dollars,  also  his  tools  neces- 
sary to  carry  on  his  mining  operations,  not  exceeding  in  value 
five  hundred  dollars,  and  two  horses,  two  oxen,  or  two  mules, 
their  harness  and  food  for  one  month  for  such  animals,  when 
they  are  necessary  in  his  mining  operations ;  two  oxen,  two 
horses,  or  two  mules,  and  their  harness  and  one  cart  or  wagon, 
by  the  use  of  which  a  teamster  or  laborer  habitually  earns 
his  living;  one  horse,  harness,  and  vehicle,  of  a  physician 
or  surgeon,  or  minister  of  the  gospel,  and  food  for  such  ani- 
mal for  one  month ;  one  sewing-machine  in  actual  use  in  the 


*Gen.  Stat.,  Nev.,  1885.  Sec.  542.  e  Gen.  Stat.,  Nev.,  1885,  Sec.  504- 

5  Gen.  Stat.,  Nev.,  1885,  Sec.  547.  '^  Stat..     Nev.,     1897,    Chap.     106, 

Sec.   icx),  p.   134. 


EXEMPTIONS.  505 

debtor's  family,  not  exceeding  in  value  one  hundred  and  fifty 
dollars ;  all  fire  engines  and  property  of  fire  companies ;  all 
arms,  etc.,  required  by  law  to  be  kept  by  any  person ;  all 
public  property  of  state,  counties,  towns,  etc.* 

Wages  of  a  debtor,  not  exceeding  $50  for  the  calenda- 
mcjnth  during  or  immediately  preceding  that  in  which  process 
is  issued,  are  exempt  when  it  apj^ears  that  such  earnings  are 
necessary  in  whole  or  part  for  the  use  of  a  family  supported 
in  whole  or  part  by  the  debtor's  labor,  provided ,  if  it  appears 
that  the  judgment  debtor  or  his  assignee  has  received  part 
payment  for  such  personal  services  during  such  calendar 
month,  then  only  the  difference  between  the  amount  of  such 
payment  and  $50  is  exempt.** 

The  wages  of  miners,  mechanics,  salesmen,  clerks  or  labor- 
ers are  preferred  claims.'' 

Horses  and  equipments  of  officers  of  mounted  companies 
and  all  company  property  of  uniformed  companies  are  ex- 
empt.'* 

Lands  and  property  of  cemetery  associations  can  not  be 
applied  in  payment  of  debts  of  individual  proprietors,  so  long 
as  used   for  cemetery  purposes. '^ 

All  lots,  buildings  or  other  public  school  property  are 
exempt.'^ 

Mineral,  geological  and  paleontological  specimens  collected 
and  classified   are  exempt.^'' 

The  money,  benefit  or  aid  paid  or  provided  by  contracts 
issued  by  mutual  insurance  companies  on  the  assessment  plan 
is  exempt  from  the  debts  of  any  contract  holder  or  beneficiary 
named  therein.'* 

New  Hampshire. —  Everv  person  is  entitled  to  $500  worth 
of  his  homestead,  or  his  interest  therein,  as  a  homestead  right. "^ 


"Gen.     Stat.,     Nev.,     1885,  Sec.           '^Gen.     Stat.,     Nev.,     1885,     Sec. 

3243-  1328. 

"*  Gen.  Stat.,  Nev.,  1897,  p.  22.  "  Gen.    Stat.,    Nev.,    1885,    Sees. 

•Gen.  Stat.,  Nev.,  1885.  Sees.  4986-4988. 

3829-3831.  i*Staf..  Nev.,  1801.  Sec.  9.  p.  133- 

'"Stat.,  Nev.,  1885.  Sec.  71T.  n".  p„ii    stat..  N.   H.,   1901,  Chap. 

11  Gen.     Stat..     Nev..     1885,  Sec.        138,    Sec.    i,   p.   439. 
1054.     See  also  Sec.  1056. 


506  LAW    AND    PROCEEDINGS   IN    BANKRUPTCY. 

The  owner,  the  husband  or  wife  of  the  owner  and  the  minor 
children,  if  any,  are  entitled  to  occupy  the  homestead  during 
the  life  of  the  owner ;  after  his  decease  the  surviving  husband 
or  wife  and  the  minor  children,  if  any,  are  entitled  to  occupy 
the  homestead  right  during  the  minority  of  the  children;  sub- 
ject to  the  foregoing  provisions,  the  surviving  husband  or 
wife  is  entitled  to  the  homestead  right  during  the  lifetime 
of  the  survivor.^" 

The  homestead  right  during  its  continuance  is  not  exempt 
in  the  following  cases:  (i)  in  the  collection  of  taxes;  (2)  in 
the  enforcement  of  liens  of  mechanics  or  others  for  debts 
created  in  the  construction,  repair  or  improvement  of  the 
homestead;  (3)  in  the  enforcement  of  mortgages  made  a 
charge  thereon  according  to  law;  (4)  in  the  levy  of  executions 
provided  by  chapter  138.^^ 

No  deed  shall  convey  or  incumber  the  homestead  right, 
except  a  mortgage  for  the  purchase  money,  unless  executed 
by  the  owner  and  wufe  or  husband.^^ 

No  devise  of  the  homestead  shall  afifect  the  estate  of  the 
surviving  wife  or  husband  or  minor  children  in  the  homestead 
right.^' 

The  following  goods  and  property  are  exempt:  Wearing 
apparel  of  debtor  and  family;  comfortable  beds,  bedsteads  and 
bedding  necessary  for  debtor  and  family ;  household  furniture 
to  the  value  of  $100;  one  cooking-stove  and  necessary  fur- 
niture; one  sewing-machine,  kei)t  for  use  by  debtor  or  his 
family;  provisions  and  fuel  to  value  of  $50;  uniforms,  arms 
and  equipments  of  the  militia ;  bibles,  schoolbooks  and  library 
to  the  value  of  $200 ;  tools  of  debtor's  occupation  to  the  value 
of  $100;  one  hog,  one  pig  and  the  pork  therefrom;  six  sheep 
and  the  fleeces  therefrom;  one  cow;  a  yoke  of  oxen  and  a 


"Pub.  Stat,  N.  H.,  1901,  Chap.  is  Pub.  Stat.,  N.  H.,  1901,  Chap. 

138,  Sec.  2,  p.  440.  138,  Sec.  4,  p.  44°. 

"Pub.  Stat.,  N.  H.,   1901,  Chap.  !»  Pub.   Stat.,  N.  H.,  1901,  Chap. 

138,  Sec.  3.  p.  440.      Pub.  Stat.,  N.  138,  Sec.  5,  p.  440. 
H.,  1901,  Chap.  233,  Sec.  i,  p.  733- 


EXEMPTIONS.  507 

horse  for  farming  or  teaming  purposes  or  actual  use ;  four  tons 
hay;  $50  worth  of  poultry;  debtor's  interest  in  a  pew,  or  lot 
or  right  of  burial  in  any  cemetery.-" 

The  money,  rights  and  credits  of  a  defendant  are  exempt 
from  trustee  process  in  the  following  instances :  ( i )  Wages 
for  labor  performed  by  the  defendant  after  the  service  of  the 
writ;  (2)  wages  of  the  defendant  earned  before  the  service  of 
the  writ  to  the  amount  of  $20,  except  in  actions  brought  to 
recover  for  necessaries  furnished  to  the  defendant  or  his  fam- 
ily; (3)  wages  for  personal  services  of  the  wife  and  minor 
children  of  defendant;  (4)  pension  money  from  the  United 
States  before  it  has  come  into  the  actual  possession  of  defend- 
ant; (5)  funds  held  by  the  trustee  as  clerk,  cashier  or  other 
employee  of  defendant  which  was  received  in  the  actual  course 
of  employment;  (6)  jury  or  witness  fees  due  a  defendant.'^ 

A  policy  of  insurance  for  the  benefit  of  a  married  woman, 
effected  either  by  herself  or  husband,  is  exempt  from  the  claims 
of  creditors  of  person  effecting  the  same."" 

Money  due  for  the  relief  of  firemen  is  exempt. ^^ 

The  money,  aid  or  benefit,  etc.,  provided  or  rendered  by  any 
fraternal  benefit  association  is  not  liable  to  process  to  be  ap- 
plied to  payment  of  debts  of  a  certificate-holder  therein  or  of 
a  beneficiary  named  in  such  certificate."* 

Insurance  on  exempt  property  is  exempt ;  "  so  also  are  dam- 
ages recovered  for  the  conversion  of  exempt  property.'" 

Xew  Jersey.-^ — in  addition  to  property  exempt  by  law, 
the  lot  and  buildings  thereon,   occupied  as  a  residence  and 


20  Pub.  Stat.,  N.  H.,  1901,  Chap.  10,  p.  444:  Pub.  Stat.,  N.  H.,  1901, 
220,  Sec.  2,  p.  701.  p.  581. 

21  Pub.   Stat..   N.   II.,   1901,  Chap.  -■•L.,    N.    11.,    1899,    Chap.    27,   p. 
245,  Sec.  20,  p.  761.  263. 

22Pi]b.   Stat.,  N.  H.,   1901,  Oiap.  -'•  L.,    N.    H.,    1901,    Chap.    55.   p. 

171,  Sec.  I,  p.  573.  545. 

23  Pub.  Stat.,  N.  H.,  1901,  p.  569  27  The  exemption  law  of  this  state 

L.,  N.  H.,  1899.  Chap.  64,  Sec.  3,  p.  is    treated    in   In   re   Demerest,    no 

301.  Fed.  Rep.  638,  6  Am.  B.  R.  232. 

2U..,  N.  H.,  1805.  Chap.  86,  Sec. 


5o8  LAW   AM)   i'R()ri:i:i)i\(;s  in   bankrl'ptcy. 

owned  by  a  debtor  being-  a  householder,  not  exceeding  in  value 
$i,ooo.  is  exeni])t  from  process;  the  exemption  continues  after 
the  death  of  the  householder  for  the  benefit  of  the  widow  and 
family,  some  or  one  of  them  continuing'  to  occupy  such  home- 
stead until  youngest  child  becomes  twenty-one  years  of  age 
and  initil  the  deatli  of  the  widow;  no  release  or  waiver  of 
such  exemption  is  valid. "^ 

To  entitle  property  to  such  exemption  the  conveyance  of  the 
same  must  show  that  it  is  designed  as  homestead,  or,  if  al- 
ready purchased  or  the  conveyance  does  not  show  such  desig- 
nation, a  notice  that  the  property  is  designed  as  a  homestead, 
with  a  description  thereof,  must  be  executed  by  the  owner  and 
filed  for  record ;  such  notice  and  description  must  be  published 
once  a  week  for  six  wrecks  in  a  public  newspaper  in  the  county 
in  which  the  property  is  located ;  the  property  is  liable  for 
taxes,  for  any  labor  done  thereon  or  materials  furnished  there- 
for, for  a  debt  contracted  for  the  purchase  price  thereof  or 
prior  to  the  record  of  the  deed  of  notice."** 

In  case  homestead  is  sold  under  legal  proceedings,  the  pro- 
ceeds thereof  to  the  amount  of  $i.ooo  are  paid  to  the  execu- 
tion debtor,  which  is  exempt  for  one  year.^° 

Property  declared  to  be  homestead  can  not  be  aliened  or 
encumbered  by  the  owner  nor  leased  for  more  than  one  year; 
any  alienation  or  encumbrance  by  the  owner  is  void  unless 
made  with  the  full  consent  of  wife  or  husband  of  the  owner,  by 
deed  duly  acknowledged,  for  a  full  fair  consideration,  and  the 
same,  or  $i.ooo  thereof,  be  invested  in  a  new  homestead. ^^ 

Goods  and  chattels,  shares  of  stock  or  interest  in  any  cor- 
poration, and  personal  property  of  every  kind,  not  exceeding 


28  Gen.  Stat.,  N.  J.,  1895,  Vol.  Ill,  s"  Gen.  Stat.,  N.  J.,  1895,  Vol.  Ill, 

Sec.  63,  p.  2997.  Sec.  67.  p.  2997. 

^'■>  Gen.  Stat.,  N.  J.,  1895,  Vol.  Ill,  -'i  Gen.  Stat,.  N.  J.,  1895,  Vol.  Ill, 

Sec.  64,  p.  2997,  Sec.  69,  p.  2998. 


EXEMPTIOXS.  509 

in  value  (exclusive  of  wearing  apparel)  $200,  and  all  the 
wearing  apparel,  the  property  of  any  debtor  having  a  family 
residing  in  this  state,  as  well  after  as  before  death,  are  exempt 
from  process  except  the  same  be  issued  on  a  judgment  founded 
on  contract  made  before  the  14th  of  March,  1851.  Provided, 
this  exemption  does  not  apply  to  process  founded  upon  a 
judgment  for  the  purchase  price  of  property  or  for  the  collec- 
tion of  taxes.' 

The  household  goods  and  furniture  of  every  kind,  not  ex- 
ceeding $200  in  value,  of  every  absconding  debtor  having  a 
family  residing  in  the  state,  are  exempt,  except  the  writ  is 
issued  on  a  debt  for  which  said  household  goods  have  been 
sold.^ 

Personal  property  of  a  nonresident  of  the  state,  being  in 
the  state,  is  not  liable  to  attachment  at  the  suit  of  a  nonresi- 
dent, when  the  said  property  is  exempt  by  the  law  of  the 
state  of  which  said  debtor  and  creditor  are  residents.^ 

Two  hundred  dollars'  worth  of  personal  property  (exclusive 
of  wearing  apparel)  is  exempt  from  distress  as  rent.* 

In  assignments  for  the  benefit  of  creditors  $200  worth  of 
personal  property  and  wearing  apparel  is  to  be  reserved  to 
debtor.* 

In  case  of  death  of  debtor  having  a  family  residing  in  the 
state  his  wearing  apparel  and  $200  worth  of  goods  and  chat- 
tels are  not  liable  to  payment  of  his  debts." 

The  arms  and  accouterments  of  a  member  of  the  national 
guard  are  exempt  from  execution.^ 

The  wages,  salaries  or  other  compensation  for  work,  labor, 
etc.,  due  a  nonresident  employee  are  not  liable  to  attachment 
at  the  suit  of  a  nonresident  creditor. ** 

Married  woman  may  insure  the  life  of  her  husband  and  the 
proceeds  are  free  from  claim  of  her  husband's  creditors." 

'Gen.  vStat.,  N.  J.,  1895,  Vol.  II.  •"'Gen.  vStat.,  N.  J.,  1S95,  Vol.  I, 

Sec.  35,  p.  142 1.     vSee  r>en.  Stat.,  Sec.  9,  p.  79. 

N.  J.,    1895,   Vol.     II.   vSec.    12,  p.  «Gen.  vStat.,  N.  J..  Vol.  II,   vScc. 

14 '7-  52,  p.  2366. 

«Gen.  Stat.,  X.  J..  1895.  Vol.  II,  'Gen.  Stat.,  N.  J.,  Vol.  II,    Sec. 

Sec.  42.  p.  1424.  74,  p.  2269. 

'Gen.    vStat..  N.  J.,  1895,  Vol.  I,  *<  Gen.   vStat.,    N.  J.,  \'ol.  I,  Sec. 

Sec.  12,  p.  100.  103,  p.  116. 

♦Gen.  Stat.,  N.  J..  1895.  Vol.  I.  oGen.  Stat.,  N.  J.,  Vol.  II,    Sec. 

Sec.  24,  p.  1213.  29,  p.  2018. 


5IO  LAW    AND    I*K(Xi:KinNt".S    IN    HANKRIPTCY. 

The  money,  aid,  etc.,  provided  by  a  fraternal  beneficiary 
association  is  not  liable  to  process  to  pay  the  debts  of  any 
certificate-holder  or  of  any  beneficiary  named  in  such  certifi- 
cate.' 

Lands  and  property  of  cemetery  associations  are  not  liable 
to  be  sold  on  execution. - 

♦  New  Mexico. — Husband  and  wife,  widow  or  widower, 
living  with  an  unmarried  daughter  or  unmarried  minor  son, 
may  hold  exempt  from  process  a  family  homestead  to  the 
value  of  $i,ooo;  the  wife  may  make  the  demand  if  husband 
fails,  but  neither  can  make  demand  if  the  other  has  a  home- 
stead ;  the  provisions  of  this  section  do  not  extend  to  a  judg- 
ment rendered  on  a  mortgage  executed  by  the  debtor  and  his 
wife,  nor  to  impair  the  lien  by  mortgage  or  otherwise  of 
the  vendor  for  purchase  money,  nor  the  lien  of  any  mechanic, 
laborer  or  other  person  for  materials  furnished  or  labor  per- 
formed in  the  erection,  repair  or  improvement  of  a  dwelling- 
house  on  homestead  land.^ 

A  person  owning  a  dwelling-house  on  land  not  his  own  is 
entitled  to  benefits  of  section  1747.* 

Any  resident  of  the  territory,  who  is  the  head  of  a  family 
and  not  the  owner  of  a  homestead,  may  hold  exempt  $500 
worth  of  real  or  personal  property,  in  addition  to  chattel 
property  exempt  bv  law,  to  be  selected  by  him  at  any  time 
before  sale.^ 

Every  person  who  has  a  family,  and  every  widow,  may 
hold  the  following  property  exempt  from  process,  to  wit: 
Wearing  apparel  of  such  person  or  family  ;  beds,  bedding  and 
bedsteads  necessary  for  the  use  of  the  same ;  one  cooking- 
stove  and  pipe ;  one  stove  and  pipe  used  for  warming  the 
dwelling,  and  fuel  sufficient  for  sixty  days,  actually  provided 
and  designated  for  the  use  of  such  person  and  family ;  one 
cow,  or,  if  the  debtor  owns  no  cow,  household  furniture,  to 
be  selected,  not  exceeding  $40  in  value;  two  swine  or  the 
pork  therefrom,  or,  if  the  debtor  owns  no  swine,  household 

iGen.  Stat.,   N.  J.,  Vol.1,  Sec.  *  Comp.    L.,    N.    M.,   1897,    Sec. 

60,  p.  162.  1748- 

2  Gen.  Stat..  N.  J.,  Vol.  I,   vSecs.  f^  Comp.    L.,   N.    M.,   1897,   Sec. 

8  and  9,  p.  350.  1753. 

■iComp.    L.,    N.    M.,    1897,  Sec. 
1747- 


EXEMPTIONS.  51 1 

furniture,  not  exceeding  $15  in  value;  six  sheep  and  the 
wool  therefrom  and  cloth  and  other  articles  manufactured 
therefrom,  or,  in  lieu  thereof,  household  furniture  not  exceed- 
ing $20  in  value ;  food  for  such  animals  for  sixty  days ;  bibles, 
hymnbooks,  psalmbooks,  testaments,  school  and  miscellane- 
ous books  used  in  the  family,  and  all  family  pictures;  provi- 
sions for  the  use  of  the  debtor  and  family,  to  be  selected,  not 
exceeding  $50  in  value,  and  other  articles  of  household  and 
kitchen  furniture,  or  either,  necessary  for  such  person  or 
family,  not  exceeding  $200  in  value;  one  sewing,  one  knit- 
ting-machine, one  gun  or  pistol,  and  the  tools  and  implements 
of  the  debtor  necessary  for  carrying  on  his  trade  or  business, 
to  be  selected  by  him,  not  exceeding  $150  in  value;  the 
personal  earnings  of  the  debtor  for  sixty  days  next  prt-ceding 
his  application  for  such  exemption,  when  it  appears  that  such 
earnings  are  necessary  for  the  support  of  such  debtor,  his  wife 
or  family;  provided,  that  such  exemption  shall  not  apply  to 
debts  incurred  for  manual  labor  or  for  necessaries  furnished 
to  the  debtor  or  his  family;  all  articles,  specimens  and  cab- 
inets of  natural  history  or  science,  except  when  the  same  are 
kept  for  exhibition  for  pecuniary  gain.^ 

Every  person  who  is  engaged  in  the  business  of  draying  or 
carrying  property  from  place  to  place  with  one  horse  and 
wagon  for  a  livelihood  has,  in  addition  to  exemptions  speci- 
fied in  section  1737,  one  horse,  harness,  dray  or  wagon  ex- 
empt; every  head  of  a  family  engaged  in  the  business  of 
agriculture  has,  in  addition  to  the  exemptions  provided  for 
in  section  1737,  two  horses  or  one  yoke  of  cattle,  with  neces- 
sary gearing  for  same,  and  one  wagon  exempt  from  execu- 
tion;  every  head  of  a  family  who  is  engaged  in  the  practice 
of  medicine  has  exempt,  in  addition  to  the  exemptions  speci- 
fied in  section  1737,  one  horse,  one  saddle  and  bridle,  and 
also  books,  medicines  and  instruments  pertaining  to  his  pro- 
fession, not  exceeding  $100  in  value. ^ 

Every  unmarried  woman  may  hold  the  following  property 
exempt:  Wearing  apparel,  to  be  selected  by  her,  to  the  value 
of  $150;  one  sewing-machine;  one  knitting-machine ;  if  en- 
gaged in  teaching  music,  one  piano  or  organ;  a  bible,  hymn- 

'Comp.    L.,    N.    M.,   1897,   Sec.  ^Coinp.   L.,  N.    M.,    1897,   Sec. 

1737-  1738. 


512  LAW    AND    rROCEEDIXC.S    IX     HANKRITTCY. 

book,  psalmbook.  album  and  any  other  books,  not  exceeding 
in  \ahie  $50.' 

Any  person,  the  head  of  a  family,  engaii^ed  in  the  practice 
of  the  law  has  exempt,  in  addition  to  the  foregoing  exemp- 
tions, books  pertaining  to  his  profession,  not  exceeding  in 
value  $500.'' 

Any  beneficiary  fund,  not  exceeding  $5,000,  appropriated 
by  any  benevolent  association  to  the  family  of  any  deceased 
member  can  not  be  taken  to  pay  the  debts  of  such  deceased 
member.^ 

The  regalia,  insignia,  etc.,  of  any  benevolent  society  in  the 
territory  is  exempt.* 

Property  of  a  municipal  corporation  or  fire  company  used  to 
extinguish  fires  is  exempt,  but  a  valid  lien  may  be  contracted 
thereon  by  bill  of  sale  or  mortgage.^ 

The  owner  of  improvements  on  public  lands  of  the  United 
States  holds  the  same  exempt  from  execution,  and  there  can  be 
no  valid  sale  thereof  by  the  owner  who  is  the  head  of  a 
family  and  married,  without  the  consent  of  the  wife.® 

The  arms,  uniforms  and  equipments  of  the  national  guard, 
required  to  be  kept  by  law,  are  exempt.^ 

New  York.®  —  A  lot  of  land  with  the  buildings  thereon, 
not  exceeding  $1,000  in  value,  owned  and  occupied  as  a  resi- 
dence by  a  householder  having  a  family,  and  heretofore  desig- 
nated as  an  exempted  homestead,  as  prescribed  by  law,  or 
hereafter  designated  for  that  purpose,  is  exempt  from  process 
issued  on  a  judgment  recovered  for  a  debt  contracted  April 
30,  1850,  unless  the  judgment  was  recovered  wholly  for  a 
debt  contracted  before  the  designation  of  a  homestead,  or  for 
the  purchase  money  thereof.** 


1  Comp. 

L., 

N. 

M., 

1897, 

Sec. 

"Comp.    L.,    N.    M.,    1897,    Sec. 

1739. 

3745. 

-  Comp. 

L-, 

N. 

M., 

1897, 

Sec. 

7  Comp.    L.,    N.    M.,    1897.    Sec. 

1740. 

2266. 

3  Comp. 

L., 

N. 

M., 

1897, 

Sec. 

*  The  exemption  laws  of  this  state 

1741. 

are  treated  in  In  re  Ellithorpe,   ill 

*  Comp. 

L., 

N. 

M., 

1897, 

Sec. 

Fed.  Rep.   163,  7  Am.  B.  R.  18;  In 

1742. 

re  Osborn,  104  Fed.  Rep.  780,  5  Am. 

•''  Comp. 

L., 

N. 

M., 

1897, 

Sec. 

R.  R.  III. 

1743- 

•Bliss,   N.    Y.,   Ann.    Code,    1895, 

EXEMPTIONS.  513 

In  order  to  designate  a  homestead,  a  conveyance  thereof, 
stating  that  it  is  designated  to  be  held  as  a  homestead,  must 
be  recorded ;  or  a  notice  containing  a  full  description,  and 
stating  that  it  is  designed  to  be  so  held  and  executed  as  a 
deed,  must  be  recorded.^" 

A  lot  of  land,  with  the  buildings  thereon,  owned  by  a  mar- 
ried woman,  and  occupied  by  her  as  a  residence,  may  be  desig- 
nated as  a  homestead,  and  is  exempt  under  the  same  circum- 
stances and  to  the  same  exceptions  as  the  homestead  of  a 
householder  having  a  family.^^ 

The  homestead  exemption  exists  after  the  death  of  a  person 
in  whose  name  the  property  was  exempted,  as  follows :  If  the 
decedent  was  a  woman,  it  continues  for  the  surviving  children 
during  the  minority  of  the  youngest  child;  if  the  decedent 
was  a  man.  it  continues  for  the  benefit  of  the  widow  and  sur- 
viving children  until  the  majority  of  the  youngest  surviving 
child  and  until  the  death  of  the  widow :  but  the  exemption 
ceases  earlier  if  the  property  ceases  to  be  occupied  as  a  resi- 
dence, except  as  provided  in  section  1401.'" 

The  right  to  homestead  exemption  is  not  affected  by  a  sus- 
pension of  the  occupation  as  a  residence  for  a  period  not  ex- 
ceeding one  year,  wliich  occurs  in  consecjuence  of  injury  to, 
or  destruction  of,  the  dwelling-house  upon  the  premises.^'' 

The  owner  of  exempted  real  property  may,  by  a  properly 
executed  notice,  cancel  the  exemption ;  the  cancellation  takes 
effect  when  the  same  is  recorded;  tlie  husband  and  wife  may 
jfMntly  convey  or  mortgage  exempted  real  estate." 

The  following  personal  property,  when  owned  by  a  house- 
holder, is  exempt  from  process,  and  each  movable  article 
therer)f  continues  to  be  exempt,  while  the  family,  or  any  of 
them,  are  removing  from  one  residence  to  another:  All  spin- 
ning-wheels. weaving-k)oms  and  stoves  put  up  or  kept  for  use 

See.    I.3Q7,    p.    1974:    see    Sec.  1389          i*  Bliss'  N.   Y..  Ann.  Code,   1895, 

as    to    special    exemptions    not    af-       Sec.   1400,  p.   1975. 

fected  by  Title  II,  Art.  i.  '»  Bliss'   N.   Y.   Ann.   Code.    1895, 

1"  P.Iiss'   N.    Y.    Ann.    Code,  1895,       Sec.   1401,  p.   1975. 

Sec.   1388.  p.   1975.  '*  Bliss'   N.   Y.    Ann.   Code,    1895, 

"  Bliss'    N.   Y.    Ann,    Code,  1895,       .Scr.  1.404,  p.  1076. 
Sec.   1390,  p.  1975- 


514  LAW    AND    TROCEEDINGS    IN    BANKRUPTCY. 

in  a  chvelling-hoiise ;  one  sewing-machine  wilh  appurtenances; 
the  family  bible,  the  family  pictures  and  schoolbooks  used 
by  or  in  the  family;  other  books,  not  exceeding  in  value  $50, 
kept  and  used  as  part  of  the  family  library ;  a  pew ;  ten  sheep 
with  their  fleeces,  and  the  yarn  or  cloth  manufactured  there- 
from ;  one  cow ;  two  swine ;  the  necessary  food  for  those  ani- 
mals ;  all  necessary  meat,  fish,  flour,  groceries  and  vegetables 
actually  provided  for  family  use,  and  necessary  fuel,  oil  and 
candles  for  the  use  of  the  family  for  sixty  days ;  all  wearing 
apparel,  beds,  etc.,  necessary  for  debtor  and  family;  all  neces- 
sary cooking  utensils ;  one  table ;  six  chairs ;  six  knives ;  six 
forks ;  six  spoons ;  six  plates ;  six  tea  cups ;  six  saucers ;  one 
sugar  dish ;  one  milk  pot ;  one  tea  pot ;  one  crane  and  its  ap- 
pendages ;  one  pair  andirons  ;  one  coal  scuttle  ;  one  shovel ;  one 
pair  tongs ;  one  lamp  and  one  candlestick ;  the  tools  and  im- 
plements of  a  mechanic  necessary  to  the  carrying  on  of  his 
trade,  not  exceeding  $25  in  value.^^ 

In  addition  to  the  exemptions  allowed  in  section  1390,  neces- 
sary household  furniture,  working  tools  and  team,  profes- 
sional instruments,  furniture  and  library,  not  exceeding  $250 
in  value,  together  with  food  for  the  team  for  ninety  days, 
when  owned  by  a  householder  or  a  person  having  a  family 
for  which  he  provides,  are  exempt  except  as  against  a  claim 
for  work  performed  in  the  family  as  a  domestic  or  for  pur- 
chase money. ^^ 

When  the  debtor  is  a  woman,  she  is  entitled  to  the  same 
exemptions,  subject  to  the  same  exceptions,  as  a  householder.^^ 

Military  pay,  rewards,  pensions,  arms,  uniforms,  etc.,  are 
exempt. ^^ 

Lands  set  apart  as  a  family  burying-ground  are  exempt  un- 
der certain  conditions.^® 


"Bliss'   N.   Y.   Ann.   Code,    1895,  is  Bliss'   N.   Y.   Ann.   Code,    1895, 

Sec.    1390,  p.    1966;    In   re   Osborn,  Sec.  1393,  p.  1973;  In  re  Ellithorpe, 

104  Fed.  Rep.  780,  5  Am.  B.  R.  in.  in  Fed.  Rep.  163,  7  Am.  B.  R.  18. 

18  Bliss'   N.   Y.   Ann.   Code,   1895,  i9  Bliss'   N.    Y.   Ann.   Code,   1895, 

Sec.  1391,  p.  1966.  Sec.  1395,  p.  1974. 

"Bliss'   N.   Y.   Ann.   Code,    189S, 
Sec.  1392,  p.  1972. 


EXEMPTIONS. 


515 


A  right  of  action  for  taking  or  injuring  exempt  personal 
property  is  exempt  for  one  year  from  the  collection  thereof.^" 

North  Carolina.-'  —  Every  homestead  and  the  dwellings 
and  buildings  used  therewith,  not  exceeding  in  value  $1,000, 
to  be  selected  by  the  owner,  or,  in  lieu  thereof,  at  the  option 
of  the  owner,  any  lot  in  a  city,  etc.,  with  the  dwellings  and 
buildings  used  thereon,  owned  and  occupied  by  a  resident  of 
the  state,  and  not  exceeding  $1,000  in  value,  is  exempt  from 
process ;  no  property  is  exempt  from  sale  for  taxes  or  for  the 
purchase  price  thereof.-^ 

The  homestead,  after  the  death  of  the  owner,  is  exempt 
from  the  payment  of  any  debt  during  the  minority  of  any  of 
his  children.-"' 

The  homestead  is  subject  to  laborers'  and  mechanics'  liens 
for  work  done  for  the  owner  on  the  homestead  premises.^* 

After  the  death  of  the  owner  of  a  homestead,  leaving  no 
children,  but  leaving  a  widow,  the  same  is  exempt  from  the 
payment  of  his  debts  during  her  widowhood,  unless  she  be 
the  owner  of  a  homestead  in  her  own  right. -^ 

The  husband  may  insure  his  life  for  the  benefit  of  his  wife 


20  Bliss'  N.   Y.  Ann.   Code,   1895,  22  Const.,   N.   Car.,   1876,  Art.   X, 
Sec.  1394,  p.  1974.  Sec.  2.    Code  Civil  Pro.,  1883,  Sec. 

21  The    exemption    laws    of    this  501    (4). 

state  are  treated  in  In  re  Evans,  116  Where  a  bankrupt's  husband  was 

Fed.  Rep.  909,  8  Am.  B.  R.  730;  In  never    a    resident    of    the    state    of 

re  Seabolt,  113  Fed.  Rep.  766,  8  Am.  North  Carolina,  and  .she  was  never: 

B.  R.  57;  /m  r^  Dinglehoef,  109  Fed.  therein     except     that     they     visited 

Rep.    866,    6    Am.    B.    R.    242;    In  and    boarded    in    the    state    a    short 

re  Steed,   107  Fed.  Rep.  682,  6  Am.  time  soon  after  their  marriage,  she 

B.   R.   7^;   In    re  Wilson,    loi    Fed.  is  not  a  resident,  or  entitled  to  the 

Rep.  571,  4  Am.   B.   R.  260;  In  re  exemption     in  that     state.       In     re 

Duguid,   100  Fed.  Rep.  274,  3  Am.  Dinglehoef,    109    Fed.    Rep.    866,    6 

B.   R.   794;   In   re  Grimes,  96   Fed.  Am.  B.  R.  242. 

Rep.  529,  2  Am.   B.  R.  730;  In  re  23  Const.,   N.   Car.,   1876,   Art.   X, 

Woodward,    95    Fed.    Rep.    955,    2  Sec.  3. 

Am.    B.    R.  692;   In  re   Grimes,  94  24  Const,   N.   Car.,    1876.   Art.   X, 

Fed.  Rep.  800,  2  Am.  B.  R.  160;  In  Sec.  44. 

re   Richard.  94  Fed.  Rep.  633.  2  Am.  2.--.  Const.,  N.  Car.,  1876,  Art.  X, 

B.  R.  506 ;  In  re  Stevenson,  93  Fed.  Sec.  5. 

Rep.  789,  2  Am.  B.  R.  230. 


5l6  LAW    AM)    I'KOCKliinMIS    IN    BANKRUPTCY. 

and  children,  and  the  proceeds  thereof  are  free  from  his 
debts.''* 

The  homestead  may  be  disposed  of  by  deed  with  the  consent 
of  the  wife  of  the  owner." 

The  personal  property  of  any  resident  of  the  state,  to  the 
value  of  $500.  to  be  selected  by  him,  is  exempt,  except  as  to 
taxes  and  obligations  contracted  for  the  purchase  price."* 

For  exemptions  from  process  on  judgments  for  debts  con- 
tracted or  causes  of  action  accruing  prior  to  May  i,  1877,  see 
Code  of  Civil  Procedure  of  North  Carolina  of  1883,  section 
501.  (i),  (2)  and  (3). 

North  Dakota. —  The  homestead  of  every  head  of  a  fam- 
ily residing  in  the  state,  not  exceeding  in  value  $5,000,  and 
if  within  a  town  plat,  not  exceeding  two  acres,  and  if  not,  not 
exceeding  in  the  aggregate  160  acres,  and  consisting  of  a 
dwelling-house  in  which  the  claimant  resides,  and  the  appur- 
tenances, and  the  land  on  which  the  same  is  situated,  is  exempt 
from  process  except  as  provided  by  law.^" 

If  the  homestead  claimant  is  married,  the  homestead  may 
be  selected  from  the  separate  property  of  the  husband  or  from 
the  separate  property  of  the  wife,  with  her  consent ;  if  the 
claimant  is  unmarried,  but  the  head  of  a  family,  the  home- 
stead may  be  selected  from  any  of  his  or  her  property.  The 
homestead  must  not  embrace  different  lots,  unless  they  are 
contiguous.^'* 

The  homestead  is  subject  to  process  on  debts  secured  by 
mechanics'  or  laborers'  liens  for  work  done  or  materials  fur- 
nished exclusively  for  the  improvement  of  the  same;  on  debts 


2«  Const.,   N.   Car.,    1876,  Art.   X,  Rep.   766,  8  Am.    B.   R.   57;  In   re 

Sec.  7.  Wilson,   loi    Fed.  Rep.  571,  4  Am. 

'-7  Const.,   N.   Car.,    1876,   Art.   X,  B.  R.  260;  In  re  Duguid,  100  Fed. 

Sec.  8.  Rep.  274,  3   Am.   B.   R.  794;  In  re 

28  Const.,   N.   Car.,   1876,  Art.   X,  Grimes,   94   Fed.    Rep.   800,   2   Am. 

Sees.   I   and  2.  B.  R.  160;  In  re  Stevenson,  93  Fed. 

Bankrupt   can   not   claim   exemp-  Rep.  789,  2  Am.  B.  R.  230. 

tion    in   both    individual    estate   and  29  Rgy    Code,  N.  Dak.,   1895,  Sec. 

firm   estate.   In   re   Steed,    107    Fed.  3605. 

Rep.  682,  6  Am.  B.  R.  -]?,.     See  also  =">  Rev.  Code.  N.  Dak..  1895.  Sec 

as    to    exemptions     in     partnership  3606. 
property,    In    re    Seabolt,    113    Fed 


EXEMPTIONS.  517 

secured  by  mortgage  on  the  premises  executed  by  both  hus- 
band and  wife  or  an  unmarried  claimant,  or  debts  created  for 
the  purchase  thereof.^^ 

The  homestead  of  a  married  person  can  be  conveyed  or  en- 
cumbered only  by  an  instrument  in  which  both  husband  and 
wife  join."*" 

When  homestead  is  sold  under  legal  proceedings,  the  money 
accruing  therefrom  to  the  debtor  to  the  amount  of  $5,000  is 
exempt.^^ 

If  homestead  is  conveyed  as  provided  in  section  3508,  or 
sold  as  mentioned  in  section  3607,  the  price  thereof  or  the  pro- 
ceeds beyond  the  amount  necessai-y  to  satisfy  such  lien  and 
not  in  excess  of  the  homestead  exemption  is  exempt.^* 

Any  person  who  is  the  head  of  a  family  may  make  a  de- 
claration of  homestead.  The  failure  to  make  such  declara- 
tion does  not  impair  the  right.'"' 

The  declaration  of  homestead  must  be  executed  and  ac- 
knowledged in  the  same  manner  as  a  grant  of  real  property  is 
executed  and  acknowledged,  and  must  be  filed  for  record.'^ 

It  must  contain  a  statement,  showing  that  the  claimant  is 
the  head  of  a  family,  or  when  the  declaration  is  made  by  the 
wife,  that  the  husband  has  not  made  such  declaration  for  the 
joint  benefit ;  that  the  person  making  it  resides  on  and  claims 
the  premises  as  homestead;  a  description  of  the  premises  and 
an  estimate  of  tlieir  cash  value." 

The  sale  of  a  homestead  does  not  prevent  the  acquisition  of 
another.'"* 

The  head  of  family,  as  used  in  chapter  39.  includes  within 
its  meaning  the  husband  or  wife  when  claimant  is  married; 
both  husband  and  wife  are  not  entitled,  each,  to  a  homestead; 

'■"  Rev.  Code.  N.  Dak.,   1895,  Sec.  •"  Rev.  Code.  N.  Dak..  1895,  Sec. 

3^«7.  3620. 

••'3  Rev.  Code.  N.   Dak..   1895.  Sec.  ^»  Rev.  Code.  N.  Dak.,  1895.  Sees. 

^^^  .3621    and   3623. 

■■'■'•Rev.  Code,  N.   Dak..   iH<)S.  Sec.  "Rev.  Code.  N.  Dak..  Sec.  .1622. 

•^•""^  ■"*Rev.  Code,  N.  Dak.,  Sec.  3624. 

••'■'  Rev.  Code,  N.  Dak.,  1895,  Sec. 
3619. 


5l8  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

every  person  who  has  resided  on  the  premises  with  him  or  her, 
his  or  her  child,  or  the  child  of  a  deceased  wife  or  husband ;  a 
minor  brother  or  sister,  or  the  minor  child  of  such  deceased 
person ;  a  father,  mother  or  grandparents ;  a  father,  mother  or 
grandparents  of  a  deceased  husband  or  wife;  an  unmarried 
sister  or  any  other  relatives  mentioned  above  who  have  at- 
tained majority  and  can  not  support  themselves.^" 

Except  as  provided  by  law,  the  property  mentioned  in  chap- 
ter 2  of  the  Code  of  Civil  Procedure  is  exempt  to  the  head  of 
a  family,  as  defined  by  chapter  39  of  the  Civil  Code.*" 

The  following  property  is  absolutely  exempt :  All  family 
pictures,  a  pew,  a  burial  lot.  the  family  bible  and  all  school- 
books  used  as  a  part  of  the  family  library,  not  exceeding  $100 
in  value;  all  wearing  apparel  of  debtor  and  family;  provi- 
sions and  fuel  for  the  debtor  and  his  family  for  one  year;  the 
homestead. ^^ 

In  addition  to  the  property  mentioned  in  section  5517,  the 
head  of  a  family  may  select  from  all  his  personal  property, 
personal  property,  not  absolutely  exempt,  not  to  exceed  in  the 
aggregate  $1,000.  which  is  also  exempt,  and  must  be  chosen 
and  appraised.*^ 

Instead  of  the  exemption  provided  for  in  section  5518,  the 
head  of  a  family  may  select  the  following  property,  which  is 
then  exempt :  All  miscellaneous  books  and  musical  instru- 
ments, not  exceeding  $500  in  value ;  all  household  and  kitchen 
furniture,  including  beds,  bedsteads  and  bedding  used  by  the 
debtor  and  family,  not  exceeding  v$5oo  in  value;  three  cows, 
ten  swine,  one  yoke  of  cattle  and  two  horses  or  mules,  or  two 
yokes  of  cattle,  or  two  spans  of  horses  or  mules ;  one  hundred 
sheep  and  their  lambs  under  six  months  old,  and  all  wool  of 
the  same,  and  all  cloth  or  yarn  manufactured  therefrom;  the 
necessary  food  for  the  animals  heretofore  mentioned  for  one 
year,  one  wagon,  one  sleigh,  two  plows,  one  harrow  and  farm- 
ing utensils,  including  tackle  for  teams,  not  exceeding  $300 

30  Rev.  Code,  N.  Dak.,  1895,  Sec.  *'  Rev.  Code.  N.  Dak.,  1805,  Sec. 

3625.  5517- 

♦oRev.  Code,  N.  Dak.,  1895,  Sec.  *^Rev.  Code,  N.  Dak.,  1895,  Sec. 

5516.  5518,  as  amended  in  L.,  N.  D.,  1901, 

p.   87. 


EXEMPTIONS.  519 

in  value ;  tools  of  a  mechanic  used  and  kept  for  the  purpose  of 
carrying  on  his  trade,  and  in  addition,  $200  worth  of  stock 
in  trade;  the  library  and  instruments  of  any  professional  person 
not  exceeding  $600  in  value.*^ 

If  debtor  fails  to  make  a  claim  for  exemptions,  his  wife 
may;  if  she  fails  to  make  claim,  one  of  the  children  of  16  years 
of  age  may  do  so/* 

No  personal  property,  except  absolute  exemptions,  is  ex- 
empt in  an  action  for  laborers'  or  mechanics'  wages,  or  for  a 
debt  incurred  for  property  obtained  under  false  pretenses;  no 
personal  property  is  exempt  from  process  in  an  action  for  the 
collection  of  a  legally  practicing  physician's  bills  for  profes- 
sional services  or  medicine,  except  absolute  exemptions  and 
household  and  kitchen  furniture,  stoves,  and  two  cows,  the 
value  of  which,  exclusive  of  absolute  exemptions,  does  not  ex- 
ceed $500."' 

No  property  is  exempt  in  an  action  brought  for  the  pur- 
chase price  thereof.*" 

A  partnership  firm  can  claim  but  one  exemption  of  $1,000 
in  value  or  alternative  property,  when  so  applicable,  out  of  the 
partnership  property.  All  partnership  property  claimed  as 
exempt  shall  constitute  a  part  of  the  exemptions  of  the  several 
partners,  the  same  being  divided  in  proportion  to  the  interests 
of  the  partners  in  the  firm  assets,  and  in  no  case  can  the  ag- 
gregate exemptions  of  the  several  partners  exceed  the  amount 
which  would  have  been  allowed  them  if  the  partnership  had 
not  existed.*^ 

Except  those  made  absolute,  the  exemptions  provided  for  do 
not  apply  to  the  following:  Corporations  for  prf)fit.  nonresi- 
dents, a  flebtor  who  is  in  the  act  of  removing  from  the  state 
with  his  family,  or  has  absconded,  taking  his  family  with 
him.^' 

No  property  except  the  homestead  and  property  absolutely 

*»  Rev.  Code,  N.  Dak..  1895,  Sec.  ♦"  Rev.  Code.  N.  Dak.,  1893.  Sec. 

55'9-  5527. 

♦♦  Rev.  Code.  N.  Dak..  1895.  Sec.  *''  Rev.  Code,  N.  Dak..  1895.  Sec. 

552.1.  5528:   as  amended   L..  N.   D..    1901, 

*''  Rev.  Code,  N.  Dak.,   1895,  Sec.      p.  88. 
5526.  *"  Rev.  Code,  N.  Dak..  1895,  Sec. 

5529. 


520  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

exempted  is  exempt  from  process  for  tines,  penalties  and  costs 
of  criminal  prosecutions;  no  property  except  homestead  and 
property  absolutely  exempted  is  exempt  from  process  on  a 
judgment  for  forfeitures  of  undertakings  and  bonds  or  a 
recognizance  in  criminal  cases.*" 

The  projierty  of  a  cemetery  corporation  and  the  lots  sold  by 
it  to  individual  proprietors  are  exempt.^" 

Ohio. —  Husband  and  wife  living  together,  a  widow  or 
widower  living  with  an  unmarried  daughter  or  an  unmarried 
minor  son,  may  hold  exempt  from  process  a  family  homestead, 
not  exceeding  $i,ooo  in  value;  the  husband,  or,  in  case  of  his 
neglect,  the  wife,  may  make  the  demand  therefor ;  but  neither 
can  make  such  demand  if  the  other  has  a  homestead. ^^ 

A  person  owning  the  superstructure  of  a  dwelling-house, 
occupied  by  him  or  her  as  a  family  homestead,  although  the 
title  to  the  land  is  in  another,  and  also  lessees,  are  entitled  to 
the  benefits  of  section  5435-°^ 

On  petition  of  personal  representative  to  sell  land  to  pay 
debts,  w4ien  decedent  has  left  a  widow  or  a  minor  child  un- 
married and  composing  part  of  the  family  at  the  time  of  his 
death,  the  appraisers  must  set  aside  a  homestead  as  provided 
in  section  5438,  and  the  same  is,  except  as  provided  in  section 
6155,  exempt  so  long  as  the  widow  remains  unmarried,  or  any 
unmarried  minor  child  of  decedent  resides  thereon;  when 
homestead  is  sold  to  pay  any  lien  which  precludes  the  allow- 
ance thereof,  the  residue  of  the  proceeds,  not  exceeding  v$500, 
shall  be  paid  to  the  widow,  etc.°^ 

The  homestead  exemption  does  not  extend  to  a  judgment 
rendered  on  a  mortgage  executed  by  a  debtor  and  his  wife, 
nor  to  a  claim  for  manual  labor  less  in  amount  than  $100,  nor 
to  impair  the  lien,  by  mortgage  or  otherwise,  of  the  vendor 
for  the  purchase  money  of  the  premises,  nor  to  the  lien  of  a 
mechanic  or  other  person  under  any  statute  of  the  state  for 

*"  Rev.  Code,  N.  Dak.,  1895,  Sec.  5435 ;  In  re  Rhodes,  109  Fed.  Rep. 
5530.  117,  6  Am.  B.  R.  173. 

50Rev.  Code,  N.  Dak.,   1895,  Sec.  '-2  Rev.    Stat.,    Ohio,    1897.    Sec 

3199-  5436. 

"  Rev.     Stat.,    Ohio,     1897,     Sec.  '^•'  Rev.    Stat.,    Ohio,     1897,    Sec. 

5437;  sec  Sfc.  5440. 


EXEMPTIONS.  521 

material  furnished  or  labor  j)erformed  in  the  erection  of  the 
dwelling-house  thereon,  nor  for  the  payment  of  taxes,^* 

No  sale  of  real  estate  made  under  a  mortgage  not  executed 
by  the  wife  of  a  married  debtor  can  affect  the  homestead 
right." 

Dower  is  not  affected  by  the  homestead  exemption.^* 

Husband  and  wife  living  together,  a  widower  living  with 
an  unmarried  daughter  or  minor  son.  every  widow  and  every 
unmarried  female  having  in  good  faith  the  care,  maintenance 
and  custody  of  any  child  or  children  of  a  deceased  relative, 
resident  of  Ohio,  and  not  the  owner  of  a  homestead,  may  in 
lieu  thereof  hold  exempt  from  process  real  or  personal  prop- 
erty, to  be  selected  by  such  person,  not  exceeding  in  value 
$500.  in  addition  to  the  chattel  property  otherwise  exempt  by 
law ;  such  selection  and  exemption  can  not  be  made  by  the 
debtor  from  any  money,  salary  or  wages  due  such  person  as 
against  a  debt  due  for  necessaries  furnished  such  debtor  after 
the  passage  of  this  act,  except  to  the  extent  of  ninety  per 
centum  of  such  money,  etc.'*^ 

Every  person  who  has  a  family  and  every  widow  may  hold 
exempt  the  following  property  from  process  for  any  debt, 
damage,  fine  or  amercement,  to  wit :  The  wearing  apparel  of 
such  person  or  family,  beds.  etc..  for  the  use  of  the  same ;  one 
cr)f)king-stove  and  pipe;  one  stove  and  pipe,  used  for  warm- 
ing the  dwelling,  and  fuel  for  sixty  days,  provided  and  de- 
signed for  the  use  of  such  person  and  family;  one  cow.  or.  if 
the  debtor  owns  no  cow,  household  furniture,  to  be  selected 
by  him,  not  exceeding  $35  in  value;  two  swine  or  the  pork 
therefrom,  or,  if  the  debtor  owns  no  swine,  household  furni- 
ture not  exceeding  $15  in  value,  to  be  selected  by  him;  six 
sheep  and  the  wool  therefrom,  and  the  cloth  or  other  articles 
manufactured  therefrom,  or  in  lieu  thereof  household  furni- 
ture, to  be  selected  by  the  debtor,  not  exceeding  $15  in  value, 

"Rev.     Stat..    Ohio.     1897,     Sec.  "  Rrv.    Stat..     Ohio,     1807,     Sec. 

54.34.     Sec   Sees.   32060  and   3185  as  5441;  as  ameiiflcd,  93  O.  L.,  p.  318. 

to  labor  and  material  liens.  A  divorced  hnshand,  h'vinp;  on  a 

•'•''  Rev.     Stat.,     Ohio,     1807,     Sec  homestead   with   a   minor  child,   for 

5442.  whose   maintenance   he   is   responsi- 

'"'  Rev.     Stat.,     Ohio,     1807,     Sec.  ble.  is  entitled  to  hnid   the  same  as 

5443-  exempt    on    hecominjj    a    bankrupt. 

In  re  Rhodes,  109  Fed.  Rep.   117. 


522  LAW    AXn    PROCEEDINGS    IN    BANKRUPTCY. 

and  sufficient  food  for  such  animals  for  sixty  days;  the  bibles, 
etc.,  and  schoolbooks  used  in  the  family,  and  all  family  pic- 
tures; provisions  actually  provided  and  designed  for  the  use 
of  the  debtor  or  family,  not  exceeding  $50  in  value,  to  be 
selected  by  the  debtor,  and  other  articles  of  household  and 
kitchen  furniture,  or  either,  necessary  for  such  person  or 
family,  to  be  selected  by  the  debtor,  not  exceeding  $50  in 
value;  one  sewing-machine,  one  knitting-machine,  and  the 
tools  and  implements  of  trade  or  business,  whether  mechanical 
or  agricultural,  to  be  selected  by  debtor,  not  exceeding  $100 
in  value;  the  personal  earnings  of  the  debtor  and  minor  chil- 
dren for  three  months,  when  it  appears  that  such  earnings 
are  necessary  for  the  support  of  such  debtor  or  his  family ;  such 
period  of  three  months  dates  from  the  issuing  of  any  attach- 
ment, etc.,  the  rendition  of  any  judgment,  or  the  making  of 
any  order  under  which  the  attempt  to  subject  such  earnings 
is  made;  provided,  that  if  the  debt  is  one  for  necessaries  fur- 
nished to  the  debtor,  his  wife  or  family,  after  the  passage  of 
this  act,  only  90  per  centum  of  such  earnings  is  exempt;  and 
provided,  that  nothing  herein  contained  shall  render  the  per- 
sonal earnings  of  such  debtor's  minor  child  subject  to  the 
payment  of  any  such  claim,  etc.  ;'  all  specimens  of  natural 
history  or  science,  except  such  as  may  be  kept  for  exhibition 
for  money  or  pecuniary  gain.^ 

Every  person  who  is  the  head  of  a  family  and  engaged  in 
the  business  of  draying  for  a  livelihood,  in  addition  to  the 
exemptions  specified  in  section  5430,  may  hold  exempt  one 
horse,  harness  and  dray;  every  head  of  a  family  who  is  en- 
gaged in  the  business  of  agriculture,  in  addition  to  the  ex- 
emptions provided  for  in  section  5430,  may  hold  exempt  one 
horse,  one  yoke  of  cattle,  with  necessary  gearing  for  the  same, 
and  one  wagon ;  every  head  of  a  family  who  is  engaged  in  the 
practice  of  medicine,  in  addition  to  the  exemptions  provided 
for  in  section  5430,  may  hold  exempt  one  horse,  one  saddle 
and  bridle,  also  books,  medicines  and  instruments  pertaining 
to  his  profession,  not  exceeding  $100  in  value.'' 

'See   Sees.   5453  and  6489;  as      5430;    as  amended,   93  O.   L.,  p. 
amended,  93  O.  L.,  p.  318  and  319.      316. 
•Rev.   Stat.,  Ohio,    1897,    Sec.  sRev.  Stat,    Ohio,    1897,    Sec. 

5431- 


EXEMPTIONS.  :;23 

Every  unmarried  woman  may  hold  the  following  property 
exempt  from  process:  Wearing  apparel,  to  be  selected  by 
her,  not  exceeding  in  value  |ioo;  one  sewing-machine,  one 
knitting-machine,  a  bible,  hymnbook,  psalmbook  and  any 
other  books,  not  exceeding  in  value  $25.^ 

Any  beneficiary  fund,  not  exceeding  $5,000,  of  any  benev- 
olent society,  appropriated,  set  apart  or  paid,  according  to 
its  rules,  etc.,  to  the  family  of  any  deceased  member,  is  not 
liable  to  be  taken  to  pay  the  debts  of  any  deceased  member.* 

Property  kept  and  used  to  extinguish  fires  is  exempt.^ 

The  regalia,  insignia  of  office,  etc.,  of  any  benevolent 
society  in  the  state  is  exempt.* 

The  money  or  other  benefit,  etc.,  provided  or  rendered  by 
any  fraternal  benefit  association  can  not  be  taken  to  pay  the 
debts  of  a  certificate-holder  or  of  any  beneficiary  named 
therein.^ 

Husband  may  insure  his  life  for  the  benefit  of  wife  and 
children,  and  the  proceeds  thereof  are  exempt  from  the  claims 
of  his  creditors;  the  amount  of  premiums  paid  in  fraud  of 
creditors  enures  to  their  benefit  out  of  the  proceeds  of  the 
policy.* 

Burial  lots  sold  by  cemetery  association,  if  used  exclusively 
for  burial  purposes,  are  exempt,^ 

Fireman's  pension  fund  is  exempt.^ 

All  property  vested  in  a  board  of  education  is  exempt  from 
process." 

Any  association  organized  for  the  purpose  of  preserving  and 
protecting  bodies  of  the  dead  may  hold  one  acre  of  ground 
exempt  from  process  if  used  exclusively  for  such  purpose.'" 


•Rev.    Stat,    Ohio. 

1897,    Sec. 

«  Rev. 

Stat.,    Ohio,    1897, 

Sec. 

5426. 

3628;  as 

amended,  93  0.  L.,  p 

•  131- 

A  married  woman  is 

entitled  to 

7  Rev. 

Stat.,    Ohio,    1897, 

Sec. 

the  benefits  of  all  exemptions  to 

3575- 

heads  of  families,  Sec. 

.S3I9- 

•*  Rev. 

Stat.,    Ohio,   1897, 

Sec. 

2  Rev.    vStat.,     Ohio, 

1S97,    vSec. 

(2477—1 

4),  (2477— 3r),(2477- 

-50). 

5427- 

(2477—6 

.2),  (2477—80). 

"Rev.    Stat.,    Ohio, 

1897,    Sec. 

"  Rev. 

vStat.,    Ohio,    1897, 

vSec. 

5429- 

,^97.^- 

*Rev.   Stat.,    Ohio, 

1S97,     Sec. 

'"  Rev. 

Stat.,    Ohio,   1897, 

Sec. 

5428. 

3884. 

'•Rev.    Stat.,     Ohio, 

1897,   Sec. 

(3631-18). 

5-4 


1  AW      AM)     I'KOrKKOTNr.S    IN     BANKRII'TCY. 


The  property,  both  real  and  personal,  of  a  defendant  against 
whom  a  jndgment  is  rendered  nnder  Title  V,  Chap.  5,  is 
liable  tiierefor  without  exemption.' 

The  real  and  personal  property  of  every  kind,  without 
exception  or  exemption  except  under  section  5430,  is  liable 
for  all  fines  costs  and  damages  assessed  against  a  person  for 
the  sale  of  intoxicating  liquors.* 

A  lot  held  by  an  individual  in  a  cemetery  is  in  no  case 
subject  to  execution,^ 

The  seal  and  register  of  a  notary  public  is  exempt.* 

Oklahoma. — The  homestead  of  the  family,  belonging  to 
the  head  thereof  residing  in  the  territory,  is  exempt  from  all 
process  for  the  payment  of  debts,  except  as  hereinafter  pro- 
vided.' 

The  homestead  of  a  family  not  in  a  town  or  city  may  con- 
sist of  not  more  than  160  acres,  which  must  be  in  one  tract, 
with  the  improvements;  the  homestead  in  a  city,  town  or 
village  may  consist  of  a  lot  or  lots,  not  to  exceed  one  acre, 
with  the  improvements;  the  same  must  be  used  for  the  pur- 
pose of  a  home  for  the  family;  a  temporary  renting  of  the 
homestead  does  not  change  its  character  when  no  other  home- 
stead has  been  acquired  ;  the  homestead  may  be  mortgaged  ; 
the  homestead  exemption  does  not  apply  to  a  corporation  for 
profit,  to  a  nonresident,  to  a  debtor  in  the  act  of  removing 
his  family  from  the  territory,  or  who  has  absconded,  taking 
with  him  his  family.* 

The  following  property  is  exempt  to  the  head  of  a  family 
in  the  territory  from  process,  except  as  hereinafter  provided : 
all  household  and  kitchen  furniture ;  lots  in  a  cemetery  held 
for  the  purpose  of  sepulture;  all  implements  of  husbandry 
used  upon  the  homestead;  all  tools,  apparatus  and  books 
belonging  to  and  used  in  any  trade  or  profession ;  the  family 
library  and  all  family  portraits  and  pictures  and  wearing 
apparel ;    five  milch  cows  and  their  calves  under  six  months 

1  Rev.  wStat.,  Ohio,  1897,  Sec.  <  Rev.  vStat.,  Ohio,  1897,  Sec. 
42715.  11.^;  as  amended,  93  O.  L.,  p.  405- 

2  Rev.  Stat.,  Ohio,  1897,  Sec.  ^  Stat.,  Ok.,  1893,  Chap.  XXXIV, 
4363.  Sec.  I,  Par.  2844. 

8Rev.     Stat.,    Ohio,   1897,  Sec.  «  Stat.  Ok.,  1893,  Chap.  XXXIV, 

1469.  Sec.  2,  Par.  2845. 


EXEMPTIONS.  525 

old  ;  one  yoke  of  work  oxen,  with  necessary  yokes  and  chains; 
two  horses  or  two  mules  and  one  wagon,  cart  or  dray;  one 
carriage  or  buggy  ;  one  gun  ;  ten  hogs ;  twenty  head  of  sheep ; 
all  saddles,  bridles  and  harness  necessary  for  the  use  of  the 
family;  all  provisions  and  forage  on  hand  or  growing  for 
home  consumption  and  for  the  use  of  exempt  stock  for  one 
year.' 

The  following  property  is  exempt  to  persons  who  are  not 
heads  of  families;  it  is  subject  to  liens  given  by  the  owners: 
A  lot  in  cemetery  held  for  the  purpose  of  a  sepulcher ;  all  wear- 
ing apparel;  all  tools,  apparatus  and  books  belonging  to  any 
trade  or  profession ;  one  horse,  bridle  and  saddle,  or  one  yoke 
oxen;  current  wages  for  personal  service.^ 

The  exemption  of  the  homestead  does  not  apply  where  the 
debt  is  due  for  the  purchase  money  of  the  homestead,  for 
taxes  due  thereon,  for  work  and  material  used  in  constructing 
improvements  thereon,  or  for  mortgage  indebtedness;  but 
such  work  and  material  or  mortgage  indebtedness  must  have 
been  contracted  for  in  writing,  and  the  consent  of  the  wife 
must  have  been  given  in  the  same  manner  as  required  by  law 
in  making  conveyance  of  the  homestead.^ 

The  exemption  of  personal  property  does  not  apply  when 
the  debt  is  due  for  rents  and  advances  made  by  a  landlord  to 
his  tenant,  or  to  other  debts  which  are  secured  by  a  lien  on 
the  property/ 

None  of  the  personal  property  mentioned  in  this  act  is  ex- 
empt from  attachment  or  execution  for  wages  of  any  clerk, 
mechanic,  laborer  or  servant.^ 

The  pension  money  of  every  resident  of  the  territory  who 
became  disabled  in  the  service  of  the  United  States  is  ex- 
empt." 

All  conveyances  affecting  the  title  of  homestead  exempted 
bv  law   to  the  head  of  a   family  arc  void  unless  the  husband 

'  Stat.,  Ok.,  1893,  Chap.  XXXIV,  <  Stat.,  Ok.,  Cliaj).  XXXIV.  Sec. 

Sec.    I,  Par.  2844.  5,  I'ar.  2H4S. 

« vStat.,  Ok.,  Chap.  XXXIV,  Sec.  ••  Stat.,  Ok.,  Chap.  XXXIV,  Sec. 

3.  Par.  2846,  6,  Par.  2849. 

«  Stat..  Ok.,  Chap.  XXXIV.  Sec.  «  Stat..  Ok..  Chap.  XXXIV,  Sec. 

4.  Par.  2847.  7>  J'sr.  2850. 


1^26  LAW    AXn    PROCKKniXCS    IX    RAXKUrPTCY. 

and  wife  sign  and  acknowledge  one  and  the  same  joint  instru- 
ment. ' 

No  land  acquired  under  the  provisions  of  Title  XXXII, 
Chap.  5,  of  the  Rev.  Stat,  of  the  United  States  is  liable  to 
the  satisfaction  of  any  debt  contracted  prior  to  issuing  the 
patent  therefor. - 

The  proceeds  of  the  insurance  on  the  life  of  the  husband 
for  the  benefit  of  the  wife  and  children  are  exempt  from  lia- 
bility to  pay  the  debts  of  the  husband ;  if  the  premium  is 
paid  by  any  person  with  the  intent  to  defraud  his  creditors, 
an  amount  equal  to  the  premium  so  paid  enures  to  the  benefit 
of  the  creditors. •' 

No  property  is  exempt  from  execution  for  fines  for  profane 
swearing  and  Sabbath  breaking.* 

The  personal  earnings  of  a  debtor  who  is  a  resident  of  the 
territory  at  any  time  within  three  months  next  preceding  the 
issuing  of  process  can  not  be  applied  to  the  payment  of  his 
debts,  when  it  appears  by  debtor's  affidavit  or  otherwise  that 
such  earnings  are  necessary  in  whole  or  part  for  the  support 
of  his  family;  provided,  that  at  the  time  of  filing  such  affi- 
davit he  shall  notify  plaintiff  in  writing.^ 

For  exemptions  upon  the  decease  of  husband  and  wife,  see 
Stat.  Ok.,  1893,  Chap.  XVIII,  Sees.  1-9,  par.  1300-1308. 

Oregon. — The  homestead  of  any  family  is  exempt  from 
judicial  !-ale  for  the  satisfaction  of  any  liability  or  judgment 
contracted  or  obtained  after  February  21,  1893.*' 

Such  homestead  must  be  the  actual  abode  of,  and  used  by, 
such  familv  or  some  members  thereof." 

Such  homestead  can  not  exceed  $1,500  in  value,  nor  160 
acres  in  extent  if  not  located  in  a  town  or  city  laid  off  in 
blocks  or  lots;  if  located  in  any  such  town  or  city,  then  it 
can  not  exceed  one  block,  but  in  no  case  can  such  homestead 
be  reduced  to  less  than  twenty  acres,  nor  one  lot,  regardless 
of  value.  ^ 

1  vStat,  Ok.,  Chap.  XXI,  Sees.  20  -'vStat.,  Ok.,  1S93,  Chap.  LXVI, 
and  21,  Par.  1627  and  1628.                  Sec.  506,  Par.  4384;  Chap.  LXVII, 

2  Rev.   wStat.,  U.  S.,  2296.  Sec.  165,  Par.  4803. 

■'■Rev.   Stat.,    Ok.,   1893,  Chap.          « Gen.  L..  Or.,  1893.  p.  93,  Sec.  i. 

XLIV,  Sec.  19.  Par.  3080.  ^  Gen.  L.,  Or.,  1893,  p.  93,  Sec.  2. 

*Rev.  Stat.,  Ok.,  1893,  Chap.  s  Gen.  L.,  Or.,  1893,  p.  93,  Sec.  3. 
XXV,  Sec.  20,  Par.  1886. 


EXEMPTIONS.  527 

This  exemption  does  not  apply  to  decrees  for  the  foreclo- 
sure of  mortgages  properly  executed;  nor  to  mortgages  of 
married  people  on  homestead,  executed  by  husband  and  wife/ 

The  homestead  is  exempt  from  process  after  the  death  of 
the  owner,  as  against  debts  for  which  it  could  not  have  been 
sold  during  his  life.^ 

The  following  property  is  exempt,  if  selected  and  reserved 
by  the  debtor  at  time  of  levy,  or  as  soon  thereafter,  before 
sale,  as  known  to  him:  Books,  pictures  and  musical  instru- 
ments of  value  of  $75  ;  necessary  wearing  apparel  of  any  per- 
son to  the  value  of  $100,  and  $50  additional  for  each  member 
of  family ;  tools,  implements,  apparatus,  team,  vehicle,  harness 
or  Jibrary,  necessary  to  carry  on  trade  or  profession,  to  the 
value  of  $400 ;  food  for  team  for  sixty  days ;  the  word  team 
does  not  include  more  than  one  yoke  of  oxen  or  span  of  horses 
or  mules ;  if  owned  by  householder  and  in  actual  use,  or  kept 
for  use  by  and  for  his  family,  ten  sheep  and  fleece  for  one 
year,  or  cloth  and  yarn  made  therefrom ;  two  cows;  five  swine; 
household  goods,  furniture  and  utensils  to  the  value  of  $300, 
and  food  for  such  animals  for  three  months,  and  for  household 
and  family  six  months;  a  pew,  property  of  the  state,  county, 
municipal  corporation  or  any  other  public  or  municipal  corpo- 
ration of  like  character.  No  article  of  property  or  article  re- 
ceived in  exchange  therefor  is  exempt  from  execution  issued 
on  judgment  for  its  price.  In  all  cases  where  advances  of 
goods,  wares,  merchandise  or  money  are  made  to,  or  labor  per- 
formed for.  any  person  engaged  in  an  undertaking,  trade, 
etc.,  to  enable  or  assist  such  person  to  carry  on  such  under- 
taking, trade,  etc.,  or  which  shall  l)e  used  or  cmj)loyed  for  such 
purpose,  then  no  article  of  personal  property,  tool,  implement 
or  apparatus  used  or  employed  by  such  person  in  such  under- 
taking, trade,  etc.,  or  money  due  such  person  growing  out  of 
or  incident  thereto,  shall  be  exempt  from  execution  on  a  judg- 
ment recovered  for  such  advances  or  for  such  labor  i)er- 
formed.^ 

The  earnings  of  a  debtor  for  personal  services,  at  any  time 
within  thirty  days  next  preceding  the  service  of  attachment, 

1  Gen.  L,.  Or..  1803.  p.  93.  Sec.  4-  ''  Gen.  L.,  Or.,  1903,  p.  160. 

2  Gen.  L.,  Or.,  1893,  p.  94.  Sec.  7- 


528  LAW    AND    rROCKKDINGS    IN    BANKRUPTCY. 

etc.,  anu^initiiii;-  to  $75.  ;ire  exempt  when  it  appears  that  such 
earning-s  are  necessary  for  the  use  of  a  family  supported  in 
whole  or  part  by  the  debtor.* 

Burial  lots  sold  by  a  cemetery  association  for  the  sole  pur- 
pose of  interment  are  exempt  from  process  against  the  pur- 
chaser, i  f  used  as  such  by  him."* 

Pennsylvania."  —  Property,  real  or  personal,  to  the  value 
of  $300,  exclusive  of  all  wearing  apparel  of  the  defendant  and 
his  family,  and  all  bibles  and  schoolbooks  in  use  are  exempt 
from  process,  except  liens  for  purchase  money  of  the  real  estate 
of  insolvent  debtors.'' 

The  wife  and  family  of  debtor  are  entitled  to  retain  for  their 
own  use  free  from  attachment  such  articles  as  are  by  law  ex- 
empted from  levy  and  sale  on  execution." 

Persons  entitled  to  exemption,  provided  for  in  an  act  en- 
titled "  An  act  to  exempt  property or  distress 

for  rent."  approved  April  9,  1849,  may  elect  to  retain  the 
same  out  of  any  bank  notes,  money,  stocks,  judgments  or 
other  indebtedness  to  such  person.® 

All  sewing-machines  belonging  to  seamstresses  in  the  com- 
monwealth, in  addition  to  any  articles  exempt  by  law,  are 
exempt  from  process.^" 

*  Gen.  L.,  Or.,  1903,  p.  26.  re  Meyers,  102  Fed.  Rep.  869,  4  Am. 
'^Hill's  Ann.  L.,  Or.,   1892,  Chap.      B.   R.  536;  In  re  Brown,   100  Fed. 

XXXV,   Sec.  3326,  as  amended,  L.  Rep.  441,  4  Am.  B.  R.  46. 

Or.,  1893,  P-  149.  ■^  Bright,   Pur.   Dig.,   1883,  p.  627, 

*  The  exemption  laws  of  this  Sec.  24 ;  In  re  Haskin,  109  Fed.  Rep. 
state  are  dealt  with  in  In  re  Duffy,  789,  6  Am.  B.  R.  485 ;  In  re  Wood- 
118  Fed.  Rep.  926,  9  Am.  B.  R.  358;  ward,  95  Fed.  Rep.  955,  2  Am.  B.  R. 
In  re  Yost,  117  Fed.  Rep.  792,  9  Am.  693. 

B.  R.  153;  In  re  Staunton,  117  Fed.  ^  Bright,   Pur.   Dig.,    1883,  p.   742, 

Rep.   507,  9  Am.    B.   R.  79;   In   re  Sees.  23,  25.     As  to  insolvents,  see 

Long,  116  Fed.  Rep.  113,  8  Am.  B.  p.  899,  Sec.  46  and  42  V,  and  p.  900, 

R.  591  ;  In  re  Jackson,  116  Fed.  Rep.  Sec.  49.     For  exemptions  to  widow 

46,  8  Am.  B.  R.  594;  In  re  Hoover,  and  children  of  decedent,  see  p.  518, 

113  Fed.  Rep.  136,  7  Am.  B.  R.  330;  Sec.  64,  ct  seq.    For  exemptions  in 

Iv.  re  Manning,   112  Fed.   Rep.  948,  cases  of  assignments   for  benefit  of 

7  Am.  B.  R.  571  ;  In  re  Haskin,  109  creditors,  .see  p.  123,  Sec.  22,. 

Fed.  Rep.  789.  6  Am.  B.  R.  485 ;  In  »  Bright,   Pur.   Dig.,   1883.  p.  744. 

re    Bolinger,    108   Fed.    Rep.    374,   6  Sec.    29.      In    re    Myers,    102    Fed. 

Am.    B.    R.    171  :    In    re    Black,    104  Rep.  869,  4  Am.  B.  R.  536. 

Fed.  Rep.  289,  4  Am.  B.  R.  776;  In  '«  Bright,  Pur.  Dig.,  1883,  p.  744, 

Sees.  30  and  31. 


EXEMPTIONS.  529 

All  pianos,  melodeons  and  organs  leased  or  hired  by  per- 
sons residing  in  the  commonwealth  are  exempt  from  process 
for  rent  due,  in  addition  to  articles  exempt  by  law,  provided 
the  persons  so  leasing  or  hiring  the  said  instruments  give 
notice  to  the  landlord  of  such  hiring  or  leasing/^  This  ex- 
emption also  applies  to  sewing-machines  and  typewriting- 
machines.^" 

No  exemption  is  allowed  upon  a  judgment  for  $100  or  less 
for  wages  for  manual  labor.^^ 

No  exemption  is  allowed  as  against  a  judgment  obtained 
for  assigning  or  sending  a  claim  to  be  collected  against  a  resi- 
dent of  the  commonwealth  by  proceedings  in  attachment  in  a 
foreign  state." 

From  and  after  April  4.  1889,  there  is  no  exemption  allowed 
on  a  judgment  for  board  for  four  weeks  or  less.*"^ 

The  uniforms,  arms,  ammunition  and  accouterments  of 
members  of  the  national  guards  are  exempt.*® 

Rhode  Island. —  The  following  property  is  exempt  from 
process :  Necessary  wearing  apparel  of  debtor  and  family ; 
uniform,  arms  and  equipments  of  militiamen ;  '^  one  pew  in 
church :  one  burial  lot ;  working  tools  and  the  professional 
library  of  any  professional  man  in  actual  practice,  not  exceed- 
ing $200;  household  furniture  and  family  stores,  not  exceed- 
'"S"  $300,  of  a  housekeeper;  books  in  use  in  the  family,  not 
exceeding  $300;  one  cow  and  one  and  one  half  tons  of  hay. 
one  hog.  one  ])ig.  and  the  pork  of  the  same,  of  a  housekeeper: 
mariners'  wages;  debts  secured  by  bills  of  exchange  and 
promissory  notes;  ten  dollars  of  wages,  except  it  be  for  neces- 
saries; wages  of  debtor's  wife  and  minor  children;  such  other 
property,  real,  personal  or  mixed,  as  is  exempted  by  general 
or  special  acts,  charters  of  incorporation,  or  by  the  policy  of 
the  law.'" 

"Bright.   I'ur.  Dip;.,   1883.  p.  744,  if'-BripIit,     Pur.     Dip.,    Supp.,    p. 

Sec.   32.  2505,    Sec.   .1. 

12  T..    Pcnna..    1893.    p.    282,      For  '"  Bright,  Pur.  Dig.,  1883,  p.  1260. 

exemptions   from   distress    for   rent,  .Sec.  84. 

'Of  p.  1012,  Sec.  5.  IT  Gen.  L..  R.  T.,  1896,  Chap.  206, 

'^Bright.     Pur.    Dig..     Supp,    p.  Sec.   109,  p.   lOQO. 

2202.  Sec.  5.  '"Gen.  L.,  R.  I..  tA)^.  rii.ip    255. 

1*  Bright,     Pur.    Dig.,    Supp..    p.  Sec.  5,  p.  888 
2202.  Sec.  7. 


530  LAW    AXn    PROCEEDINGS    IN    BANKRUPTCY. 

South  Carolina.^''  —  The  general  asseinl)ly,  acting-  under 
a  provision  in  the  state  constitution,  has  enacted  laws  ex- 
empting from  attachment  and  sale  under  any  mesne  or  final 
process  issued  from  any  court  to  the  head  of  any  family  resid- 
ing in  the  state  a  homestead  in  lands,  whether  held  in  fee  or 
in  anv  lesser  estate,  not  to  exceed  the  value  of  one  thousand 
dollars,  with  the  yearly  products  thereof,  and  to  every  head  of 
a  family  residing  in  the  state,  whether  entitled  to  a  homestead 
exemption  in  lands  or  not.  personal  property  not  to  exceed  in 
value  the  sum  of  five  hundred  dollars.  No  property,  however, 
is  exempt  from  attachment,  levy  or  sale  for  taxes,  or  for  pay- 
ment of  obligations  contracted  for  the  purchase  of  the  home- 
stead, or  the  erection  of  improvements  thereon,  and  the  yearly- 
products  of  the  homestead  are  not  to  be  exempt  from  attach- 
ment by,  or  sale  for,  the  payment  of  obligations  contracted  in 
the  production  of  the  same.^** 

If  the  husband  be  dead,  the  widow  and*  children,  if  the 
father  and  mother  be  dead,  the  children,  whether  they  be 
minors  or  not,  are  entitled  to  have  the  homestead  exempted  in 
the  same  manner  as  if  the  parents  were  living." 

No  waiver  of  the  right  of  homestead  will  defeat  the  right 
before  assignment,  except  it  be  by  deed  of  conveyance  or  by 
mortgage,  and  only  as  against  the  mortgage  debt ;  and  no 
judgment  creditor  or  other  creditor,  whose  lien  does  not  bind 
the  homestead,  has  any  right  or  equity  to  require  that  a  lien 
which  embraces  a  homestead  and  other  property  shall  first 
exhaust  the  homestead ;  provided,  that  after  a  homestead  in 
lands  has  been  set  ofif  and  recorded  the  same  can  not  be  waived 
by  deed  of  conveyance,  mortgage  or  otherwise,  unless  the  same 
be  executed  by  both  husband  and  wife.^^ 

The  personal  property  of  the  head  of  any  family  residing 
in  the  state,  whether  entitled  to  homestead  exemption  in  lands 

i^The    exemption    laws    of    this  ^'^  Con?it.,  S.  C,  Art.  11,  Sec.  32. 

state  are  dealt  with   in   Cannon  v.  Rev.    Stat.,   S.   C,   1893,   Sec.  2126; 

Dexter,  etc.,  Mfg.  Co.  fC.  C.  A.  4th  as  amended,  L.,  S.  C,  1896,  p.  190. 

Cir.),    120    Fed.    Rep.    657,    9    Am.  21  Rg^.    Stat.,    S.    C,    1893,    Sec. 

B.   R.   724;   McGahan  v.   Anderson  2129. 

(C.  C  A.  4th  Cir.),  113  Fed.  Rep.  22  Rev.    Stat.,    S.    C,    1893.    Sec. 

Ill,   7  Am.   B.   R.  641;  In  re  Mc-  2130;   as   amended,  L.,   S.   C,   1896, 

Cntchen,  100  Fed.  Rep.  779,  4  Am.  p.   191. 
B.  R.  81. 


EXEMPTIONS.  .  531 

or  not,  to  the  extent  of  $500,  is  exempt ;  the  personal  property 
of  any  person  not  the  head  of  a  family,  consisting  of  neces- 
sary wearing  apparel  and  tools  and  implements,  or  other  prop- 
erty, to  the  extent  of  $500,  is  also  exempt.'^ 

In  case  any  woman,  having  a  separate  estate,  is  married  to 
the  head  of  a  family  who  has  not  sufficient  property  to  consti- 
tute a  homestead,  she  is  entitled  to  the  homestead  exemption, 
as  provided  for  the  head  of  a  family,  but  there  shall  not  be 
the  allowance  of  more  than  $1,000  worth  of  real  estate  nor 
$500  worth  of  personal  property"  to  the  husband  and  wife 
jointly."* 

The  exemptions,  however,  do  not  extend  to  an  attachment, 
levy  or  sale  in  any  mesne  or  final  process,  to  secure  or  enforce 
the  payment  either  of  taxes  or  of  obligations  contracted  for 
the  purchase  of  the  homestead  or  the  erection  or  making  of 
improvements  or  repairs  thereon,  or  for  the  purchase  of  the 
said  personal  property.  The  yearly  products  of  the  homestead 
are  subject  to  attachment,  levy  and  sale  to  secure  or  enforce 
the  payment  of  obligations  contracted  for  provisions  or  other 
necessary  articles  purchased,  or  advances  in  money,  or  mer- 
chandise, procured  to  be  used  or  expended  in  the  production  of 
the  same,  or  of  other  obligations  contracted  in  the  production 
of  the  same,  and  of  none  other."'* 

South  Dakota. —  To  all  heads  of  families  an  absolute  ex- 
emption, consisting  of  a  homestead  containing  not  to  exceed 
160  acres  of  land,  with  the  improvements  thereon,  not  ex- 
ceeding $5,000  in  value,  or  a  house  and  lot  and  lots  in  any 
town  or  city,  not  exceeding  one  acre,  to  the  same  value,  is 
allowed.^" 

In  case  the  homestead  is  sold  under  legal  proceedings  the 
amount  paid  the  judgment  debtor  is  exempt  for  one  year,  and 
if  reinvested  in  a  homestead  is  entitled  to  the  same  exemp- 
tion as  the  original  homestead." 

28  Rev.    Stat,,    S.    C,    iRg.i.    Sec.  ^f"' Rev.    Stat.,    S.    C,    189.3,    Sec. 

2131:   as  amended,  L.,   S.  C,   1896.  21.13:  as  amended.  L..  S.   C,   1896, 

192:   Const..   S.   C,  Art.  .3,   Sec.  28.  p.   192. 

"Rev.    Stat.    S.    C.    1893,    Sec.  2"  Civil  Code  Pro..  S.  Dak..  Sec. 

2132.      /n    re   McCutchcn,    100   Fed.  323    (7)  ;   as   amended.   L..   S.   Dak., 

Rep.  779,  4  Am.  B.  R.  81.  1890.  p.  201. 

27  Civil    Code.    S.    Dak.,    Sec.   .323 


53-' 


LAW    AM)    PROCEEDINGS    IN    BANKRUPTCY. 


A  conveyance  or  incumbrance  of  a  homestead  is  invalid,  if 
the  owner  is  married  and  both  husband  and  wife  are  residents 
of  the  state,  unless  both  husband  and  wife  concur  in  and  sign 
the  same  joint  instrument  or  separate  instruments.^* 

The  homestead  is  liable  for  taxes,  and  the  purchase  price 
and  is  subject  to  mechanics'  lien  for  work,  labor  or  material 
done  or  furnished  for  its  improvement.'^ 

The  homestead  must  not  embrace  more  than  one  dwelling- 
house  and  its  appurtenances,  but  a  shop,  store  or  other  build- 
ing situated  thereon  and  really  used  or  occupied  by  the  owner 
in  the  prosecution  of  his  ordinary  business  may  be  deemed  an 
appurtenance;  if  it  embraces  more  than  one  lot  they  must  be 
contiguous.^" 

The  homestead  can  not  include  any  gold  or  silver  mine  or 
mill  or  any  smelter  or  machinery  used  or  intended  to  be  used 
for  the  reduction  or  milling  of  gold  or  silver  ores.^^ 

The  following  pro])erty  is  absolutely  exempt :  All  family 
pictures ;  a  pew ;  a  burial  lot ;  the  family  bible  and  all  school- 
books  used  by  the  family,  and  all  other  books  used  as  a  part 
of  the  family  library,  not  exceeding  $200  in  value ;  wearing 
apparel  of  debtor  and  family ;  provisions  for  the  debtor  and 
family  necessary  for  one  year,  provided  or  growing,  or  both, 
and  fuel  for  one  year ;  the  homestead.^* 

In  addition  to  the  property  mentioned  in  section  323,  the 
debtor,  if  the  head  of  a  family,  may  select  from  all  other  per- 
sonal property  not  absolutely  exempt  goods,  chattels,  merchan- 
dise, money  or  other  personal  property  not  exceeding  $750  in 
value;  and  if  a  single  person,  not  the  head  of  a  family,  personal 
property  not  exceeding  $300  in  value;  this  act  does  not  afifect 
existing  contracts  nor  reduce  exemptions  thereon.^^ 

Instead  of  the  exemptions  provided  for  in  sections  323  and 
324,  the  debtor,  if  the  head  of  a  family,  may  select  the  fol- 

(8)  ;  as  amended ;  L,  S.  Dak.,  1890,  •'»'  S.  Dak.  Stat.,  1899,  Sec.  3380. 

p.   201.  32  Civil   Code   Pro.,   S.   Dak..   Sec. 

28  Pol.   Code,    S.   Dak..   Chap.   38,  323 ;  as  amended,  L.,  S.  Dak.,  1890, 

Sec.    3 ;    as   amended,    L.    S..    Dak.,  p.   200. 

1891,   p.    190;   L.,    S.   Dak.,    1891.  p.  •''3  Civil   Code,   S.   Dak.,   Sec.   324; 


191. 

2»  S.  Dak.  Stat..  1899.  Sec.  3364-5-       202 
30  S.  Dak  Stat.,  1899,  Sec.  3366-9. 


as   amended,    L.,    S.    Dak.,    1890,   p. 


EXEMPTIONS.  533 

lowing  property,  which  is  then  exempt :  All  miscellaneous 
books  and  musical  instruments  for  the  use  of  the  family,  not 
exceeding  $200  in  value;  all  household  and  kitchen  furni- 
ture, including  beds,  bedsteads  and  bedding  used  by  the  debtor 
and  family,  not  exceeding  $200  in  value ;  in  case  the  debtor 
owns  more  than  $200  worth  of  such  property  he  must  select 
therefrom  such  articles  to  the  value  of  $200,  leaving  the  re- 
mainder subject  to  process ;  two  cows,  five  swine,  two  yoke  of 
oxen  or  one  span  of  horses  or  mules,  25  sheep  and  their  lambs 
under  six  months  old,  and  all  the  wool  of  the  same,  and  all 
cloth  or  yarn  manufactured  therefrom ;  the  necessary  food  for 
such  animals  for  one  year ;  one  wagon,  one  sleigh,  two  plows, 
one  harrow ;  farming  machinery  and  utensils,  including  tackle 
for  teams,  not  exceeding  $1,250  in  value;  the  tools  and  im- 
plements of  any  machine  [mechanic],  whether  a  minor  or  of 
age,  used  and  kept  for  the  purpose  of  carrying  on  his  trade  or 
business,  and  in  addition  thereto  stock  in  trade,  not  exceeding 
$200  in  value ;  the  library  and  instruments  of  any  professional 
person,  not  exceeding  $300  in  value.^* 

The  wages  due  a  nonresident  of  the  state,  earned  and  pay- 
able outside  the  state,  are  allowed  the  same  protection  from 
process  in  the  courts  of  the  state  as  are  allowed  by  the  state 
of  the  residence  of  such  nonresident.^" 

Moneys  received  by  a  widow  or  children  for  insurance  upon 
the  life  of  any  person  who  when  living  was  the  head  of  a 
family  are  exempt.''® 

The  avails  of  any  policy  of  insurance  heretofore  or  here- 
after issued  upon  the  life  of  any  person,  and  payable  upon 
death  to  assigns,  estate,  executors  or  administrators  of  the 
insured,  not  exceeding  ,$5,000,  if  the  insured  at  the  time  of 
death  reside  or  resided  in  the  state  and  leave  surviving  a 
widow  or  husband  or  any  nn'nor  child,  enures  to  the  benefit 
of  such  husbanfl  or  wife  or  minor  child  free  from  the  debts  of 
such  decedent." 

Neither  the  homestead  nor  any  article  of  personal  proi)erty 
can  be  claimed  as  exempt  on  an  execution  issued  for  judg- 

"  Civil   Code.   .S.   Dak..   Sec.   325:  ""^  L..    S.    Dak..    189.3.    Giap.    97, 

as    amended.    T,.,    S.    Dak..    1800.    p.       Scr     t..  p.    165. 
2"^  "'•  I- .  S    Dak..  1890.  p.  203. 

' "  .'^e".  Laws.  S.  Dak..  1895,  P-  93. 


534 


LAW    AND    TROCEEDINGS    IN    BANKRUPTCY. 


nieiit  for  the  purchase  price.  None  excej^t  absolute  exemp- 
tions are  alUnved  to  a  corporation  for  profit,  to  a  nonresident, 
to  a  debtor  in  the  act  of  removing  with  his  family  from  the 
state,  or  who  has  absconded,  taking  his  family,  nor  for  la- 
liorers'  or  mechanics'  wages  or  physicians'  bills,  nor  for  a  debt 
incurred  for  property  obtained  under  false  pretenses,  nor  for 
fines,  penalties  or  costs  in  criminal  prosecutions.  None  except 
absolute  exemptions  and  personal  property  to  the  value  of 
$500  for  forfeitures  of  undertakings  or  bonds.^* 

Upon  the  failure  of  the  debtor  to  claim  exemptions  his  wife 
may  do  so.  and  upon  her  failure  one  of  the  children  of  16  years 
of  age.^^ 

Tennessee. —  A  homestead  in  the  possession  of  each  head 
of  a  family,  and  the  improvements  thereon,  to  the  value  in  all 
of  $1,000,  is  exempt  from  process  during  the  life  of  such  head 
of  a  family,  to  enure  to  the  benefit  of  the  widow  and  during 
the  minority  of  their  children  occupying  the  same;  the  prop- 
erty can  not  be  alienated  without  the  joint  consent  of  husband 
and  wife,  while  the  relation  exists;  this  exemption  does  not 
operate  against  public  taxes  nor  debts  contracted  for  the  pur- 
chase money  of  the  homestead  or  improvements  thereon.*'' 

Each  head  of  a  family,  owning  real  estate,  may  elect  where 
the  homestead  shall  be  set  apart,  whether  living  on  the  same 
or  not." 

The  provisions  of  section  2935  apply  to  equitable  estates, 
and  the  court  may  prescribe  how  a  homestead  therein  shall 
be  set  apart.*^ 

The  provisions  of  section  2935  apply  to  leasehold  property 
occupied  by  every  housekeeper  or  head  of  a  family  in  the 
state,  when  such  leasehold  estate  is  for  more  than  two  and  not 
exceeding  fifteen  years.*^ 

The  homestead  upon  leasehold  estates  is  not  exempt  from 
process  for  rent  due  thereon.** 

3s  S.  Dak.  Stat,  1899,  Sec.  6356-  fore  bankruptcy  on   right  to  claim 

6360,    3365;    L.,    S.    Dak.,    1903,    p.  exemption  see  In  re  Tollelt   (C.  C. 

158.  A.   6    Cir.),    106    Fed.    Rep.   866,   5 

39  S.   Dak.   Stat.,    1899,  Sec.  6356.  Am.  B.  R.  404 ;  3  N.  B.  N.  454. 

4«  Const.,  Tenn.,  Art.  XI,  Sec.  11.  4i  Code,  Tenn.,  1884,  Sec.  2936. 

Code,  Tenn.,  1884,  Sec.  2935.    As  to  ^2  Code,  Tenn.,  1884,  Sec.  2937- 

effect   of   conveying   homestead   be-  ^^  Code,  Tenn.,  1884,  Sec.  2938. 

"Code,  Tenn.,  1884,  Sec.  2939. 


EXEMPTIONS.  535 

When  lands  in  which  a  debtor  is  entitled  to  homestead  are 
sold  under  order  of  court,  $i,6oo  thereof  are,  under  the  order 
of  court,  to  be  invested  in  property  which  is  exempt  from 
process.*^ 

Upon  the  death  of  a  head  of  a  family  without  widow  or 
minor  children,  homestead  becomes  liable  for  the  payment  of 
debts.*« 

The  following  property  is  exempt  from  process  in  the  hands 
of  every  male  citizen  of  the  age  of  eighteen  years  and  up- 
wards, and  every  female  who  is  the  head  of  a  family,  one 
gun;  every  single  woman  who  uses  it  for  a  livelihood,  one 
sewing-machine;  every  mechanic  in  the  state  who  is  engaged 
in  the  pursuit  of  his  trade  or  occupation,  one  set  of  mechanic's 
tools,  such  as  are  usual  and  necessary  to  the  pursuit  of  his 
trade;  thirty  dollars  of  the  wages  of  every  mechanic  or  other  *~ 
laborer ;  the  lien  created  by  service  of  garnishment  only  affects 
that  portion  of  a  laborer's  wages  that  may  be  due  at  the  time 
service  is  made;*®  numerous  specific  exemptions  to  heads  of 
families." 

To  the  head  of  a  family  engaged  in  agriculture  there  is 
further  exempted  two  plows,  two  hoes,  one  grubbing-hoe.  one 
cutting-knife,  one  harvest  cradle,  one  set  of  plow  gears,  one 
pitchfork,  one  rake,  three  iron  wedges  and  ten  heads  of  stock 
hogs.^'^ 

The  personal  property  mentioned  in  sections  2931  and  2932 
is  exempt  from  seizure  in  criminal  and  civil  cases,  but  not 
exempt  from  distress  or  sale  for  taxes,  or  on  a  judgment  for 
failure  or  refusal  to  work  on  public  roads,  or  for  fines  and  costs 
for  voting  out  of  district  or  ward  in  which  the  voter  lives,  or 
for  carrying  concealed  weapons,  or  selling  intoxicating  liquors 
on  election  day.*^^ 

When  the  debtor  absconds  or  leaves  his  family,  the  exempted 
property  is  set  a])art  fr)r  the  use  of  the  wife  and  family,  and 
is  exempt  in  their  hands;  such  property,  on  death  of  owner,  is 
exempt  in  the  hands  of  widow  and  children. °^ 

"Code,  Tenn.,   1884.  Sc-c.  2941.  1884,    Sec.    29.^1;  Act,   Tenn,    1895^ 

♦•"•Cnrle,  Tenn..   1884.  Sec.  2945.  p.  68. 

<7  Act,  Tenn.,  1887,  p.  267.  <*"  Code,  Tenn.,  1884,  Sec.  2932. 

"Act.  Tenn..  1895,  p.  388.  f'l  Code,  Tenn.,  1884.  Sec.  2933. 

*"  See     Sec.     3798,     Code,     Tenn,  ''■'Code.  Tenn..  1884,  Sec.  29.34- 


53^  LAW    AM)    I'ROCEEDINGS    IN    BANKRUPTCY. 

Proceeds  of  life  insurance  for  the  benetil  of  wife  or  children 
are  exeinpt.^^ 

Property  of  municipal  corporations  held  and  used  for  public 
purposes  is  exempt.''* 

The  moneys  and  effects  of  a  decedent  set  apart  to  his  widow 
are  exempt  from  process.^"^ 

Uniforms,  etc.,  of  the  national  guard  are  exempt.^" 

The  ])roperty  of  free  public  libraries  is  exempt  from  execu- 
tion.^' 

The  wages  of  any  employe  to  the  amount  of  $30  are  ex- 
empt.^* 

Texas. °''  —  The  homestead  of  a  family,  not  in  a  town  or 
city,  consists  of  not  more  than  200  acres  of  land,  which  may 
be  in  one  or  more  parcels,  with  the  improvements  thereon ;  the 
homestead  in  a  city,  town  or  village  consists  of  a  lot  or  lots, 
not  to  exceed  in  value  $5,000  at  the  time  of  their  designation 
as  a  homestead,  without  reference  to  the  value  of  any  im])r()ve- 
ments  thereon ;  the  homestead  mast  be  used  for  the  purpose  of 
a  home  or  as  a  place  to  exercise  the  calling  or  business  of  the 
head  of  a  family ;  a  temporary  renting  does  not  change  the 
same  when  no  other  has  been  acquired ;  the  proceeds  of  a 
voluntary  sale  are  exempt  for  six  months;  this  homestead  is 
exempt  from  process.^** 

5''Code,    Tenn.,    1884,   Sees.    1813  «» Const.,   Tex.,   Art.   XVI,    Sees, 

and  3135.  28,   50,   51  ;   Sayle,  Tex.   Civil   Stat., 

'*  Code,  Tenn.,  1884,  Sec.  1676.  1897,    Art.    2395    and  2396.     In  re 

55  Code,  Tenn.,   1884,  Sec.  3126.  Flannagan,    117    Fed.    Rep.    695,    9 

5«Act,    Tenn.,     1887,    Chap.     159,  Am.   B.    R.    140:  In  re  Harrington, 

Sec.  18,  p.  274.  99  Fed.  Rep.  3gio,  3  Am.  B.  R.  639. 

"  Act,    Tenn.,     1897,    Chap.     105,  For     the     mode     of     setting     apart 

Sec.   13,  p.  256.  homestead    and    the    treatment    of 

58  Acts  of  Tenn.,   1899,  Chap.  38,  excess,   see   Art.    2403-2427 ;    home- 

p    53-  stead  can  not  be  conveyed   without 

5*  The    homestead    laws    of    this  the   consent   of  the  wife,   evidenced 

state  are  dealt  with  in  In  re  Flan-  by   her   joining   in    the   conveyance. 

nagan,  117  Fed.  Rep  695,  9  Am.  B.  properly   signed,   acknowledged   and 

R.   140;   In  re  Harrington,  99  Fed.  certified,  Art.  636;  for  setting  apart 

Rep.   390,  3  Am.   B.   R.  639;  In  re  exempt     property     to     widow     and 

Smith,  96  Fed.  Rep.  832,  3  Am.  B.  children,    see    Art.    2046 ;    for    what 

R.   140;  In  re  Smith,  93  Fed.   Rep.  debts  homestead  liable  on  death  of 

791,  2  Am.  B.   R.   190;  In  re  Coff-  owner,  see  Art.   2060;   for  mechan- 

man,  93  Fed.  Rep.  422,  i  Am.  B.  R.  ics'    liens    on    homestead,    see    Art. 

530.  3304. 

i 


EXEMPTIONS.  537 

The  homestead  exemption  does  not  apply  where  the  debt  is 
due  for  the  purchase  money  or  taxes  due  thereon;  for  work 
and  material  used  in  constructing  improvements  thereon ;  such 
work  and  material  must  have  been  contracted  for  in  w^riting. 
and  the  consent  of  the  wife,  if  there  be  one.  must  be  obtained 
in  the  same  manner  as  is  by  law  required  in  making  sale  and 
conveyance  of  the  homestead.®^ 

The  following  property  is  exempt  from  process  for  the  pay- 
ment of  debts,  except  as  provided  in  Title  XLII,  Chap.  I : 
The  homestead  of  the  family;  all  household  and  kitchen  prop- 
erty ;  a  lot  or  lots  in  a  cemetery  for  burial  purposes ;  all  imple- 
ments of  husbandry;  all  tools,  apparatus  and  books  belonging 
to  any  trade  or  profession ;  the  family  library  and  all  family 
portraits  and  pictures;  five  milch  cows  and  their  calves;  two 
yoke  of  work  oxen,  with  necessary  yokes  and  chains;  two 
horses  and  one  wagon ;  one  carriage  or  buggy ;  one  gim ; 
twenty  hogs,  twenty  head  of  sheep;  all  saddles,  bridles  and 
harness  necessary  for  family  use;  all  provisions  and  forage 
on  hand  for  home  consumption ;  all  current  wages  for  per- 
sonal services.®^ 

The  following  property  is  exempt  to  persons  not  constitu- 
ents of  a  family :  A  lot  or  lots  in  a  cemetery  held  for  burial 
purposes;  all  wearing  a])parel ;  all  tools,  apparatus  and  books 
belonging  to  any  trade  or  profession;  one  horse,  saddle  and 
bridle ;  current  wages  for  personal  service."^ 

Every  ferryman  may  hold  exempt  from  process  one  ferry- 
boat, keel  or  flatboat,  used  as  a  ferryboat,  with  necessary 
tackle,  not  exceeding  $500  in  value ;  such  exemption  does 
not  apply  to  damages  sustained  by  the  negligence  of  such 
ferryman."* 

Public  property  of  cities,  towns  and  counties  is  exempt,  ex- 

•^  Sayle,    Tex.    Civil    Stat.,    iH<;7,  homestead,  is  liable  in  case  of  death, 

Art.  2401.     Const.,  Art.   XVI,  Sec.  see  Art.   201. 

50.  «•■' Const.    Tex.,    Art.    XVI,    Sec. 

"Const..   Tex.,   Art.    XVI,    Sees.  <28:    Sayle.    Tex.    Civil    Stat.,    1897, 

28  and  50;   Sayle,  Tex.   Civil   Stat.,  Art.    2397.      In    re    Smith.    96    Fed. 

1897.    An.    2395;     for    what    debts  Rep.  832.  3  Am.  R.  R.  140. 

exempted    property,   other    than    the  •"'■♦  .S.iyle,    Tex.    Civil    Stat.,    1897, 

Art.   2vi8. 


53^^  LA^V    AND    PROCEEDINGS    IN    BANKRUPTCY. 

cept  as  to  vendors',  mechanics'  or  other  builders'  Hens,  or  other 
liens  existing  on  April  i8,  1876.'"'" 

All  public  libraries  are  exempt.""     The  exemption  of  per- 
sonal proj^erty  above  mentioned  does  not  apply  when  the  debt 
is  due  for  rents  and  advances  made  by  a  landlord  to  his  tenant 
under  the  provisions  of  Title  LXIII,  or  to  other  debts  which, 
are  a  lien  on  such  property.^^ 

Cemetery  lots  laid  out  and  sold  for  a  city  for  private  places 
of  burial  are  exempt.®^ 

Utah. —  A  homestead,  consisting  of  lands  and  appur- 
tenances, which  lands  may  be  in  one  or  more  localities,  not 
exceeding  in  all  $1,500  in  value  for  the  head  of  the  family, 
and  the  further  sum  of  $500  for  his  wife  and  $250  for  each 
other  member  of  his  family,  is  exempt  from  process  except 
as  provided  by  law."® 

If  the  homestead  claimant  is  married  the  homestead  may 
be  selected  from  the  separate  property  of  the  husband,  or, 
with  the  consent  of  the  wife,  from  her  separate  property.^" 

Any  person  who  is  the  head  of  a  family  may  make  a  declara- 
tion of  homestead ;  a  failure  to  make  such  declaration  does  not 
impair  the  right.'^^ 

The  declaration  may  be  made  by  the  wife,  in  case  the 
husband  has  not  made  the  declaration.  It  must  be  executed, 
acknowledged  and  recorded  in  the  county  where  the  land  is 
situated. '^^ 

The  declaration  of  homestead  must  contain  a  statement 
showing  that  the  declarant  is  the  head  of  a  family,  or  when 
made  by  the  wife,  that  the  husband  has  not  made  such  declara- 
tion ;  a  description  of  the  premises ;  an  estimate  of  their  cash 
value." 

«5  Sayle,  Tex.    Civil    Stat,    1897,      ii47;  as  to  homestead   after  death 

Art.    2399;  Const.,    Tex.,    Art.    I*X,      of  owner,  see  Sec.  2829. 

Sec.  9.  TO  Rev.     Stat.,     Utah,     1898,    Sec, 

eeSayle,  Tex.    Civil    Stat.,    1897,       1 148. 

Art.  2400.  71  Rev.     Stat.,    Utah,     1898,     Sec. 

s^Sayle,  Tex.    Civil    Stat.,    1897,      1 149. 

Art.  2402.  "Rev.     Stat.,    Utah,     1898,     Sec. 

«»Sayle,  Tex.    Civil    Stat,    1897,       ^SO- 

Art  571.  "Rev.     Stat.,    Utah,     1898,     Sec. 

«»Rev.  Stat.,    Utah,     1898,     Sec.       1151. 


EXEMPTIONS.  539 

The  husband  or  wife  may  claim  and  select  the  homestead/* 

A  sale  of  one  homestead  does  not  prevent  the  selection  or 
purchase  of  another.'^ 

The  head  of  a  family  means  the  husband  or  'wife,  when 
claimant  is  married.  In  no  case  are  both  husband  and  wife 
entitled,  each,  to  a  homestead  as  herein  provided ;  every  person 
who  has  residing  on  the  premises  with  him  or  her  and  under 
his  or  her  care  and  maintenance  his  or  her  child  or  the  child 
of  a  deceased  husband  or  wife;  a  minor  brother  or  sister  or 
the  minor  child  of  such  deceased  person ;  a  father,  mother, 
or  grandparents ;  the  father,  mother,  or  grandparents  of  a 
deceased  husband  or  wife;  an  unmarried  sister  or  any  other 
of  the  relatives  mentioned  in  this  section  who  have  attained 
the  age  of  majority  and  are  unable  to  take  care  of  or  support 
themselves.'^" 

Both  husband  and  wife  must  join  in  the  conveyance  or  in- 
cumbrance by  the  married  owner  of  a  homestead. ^^ 

The  homestead  is  subject  to  the  satisfaction  of  judgments 
on  debts  secured  by  mechanics'  or  laborers'  liens  for  work 
or  labor  done  or  material  furnished  exclusively  for  the  im- 
provement of  the  same;  for  debts  secured  by  lawful  mortgage 
on  the  premises ;  for  debts  created  for  the  purchase  thereof 
and  taxes.^^ 

In  case  the  husband  or  wife  desert  his  or  her  family,  the 
exemption  continues  in  favor  of  the  one  residing  upon  the 
premises.'* 

When  homestead  is  conveyed,  the  premises  are  not  liable 
to  any  incumbrance  to  which  it  would  not  be  subject  in  the 
hands  of  the  owner;  the  proceeds  of  the  sale  are  exempt  for 
one  year.®" 

The  proceeds  of  insurance  on  homestead  are  exempt.®^ 

Water  rights  and  interests,  either  in  the  form  of  corporate 

74  Rev.  Stat.,    Utah,     1898.     Sec.  "  r^v.     Stat..    Utah,     1898,     Sec. 

IT 52.  1 1 56. 

"Rev.  Stat.    Utah,     1898,     Sec.  -"Rev.     Stat.,     Utah.     1898.     Sec. 

IT  5  J-  1 157. 

^^  Rev.  Stat,     Utah.     1898,     Sec.  ""  Rev.     Stat.,     l^tah,     1898.     Sc-c. 

1 1 54-  1 158. 

^T  Rev.  Stat.,    Utah,     1898,    Sec.  «»  Rev.     Stat.,    I'lah,     1898,     Sec. 

1 155.  1 159. 


540  LAW    AND    PROCKEDINC.S    IN    BANKRUPTCY. 

Stock  or  Otherwise,  owned  by  the  judgment  debtor,  are  exempt 
to  the  extent  that  such  rights  and  interests  are  necessarily  em- 
ployed in  supplying  water  to  the  homestead  for  domestic  and 
irrigating  purposes;  but  such  rights  and  interest  are  not  ex- 
empt from  assessment  and  sale  by  companies  owning  the 
water,  nor  from  process  against  such  companies.®^ 

If  the  homestead  is  sold  under  legal  proceedings,  the  money 
paid  to  the  judgment  debtor  under  such  sale  is  exempt.** 

The  following  property  is  exempt  from  execution,  except 
as  provided  herein :  Chairs,  tables  and  desks,  to  the  value  of 
$200;  the  library  and  musical  instruments  in  actual  use  in  the 
family;  necessary  household,  table  and  kitchen  furniture,  to 
the  value  of  $300;  one  sewing-machine,  all  family  hanging 
pictures,  oil  paintings  and  drawings,  portraits  and  their  neces- 
sary frames,  all  carpets  in  use;  provisions  actually  provided 
for  individual  and  family  use,  sufficient  for  three  months;  two 
cows  with  their  sucking  calves,  two  hogs  with  all  their  sucking 
pigs,  all  wearing  apparel  of  every  person  and  family,  all  beds 
and  bedding;  if  the  debtor  is  the  head  of  a  family  consisting  of 
five  or  more  members,  there  is  a  further  exemption  of  two 
cows  and  their  sucking  calves ;  farming  utensils  to  the  value 
of  $300;  two  oxen  or  two  horses,  or  two  mules  and  their 
harness ;  one  cart  or  wagon,  all  seed,  grain  or  vegetables 
actually  provided,  reserved,  or  on  hand,  for  the  purpose  of 
planting  or  sowing  at  any  time  within  the  ensuing  six  months, 
not  exceeding  in  value  $200 ;  crops,  whether  growing  or  har- 
vested, and  tlie  proceeds  thereof,  not  exceeding  $200  in  value; 
the  tools,  chest,  and  implements  of  a  mechanic  or  artisan,  nec- 
essary to  carry  on  his  trade,  not  exceeding  $500  in  value;  the 
notarial  seal  and  records  of  a  notary  public ;  the  instruments 
and  chests  of  a  surgeon,  physician,  surveyor  and  dentist,  neces- 
sary to  the  exercise  of  their  professions,  with  their  scientific 
and  professional  libraries,  and  the  law  professional  libraries 
and  office  furniture  of  attorneys,  counsellors  and  judges,  and 
the  libraries  of  ministers  of  the  gospel,  and  the  typewriting- 
machine  of  a  stenographer,  typewritist.  copyist  and  reporter; 
and  the  type,  presses  and  material  of  a  printer  or  publisher 

*<-  Rev.     Stat.,    Utah,     1898.    Sec.  s.-?  Rev.     Stat..     Utah,     1898,    Sec. 

1 160.  1 164. 


EXEMPTIONS.  541 

necessary  in  the  pursuit  of  his  business,  not  exceeding  in  value 
$500;  the  cabin  of  a  miner,  not  exceeding  in  value  $500;  also 
his  sluices,  pipes,  hose,  windlass,  derricks,  cars,  pumps  and 
tools,  not  exceeding  $500  in  value ;  two  oxen,  two  horses,  or 
two  mules,  and  their  harness ;  a  cart  or  wagon,  one  dray  or 
truck,  by  the  use  of  which  a  cartman,  drayman,  truckman, 
peddler,  hackman,  teamster,  or  other  laborer  habitually  earns 
his  living;  one  horse  with  vehicle  and  harness,  or  other  equip- 
ments, used  by  a  physician,  surgeon  or  minister  of  the  gospel 
in  making  professional  visits ;  the  earnings  of  the  debtor 
for  his  personal  services,  rendered  at  any  time  within  60  days 
next  preceding  the  levy  of  execution,  if  the  debtor  be  a 
married  man,  or  with  a  family  dependent  upon  him  for  sup- 
port;  all  moneys,  etc.,  accruing  from  any  life  insurance  on  the 
life  of  the  debtor,  if  tiie  annual  premiums  do  not  exceed  $500; 
arms,  etc.,  required  by  law  to  be  kept;  public  property  of  va- 
rious kinds ;  the  homestead.®* 

No  property  is  exempt  from  execution  on  a  judgment  re- 
covered for  its  purchase  price,  or  upon  a  judgment  on  fore- 
closure of  a  mortgage  or  mechanics'  or  laborers'  lien  thereon, 
nor  from  sale  for  taxes.  There  are  no  exemptions  to  non- 
residents or  persons  about  to  depart  from  the  state  with  the 
intention  of  removing  their  efifects  therefrom ;  but  their  prop- 
erty is  liable  to  execution  with  the  exception  of  ordinary  wear- 
ing apparel.*' 

Food  for  six  months  for  exempted  animals,  provided,  grow- 
ing, or  both,  as  the  debtor  may  elect,  is  exempt."" 

The  earnings  of  any  minor  child  of  any  debtor  within  the 
state  and  the  proceeds  thereof  are  exempt  from  execution 
against  such  debtor,  by  reason  of  any  liability  of  such  debtor, 
not  contracted  for  the  special  benefit  of  such  minor  child." 

A  judgment  for  damages  for  the  unlawful  taking  of  exempt , 
property  is  exempt.**  ' 


8*  Rev.     Stat.,     Utah,     1898.     Sec.  '*"  Rev.     Stat..     Utah.     i8.;8.     Sec. 

3245 ;    as    amended    L..    I'tah.    189Q,      3246. 
Chap.  66,  p.  99.  "Rev.     Stat.     Utali.     i««jH.     Sec. 

'♦•'•Rev.    Stat.,    Utah,     1898,     Sec.       3243. 
3247.  «« Rev.     Stat.,     Utali.     i8<;8.     Sec. 

3244 


542  LAW    AND    PROCEEDINGS   IN    BANKRUPTCY. 

The  uniform,  arms.  c(iiiipmcnts  issued  l)y  the  state  for  mili- 
tia purposes  are  exempt.''' 

Xo  property  is  exempt  from  seizure  in  satisfaction  of  fines, 
etc..  imposed  by  courts-martial."** 

No  property  or  wages  are  exempt  from  the  poll  tax  for 
labor  on  roads."^ 

In  actions  for  damages  done  by  trespassing  animals,  such 
animals  trespassing  are  liable  to  process.®^ 

Vermont."^  —  The  homestead  of  a  housekeeper  or  head 
of  a  family,  consisting  of  a  dwelling-house,  out-buildings,  and 
land  used  in  connection  therewith,  not  exceeding  $500  in 
value,  used  and  kept  by  such  person  as  a  homestead,  is  ex- 
empt, except  as  hereinafter  provided."* 

Such  homestead  is  subject  to  process  upon  causes  of  action 
existing  at  the  time  of  acquiring  the  same,  except  as  provided 
by  law ;  for  this  purpose  such  time  is  the  date  of  filing  the 
deed  of  homestead  for  record  in  the  proper  office."'^ 

WHien  such  head  of  a  family  or  householder  acquires  an- 
other homestead,  the  prior  homestead  becomes  liable  for  hii 
debts,  and  may  be  conveyed  like  other  real  estate,  but  th( 
new  homestead  is  not  liable  for  causes  of  action  to  which 
such  prior  homestead  would  not  have  been  liable,  if  the  new 
homestead  is  acquired  with  the  consideration  derived  from 
the  sale  of  the  prior  homestead,  or  with  other  means  not  de- 
rived from  the  property  of  such  housekeeper  or  head  of  a 
family."** 

«3Rev.     Stat.,    Utah,     1898,     Sec.  In  re  Oderkirk,  103  Fed.  Rep.  779, 

1472.  4  Am.   B.   R.  617;  In  re  Hopkins, 

90  Rev.    Stat,    Utah,    1898,    Sec.  103  Fed.  Rep.  781,  4  Am.  B.  R.  619; 

1487.  In  re   Bean,    100  Fed.   Rep.   262.   4 

»i  Rev.     Stat.,    Utah,     1898,    Sec.  Am.    B.    R.    53 ;    In   re   Dawley,   94 

1745.  Fed.  Rep.  795,  2  Am.  B.  R.  496. 

»2Rev.     Stat,    Utah,     1898,    Sec.  »*  Stat.,   Vt,    1894,    Sec.    2179- 

20.  ^■'  Stat,  Vt.,   1894,   Sec.  2186.     In 

9''The    exemption    laws    of    this  re  Gordon,  115  Fed.  Rep.  445,  8  Am. 

state  are  dealt  with  in  In  re  Gor-  B.  R.  255.    The  homestead  is  liable 

don.   115   Fed.   Rep.  445,  8  Am.   B.  for    damages    and    costs    recovered 

R.  255;  In  re  Mosier,  112  Fed.  Rep.  for   failure  to  maintain  his  propor- 

138,  7  Am.  B.  R.  268;  In  re  White,  tion     of     division     fence     between 

103  Fed.  Rep.  774,  4  Am.  B.  R.  613;  homestead  and  adjoining  lands.  Sec. 

In  re  Libby,    103   Fed.   Rep.   776,  4  3579- 

Am.    B.    R.   615 ;   In   re   Marquette,  »"  Stat.,  Vt.,  1894,  Sec.  2188. 
103  Fed.  Rep.  777,  4  Am.  B.  R.  623 ; 


EXEMPTIONS.  543 

No  homestead  can  be  conveyed  by  a  married  owner  thereof, 
except  by  way  of  mortgage  thereof  for  the  purchase  money, 
unless  wife  joins." 

When  the  housekeeper  or  head  of  a  family  dies,  leaving  a 
widow,  his  homestead  rests  in  such  widow  free  of  debts,  un- 
less legally  charged  thereon.''® 

The  homestead  is  subject  to  mechanics'  liens  thereon. ^^ 

The  following  articles  are  exempt  from  process,  unless 
turned  out  to  the  officer  by  the  debtor :  Such  suitable  ap- 
parel, bedding,  tools,  arms  and  articles  of  household  furni- 
ture as  are  necessary  for  sustaining  life;  one  sewing-machine 
kept  for  use,  one  cow  not  exceeding  in  value  $ioo,  the  best 
swine  or  the  meat  of  one  swine,  sheep  not  exceeding  in  num- 
ber ten,  nor  in  value  $ioo.  and  one  year's  product  of  said 
sheep  in  wool,  yarn  or  cloth,  and  forage  for  ten  sheep,  one 
cow  and  two  oxen  or  horses,  as  the  debtor  may  select,  through 
one  winter,  ten  cords  of  firewood  or  five  tons  of  coal,  twenty 
bushels  of  potatoes,  the  pistols,  side  arms,  and  equipments  of 
a  soldier  in  the  service  of  the  United  States,  and  kept  by  him 
or  his  heirs  as  mementoes  of  his  service,  growing  crops,  ten 
bushels  of  grain,  one  barrel  of  fiower.  three  swarms  of  bees, 
and  their  hives  with  therr  produce  in  honey.  200  pounds  of 
sugar,  lettered  gravestones,  the  bibles  and  other  books  used  in 
the  family,  a  pew,  $10  worth  of  live  poultry,  the  i)rofessional 
books  and  instruments  of  physicians,  the  professional  books 
rtf  clergymen  and  attorneys  at  law,  to  the  value  of  $200,  one 
tool  chest  kept  for  use  by  a  mechanic,  one  yoke  of  oxen  or 
steers,  as  the  debtor  may  select,  two  horses  kc])t  and  used  for 
team  work,  and  such  as  the  debtor  may  select  in  lieu  of  oxen 
or  steers,  not  exceeding  in  value  $200,  one  two-horse  wagon 
with  whiffletrees  and  neckyoke,  or  one  one-horse  wagon  used 
for  teaming  or  one  ox-cart,  as  the  debtor  may  choose ;  one  sled 
or  one  set  of  traverse  sleds,  either  for  horses  or  oxen,  as  the 
debtor  may  select;  two  harnesses,  two  halters,  two  chains,  one 
plow,  and  one  ox-yokc.  wliicli.  witli  tlie  oxen  or  steers  or  horses 
which  the  debtor  may  select  for  team  work,  sh.all  not  exceed 

''^  Stat..  Vt.,   1894,  Sec.  2189.  Marquette,    w^    Fed.    Rep.    -777,    4 

""Stat.,    St..    1894.    Sec.    2183:    as       Am.   B.   R.  623. 
amended,  L.,  Vt,  1896,  p.  35.    In  re  ""  Stat.,  Vt.,  1894,  Sec.  2277. 


=;44  ^'^^^'    ■'^^^^    PROCEEDINCS    IN     BANKRUPTCY. 

in  value  $250.  No  personal  ])r()])crty  is  exempt  from  process 
on  a  suit  broug-ht  to  recover  payment  for  the  purchase  price 
thereof,  or  for  material  or  labor  exi)encled  on  the  same.'"'" 

No  fire  insurance  company  is  liable  on  trustee  process  for 
the  jiroceeds  of  policy  on  exempt  property;  a  person  can  not 
l)e  adiudged  a  trustee  by  reason  of  his  having  in  his  hands 
money  due  the  debtor,  as  his  debenture  as  a  member  of  the 
general  assembly,  or  as  a  petit  or  grand  juror  of  a  county 
court;  a  member  of  the  general  assembly,  an  officer  of  the 
state  required  to  report  thereto,  can  not  be  adjudged  a  trustee 
upon  a  contract  express  or  implied,  for  board  and  lodging 
furnished  him  by  the  principal  debtor  while  attending  a  ses- 
sion of  the  general  assembly ;  a  person  can  not  be  adjudged  a 
trustee  by  reason  of  wages  or  compensation  due  the  principal 
debtor,  for  work  or  labor  performed  by  him  in  person  after 
the  service  of  the  trustee  process  upon  the  trustee;  no  earnings 
of  a  minor  or  a  married  woman  is  subject  to  trustee  process 
in  a  suit  against  the  parent  of  such  minor  or  husband  of  such 
married  woman. '"^ 

No  person,  except  as  herein  otherwise  provided,  is  liable 
on  trustee  process  for  a  sum  due  a  principal  debtor  for  prop- 
erty sold,  conveyed,  or  delivered  by  him  which  was  at  the 
time  exempt.*"^ 

Burial  lots,  etc.,  are  exempt."^ 

No  property  of  a  magistrate  is  exempt  from  process  on  a 
judgment  obtained  for  wrongfully  withholding  any  portion  of 
the  fees  allowed  him.'"* 

The  avails  of  a  policy  of  life  insurance  for  the  benefit  of  a 
married  woman,  whether  effected  by  herself  or  her  husband, 
are  exempt  from  the  claims  of  creditors  of  husband. ^"^ 

When  a  married  woman  causes  the  life  of  her  husband  to 
be  insured  for  her  use.  if  the  annual  premium  does  not  exceed 
$300,  the  avails  thereof  enures  to  her  benefit,  free  from  the 
claims  of  creditors  of  the  husband."^ 

^'>'>  Stat.,  Vt.,  1894,  Sec.  1805.     In  ^"^  Stat.,    Vt.,    1894,    Sees.    3595, 

re  Libby,  103  Fed.  Rep.  77^^  4  Am.  3619- 
B.   R.  615.  '"*  Stat.,  Vt.  1894,  Sec.  332. 

1"'  Stat,  Vt..  1894.  Sec.   1312.  "'•'•Stat.,  Vt.,  1894,  Sec.  2656. 

"^2  Stat.,  Vt.,  1894,  Sec.   1313-  '""  Stat.,  Vt..  1894,  Sec.  2653. 


EXEMPTIONS. 


545 


The  rents,  issues  and  profits  of  the  real  estate  of  a  married 
woman,  and  the  moneys  and  obhgations  arising  from  its  sale, 
and  the  interest  of  her  husband  in  her  right  in  real  estate  are. 
during  coverture,  exempt  from  the  sole  debts  of  her  husband. 
But  such  annual  products  may  be  attached  for  a  liability  of  her 
husband  for  necessaries  for  the  wife  and  family,  and  for  debts 
for  labor  or  materials  furnished  upon  or  for  the  cultivation  or 
improvement  of  such  real  estate/'*^ 

Virginia."^  —  Every  householder,  residing  in  the  state, 
may  hold  exempt  from  process  issued  on  any  demand  for  any 
debt  or  liability  on  contract,  in  addition  to  the  exemptions  pro- 
vided in  sections  3650,  3651  and  3652,  real  and  personal  estate, 
or  either,  to  be  selected  by  him,  including  money  and  debts  due 
him,  to  the  value  of  $2,000.  Such  exemption  does  not  extend 
to  the  following  cases :  First,  for  the  purchase  price  of  said 
estate ;  second,  for  services  rendered  by  a  laboring  person  or  a 
mechanic ;  tJiird,  for  liabilities  incurred  by  any  public  officer, 
officer  of  a  court,  or  by  an  attorney  at  law  for  monev  collected 
by  him;  fourth,  for  taxes:  fifth,  for  rent;  sixtJ}.  for  the  legal 
or  taxable  fees  of  any  public  officer  or  officer  of  a  court ; 
seventh,  for  any  debt  or  li-ability  on  contract,  as  to  which  the 
debtor  has  waived,  as  provided  by  law,  his  exemptions  which 
he  mav  claim  under  this  section.^"® 


1""  L.,  Vt.,  1902.  p.  49. 

""*  The  exemption  laws  of  this 
state  are  dealt  with  in  In  re  Camp- 
bell, 124  Fed.  Rrp.  417,  10  Am.  B. 
R.  — :  In  re  Garner,  115  Fed.  Rep. 
200.  8  Am.  Pi.  R.  26.3:  Moran  v. 
King  (C.  C  A.  4th  Cir.),  in  Fed. 
Rtp.  730,  7  Am.  B.  R.  176;  In  re 
Wilson,  108  Fed.  Rep.  197,  6  Am. 
P..  R.  287:  Richardson  v.  Wood- 
ward (C.  C.  A.  4th  Cir.),  104  Fed. 
Rcp-  S73,  5  Am.  B.  R.  94 ;  In  re 
Tnhias,  103  Fed.  Rep.  68,  4  Am,  B. 
R.  555:  In  re  Sisler,  96  Fed.  Rep. 
402,  2  Am.  B.  R.  760. 

1""  Const.,  Va.,  Art.  XT.  Sec.  i. 
Mr)ran  v.  King,  in  Fed.  Rep.  730, 
7  Am.  B.  R.  176;  In  re  Garner,  115 
Fed.  Rep.  200.  8  Am.  R.  R.  263 ; 
RirliaTdvfin     v.     Wriodward     CC.    C. 


A.  4th   Cir.).   104   Fed.   Rep.  873,  5 
Am.  B.  R.  94. 

Code,  Va.,  1887,  Sec.  3630:  The 
real  estate  set  apart  to  the  house- 
holder as  exempt  is  held  hy  widow 
and  minor  children  exempt  until 
the  death  or  marriage  of  the  wid- 
ow, and  during  the  unmarried 
minority  of  the  children.  Sec. 
3635:  If  householder  has  not  set 
apart  real  estate  during  his  life- 
time, the  widow  and  minor  chil- 
<lren  may  have  it  done.  Sec.  3636: 
If  widow  receives  dower  or  joint- 
ure, she  can  not  have  homestead 
exemption,  hut  the  rights  of  the 
minor  children  are  imimpaired. 
Sec.  .3637.  ,\s  to  garnishment,  see 
Sec.  2976.  Richardson  v.  Wood- 
warrl    (C.   C.    .^.   4   Cir.),    104   Fed. 


546  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

In  urdcr  to  secure  an  exemption  to  real  estate,  a  declaration 
of  intention  td  claim  it  must  be  made  in  writing,  with  a  de- 
scription of  the  property  and  an  estimate  of  its  cash  vakie, 
which  declaration  must  be  admitted  to  record  as  a  deed  for 
land.     Equitable  as  well  as  legal  estates  may  be  selected. ^^" 

l^he  real  estate  set  apart  according  to  section  3631  can  not 
be  encumbered  or  aliened  by  the  owner,  if  a  married  man, 
except  by  the  joint  deed  of  himself  and  wife,  but  the  house- 
holder may,  without  the  consent  of  his  wife,  mortgage  or  en- 
cumber such  real  estate  for  the  purchase  money  thereof,  or  for 
the  repair  or  erection  of  buildings  thereon."^ 

If  the  householder  does  not  set  apart  any  real  estate,  or  if 
what  he  does  set  apart  is  not  of  the  value  of  $2,000,  he  may 
(in  addition  to  the  exemptions  to  which  he  is  entitled  under 
sections  3650,  3651  and  3652)  in  the  first  case  select  and  set 
apart,  to  be  held  as  exempt,  so  much  of  his  personal  estate 
as  does  not  exceed  $2,000.  and  in  the  latter  case  personal  estate 
the  value  of  which,  when  added  to  the  value  of  the  real  estate 
set  apart,  does  not  exceed  the  said  sum."- 

The  real  or  personal  estate  which  a  householder,  his  widow 
or  minor  children,  may  be  entitled  to  may  be  set  apart  at  any 
time  before  the  same  is  subjected  to  process.^^^ 

The  real  and  personal  estate  set  apart  as  exempt  to  the 
value  of  $2,000  is  not  affected  by  any  increase  in  its  value 
afterwards,  unless  caused  by  permanent  improvements  on  the 
real  estate.^" 

A  waiver  of  exemption  may  be  made  as  to  all  exempted 
property  except  the  property  mentioned  in  sections  3650,  3651 
and  3652."° 

When  any  person  entitled  to  the  exemption  provided  in  sec- 
Rep.   873,   5   Am.   B.   R.  94;   In   re      108  Fed.  Rep.  197,  6  Am.  B.  R.  287; 
Wilson,  108  Fed.  Rep.  197,  6  Am.  B.      In  re  Tobias,    103  Fed.   Rep.   68,  4 
R.    287,    3    N.    B.    N.    761 ;    In    re      Am.  B.  R.  555. 
Campbell,    124    Fed.    Rep.    417,    10  ^i"Code,  Va.,  1887,  Sec.  3642. 

Am.   B.    R.  — ;    In  re  Tobias,    103  n*  Code,   Va.,    1887,    Sec.   3643. 

Fed.  Rep.  68,  4  Am.  B.  R.  555.  n"'  Code,  Va.,  1887,  Sec.  3647.    In 

"0  Code,  Va.,   1887,  Sec.  3631.  re  Sisler,  96  Fed.  Red.  402,  2  Am. 

m  Code,  Va..  1887,  Sec.  3634.  B.  R.  760 ;  but  see  Lockwood  v.  Ex- 

112  Code,    Va.,     1887,    Sec.    3638.      change    National    Bank,    190   U.    S. 
How    personal    estate    is    set   apart,       294. 
see  Sees.  3639-3641 ;  In  re  Wilson, 


EXEMPTIONS. 


547 


tion  3630  ceases  to  be  a  householder,  or  when  any  person  re- 
moves from  the  state,  his  exemption  ceases.  Upon  the  death 
of  a  householder,  leaving  surviving  him  neither  wife  nor  minor 
child,  or  if  she  or  any  of  them  survive  him  and  he  leaves  any 
estate  which  they  may  hold  as  exempt,  then  upon  her  death 
or  marriage,  and  if  there  be  minor  children  as  soon  as  the 
youngest  of  those  who  attain  the  age  of  21  years  attain  that 
age  or  all  marry,  if  they  all  marry  before  attaining  that  age, 
the  exemption  ceases.^^" 

In  addition  to  the  estate  not  exceeding  $2,000  the  house- 
holder is  also  entitled  to  hold  exempt  from  process  the  fol- 
lowing articles,  to  be  selected  by  him,  except  that  live  stock 
so  exempted  under  this  section,  and  section  3651,  is  not  ex- 
empt under  chapter  93  of  the  code :  The  family  bible,  family 
pictures,  schoolbooks,  and  library  for  the  use  of  the  family,  not 
exceeding  in  all  $100  in  value,  a  pew,  a  lot  in  a  burial  ground, 
all  necessary  wearing  apparel  of  himself  and  family,  all  beds, 
etc..  necessary  for  the  use  of  the  family,  all  stoves  and  ap- 
pendages put  up  and  kept  for  the  necessary  use  of  the  family 
not  exceeding  three,  one  cow  and  her  calf  till  one  year  old,  one 
horse,  six  chairs,  one  table,  six  knives,  six  forks,  six  plates, 
one  dozen  spoons,  two  dishes,  two  basins,  one  ]:)Ot,  one  oven, 
six  pieces  of  wooden  or  earthenware,  one  loom  and  its  appur- 
tenances, one  safe  or  press,  one  spinning-wheel,  one  pair  of 
cards,  one  axe,  two  hoes,  ten  barrels  corn,  or,  in  lieu  thereof, 
25  bushels  rye  or  buckwheat,  five  bushels  wheat  or  one  barrel 
of  flour,  20  bushels  of  potatoes,  200  pounds  of  bacon  or  pork, 
three  hogs,  fowls  not  exceeding  in  value  $10.  $10  worth  of 
forage  or  hay,  one  cooking-stove  and  utensils,  one  sewing- 
machine;  in  the  case  of  a  mechanic,  the  tools  and  utensils  of 
his  trade,  not  exceeding  $100  in  value;  in  case  of  an  oysterman 
or  fisherman,  his  boat  and  tackle,  not  exceeding  $200  in 
value."^ 

If  the  householder  be  at  the  time  actually  engaged  in  the 
business  of  agriculture  there  is  also  exempt  from  process 
while  he  is  so  engaged,  to  be  selected  ])y  him,  llic  following 
articles:     One  yoke  of  oxen,  or  a  pair  of  horses  or  mules  in 

""'Code,    Va.,    1887,    Sec.    3649.  amended    by   acts    of   the   assembly, 

11^  Code,  Va.,  1887,  Sec.  3650;  as       Va.,   1901-02,   Chap.   54,  p.  48. 


54<^  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

lieu  thereof  (unless  he  selects  or  has  selected  under  section 
3650  a  horse  or  mule,  in  which  case  he  may  select  only  one), 
with  the  necessary  gearing,  one  wagon  or  cart,  two  plows, 
one  dray,  one  harvest  cradle,  one  pitchfork,  one  rake,  and 
two  iron  wedges. ^^^ 

Wages  owing  a  laboring  man,  being  a  householder,  not  ex- 
ceeding $50  a  month,  are  exempt."" 

Upon  the  death  of  a  householder,  leaving  a  widow,  minor 
children  or  unmarried  daughters,  there  is  vested  in  them,  free 
from  sale  for  funeral  expenses,  costs  of  administration,  or  debts 
of  tlie  decedent,  such  i)roperty  of  the  decedent  as  is  exempt 
under  section  3650.^"** 

The  exemptions  under  sections  3650,  3651,  3652  and  3653 
do  not  extend  to  taxes,  nor  to  process  for  the  purchase  price  of 
the  articles  therein  mentioned,  nor  for  fines  and  damages  aris- 
ing from  trespass  by  animals  under  section  2042  as  to  such 
animal  so  trespassing.^"^ 

Any  deed  of  trust,  mortgage,  or  other  writing  or  pledge 
made  by  a  householder  on  property  exempt  under  section  3650 
is  void.^^'" 

The  word  "  householder  "  is  equivalent  to  the  expression 
"  householder  or  head  of  a  family,"  and  the  term  "  laboring 
man  "  includes  householders  who  receive  wages  for  their 
services. '^"^ 

The  wages  and  salaries  of  all  officials,  clerks  and  em- 
ployees of  any  city,  town,  or  county  are  subject  to  garnish- 
ment, provided  said  persons  are  not  exempt  from  process 
under  chapter  178  of  the  code.^^* 

Exemptions  do  not  extend  to  fines  imposed  by  courts-mar- 
tial.^'=* 

Uniforms,  arms,  and  equipments  of  militia  are  exempt  from 
process."* 

"8  Code,   Va.,    1887,    Sec.   3651.  122  Code,   Va.,    1887,   Sec.   36S5- 

"9  Code,    Va.,     1887,     Sec.    3652.  12.3  Code,  Va.,  1887,  Sec.  3657 ;  as 

See  acts  of  assembly  of  Va.,  1895-6,  amended   by  acts  of  the   assembly, 

p.  324-  Va.,   1887-8,  p.  423. 

i2«  Code  of   Va.,    1887,   Sec.   3653.  ^'-4  Acts   of   the  assembly  of  Va., 

121  Code,  Va.,   1887,  Sec.  3654,  as  1897-98,  p.  445. 
amended      by      act      of      assembly,  '25  Code,  Va.,  1887,  Sec.  329. 

1893-94.    P-    447-  ""  Code,  Va.,  1887,  Sec.  353. 


EXEMPTIONS. 


549 


Payments  made  in  weekly  or  monthly  installments  to  the 
holder  of  any  policy  of  insurance  in  any  accident,  sick  benefit 
company  or  any  company  of  like  kind  are  not  subject  to  process 
for  any  debt  due  by  the  holder  of  such  policy.^-^  Wages  of 
minors  are  not  liable  in  payment  of  debts  of  parents.^^^ 

Washington/-''  —  The  homestead  consists  of  the  dwelling- 
house  in  which  the  claimant  resides  and  the  land  on  which  the 
same  is  situated,  selected  as  in  this  act  provided/^** 

If  the  claimant  is  married,  the  homestead  may  be  selected 
from  the  community  property,  or  the  separate  property  of  the 
husband,  or.  with  the  consent  of  the  wife,  from  her  separate 
property;  when  the  claimant  is  not  married,  but  the  head  of 
a  family,  the  homestead  may  be  selected  from  any  of  his  or 
her  property.^^^ 

The  homestead  is  exempt  from  process  except  in  satisfaction 
of  judgments  obtained  on  debts  secured  by  mechanics'  or 
laborers'  or  vendors'  liens  upon  the  premises ;  on  debts  secured 
by  mortgages  executed  by  husband  and  wife  or  unmarried 
claimants. ^"^^ 

Homesteads  may  be  selected  and  claimed  in  lands  and  tene- 
ments with  the  improvements  thereon,  not  exceeding  $2,000 
in  value;  the  premises  included  in  the  homestead  must  be 
actually  intended  and  used  for  the  claimants,  and  can  not  be 
devoted  exclusively  to  any  other  purpose.^''^ 

The  conveyance  or  incumbrance  of  a  homestead  of  a  married 
person  must  be  by  both  husband  and  wife."* 

In  order  to  select  a  homestead  the  husband  or  wife,  or  other 
head  of  a  family,  must  execute  and  acknowledge  a  declaration 
thereof  in  tlie  same  manner  as  a  grant  of  real  estate,  and  file 
the  same  f(jr  record.''"' 

The   declaration   of   homestead    must   contain    a    statement 

'27  Acts   of   assembly,    Va.,    1895-  In   re    Buclow,   98   Fed.    Rep.   86,   3 

96.  p.  700.  Am.   B.  R.  389. 

»2«  Acts    of     the    assembly.    Va.,  isj  L.,  Wash.,  1895.  Sec.  2,  p.  109. 

189.3-4.  p.  448.  i'«i'  L..  Wash..  1895,  Sees.  4  and  5, 

12"  The    exemption    laws    of    this  pp.   109  and   no. 

state  are  dealt  with  in  In  re  Buelow,  i-'"'  L..  Wash.,  1895,  Sec.  24,  p.  112. 

98  Fed.  Rep.  86,  3  Am.  B.  R.  389;  Exemption    in    case    of   assignment, 

In  re  Thomas,  96  Fed.   Rep.  828,  3  see  L..   Wash..   1897.  p.  6. 

Am.  B.  R.  99.  134L..  Wash..  1895,  Sec.  6.  p.  no. 

'30  L.,  Wash,.  1895.  Sec.   r,  p.  109.  '•"'s  L.,  Wash.,  1895,  Sec.  30,  p.  03. 


550  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

showing  that  the  dechirant  is  the  head  of  a  family;  when  the 
declaration  is  made  by  the  wife,  that  her  husband  has  not 
made  it ;  that  the  person  making  it  is  residing  on  the  ])remises 
and  has  purchased  the  same  as  a  homestead  and  intends  to 
reside  thereon  and  claims  them  as  a  homestead ;  a  description 
of  the  premises ;  an  estimate  of  their  cash  value.""  The  home- 
stead may  be  abandoned  by  a  declaration  thereof  or  a  grant 
executed  by  husband  and  wife  or  by  an  unmarried  person ; 
this  declaration  is  effectual  only  from  the  time  it  is  filed  in 
the  office  in  which  the  homestead  was  recorded/''^ 

When  homestead  is  sold  under  legal  proceedings,  the  money 
paid  to  claimant  is  entitled  to  the  same  protection  against 
process  as  the  law  gives  to  homestead/'^** 

The  phrase  "  head  of  a  family  "  in  the  homestead  or  exemp- 
tion law  means  the  husband  or  wife  when  the  claimant  is 
married ;  every  person  who  has  residing  on  the  premises  with 
him  or  her,  and  under  his  or  her  care  and  maintenance,  either 
his  or  her  minor  child  or  the  minor  child  of  a  deceased  hus- 
band or  wife;  a  minor  brother  or  sister  or  their  minor  child; 
a  father,  mother  or  grandparents ;  a  father,  mother  or  grand- 
parents of  a  deceased  husband  or  wife;  an  unmarried  sister, 
or  any  other  of  the  relatives  mentioned  in  this  section,  who 
have  attained  majority  and  are  unable  to  support  them- 
selves."" 

The  following  properly  is  exempt  irom  process,  except  as 
specially  hereinafter  provided  :  First,  all  wearing  apparel  of 
debtor  and  family;  second,  all  ])rivate  libraries,  not  to  exceed 
$500  in  value,  and  all  family  pictures  and  keepsakes ;  tJiird, 
to  each  householder,  one  bed  and  bedding,  and  one  additional 
bed  and  bedding  for  each  additional  member  of  the  family, 
and  other  household  goods,  utensils  and  furniture,  not  exceed- 
ing $500,  coin,  in  value,  to  be  selected  by  the  debtor,  his  wife 
or  the  officer  having  the  execution ;  fourth,  to  each  house- 
holder, two  cows  w^ith  their  calves,  five  swine,  two  stands  of 
bees,  36  domestic  fowls ;  provisions  and  fuel  for  the  comfort- 
able   maintenance   of   such   householder   and    family    for    six 

i'"'!.,  Wash.,  1895,  Sec.  31,  p.  113.  i-'^L.,  Wash.,  1895,  Sec.  21,  p.  in. 

""L.,  Wash.,  1895,  Sees.  7  and  8,  ^'^^  L.,  Wash.,  1895,  Sec.  25,  p.  112, 

p.   no.  See  L..  Wash.,  1897,  Sec.  i,  p.  93. 


EXEMPTIONS.  551 

months,  also  feed  for  such  animals  for  six  months ;  in  lieu 
of  the  animals  named  above  the  householder  may  select  prop- 
erty to  the  value  of  $250.  coin;  fifth,  to  a  farmer,  one  span 
of  horses  or  mules  with  harness,  or  two  yoke  of  oxen,  with 
yokes  and  chains,  and  one  wagon;  farming  utensils  actually 
used  about  the  farm,  not  to  exceed  $500  in  value,  coin;  150 
bushels  wheat,  150  bushels  oats  or  barley,  50  bushels  pota- 
toes, ID  bushels  corn,  10  bushels  peas,  10  bushels  onions  for 
seed;  sixth,  to  a  mechanic,  the  tools  and  instruments  used  to 
carry  on  his  trade  for  the  support  of  himself  and  family,  also 
the  material  used  in  his  trade,  not  exceeding  in  value  $500. 
in  coin ;  seventh,  to  a  physician,  his  library,  not  to  exceed 
$500  in  value  in  coin ;  also  one  horse,  with  harness  and  buggy ; 
the  instruments  used  in  his  practice,  and  medicines,  not  ex- 
ceeding in  value  $200  in  coin;  eighth,  to  attorneys,  clergymen 
and  other  professional  men,  their  libraries,  not  exceeding  in 
value  $1,000.  coin,  also  office  furniture,  fuel  and  stationery,  not 
exceeding  in  value  $200  in  coin;  ninth,  all  firearms  kept  for 
the  use  of  any  person  or  family ;  tenth,  to  any  person,  a  canoe, 
skiff  or  small  boat,  with  its  oars,  sails  and  rigging,  not  ex- 
ceeding in  value  $250;  eleventJi,  to  a  person  engaged  in  lighter- 
ing for  the  support  of  himself  or  family,  one  or  more  lighters, 
barges  or  scows,  and  a  small  boat,  with  oars,  sails  and  rigging, 
not  exceeding  in  the  aggregate  in  value  $250  in  coin ;  twelfth, 
to  a  teamster  or  drayman  engaged  in  that  business  for  the  sup- 
port of  himself  or  family,  his  team,  consisting  of  one  span  of 
horses  or  mules,  or  two  yoke  of  oxen,  or  a  horse  and  mule,  with 
harness,  yokes,  one  wagon,  truck,  cart  or  dray;  thirteenth, 
to  a  persrm  engaged  in  the  business  of  logging  for  his  support 
or  that  of  his  family,  three  yoke  of  work  cattle  and  their  yokes, 
and  axes,  chains,  implements  for  the  business  and  camp  equip- 
ments, not  exceeding  in  value  $300  in  coin;  fourteenth,  a 
sufficient  quantity  of  feed  for  the  animals  mentioned  in  the 
several  subdivisions  for  six  months.  No  property  is  exempt 
ff)rm  process  issued  for  the  purchase  price  or  for  taxes.  Each 
person  may  select  the  property  to  which  he  is  entitled.'*" 

'^"Hill.  Ann.  Code  Proc.  Wash..      p.  6.    In  re  Biiclow.  98  Fed.  Rep.  86, 
i8gi.  Sec.  486.     E.xemption  in  case      3  Am.  B.  R.  389. 
of  assignments,  sec  L..  Wash..  1897, 


552  LAW     AM)    I'KOCEEDINGS    IN    BANKRUPTCY. 

In  addition  to  the  property  exempt  under  section  486,  there 
is  exempt  to  every  householder  in  the  state  property  to  the 
amount  of  $1,000;  but  no  property  is  exempt  from  process 
for  clerk's,  laborer's  or  mechanic's  wages  earned  within  the 
state,  nor  is  any  property  exempt  from  execution  issued  upon 
a  judgment  against  an  attorney  or  agent  for  money  or  prop- 
erty coming  into  his  hands  from  or  belonging  to  the  client  or 
principal. ^*^ 

The  avails  of  fire  insurance  on  exempted  property  are  ex- 
empt"" 

The  avails  of  all  life  and  accident  insurance  are  exempt 
from  all  liability  for  any  debt."^ 

Current  wages  or  salary  to  the  amount  of  $100  for  personal 
services  rendered  by  any  person  having  a  family  dependent 
upon  him  for  support  are  exempt."* 

Any  money  received  by  a  citizen  of  the  state  as  a  pension 
from  the  government  of  the  United  States,  whether  in  his 
actual  possession  or  is  deposited  or  loaned  by  him.  is  exempt 
from  process.^*^ 

When  any  debtor  dies  or  absconds  and  leaves  his  family, 
money  exempted  by  section  487  is  exempt  to  his  family."" 

Benefits  payable  by  charitable  associations,  etc.,  to  widows, 
orphans,  or  others  dependent  upon  deceased  members  of  such 
association,  are  not  liable  to  garnishment."'' 

The  arms,  etc.,  of  members  of  the  national  guard  are  ex- 
empt."* 

West  Virginia. —  Any  husband  or  parent  residing  in  the 
state,  or  the  infant  children  of  deceased  parents,  may  hold  a 
homestead  of  the  value  of  $1,000,  and  personal  property  to 
the  value  of  $200,  exempt  from  process,  provided  that  such 
homestead  exemption  shall  not  affect  obligations  existing  at 
the  time  of  the  adoption  of  the  constitution  of  1872,  and  pro- 

^41 L.,  Wash.,  1897,  Sec.  i,  p.  93;  See    L.,    Wash.,    1893;    Sec.    25,    p. 

as  amended  L.,  Wash.,  1901,  Chap.  441. 

158,  p.  323;  for  what  is  meant  by  1*'' Hill.  Ann.  Code  Proc,  Wash., 

householder,  see  Sec.  2.  1891,  Sec.  487. 

"2L.,  Wash..  1895,  Sec.  i,  p.  1345-  '*«Hill.  Ann.  Code  Proc,  Wash., 

i«L.,  Wash..  1895,  Sec.  i,  p.  336;  1891,  Sec.  488. 

as   amended,   L.,   Wash.,    1897,   Sec.  ^*''  L.,  Wash.,  1895,  Sec.  8,  p.  402. 

I,   p.   70.  ^■•sL.,  Wash.,  1895,  Sec.  82,  p.  223. 

i**L.,  Wash.,  1897,  Sec.  i,  p.  24. 


EXEMPTIONS. 


553 


vided  that  no  property  is  exempt  from  taxes  or  for  the  pay- 
ment of  the  purchase  money  due  upon  such  property  or  for 
debts  contracted  for  the  erection  of  improvements  thereon."** 

Every  husband  or  parent,  and  every  guardian  or  curator 
of  any  infant  child  of  deceased  or  insane  parents,  may  ac- 
quire a  homestead  by  a  writing,  executed  and  acknowledged 
according  to  law,  in  the  same  manner  as  deeds  are  executed ; 
such  writing  must  be  recorded  in  the  office  of  the  county 
clerk.^^" 

The  real  estate  so  set  apart,  from  the  time  said  writing  is 
delivered  to  the  county  clerk,  is  exempt  from  debts  thereafter 
incurred,  except  debts  incurred  for  the  purchase  money,  or  for 
the  erection  of  permanent  improvements  thereon  and  taxes; 
it  is  not  exempt  from  debts  and  liabilities  incurred  prior 
to  the  delivery  of  such  writing  for  record;  this  does  not  im- 
pair any  right  acquired  under  chapter  193  of  the  acts  of  1872 
and  1873."' 

If  the  homestead  set  apart  is  not  of  a  greater  value  than- 
$1,000  at  the  time  of  the  execution  and  recordation  of  the 
declaration  thereof,  the  same  is  not  affected  by  any  increase 
in  \alue  unless  caused  by  the  erection  of  permanent  improve- 
ments thereon. ^^" 

In  case  of  the  death  of  a  husband  or  parent  owning  a  home- 
stead, the  benefit  thereof  descends  to  his  or  iier  minor  children, 
and  is  to  l)e  enjoyed  by  them  until  all  of  said  infants  attain 
the  age  of  21  years  or  die.^**^ 

Any  husbanrl  or  parent  residing  in  this  state,  or  the  widow, 
or  the  infant  children  of  deceased  parents,  may  set  apart  and 
hold  personal  property  to  the  value  of  $200,  exemi)t  from 
process,  except  as  hereafter  ai)i)ears ;  any  mechanic,  artisan  or 
laborer  residing  in  the  state  may  hold  the  working  tools  of 
his  trade  or  occupation  to  the  value  of  $50  exempt.'" 

After  the  death  of  any  husband  or  parent  residing  in  the 

'*»  Const,   of  W.   Va.,    1872,   Art.  "-'a  Code,     W.     Va.,     1891,    Chap. 

VI.   Sec.  48.     Cwle.   W.   Va.,    1891,  XLI.   Sec.   33,  p.  304. 

Chap.  XLI.  Sec.  30.  p.  303.  "'•■''  Code.     W.    Va.,     1891,     Chap. 

i-'^Code,     W.     Va..     jHf)i,    Chap.  XLI.   Sec.   34.   p.  304. 

XLI.  Sec.  31,  p.  303.  ''■♦Const..  W.  Va..  1872.  Art.  VL 

i"Code,     W.     Va..     iS*;!,    Chap.  .Sec.  48;  Code.  VV.  Va.,  1891,  Chap. 

XLI.  Sec.  32,  p.  303.  XLI,   Sec.   23,   p.   301. 


554  l--^^^'    -^^'^    PROCEEDINGS   IN    BANKRUPTCY. 

State,   his  witlow  or  minor  children  may  hold  exempt  $200 
worth  of  personal  property/'^^ 

No  exemptions  can  be  claimed  as  against  the  purchase 
money  for  the  personal  estate,  nor  against  taxes."" 

Any  deed  of  trust,  mortgage  or  other  writing  made  by  a 
husband  or  parent,  to  give  a  lien  on  property  set  apart  as 
exempt,  is  void.^'^^ 

A  married  woman  may  insure  the  life  of  her  husband,  and 
the  proceeds  of  such  insurance  are  free  from  the  claims  of 
the  creditors  of  her  husband;  but  such  exemption  does  not 
apply  when  the  annual  premium  paid  out  of  the  funds  of  the 
husband  exceeds  $150."' 

Wisconsin."''  —  A  homestead,  to  be  selected  by  the  owner, 
consisting,  when  not  included  in  any  city  or  village,  of  not 
exceeding  forty  acres  of  land,  used  for  agricultural  purposes, 
and  when  included  in  any  city  or  village  of  any  quantity  of 
land  not  exceeding  one  fourth  of  an  acre,  and  the  dwelling- 
house  thereon  and  appurtenances,  owned  and  occupied  by  any 
resident  of  the  state,  is  exempt  from  seizure  or  sale  on  execu- 
tion, from  the  lien  of  every  judgment  and  from  liability  in 
every  form  for  the  debts  of  such  owner  to  the  amount  in  value 
of  $5,000,  except  process  for  laborers',  mechanics'  and  pur- 
chase money  liens,  and  mortgages  lawfully  executed,  and 
taxes  and  except  as  specially  otherwise  provided  by  law ;  such 
exemption  is  not  impaired  by  temporary  removal  with  inten- 
tion to  reoccupy,  nor  by  a  sale  of  the  homestead,  but  extends 
to  the  proceeds  of  the  sale  thereof  to  an  amount  not  exceeding 
$5,000.  while  held,  with  the  intention  to  procure  another 
homestead  therewith,  for  two  years;  such  exemption  extends 
to  land  not  exceeding  altogether  the  amount  and  value  afore- 

155  Code,    W.    Va.,     1891,    Chap.  state  are  dealt  with  in  In  re   Nei- 

XLI,   Sec.   27,  p.  302.  mann,    124   Fed.    Rep.   738,    10  Am. 

i5«Code,    W.    Va.,     1891,    Chap.  B.  R.  — ;  In  re  Schuller,   108  Fed. 

XLI,   Sec'  28,  p.  303-  Rep.  591,  6  Am.   B.   R.  278;  In  re 

1"  Code,    W.    Va.,     1891,    Chap.  Mayer,  108  Fed.  Rep.  599,  6  Am.  B. 

LXXI,   Sec.  6,  p.  633-  R-    117;   In   re   Friedrich,    100  Fed. 

158  Acts,  W.  Va.,  1893,  p.  7,  Sec.  5-  R«"P-  284,  3  Am.   B.  R.  801 ;  In  re 

As    to   patents   of   married    women  Hoag,  97  Fed.  Rep.  543,  3  Am.  B. 

for    their    own    invention.      Act    of  R.  290:  In  re  Jones,  97  Fed.  Rep. 

W.  Va.,  1893,  p.  7.  Sec.  7-  772,  3  Am.  B.  R.  259. 

158  The    exemption    laws    of    this 


EXEMPTIONS.  555 

said,  owned  by  husband  and  wife  jointly  or  in  common,  and  to 
the  interest  therein  of  a  tenant  in  common,  or  two  or  more 
tenants  in  common  having  a  homestead  thereon,  with  the  con- 
sent of  the  co-tenants  and  to  any  estate  less  than  a  fee  held  by 
lease  or  otherwise. ^*^'* 

No  mortgage  or  other  alienation  of  homestead  by  a  married 
man  is  valid  without  the  signature  of  the  wife."^ 

The  following  property,  except  as  specially  provided  by 
law.  is  exempt  from  process:  (i)  The  family  bible;  (2) 
family  pictures  and  schoolbooks;  (3)  the  library  of  the  debtor 
and  every  part  thereof ;  but  this  provision  does  not  extend  to 
circulating  libraries;  (4)  a  pew;  (5)  all  wearing  apparel  of 
the  debtor  and  family;  all  beds,  etc.,  kept  and  used  by  the 
debtor  and  family:  all  stoves  and  appendages  kept  and  used 
by  the  debtor  and  family;  all  cooking  utensils  and  all  other 
household  furniture  not  herein  enumerated,  not  exceeding  $200 
in  value;  one  gun,  rifle,  or  other  firearm,  not  exceeding  $50 
in  value  ;^®^  (6)  two  cows,  ten  swine,  one  yoke  of  oxen  and 
one  horse  or  mule,  or  in  lieu  of  one  yoke  of  oxen  and  a 
horse  or  mule,  two  horses  or  two  mules,  ten  sheep,  and 
the  wool  from  the  same,  either  in  the  raw  material  or  made 
into  yarn  or  cloth ;  the  necessary  food  for  all  stock  mentioned 
in  this  section  for  one  year,  either  provided,  or  growing,  or 
both,  as  the  debtor  may  choose;  also  one  wagon,  cart,  or  dray, 
one  sleigh,  one  ])low.  one  drag,  and  other  farming  utensils, 
including  tackle  for  teams,  not  exceeding  $200  in  value:  (7) 
the  provisions  for  the  debtor  and  his  family  for  one  year,  and 
one  year's  fuel ;  ( 8 )  the  tools  and  im])lements  and  stock  in 
trade  of  any  mechanic,  miner,  merchant,  trader,  or  other  i)er- 
son,  used  or  kept  for  the  purjjose  of  carrying  on  his  trade  or 
business,  not  exceeding  $200  in  value;  (9)  all  sewing-machines 
owned  by  individuals,  and  kept  for  the  use  of  themselves  or 
families;  (10)  any  sword,  plate,  books,  or  other  articles 
presented  to  any  person  by  congress,  etc. ;  (11)  printing  mate- 
rials and  press  or  presses,  used  in  the  business  of  any  printer  or 
publisher,  to  an  amount  not  exceeding  $500  in  value;  but  no 

i^^Stat..    Wis..    1898,    Sec.    298.3;  "'■iStat..  Wis.,  i8()8.  Sec.  220.3. 

as   amended   L.,    Wis..    1901,    Chap.  "■•-'/»  re  Jones.  97  Fed.  Rep.  773, 

269,    p.    365.      See    Const.,    Art.    I,  .3  Am.  B.  R.  259. 
Sec.   17. 


55^  LAW    AND    PROCEEDINGS    IN    BANKRIPTCY. 

sum  in  excess  of  $400  is  exempt  from  execution  for  the  pay- 
ment of  wages  of  laborers  or  servants  for  services  rendered  the 
defendant;  (12)  the  arms,  etc.,  of  the  national  guard,  and  all 
military  property  thereof;  (13)  all  books,  maps,  plats,  and 
other  papers  kept  and  used  for  the  purpose  of  making  abstracts 
of  title  to  land;  (14)  the  interest  owned  by  any  inventor  in 
any  invention  secured  to  him  by  letters  patent  of  the  U.  S. ; 
(15)  the  earnings  of  any  person  having  a  family  dependent 
upon  him  for  support  at  the  time  of  commencement  of  proceed- 
ings for  the  collection  of  the  debt,  including  the  earnings  of 
minor  children,  whose  earnings  contribute  to  the  support  of 
the  family,  for  three  months  next  preceding  the  issuing  of 
process,  to  the  amount  of  $60  only,  for  each  month  in  which 
such  earnings  are  made  or  earned;  they  must  not  exceed  $180 
in  all  for  said  time;  (16)  all  public  property  used  to  extin- 
guish fires ;  ( 17)  the  proceeds  of  all  fire  insurance  on  exempted 
property;  (18)  all  private  property  is  exempt  from  process 
rendered  upon  any  judgment  or  decree,  any  county,  town, 
city,  village,  or  school  district  of  the  state;  (19)  all  moneys 
arising  on  any  policy  of  insurance  on  the  life  of  a  minor,  pay- 
able to  his  father,  mother,  or  both,  are  exempt  against  the 
creditors  of  the  father  or  mother,  but  not  against  the  cred- 
itors of  such  minor;  all  moneys  arising  under  any  policy  of 
insurance  payable  to  a  married  woman  is  exempt  from  the 
creditors  of  her  husband  and  the  person  effecting  such  in- 
surance for  her  benefit,  subject  to  the  provisions  of  section 
2347;  all  moneys,  etc.,  provided  for  by  any  mutual  benefici- 
ary or  fraternal  association,  etc.,  authorized  to  do  business  in 
the  state,  are  exempt  against  the  creditors  of  any  member 
thereof,  or  of  his  beneficiary,  to  the  amount  of  $5,000,  in  all 
cases  where  the  insured  pays  the  premiums  or  any  part  there- 
f)f,  but  if  some  other  person  pays  such  premiums  or  assess- 
ments the  insurance  is  absolutely  exempt;"^  (20)  cemetery 
lots,  monuments  therein,  the  coffins,  and  other  articles  for 
the  burial  of  the  dead,  etc.;  (21)  pension  moneys  payable  to 
retired  members  of  the  police  or  fire  department  in  certain 
cities,  or  to  the  widow  r)f  minor  children  of  a  deceased  mem- 
ber; (22)  shares  in  a  local  building  and  loan  association,  as 

i«3  In  re  Neimann,   124  Fed.  Rep.        738,   10  Am.  B.   R.  — . 


EXEMPTIONS.  557 

defined  by  section  2009,  to  the  value  of  $1,000  at  the  time  of 
withdrawal ;  but  this  subdivision  does  not  apply  to  a  person 
owning  an  exempted  homestead.  The  exemptions  provided 
for  in  subdivisions  3,  6,  7,  8,  9,  11,  13,  14.  17  and  19,  of  this 
section,  extend  only  to  debtors  having  an  actual  residence  in 
the  state,  and  when  such  debtors  and  their  families  are  remov- 
ing from  one  place  of  residence  to  another,  and  those  granted 
in  subdivisions  5.  6.  11.  13,  14,  15,  17  and  19  shall  not  be 
granted  as  against  a  claim  for  manual  or  domestic  labor  ren- 
dered by  any  female  in  or  about  the  dwelling  of  another.  No 
property  exempted  by  the  provisions  of  this  section  in  actions 
for  the  recovery  of  the  purchase  yivice  thereof:  all  articles  so 
exempted  may  be  selected  by  the  debtor  when  necessary ;  if 
debtor  fails  to  claim  the  exemption,  his  wife  may.  unless  she 
has  deserted  him  before  sale,  select  same,  and  in  her  own 
name  maintain  an  action  for  the  possession  of  the  same,  or  the 
value  thereof,  provided  the  claim  of  exemption  and  selection 
has  been  made.^"* 

No  horse  entered  in  any  race  is  exempt  from  process  in  an 
action  brought  for  the  recovery  of  the  whole  or  part  of  such 
entrance  fee.^*^ 

The  capital  stock  held  by  members  of  mutual  co-operative 
corporations  is  exempt  from  process  excc])t  for  debts  of  the 
association.^^'' 

The  costs  of  repairs,  etc..  of  a  fence,  assessed  according  to 
the  provisions  of  1397,  may  be  recovered  by  action,  and  the 
land  is  subject  to  a  judgment  therefor  without  exemption.^" 

Wyoming. —  Every  householder  of  the  state,  being  the  head 
of  a  family,  is  entitled  to  a  homestead,  not  exceeding  in  value 
$1,500,  exempt  from  i)rocess  arising  from  any  debt,  contract, 
or  civil  obligation.^"* 

Such  hcjmestead  is  exempt  while  occui)ic(l  liy  the  owner,  or 
the  person  entitled  thereto,  or  his  or  her  family.'"" 

When   any   person   dies  seized   of  a    honu'stcad.   leaving  a 

"••♦  Stat.  Wis..  i8fA  Sec.  2f>82.    In  »«M<cv.     Stat,.     Wy..  1887.  Sec. 

re   Frriflrich.    100  Fed.   Rep.   284,   3  2780:    Rev.    Stat..    Wy.,  iSfjo,  Sec. 

Am.  B.  R.  801.  .V)o\. 

'«f' Stat..  Wis..  i8g8.  .Sec.  1467^1.  i«»  Rev.     Stat..     Wy..  1887,  Sec. 

""■•  Stat.  Wis..  1895.  Sec.  1786^.  2781:  Rev.  Slat.,  Wy.,  1899.  Sec. 

1"^  Stat.,  Wis.,  1898.  Sec.  1397-  3902. 


c^58  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

widow  or  husband,  or  minor  children,  such  i)erst)n  is  entitled  to 
the  homestead,  but  when  there  is  no  such  person  the  home- 
stead is  liable  for  the  debts  of  the  deceased/^" 

The  homestead  may  consist  of  a  house  and  lot,  or  lots,  in 
any  town  or  city,  or  if  a  farm,  consisting  of  any  number  of 
acres,  not  exceeding  i6o,  so  that  the  value  does  not  exceed 
$1,500/'^ 

The  homestead  may  be  voluntarily  conveyed  or  incumbered ; 
but  when  the  owner  is  married,  the  wife  must  join  and  ac- 
knowledge separate  and  apart  from  her  husband/^- 

In  the  case  of  the  sale  of  homestead,  $1,500  of  the  proceeds 
of  the  sale  is  exempt;  any  subsequent  homestead  acquired 
with  the  proceeds  is  also  exempt;  no  judgment  or  claim  against 
the  owner  of  such  homestead  is  a  lien  against  the  same  in  the 
hands  of  a  bona  fide  purchaser  for  value/" 

The  following  property,  when  owned  by  any  head  of  a 
family,  and  residing  with  the  same,  is  exempt  from  process, 
but  no  property  of  any  person  about  to  remove  or  abscond 
from  the  state  is  exempt  under  sub.  4,  of  Chap,  i,  of  Div.  5,  of 
the  Rev.  Stat. :  The  family  bible,  pictures  and  schoolbooks, 
a  lot  in  a  burial-ground,  furniture,  bedding,  provisions,  as  the 
debtor  may  select,  not  to  exceed  in  all  $500.'^*' 

Whenever  the  head  of  a  family  dies,  deserts,  or  ceases  to 
live  with  the  same,  the  family  is  entitled  to  receive  the  bene- 
fits of  section  2788;  when  the  property  before  mentioned  is  the 
sole  and  separate  property  of  the  wife  it  is  exempt  from  the 
debts  of  the  wife  to  the  same  extent.^'^ 

The  tools,  team,  and  implements,  or  stock  in  trade,  of  any 
mechanic,  miner,  or  other  person,  used  and  kept  for  carrying 
on  his  business  or  trade,   not  exceeding  in  value  $300,  the 


i-«Rev.  Stat,  Wy.,  1887,  Sec. 
2782;  Rev.  Stat,  Wy.,  1899,  Sec. 
3903.  See  also  L.,  Wy.,  i8go,  Chap. 
LXX,    sub.    Chap.    XIII,    p.    266. 

171  Rev.  Stat,  Wy.,  1887,  Sec. 
2783;    Rev.    Stat.,    Wy.,    1899,    Sec. 

3904- 
iT2Rev.    Stat.,    Wy.,    1887,    Sec. 

2784. 


173  Rev. 

Stat., 

Wy., 

1887, 

Sec. 

2786;  Rev. 

Stat., 

,  Wy., 

1899, 

Sec. 

3906. 

174  Rev. 

Stat., 

Wy., 

1887, 

Sec. 

2788;  Rev. 

Stat., 

Wy., 

1899, 

Sec. 

3908. 

1"  Rev. 

Stat., 

Wy., 

1887, 

Sec. 

2789 ;  Rev. 

Stat, 

Wy., 

1899, 

Sec. 

3909. 

EXEMPTIONS.  559 

library,  instruments,  and  implements  of  any  professional  man, 
not  exceeding  in  value  $300,  are  exempt  from  process.^'*' 

The  necessary  wearing  apparel  of  every  person,  not  exceed- 
ing in  value  $150,  is  exempt/"^ 

No  article  of  property,  heretofore  mentioned,  is  exempt  from 
process  for  the  purchase  money  of  said  article  of  property,  and 
the  person  claiming  such  exemptions  must  be  a  bona  Ude 
resident  of  the  state.^^* 

One  half  of  the  earnings  of  a  judgment  debtor  for  his  per- 
sonal services,  rendered  at  any  time  within  60  days  next  pre- 
ceding the  issuing  of  process,  are  exempt  when  it  appears 
that  such  earnings  are  necessary  for  the  use  of  his  family  re- 
siding within  the  state,  supported  in  whole  or  part  by  his 
labor.^'^ 

Fire  saving  apparatus  is  also  exempt/*" 

i'«Rev.  Stat.,  Wy.,  1887,  Sec.  2790;  Rev.  Stat,  Wy.,  1899,  Sec. 

2790;  Rev.  Stat.,  Wy.,  1899,  Sec.  3910. 

3910.  i"'>Rev.  Stat.,  Wy.,  1899,  Sec. 

i''^  Rev.  Stat.,  Wy.,  1887,  Sec.  3951;  as  amended  L.,  Wy.,  1903, 

2787;  Rev.  Stat.,  Wy.,  1899,  Sec.  Chap.  31,  p.  27. 

3907.  "ostat.,  Wy.,  1887,  Sec.  2791; 

1^8  Rev.  Stat.,  Wy.,  1887,  Sec.  Rev.  Stat.,  Wy.,  1899,  Sec.  3911. 


560  LAW    AND    PROCEEDINGS    IN     BANKRUPTCY. 


CHAPTER  XVIII. 


PREFERENCES  AND  LIENS. 


§   i8g.     The  general  nature  of  preferences  and  liens. 

Preferences  and  liens,  as  used  in  the  bankrupt  law,  usually 
relate  to  charges  upon  the  property  of  an  insolvent  debtor. 
But  an  insolvent  debtor  may  have  a  lien  upon  the  property  of 
another,  who  may  be  either  solvent  or  insolvent.  The  present 
inquiry  is  confined  to  preferences  and  liens  against  an  insolvent 
debtor's  property. 

A  preference  is  defined  by  the  act  itself  in  the  following 
words  :  "  A  person  shall  be  deemed  to  have  given  a  preference 
if,  being  insolvent,  he  has  within  four  months  before  the  filing 
of  the  petition  or  after  the  filing  of  the  petition  and  before  the 
adjudication  procured  or  suffered  a  judgment  to  be  entered 
against  himself  in  favor  of  any  person,  or  made  a  transfer  of 
any  of  his  property,  and  the  effect  of  the  enforcement  of  such 
judgment  or  transfer  will  be  to  enable  any  one  of  his  creditors 
to  obtain  a  greater  percentage  of  his  debt  than  any  other  of 
such  creditors  of  the  same  class."  ^ 

From  this  definition  it  appears  that  a  preference  may  be  cre- 
ated by  a  judgment  or  a  transfer. 

By  judgment,  in  this  section,  is  probably  meant  an  order 
or  decree  of  court  upon  which  is  founded  process  or  other 
proceedings,  the  object  of  which  is  to  take  hold  of  the  prop- 
erty and  withdraw  it  from  the  possession  and  control  of  the 
debtor  and  from  the  ordinary  reach  of  the  creditors  for  the 
payment  of  what  is  due  to  them. 

A  transfer  is  defined  to  mean  "  the  sale  and  every  other  and 
different  mode  of  disposing  of  or  parting  with  property,  or  the 

^  B.  A.  1898,  Sec,  60 :  as  amended  Feb.  5,  1903,  32  Stat,  at  L.  797. 


PREFERENCES    AND    LIENS.  561 

possession  of  property,  absolutely  or  conditionally,  as  a  pay- 
ment, pledge,  mortgage,  gift  or  security."  "'' 

A  lien,  as  used  in  the  bankruptcy  statute,  includes  a  hold 
or  claim  which  one  person  has  upon  the  property  of  another 
as  a  security  for  some  debt  or  charge.  There  are  common 
law,  statutory  and  equitable  liens.  As  ordinarily  used  in  the 
sense  of  the  bankrupt  law,  liens  are  included  in  the  definition 
of  a  preference. 

A  preference  or  a  lien  may  be  valid  or  invalid  or  voidable. 
It  may  be  avoided  if  tainted  with  fraud,  or  it  may  be  avoided, 
although  otherwise  unobjectionable,  because  made  fraudulent 
by  the  provisions  of  the  bankrupt  statute. 

§   190.     Valid  preferences  and  liens. 

The  statute  expressly  recognizes  certain  preferences.  Hens 
or  charges  to  be  valid.''  They  are :  First,  taxes  legally  owing 
by  the  bankrupt  to  the  United  States,  state,  county,  district  or 
municipality.  Second,  the  actual  and  necessary  cost  of  pre- 
serving the  estate  subsequent  to  filing  the  petition.  Third, 
the  filing  fees  paid  by  creditors.  Fourth,  the  actual  cost  of 
administration.  Fifth,  wages  due  to  workingmen.  clerks  or 
servants,  which  have  been  earned  within  three  months  before 
the  date  of  commencement  of  proceedings,  not  to  exceed  $300 
to  each  claimant.  Sixth,  a  debt  owing  to  any  person  who  by 
the  laws  of  the  states  or  the  United  States  is  entitled  to  priority. 
Sci'cntJi,  any  ])reference,  valid  under  local  laws,  given  more 
than  four  months  prior  to  the  filing  of  the  jjetition.*  Eighth, 
any  preference  created  within  four  months  before  the  filing 
of  the  petition  where  the  person  to  be  benefited,  or  his  agent 
therein,  shall  not  have  reasonable  cause  to  believe  that  it  was 
intended  thereby  to  give  a  preference;  that  is  to  say,  a  prefer- 
ence which  has  been  acfjuired  ill  good  faith. "^  Ninth,  liens 
given  or  accepted  in  good  faith  and  not  in  contemplation  of  or 
in  fraud  up(^n  the  act,  and  for  a  present  consideration,  which 

2  B.  A.  1898,  Sec.  I,  clause  25.  Lumber  Co.,  7  Am.  B.  R.  648;  In  re 

•■'  B.  A.  i8^A  Sec.  64/^.  Mitchell,  8  Am.  B.  R.  324,  if6  Fed. 

*  B.   A.    1898.   Sees,  bob  and  67^,  Rep.  87. 

last    clause.     In    re    West    Norfolk  ^  B.  A.  1898,  Sees.  606  and  (rjc. 


562  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

have  been  recorded  acconling-  to  law,  if  record  thereof  was 
necessary  in  order  to  impart  notice." 

Property  upon  which  there  is  a  vahd  preference  or  lien 
passes  to  the  trustee,  if  he  elects  to  take  it,  subject  to  such 
equities,  liens  or  incumbrances,  whether  created  by  operation  of 
law  or  by  the  act  of  the  bankrupt/ 

§  191.     Invalid  preferences  and  liens. 

The  bankrupt  act  provides  that  certain  preferences  and  liens 
shall  be  void  or  voidable.  Such  are:  First,  those  which  are 
invalid  under  the  state  law.®  Second,  any  preference  created 
within  four  months  before  the  petition  is  filed  and  the  person 
to  be  benefited  has  reasonable  cause  to  believe  that  it  was  in- 
tended thereby  to  create  a  preference."  Third,  a  lien  created 
by  legal  proceedings  begun  within  fourth  months  before  the 
petition  was  filed,  where  the  person  sought  to  be  benefited  had 
reasonable  cause  to  believe  that  the  debtor  was  insolvent  and  in 
contemplation  of  bankruptcy,  or  that  such  lien  was  sought  and 
permitted  in  fraud  of  the  bankrupt  act.^**  And  fourth,  any 
levy,  judgment,  attachment  or  other  lien  obtained  by  legal  pro- 
ceedings within  four  months  prior  to  the  filing  of  the  petition. ^^ 
In  addition  to  these  any  preference  or  lien  which  is  tainted 

6  B.  A.  1898.  Sec.  67d.   In  re  West  Cobb,  96  Fed.  Rep.  821,  3  Am.   B. 

Norfolk  Lumber  Co.,  7  Am.  B.  R.  R.  129;  In  re  Graff,  117  Fed.  Rep. 

648,  112  Fed.  Rep.  759.  34.^.  8  Am.  B.  R.  744;  In  re  Nicho- 

^  Yeatman  v.  New  Orleans  Sav-  las,  122  Fed.  Rep.  299,  10  Am.  B. 
ings  Institution,  95  U.  S.  764;  Cook  R.  291  ;  Metcalf  v.  Barker,  187  U. 
V.  Tullis,  18  Wall.  332;  Stewart  v.  S.  165,  9  Am.  B.  R.  36;  In  re  Eng- 
Platt,  loi  U.  S.  731;  Dudley  v.  lish,  122  Fed.  Rep.  113,  10  Am.  B, 
Easton,  104  U.  S.  99;  Long  v.  Bui-  R.  133;  In  re  Goldsmith,  118  Fed. 
lard,  117  U.  S.  617;  Peck  v.  Jen-  Rep.  763,  9  Am.  B.  R.  419;  In  re 
ness,  7  How.  612;  Davis  v.  Fried-  Mitchell,  116  Fed.  Rep.  87,  8  Am. 
lander,  104  U.  S.  570;  Doe  v.  Qiil-  B.  R.  324;  First  National  Bank  v. 
dress,  21  Wall.  642;  Jerome  v.  Mc-  Pa.  Trust  Co.  (C.  C.  A.  3rd  Cir.), 
Carter,  94  U.  S.  734 ;  Chatt.  Nat.  124  Fed.  Rep.  968,  10  Am.  B.  R.  782. 
Bank  v.  Rome  Iron  Co.,  102  Fed.  See  also  Title  to  bankrupt's  prop- 
Rep.  755,  4  Am.  B.  R.  441 ;  In  re  erty,  Sec.  149. 
Hanna,  105  Fed.  Rep.  587,  5  Am.  B. 
R.  127,  3  N.  B.  N.  237;  Hutchinson 
V.  Otis  fC.  C.  A.  ist  Cir.),  8  Am. 
B.  R.  382,  115  Fed.  Rep.  937;  In  re 
Standard  Laundry  Co.,  112  Fed. 
Rep.   126,  7  Am.   B.   R.  254;  In  re 


8B.  A. 

1898,  Sees. 

67a 

clause. 

SB.  A. 

1898.  Sec. 

60&. 

10  B.  A. 

1898,  Sec. 

67c. 

11  B.  A. 

1898,  Sec. 

67/. 

PREFERENCES    AND    LIENS.  563 

with  fraud  is  in  itself  void,  irrespective  of  the  provisions  of  the 
bankrupt  act.  These  several  liens  will  be  more  fully  consid- 
ered in  connection  with  the  treatment  of  the  particular  subjects 
immediately  following. 

Whenever  a  preference  or  a  lien  which  is  declared  fraud- 
ulent or  invalid  under  the  bankrupt  act  has  been  placed  upon 
property,  the  trustee  takes  such  property  discharged  and  re- 
leased from  such  lien  or  preference.^-  The  trustee  is  author- 
ized to  reclaim  and  recover  such  property  or  its  value.^^ 

§  192.     Preferences  by  judgments,  attachments,  levies,  etc. 

Whether  a  lien  obtained  through  legal  proceedings,  other- 
wise valid,  may  be  avoided  or  dissolved  under  the  bankrupt 
law  depends  upon  the  time  when  it  attached  as  a  lien  and  the 
solvency  of  the  debtor  at  that  time.^"  Liens  by  judgment, 
levy,  attachment  or  otherwise  obtained  prior  to  four  months 
before  the  commencement  of  bankruptcy  proceedings  are  recog- 
nized and  preserved  by  the  bankrupt  law."  Those  which  are 
obtained  within  that  period  may  be  dissolved  or  avoided.^* 

Judgment,  etc..  Liens  Obtained  Prior  to  Four 
Months. —  The  provisions  of  the  bankrupt  statute  relating 
to  judgments,  levies,  attachments  and  other  liens  created  by 
legal  proceedings  provide  for  dissolving  or  avoiding  such  liens 
if  obtained  within  four  months  before  filing  the  petition.'^ 
No  other  and  earlier  liens  are  thereby  subject  to  be  avoided 
or  dissolved.'"     Not  being  void  or  dissolved,  they  remain  in 

12  B.  A.  1898,  Sees.  60,  67  and  70;  /;;  re  Blumberg,  94  Fed.   Rep.  476, 

as  amended    Feb.  5,   1903;  Trimble  i   Am.   B.  R.  633;  In  re  Blair,  108 

V.  Woodhead,  102  U.  S.  647.  Fed.  Rep.  529,  6  Am.  B.  R.  206;  In 

As   to  the  manner  of  computing  re   English,    122   Fed.   Rep.    113. 
time   see  Jones   v.   Stevens,   3    Am.  This    rule    was    adopted    in    con- 

B.    R.    571,    48    Atl.    Rep.    170,    94  struing  the  act  of  1867,  which  was 

Me.  582.  similar  in  this  respect  to  the  prcs- 

i^Metcalf   V.    Barker.    187    U.    S.  ent  act,  as  well  as  the  act  of   1841, 

165;  Pickens  v.  Roy,  187  U.  S.  177.  which,    by    Sec.    2,    expressly    de- 

'*  Clarke  v.  Laramore,   188  U.  S.  clarerl    that    "nothing    in    this    act 

486,  affirming  In  re  Kenncy,  5  Am.  contained    shall    be    considered    to 

B.  R.  355.  105  Fed.  Rep.  897.  annul,  destroy  or  impair  "  any  liens, 

^''  B.  A.  1898.  Sees.  67c  and  /,  and  etc. 
Sec.  60:  as  amended  Feb.  5,  1903.  Doe   v.   Childress,  21   Wall.  642: 

i«Metcalf   V.    Barker,    187   U.    S.  Peck  v.  Jenness,  7  How.  612;  Sam- 

165;  Pickens  V.  Roy,  187  U.  S.  177;  son,    v.     Burton,    No.    12285,    Fed. 


5(>4  1-'^^^'     '^■■^'*     l'KC)(,"KKl)Ii\c;S    1\     HANKRII'TCY. 

full  force.'"  It  has  been  held  that  an  e(|uital)lc'  or  legal  lien 
created  prior  to  four  months  of  bankruptcy  is  valid,  although 
legal  proceedings  to  enforce  such  lien  may  have  been  had 
within  the  foiu"  months'  period.  Thus  where  the  commence- 
ment of  a  judgment  creditor's  suit  creates  a  lien  in  e(|uity  ujjon 
the  judgment  debtor's  ec^uitable  assets  more  than  four  months 
before  bankruptcy  such  lien  is  not  invalidated  by  a  judgment 
to  enforce  the  lien  obtained  within  that  period/^  An  attach- 
ment lien  created  more  than  four  months  prior  to  bankruptcy 
is  not  affected  by  a  judgment  subsequently  rendered  in  the  at- 
tachment suit.'*  The  same  rule  has  been  applied  to  a  lien  cre- 
ated by  garnishment.^® 

An  equitable  lien  upon  partnership  assets  created  by  the 
transfer  of  the  interest  of  the  partnership  estate  more  than  four 
months  prior  to  the  filing  of  the  petition  is  not  affected  by  a 
judgment  within  that  period.^** 

When  such  a  lien  attaches  depends  upon  the  state  law.^^ 
The  general  rule  is  that  whenever  by  the  law  and  usage  of 
the  state  the  charge  created  by  process  of  law  becomes  fixed, 
fastened  to  the  property  itself,  so  as  to  make  is  specifically 
liable  for  the  debt  more  than  four  months  before  bankruptcy 
proceedings  are  commenced,  it  is  a  valid  lien  or  security  on 
the  property  under  the  bankrupt  law.     In  various  states  the 

Cas.,    s.    c.    5    Ben.    325;    Bates    v.  165;  Pickens  v.  Roy,  187  U.  S.  177; 

Tappan,   99   Mass.    376 ;    Davenport  Taylor  v.  Taylor,  59  N.  J.   Eq.  84, 

V.    Tilton,    51    Mass.    320;    Johnson  4  Am.  B.  R.  211;  Frazier  v.  South- 

V.  Collins,  116  Mass.  392;  Bowman  ern   Loan   &   Trust   Co.    (C.   C.   A. 

V.   Harding,   56   Me.   559;    Leighton  4th  Cir.),  99  Fed.  Rep.  707;   Doyle 

V  Kelsey,  57  Me.  85 ;  Perry  v.  v.  Heath,  22  R.  I.  213,  4  Am.  B.  R. 
Somerly,  57  Me.  552;  Kittrcdge  v.  705;  Nat.  Bank  v.  Hobbs  (Sup.  Ct., 
Emerson,   15   N.   H.  227;   Kittredge  Ga.),  9  Am.   B.  R.   190. 

V.  Warren,  14  N.  H,  509;  Stoddard  ^^  In  re  Beaver  Coal  Co.,  no  Fed. 

V  Locke,  43  Vt.  574;  Daggett  v.  Rep.  630,  6  Am.  B.  R.  404;  In  re 
Cook,  27  Conn.  341 ;  Ingraham  v.  Blair,  ro8  Fed.  Rep.  529,  6  Am. 
Phillips,   I   Day,   fCorin.)    117;  May  B.   R.  206. 

V.  Courtnay,  47  Ala.  185  :  In  re  Bel-  i"  Bank   of   Commerce   v.   Elliott, 

lows,    No.    1278,   Fed.   Cas.,   s.   c.  3  6  Am.   B.  R.  409.  109  Wis.  648. 

Story,     428.     See     also     Davis     v.  20  /„    ^^    English,    122    Fed.    Rep. 

Friedlander,    104   U.    S.   570,   where  113. 

the  principle  is  recognized,  although  ''  In    re    Darwin    (C.    C.    A.    6th 

the    case    was    decided    upon    other  Cir),    117    Fed.    Rep.    407;    In    re 

grounds.  Blair,  108  Fed.  Rep.  529,  6  Am.  B. 

"Metcalf   V.    Barker,    187   U.    S.  R.  206. 


PREFERENCES    AND    LIENS,  565 

property  becomes  so  charged  at  different  stages  in  the  process 
as  by  the  rendition  of  judgment,  by  the  deHvery  of  the  execu- 
tion to  the  sheriff,  by  the  commencement  of  the  levy,  or  it 
may  relate  back  to  the  beginning  of  the  suit  or  the  first  day 
of  the  term  at  which  the  judgment  was  rendered. ■"  When 
the  lien  has  attached  prior  to  four  months  before  the  filing  of 
the  petition,  the  debtor's  title  to  the  property  passes  to  the 
trustee,  subject  to  the  creditor's  lien  acquired  by  virtue  of  such 
levy,  attachment,  judgment  or  other  lien. 

Judgment,  etc..  Liens  Obtained  Within  Four 
Months. —  The  act  provides  "  that  all  levies,  judgments,  at- 
tachments, or  other  liens,  obtained  through  legal  proceedings 
against  a  person  who  is  insolvent,  at  any  time  within  four 
months  prior  to  the  filing  of  a  petition  in  bankruptcy  against 
him.  shall  be  deemed  null  and  void  in  case  he  is  adjudged  a 
bankrui)t,  and  the  property  affected  by  the  levy,  judgment,  at- 
tachment, or  other  lien  shall  be  deemed  wholly  discharged  and 
released  from  the  same,  and  shall  pass  to  the  trustee  as  a  part 
of  the  estate  of  the  bankrupt,  unless  the  court  shall,  on  due 
notice,  order  that  the  right  under  such  levy,  judgment,  attach- 
ment, or  other  lien  shall  be  preserved  for  the  benefit  of  the 
estate;  and  thereupon  the  same  may  pass  to  and  shall  be  i)re- 
ser\-ed  by  the  trustee  for  the  benefit  of  the  estate  as  aforesaid, 
and  the  court  may  order  such  conveyance  as  shall  be  necessary 
to  carry  the  purposes  of  this  section  into  effect :  Provided, 
That  nothing  herein  contained  shall  have  the  effect  to  destroy 
or  impair  the  title  obtained  by  such  levy,  judgment,  attach- 

22  In  re  Mencke  v.  Rosenberg,  202  the  delivery  of  the  writ  to  the  shcr- 

Penn.    St.    Rep.    131,  9   Am.    B.    R.  iflF. 

323,  it  was  held  that  a  testatum  fi  fa  Voylcs    v.    Parker,    4    Fed.    Rep. 

issued    within     four    months    on    a  210,    where    the    lien    was    held    to 

judgment  entered  prior  to  that  time  relate   hack   to   the   beginning   of   a 

was    avoided    by    Sec.    67/.     hi    re  suit   imder  a   local    statute. 

Darwin    (C.    C.    A.   6th    Cir.),    117  In    Reed    v.    Mclntyre,   98    U.    S. 

Fed.   Rep.   407,   it   was   held    that   a  507,  it  was  held  that  a  levy  on  the 

lien  of  execution  could  not  by  relat-  property     of    a    bankrupt    after    it 

ing  back  to  the  beginning  of  the  suit  had   been   conveyed   to  an   assignee 

antedate   the   date   of   acquiring   the  for  the  benefit  of  creditors  did  not 

property  seized.     In  Waller  v.  Best,  constitute     a     valid     lien,     becatise 

3  How.  III.  a  lien  was  held  to  attach  the     title     to      the     property     had 

under   the   laws   of    Kentucky   upon  passed   out   of   the  bankrupt   before 

the   levy. 


c^66  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

nient.  or  other  lien,  of  a  bona  fnic  purchaser  for  vahie  who  shall 
JKU  e  acquired  the  same  without  uotice  or  reasonable  cause  for 

iuquiry."  "^ 

This  section  applies  to  voluntary  as  well  as  to  an  involun- 
tary i>etition  in  bankruptcy."* 

In  Metcalf  v.  Barker,''  the  supreme  court  held  that  "  it  is 
the  lien  created  by  a  levy,  or  a  judgment,  or  an  attachment,  or 
otherwise,  that  is  invalidated,  and  that  where  the  lien  is  ob- 
tained more  than  four  months  prior  to  the  filing  of  the  peti- 
tion, it  is  not  only  not  to  be  deemed  to  be  null  and  void  on 
adjudication,  but  its  validity  is  recognized.  When  it  is  ob- 
tained within  four  months  the  property  is  discharged  there- 
from, but  not  otherwise."  To  come  within  the  prohibition 
of  this  section  as  thus  construed  three  things  must  concur. 
First,  a  lien  must  be  created  through  legal  proceedings ;  second, 
it  must  be  created  within  four  months  before  a  petition  in 
bankruptcy  is  filed;  and  third,  the  debtor  must  be  insolvent  at 
the  time.  If  any  one  of  these  elements  is  absent  the  judgment, 
le\'y  or  attachment  is  valid. 

The  effect  of  a  legal  proceeding  to  create  a  lien  and  the  time 
at  which  it  attaches  is  determined  by  the  law  as  construed  by 
the  highest  court  of  the  state,  where  such  proceeding  is  had.'^ 

It  should  be  observed  that  a  judgment,  levy  or  attachment 
obtained  within  tlie  four  months'  period  does  not  necessarily 
create  a  lien  within  the  prohibition  of  Sec.  67/.  It  has  been 
expressly  ruled  by  the  supreme  court  that  "  a  judgment  or 
decree  in  enforcement  of  an  otherwise  valid  pre-existing  lien 
is  not  the  judgment  denounced  by  the  statute,  which  is  plainly 
confined  to  judgments  creating  liens."  "     Thus  it  has  been 

23  B.  A.  1898,  Sec.  67/.  Mass.),   6   Am.    B.    R.    744;   In   re 

This    provision    was    inserted    in  Blair,  108  Fed.  Rep.  529. 

the   bill    for   the   first   time   by   the  25187  U.  S.  i74- 

conference    committee,    just    before  20 /„    yg    Darwin    (C.    C.    A.   6th 

its  passage.     See  statement  of  con-  Cir.),  117  Fed.  Rep.  407,  8  Am.  B. 

ference   committee   reported   to   the  R.  703;  In  re  Blair,  108  Fed.  Rep. 

house    of    representatives    June    28,  529,  6  Am.  B.  R.  206 ;  In  re  Wilkes, 

1898,     paragraph     XIX ,   31     Cong.  7   Am.  B.  R.  574. 

Record,  p.  7205.  27  Metcalf   v.    Barker,    187   U.    S. 

2*/n  re  Richards    (C.   C.   A.  7th  174;   /»  ''^  English,   122  Fed.   Rep. 

Cir.).  96  Fed.  Rep.  935,  3  Am.   B.  113. 
R.     145;    Brown    v.    Case     (S.    C. 


PREFERENCES    AND    LIENS.  567 

shown  heretofore  in  this  section  that  judgments  within  the 
four  months'  period  to  enforce  a  Hen  created  by  the  commence- 
ment of  a  judgment  creditor's  suit,  or  an  attachment  Hen,  or 
a  Hen  created  by  garnishment,  or  otherwise  vaHd  Hen  existing- 
prior  to  the  four  months'  period,  is  not  affected  by  an  adjudica- 
tion in  bankruptcy.  It  is  equally  clear  that  a  judgment  to 
foreclose  a  valid  mortgage  existing  prior  to  the  four  months' 
period,  or  a  mechanics'  lien  even  though  created  within  the 
four  months'  period,  would  not  be  invalidated  by  bankruptcy, 
although  the  judgment  was  obtained  within  the  four  months' 
jjeriod,  because  these  Hens  are  not  created  but  are  merely  en- 
forced by  the  legal  proceedings.-^ 

It  has  been  held  that  a  judgment  entered  after  the  adjudica- 
tion is  not  within  the  four  mpnths'  period  and  is  consequently 
valid.-'' 

It  is  essential  to  bring  a  case  within  the  prohibition  that  it 
appear  that  the  lien  was  obtained  against  a  person  who  was 
insolvent  at  the  time.  If  it  does  not  so  appear  the  lien  is 
valid. ■'"'     It  is  not  sufficient  that  the  levy  caused  insolvency.^^ 

If  the  elements  mentioned  above  exist  the  property  passes 
to  the  trustee,  or  may  be  recovered  by  him.  discharged  from 
the  lien,  although  otherwise  valid.  A  lien  created  by  a  judg- 
ment and  levy  of  execution  within  four  months  of  the  filing 
of  a  petition  in  bankruptcy  is  null  and  void  where  the  officer 
has  not  paid  the  money  collected  on  the  execution  to  the  judg- 
ment creditor.^-     It  has  been  intimated  by  the  supreme  court  ^^ 

2«  In    re    Emslie,    102    Fed.    Rep.  Roebling,  107  Fed.  Rep.  71,  5  Am. 

291,  4  Am.  B.  R.  126;  In  re    Kerby-  B.  R.  .368;  Reed  v.  Equitable  Trust 

Dennis  Co.   (C.  C.  A.  7th  Cir.),  95  CSup.  Ga.),  8  Am.  B.  R.  242. 

Fed.  Rep.   116,  2  Am.   B.  R.  402.  •'-'Clarke   v.    Larremore,   Trustee, 

2»  In  re  Engle,  105  Fed.  Rep.  893,  188  U.  S.  486,  9  Am.  B.  R.  476 ;  af- 

5    Am.    B.    R.    372 ;    Kinmouth    v.  firming  In  re  Kcnney,  5  Am.  B.  R. 

Braeutigam    (S.    C.    N.   J.),  4   .'Vm.  355;   In   re   Benedict    (Sup.   Ct.   N. 

B.   R.  344;  see  also  same  v.  same,  Y.),  8  Am.    B.    R.   463;    Brown   v. 

10  Am.  B.  R.  83,  52  Atl.  226;  but  Case  (Sup.  Ct.  Mass.),  —  Mass.  — , 

see  St.  Gyr  v.   Daignault,   103  Fed.  6  .^m.  B.  R.  744. 

Rep.  834,  4  Am.  B.  R.  638.  In  re  Breslauer,  10  .\ni.  R.  R.  3^, 

^"  Simpson     v.     Van     Etten,     108  it  was   held    rccovcral)le  by   trustee 

Fed.   Rep.   199,  6  Am.   B.  R.  204.  where   sheriff  had   notice   of  bank- 
As   to  computing  time  see  Jones  ruptcy  before  payment  to  creditor. 

V.   Stevens,  94   Me.   582,   5   Am.    B.  ■*•''  Clarke   v.    Larremore,    Trustee,. 

R.   571.  188  U.  S.  486,  9  Am.  B.  R.  476. 
'^  Chicago   Title    &   Trust    Co.    v. 


568  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

and  held  by  other  courts  ■'*  that  where  the  money  has  been  col- 
lected upon  an  execution  issued  upon  a  judgment  obtained 
against  the  bankrupt  within  the  four  months'  period  and  paid 
to  the  judgment  creditor  before  the  tiling  of  the  petition  in 
bankruptcy  that  it  does  not  fall  within  the  prohibition  of  Sec. 
6yf.  The  reason  for  this  distinction  is  that  Sec.  67  refers  to 
existing  liens  and  does  not  cover  cases  where  a  lien  has  been 
merged  in  judgment,  execution  and  sale  and  the  money  dis- 
tributed. The  lien  is  thereby  extinguished.  It  would  seem 
that  property  so  paid  to  a  judgment  creditor  might  be  recov- 
ered in  a  proper  case  under  Sec.  6oh,  as  a  preference  created 
by  a  judgment.  The  bankruptcy  court  may  intervene  to  stay 
the  process  at  the  instance  of  the  creditors  who  had  or  were 
about  to  institute  bankruptcy  proceedings.  This  has  frequently 
been  done.^" 

A  lien  created  by  a  judgment  obtained  within  the  four 
months'  period  on  a  note  which  gave  the  holder  a  power  of 
attorney  to  enter  up  judgment  against  the  debtor  in  case  of  non- 
payment at  maturity  is  void,  although  the  note  was  given  prior 
to  that  period.^"  The  reason  is  that  the  lien  is  created  by  the 
judgment  and  not  by  giving  the  note. 

An  execution  levied  within  four  months  of  bankruptcy  upon 
a  judgment  obtained  prior  to  that  period  is  annulled  by  Sec. 
67/.- 

The  seizure  of  property  by  a  vendor  to  subject  it  to  the  pay- 
ment of  the  purchase  money  falls  within  the  prohibition  of  the 
statute.^* 

An  attachment  in  a  suit  to  collect  a  simple  contract  debt 
begun  within  four  months  before  the  filing  of  a  petition  in 


3*Botts  V.   Hammond    (C.   C.  A.  sa /„  ^e  Richards    (C.  C  A.  7th 

4th  Cir.),  99  Fed.  Rep.  916,  3  Am.  Cir.),  96  Fed.  Rep.  935,  3  Am.  B.  R. 

B.    R.   775;   Levor   v.    Seiter    (Sup.  145;  but  see  also  Wilson  v.  Nelson, 

Ct.  App.  Div.  N.  Y.),  8  Am.  B.  R.  183  U.  S.  191,  7  Am.  B.  R.  142. 

459;   Peck  V.  Connell    (Com.   Pleas  ^^ /m   re   Darwin    (C.    C.    A.    6th 

Pa.),  6  Am.  B.  R.  93.  Cir.),  117  Fed.  Rep.  407,  8  Am.  B. 

3^  Clarke    v.    Larremore,    Trustee,  R.   703 :   Mencke  v.   Rosenberg,   202 

188  U.  S.  486,  9  Am.  B.  R.  476;  Peck  Penn    St.    Rep.    131.   9   Am.    B.    R. 

V.  Connell  (Com.  Pleas  Pa.),  6  Am.  323. 

B.  R.  93-  ^*  /"  re  Wilkes,  7  Am.  B.  R.  574. 


PREFERENCES    AND    LIENS.  569 

bankruptcy  is  invalidated  by  an  adjudication.^®  Where  the 
attachment  Hen  existed  prior  to  the  four  months'  period  a 
judgment  within  that  period  enforcing  the  lien  is  valid.**'  The 
same  rule  has  been  recognized  by  the  courts  with  reference  to 
garnishment  proceedings.*^ 

When  the  statutes  operate  to  nullify  and  render  void  a  judg- 
ment, such  nullity  and  invalidity  relate  back  to  the  time  of 
the  entry  of  the  judgment  and  affects  that  and  all  subsequent 
I)roceedings.*^  The  property  affected  by  such  lien  is  wholly 
discharged  and  released  therefrom.  If  the  property  has  been 
sold  to  a  bono  fide  purchaser  the  fund  received  from  such 
sale  takes  the  place  of  the  property  and  passes  to  the  trustee.*'' 

It  is  to  be  observed  that  the  general  rule  just  stated  is  sub- 
ject to  a  qualification.  Judicial  liens  are  not  necessarily  held 
null  and  void.  The  court  may  preserve  them  if  to  destroy 
the  lien  would  militate  against  the  best  interests  of  the  estate. 
A  familiar  example  is  where  there  are  subordinate  valid  liens 
which  would  take  precedence  if  the  judicial  lien  be  null  and 
void.  It  is  possible  that  if  the  lien  be  avoided  the  whole  prop- 
erty to  which  the  lien  attached  might  be  exhausted  by  claims 
which  should  justly  be  i)aid  after  the  judicial  lien. 

In  such  cases  the  court  may.  on  due  notice,  order  that  the 
right  under  such  levy,  judgment,  attachment  or  other  Hen 
shall  be  preserved  for  the  benefit  of  the  estate,  and  thereupon 
the  same  may  pass  to  and  be  preserved  by  the  trustee  for  the 
benefit  of  the  estate.**  In  otlier  words,  the  trustee  is  subro- 
gated to  the  rights  of  a  i)articular  creditor  for  the  benefit  of 
all  the  creditors.  Su1)stantia]ly  the  same  provision  is  made 
with  reference  to  liens  created  by  judicial  proceedings  begun 
within  four  months  of  l)ankruj)tcy  proceedings.*^     The  court 

^^  In  re  Tunc,  8  Am.  B.  R.  285,  McCartney.    109    Fed.    Rep.    621,    6 

115   Fed.  Rep.  906;  /«  re   Moore,  6  Am.  B.  R.  367;  hi  re  Beals,  8  .'\m. 

Am.  I'..  R.  175,  107  Fed.  Rep.  234.  B.    R.  639. 

♦"/«    re    Beaver    Coal    Co.,    no  ^2  darke  v.  Larrcmore,  188  U.  S. 

Fed.  Rep.  630,  6  Am.  B.  R.  404;  In  486,  9  Am.  B.  R.  476;  In  re  Beals, 

re  Blair,  108  Fed.  Rep.  529,  6  Am.  8  Am.  B.  R.  639. 

B.  R.  206.  ■'•■'  Clarke  v.  Larrcmore,  188  U.  S. 

*'  Garnishment  held  valid  in  Bank  486.  9  Am.  B.  R.  476. 

of    Commerce    v.    Elliott,    lofj   Wis.  **  B.    A.    1898,    Sec.    67/.      In    re 

648,  6  Am.  B.  R.  409;  In  re  Swift,  Moore,  6  \m.  B.  R.  175. 

7  Am.  B.  R.   117.  ■"^B.  A.   1898,  Sec.  67c. 

Garnishment    held    invalid    In    re 


570  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

is  authorized  to  order  such  conveyance  as  may  be  necessary 
to  carry  the  purposes  of  this  section  into  effect.  But  nothing 
contained  in  this  provision  has  the  effect  to  destroy  or  impair 
the  title  obtained  by  such  levy,  judgment,  attachment,  or  other 
lien  of  a  bona  fide  purchaser  for  value  who  has  acquired  the 
same  without  notice  or  reasonable  cause  for  inquiry. 

§   193.     Dissolution  of  liens. 

The  act  provides  *^  that  a  lien  created  by  or  obtained  in  or 
pursuant  to  any  suit  or  proceeding  at  law  or  in  equity,  includ- 
ing an  attachment  upon  mesne  process  or  a  judgment  by  con- 
fession, which  was  begun  against  a  person  within  four  months 
before  the  filing  of  a  petition  in  bankruptcy  by  or  against 
such  person,  shall  be  dissolved  by  the  adjudication  of  such 
person  to  be  a  bankrupt,  if.  fiist,  it  appears  that  said  lien  was 
obtained  and  permitted  while  the  defendant  was  insolvent,  and 
that  its  existence  and  enforcement  will  work  a  preference ;  *^  or, 
second,  the  party  or  parties  to  be  benefited  thereby  had  rea- 
sonable cause  to  believe  the  defendant  was  insolvent  and  in 
contemplation  of  bankruptcy;**  or,  third,  that  such  lien  was 

46  B.    A.    1898,    Sec.    67c.     In   re  13533,  Fed.   Cas.,  s.  c.  4  N.   B.   R. 

Dougherty.  log  Fed.  Rep.  480.  207 ;    Balfour   v.    Wheeler,    18    Fed. 

*' Wilson  V.  City  Bank,  17  Wall.  Rep.    893;    In    re    Baxter,   25    Fed. 

473:  Clark  V.   Iselin,  21  Wall.  360;  Rep.  703. 

Watson  V.  Taylor,  21  Wall.  378 ;  *^  As  to  what  constitutes  a  rea- 
Little  V.  Alexander,  21  Wall.  500;  sonable  cause  to  believe  the  de- 
National  Bank  v.  Warren,  96  U.  S.  fcndant  was  insolvent,  etc.,  see 
539;  Rogers  v.  Palmer,  102  U.  S.  Buchanan  v  Smith,  16  Wall.  277; 
263 ;  Traders'  Bank  v.  Campbell,  Grant  v.  First  National  Bank,  97 
14  Wall.  87;  Buchanan  v.  Smith,  U.  S.  80;  Merchants  National  Bank 
16  Wall.  277;  Hoover  v.  Wise,  91  v.  Cook,  95  U.  S.  342;  Wager  v. 
U.  S.  308;  In  re  Kerr,  No.  7728,  Hall,  16  Wall.  584;  Barbour  v. 
Fed.  Cas.  s.  c.  2  N.  B.  R.  388;  In  re  Priest,  103  U.  S.  293;  Toof  v.  Mar- 
Campbell,  No.  2349,  Fed.  Cas.,  s.  tin,  13  Wall.  40;  Stuckey  v.  Ma- 
c.  I  .A.bb.  U.  S.  185;  In  re  Schnepf,  sonic  Savings  Bank,  108  U.  S.  74; 
No.  12471,  Fed.  Cas.,  s.  c.  2  Ben.  Clark  v.  Iselin,  21  Wall.  360;  Fos- 
j2.  tei  V.  Hackley,  No.  4971  Fed.  Cas., 

As  to  judgment  notes  and  judg-  s.  c.  2  N.  B.  R.  406;  In  re  Wright, 

ment    by    confession,    see    Clark    v.  No.   18071   Fed.   Cas..  s.  c.  2  N.   B. 

Iselin.    21    Wall.    360;    Watson    v.  R.  490;  Scammon  v.  Cole,  No.  12432 

Taylor,  21    Wall.  378;  Haughey  v.  Fed.   Cas.,  s.   c.  3   Clif.  472;   Peck- 

Albin,   No.  6222,   Fed.   Cas.,  s.  c.   2  ham    v.    Burrows.    No.    10897    Fed. 

Bond,    244;     Mays    v.    Fritton,    20  Cas.,  s.  c.  3   Story,  544;   Burpee  v. 

"Wall.   414;   Street  v.   Dawson,   No.  National  Bank,  No.  2185  Fed.  Cas., 


PREFERENCES    AND    LIENS.  571 

sought  and  permitted  in  fraud  of  the  provisions  of  the  act. 
The  act  of  congress  was  designed  to  secure  an  equal  distribu- 
tion of  the  property  of  an  insolvent  debtor  among  his  cred- 
itors, and  any  judicial  lien,  obtained  with  a  view  to  secure  the 
property  or  any  part  of  it  to  one,  and  thus  prevent  such  equal 
distribution,  is  a  lien  sought  and  permitted  in  fraud  of  the  pro- 
visions of  this  act.'*" 

It  has  been  held  that  this  provision  was  destroyed  by  the 
subsequent  introduction  of  Sec.  67/  into  the  bill  before  enact- 
ment.^" It,  however,  stands  as  a  part  of  the  bankruptcy  law 
of  this  country  and  a  case  falling  within  its  terms  and  not  con- 
trolled by  67/  will  undoubtedly  be  sustained  according  to  its 
terms. 

^   194.     Preferences  by  transfers. 

Under  the  bankrupt  act  a  preference  may  be  created  by 
transferring  property  to  or  for  the  benefit  of  a  creditor  as 
well  as  by  a  judicial  lien."^  The  word  "  transfer,"  as  used 
in  the  bankrupt  act,  includes  the  sale  and  every  other  and 
different  mode  of  disposing  of  or  parting  with  property  or 
the  possession  of  property  absolutely  or  conditionally  as  a  pay- 

s.  c.  5  Biss.  405 ;  Forbes  v.  Howe,  dall,  2  Bing.,  N.  C.  225  ;  Aljl)ott  v. 
102  Mass.  427;  Otis  V.  Hadley,  112  Burbage,  2  Scott,  656;  Strachriu  v. 
Mass.  100;  Graham  v.  Stark,  No.  Barton,  11  Ex.  647. 
5676  Fed.  Cas.,  s.  c.  3  Ben.  520;  To  the  effect  that  the  circum- 
Castle  V.  Lee,  No.  2506  Fed.  Cas.,  stances  and  not  the  actual  intent 
s  c.  II  B.  R.  80;  Haskell  v.  In-  of  the  debtor  at  the  time  of  the 
galls,  No.  6193  Fed.  Cas.,  s.  c.  i  transaction  are  such  as  to  make 
Hask.  341  ;  In  re  Walton,  No.  17128  his  bankruptcy  a  probable  or  in- 
Fed.  Cas.,  s.  c.  Deady,  442.  cvitabie  event,  is  a  sufficient  con- 
As  to  the  meaning  of  the  words  tcmplation  of  bankruptcy,  see  Gib- 
"  in  contemplation  of  bankruptcy,"  son  v.  Boutts,  4  M.  &  G.  169;  Gib- 
see  Buckingham  v.  McLean,  13  son  v.  Muskett,  4  M.  &  G.  160; 
How.  167;  In  re  Craft,  No.  3316  Poland  v.  Glyn,  12  J.  B.  Moore, 
Fed.  Cas.,  s.  c.  2  Ben.  214,  affirmed  109;  Ex  parte  Simpson,  De  Gex, 
in  No.  3317  Fed.  Cas.,  s.  c.  6  P.latch.  9:  Aldred  v.  Constable,  4  Ad.  and 
177;  Ashby  V.  Stecrc,  No.  576  Fed.  FJ.   N.  S.  674. 

Cas.,  s.  c.  2  Woodb.  &  M.  347 ;  Rob-  ■*•'  See  observation  of  Mr.  Justice 

son's  Bankruptcy,   166.  Field,  with  reference  to  transfers,  in 

To    the    effect    that    actual    bank-  Tnnf  v.   Martin,   13  Wall.  40,  51. 

ruptcy    must    be    contemplated    by  ''°  In  re  Tune,  8  Am.  B.  R.  285, 

the  debtor  at  the  time  nf  the  trans-  115  V<;i\.  Rep.  906. 

action,  see  Morgan   v.   Brundrctt.  5  '"'  B.  A.  1898,  Sec.  60,  as  amended 

B.    &    .^d.    296;    .Vtkinson    v.    Brin-  Feb.   5,   1903. 


:^72  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

meat,  pledge,  mortgage,  gift  t)r  security."'-  Before  considering 
these  different  methods  of  transferring  property  separately,  it 
may  be  profitable  to  notice  the  incidents  relating  to  transfers 
generally. 

It  should  be  observed  that  Sec.  6oa  defines  what  constitutes 
a  preference,  and  par.  b  of  the  same  section  prescribes  the  con- 
ditions under  which  such  i)reference  may  be  set  aside.  By  the 
amendment  of  1903  the  four  months'  limitation  was  taken  from 
clause  b  and  inserted  in  clause  a.  Under  the  bankruptcy  act 
as  it  exists  the  only  interest  a  practitioner  has  in  a  preference 
is  to  determine  whether  it  is  a  voidable  preference  or  not.  This 
is  necessary  in  deciding  whether  the  preferred  property  trans- 
ferred can  be  recovered  in  a  suit  by  the  trustee  or  whether 
the  creditor  must  surrender  his  preference  under  Sec.  S7S  be- 
fore allowance  of  his  claim.  In  either  of  these  cases  it  must 
be  a  voidable  preference  since  the  amendment  of  1903.  What 
constitutes  a  preference  so  as  to  be  an  act  of  bankruptcy  is  con- 
sidered in  Chapter  VIII. 

In  order  that  a  transfer  shall  constitute  a  preference,  which 
may  be  avoided,  whatever  the  manner  of  transferring  it  may 
be.  four  elements  are  necessary.^^  First,  the  transfer  must  be 
made  from  an  insolvent  person  to  a  creditor.  Second,  the  efifect 
of  such  transfer  must  be  to  enable  any  one  of  his  creditors  to 

52  B.  A.  1898,  Sec.  I,  clause  25.  limitation.     However     devious     the 

In    Stern,    Falk   &   Co.   v.   Louis-  method,  if  the  result  is  that,  but  for 

ville  Trust  Co.,  112  Fed.  Rep.  501,  the  act,  the  creditor  acquires  prop- 

7  Am.   B.  R.  305,  the  circuit  court  erty  from  the  debtor  vi'hich  is  sub- 

of  appeals  for  the  sixth  circuit  said:  ject  at  law   or  in  equity  to  be  ap- 

"  The  controlling  question  of  law  propriated  to  the  satisfaction  of  the 
in  the  cases  is  whether  these  facts  debtor's  obligations,  that  is  a  trans- 
constitute  a  preference  within  the  fer  within  the  meaning  of  the  law." 
meaning  of  that  term  in  the  bank-  See  also  Pirie  v.  Chicago  Title  & 
ruptcy  act.  The  word  is  not  in  set  Trust  Co.,  182  U.  S.  438;  Jaquith  v. 
terms  defined  by  the  act,  but  we  Alden,  189  U.  S.  78. 
have  no  doubt  that  so  far  as  the  A  transfer  does  not  embrace  a 
nature  of  the  property  transferred  fictitious  transaction  where  no  value 
is  concerned  it  includes  everything  was  intended  to  pass  and  where 
which  has  capacity  for  being  taken  none  was  actually  transferred.  In  re 
and  appropriated  to  the  satisfaction  Steam  Vehicle  Co.,  10  Am.  B.  R. 
of  debts  provable  under  the  act.     It  385. 

may  be  of  a  legal  or  of  an  equitable  ^^  Sebring  v.   Wellington    (N.    Y. 

nature.  Sup.  Ct.  App.  Div.),  6  Am.   B.   R. 

"  In  respect  to  the  means  by  which  671;    In   re   Dundas,   7  Am.    B.    R. 

the  transfer  is  effected  there  is  no  129. 


PREFERENCES    AND    LIENS.  573 

obtain  a  greater  percentage  of  his  debt  than  any  other  of  such 
creditors  of  the  same  class.  Third,  the  person  receiving  it 
or  to  be  benefited  thereby,  or  his  agent  acting  therein,  must 
have  had  reasonable  cause  to  believe  that  it  was  intended 
thereby  to  give  a  preference.  Fourth,  the  transfer  must  have 
been  made  within  four  months  before  filing  a  petition  in  bank- 
ruptcy, or  after  filing  the  petition  and  before  adjudication. 

If  any  one  of  these  elements  is  wanting,  the  preference  can 
not  be  set  aside,  if  otherwise  valid  under  the  state  law.^* 
Thus  if  it  were  made  more  than  four  months  prior  to  the 
filing  of  the  petition,  or  by  a.  solvent  person,  or  did  not  in  fact 
prefer  a  creditor  by  giving  him  a  larger  percentage  than  other 
creditors,  or  if  the  person  receiving  it  had  no  cause  whatever 
to  believe  that  he  was  obtaining  a  preference  over  other  cred- 
itors, it  can  not  be  recovered  by  the  trustee. 

It  is  immaterial  under  the  bankrupt  act  whether  the  prefer- 
ence is  given  voluntarily  or  at  the  urgent  solicitation  or  threat 
of  a  cieditor.^^ 

Although  the  bankrupt  law  does  not  operate  beyond  the 
limits  of  the  United  States,  a  preference  given  to  a  foreigner 
is  in  violation  of  its  provision  to  the  same  extent  and  under 
the  same  conditions  that  it  would  be  if  the  preference  had  been 
given  to  a  resident  of  the  United  States. ''"'  It  makes  no  dif- 
ference in  this  proposition  that  the  contract  of  purchase  was 
made  abroad,  anrl  to  be  performed  abroad  when  the  goods  had 
been  delivered  to  the  bankrupt,  and  they  were  his  property,  and 
in  the  United  States.''" 

First.  The  Transfer  must  be  m.ade  by  .\n  Insolvent 
Person  to  \  Creditor. —  An  important  element  of  a  transfer 

'^^  Tiffaiiy  v.  Lucas,  15  Wall.  410;  acts  which  otherwise  did  not  amount 

Anibal    v.    Heacock,    2    Fed.    Rep.  to  a  preference." 

169;    Rice    V.    Grafton    Mills,    117  '*•'*  Clarion     Bank     v.     Jones,     21 

Mass.    228;    Paddock    v.    Fish,    10  Wall.    .325:     Wilson    v.     Brinkman, 

Fed.   Rep.   125:  Alexander  v.  Gait,  No.   17794  Fed.  Cas.,  s.  c.  2  N.   B. 

9  Fed.  Rep.  149;  Warren  v.  Moody,  R.  468;  Rison  v.  Knapp.  No.   11861 

122  U.  S.  132.  Fed.  Cas..  s.  c.  i  Dill.  187:  Graham 

In    re    Henry    C.    King    Co.,    113  v.   Stark,   No.   5676   Fed.   Cas.,  s.  c. 

Fed.    Rep.    no.   7    Am.    B.    R.   619,  3  N.  B.  R.  357:  Foster  v.  Hackley, 

Judge  Lowell  said:     "I  must  hold.  No.  4971  Fed.  Cas.,  s.  c.  2  N.  B.  R. 

therefore,    that    knowledge    insolv-  406. 

ency  did  not   make  a  preference  of  »"  Olcott     v.     McLean,    50    How. 

Prac.  455. 


574  LAW    AND    TROCEEDINGS    IN    BANKRUPTCY. 

under  Sec.  6oa  is  that  a  creditor  of  the  bankni])t  must  ha\e 
obtained  a  greater  percentage  of  his  debt  than  any  other  cred- 
itor of  the  same  class.  A  transfer  to  a  person  other  tha^a  a 
creditor  unless  for  his  benefit  is  not  a  preference  within  this 
section.'"'  But  a  creditor  will  not  be  permitted  to  obtain  a 
preference  indirectly  by  transfer  of  his  account,  procuring  a 
third  party  to  loan  money  to  the  debtor  for  payment  of  such 
creditor,  or  other  colorable  device  or-  transaction  intended  to 
evade  the  provisions  of  the  bankruptcy  act.'^^  Such  transfers 
mav  be  recovered  in  a  proper  case  under  Sec.  6yc  and  Sec.  yoe. 

The  act  of  1867  did  not  define  what  constituted  insolvency. 
It  was  defined  by  the  courts  to  mean  that  a  debtor  could  not 
pay  his  debts  in  the  ordinary  course  of  business  as  men  in  trade 
usually  do,  and  such  was  the  conclusion,  even  though  his  ina- 
bility was  not  so  great  as  to  compel  him  to  stop  business.^** 

But  in  the  present  act  "  insolvency "  is  not  used  in  the 
same  sense  as  it  was  used  in  the  prior  acts.  It  is  defined  by 
the  statute  itself :  "  A  person  shall  be  deemed  insolvent  within 
the  provisions  of  this  act  whenever  the  aggregate  of  his  proi> 
erty,  exclusive  of  any  property  which  he  may  have  conveyed, 
transferred,  concealed  or  removed  or  permitted  to  be  concealed 
or  removed  with  intent  to  hinder  or  delay  his  creditors  shall  not 
at  a  fair  valuation  be  sufficient  in  amount  to  pay  his  debts."  *"' 
It  thus  appears  that  a  person  might  not  be  able  to  pay  his 
debts  as  they  become  due  in  the  ordinary  course  of  business, 
and  yet  be  perfectly  solvent.  It  he  is  solvent  at  the  time  of 
making  the  transfer  he  can  not  give  a  preference,  although 

57  Swarts  V.  Siegel,  8  Am.  B.  R.  Markson  v.  Hobson,  No.  9099  Fed. 
220,  114  Fed.  Rep.  looi ;  Lyon  v.  Cas.,  s.  c.  2  Dill.  327;  Sawyer  v. 
Clark,  129  Mich.  381  ;  North  v.  Tay-  Turpin,  91  U.  S.  114. 
lor,  70  N.  Y.  Supp.  339,  6  Am.  B.  R.  Scammon  v.  Cole,  No.  12433 
233;  Hackney  v.  Raymond  Bros.,  Fed.  Cas.,  s.  c.  i  Hask.  214,  Judge 
Clarke  Co.  (Sup.  Ct.  Neb.),  10  Am.  Fox  says,  "this  definition  has  been 
B.  R.  213.  substantially  adopted  by  every  dis- 
ss/n  re  Beerman,  112  Fed.  Rep.  trict  judge  in  the  country  before 
663.  7  Am.  B.  R.  431 ;  In  re  Wright  whom  the  question  has  arisen." 
Lumber  Co.,  114  Fed.  Rep.  ion,  8  «•»  B.  A.  1898,  Sec.  i,  clause  15;  In 
Am.  B.  R.  345-  ''^  Eggert   (C.  C.  A.  7th  Cir.),  102 

59Toof  V.    Martin,    13   Wall.   40;  Fed.  Rep.  735,  4  Am.  B.  R.  449- 

Wager  v.  Hall,  16  Wall.  584;  Wil-  For  a  discussion  of  wlien  a  debtor 

son    V.    City    Bank,    17    Wall.   473;  is  insolvent,  see  Sec.  49,  ante. 
Tiffany    v.    Lucas,     15    Wall.    410; 


PREFERENCES    AND    LIENS.  575 

he  pays  a  creditor  in  full.  He  may  afterwards  become  in- 
solvent and  not  be  able  to  pay  his  other  creditors.  The  fact 
that  a  debtor  is  adjudged  a  bankrupt  raises  no  presumption  of 
insolvency  prior  to  the  filing  of  the  petition  against  him.^^ 

The  question  of  insolvency  is  one  of  fact,  and  but  little 
reliance  can  be  placed  upon  the  statements  of  the  bankrupt 
that  at  the  time  of  the  transfer  he  had  no  reason  to  believe 
himself  insolvent.*^ ^  The  burden  of  establishing  insolvency  at 
the  time  the  preference  was  given  is  on  the  person  alleging  it.'*^ 

In  order  to  set  aside  a  conveyance  or  transfer  of  property, 
it  must  have  been  made  by  a  person  insolvent  at  that  time."* 
A  person  may  dispose  of  his  property  by  gift  or  sale  so  long 
as  he  has  enough  left  to  pay  his  just  debts.  The  fact  that  sub- 
sequently he  becomes  insolvent,  and  is  adjudged  a  bankrupt,  is 
not  sufficient  to  invalidate  such  a  transfer."^  It  has  been  held 
that  where  a  levy  on  a  judgment  was  the  cause  of  insolvency 
no  preference  was  created  thereby  which  could  be  recovered  by 
the  trustee.*"^  An  allegation  that  the  debtor  "  was  in  failing 
circumstances  and  unable  to  pay  all  his  debts  in  full  "  is  not 
sufficient  to  establish  insolvency."'^ 

"1 /h  re  Chappell,    113   Fed.   Rep.  382;  In  jr  Alexander.  102  Fed.  Rep. 

545,  7  Am.  B.  R.  608.  464,  4  Am.  B.  R.  376;  In  re  Wit- 

•^2  Scammon    v.    Cole,    No.    12432  tenberg   Veneer    &    Pane!    Co.,    108 

Fed.  Cas.,  s.  c.  i   Hask.  214;  War-  Fed.   Rep.   593,  6  Am.    B.   R.   271; 

ren    v.    National    Bank,    No.    17202  Martin    v.    Bigelow    (Sup.    Ct.    N. 

Fed.  Cas.,  s.  c.   10  Blatch.  493,  re-  Y.),  7  Am.  B.  R.  218. 

versed  on  another  ground,  96  U.  S.  ^^  In    re  Chappell,    113   Fed.   Rep. 

539;    Graham    v.    Stark,    No.    5676  545,  7  Am.   B.   R.  608;   R.   S.   Sec. 

Fed.  Cas.,  s.  c.  3  Ben.  520;   Pierce  5128;  Toof  v.  Martin,  13  Wall.  40; 

V.    Evans,    6r    Pcnn.    415;    Otis    v.  Wilson  v.  City  Bank,  17  Wall.  473; 

Iladley,   112  Mass.    100;   In   re   Lin-  Sawyer    v.     lurpin,    91    U.    S.    114; 

ton,  7  Am.  B.  R.  676.  Wager  v.  Hail.  16  Wall.  584;  Beat- 
Where  the  quantity  and  value  of  tie  v.  Gardner,  No.   1195  Fed.  Cas., 

the  bankrupt's  assets  were  not  ma-  s.  c.  4  Ben.  479;  Warren  v.  National 

tcrially    diminished    from    the    time  Bank,    No.    17202    Fed.    Cas..    s.    c. 

of  the  transfer  until  the  commence-  10  Blatch.  493 :  Lickman  v.  Wilcox, 

ment    of   the   proceedings    in    bank-  No.  8374  Fed.  Cas.,  s.  c.  i  Dill.  161  ; 

ruptcy,  the  jury  may  find  that  he  Traders'  National  Bank  v.  Camp- 
was    insolvent    when    he    made    the  bell,  14  Wall.  87. 

transfer.     Clarion  Bank  v.  Jones.  21  ""Chicago   Title   &   Trust   Co.   v. 

Wall.  325.  Roebling  Sons,  107  Fed.  Rep.  71,  5 

^^  In  re  Chappell.    113   Fed.   Rep.  Am.  B.  R.  368. 

545,  7  Am.  B.  R.  608.  "Martin  v.  Bigelow  (Sup.  Court 

"■•Warren    v.    Moody,    122   U.    S.  N.   Y.),  7  \m.   B.   R.  218. 

\Z2;   Adams  v.   Collier,    122  U.    S. 


^-(1  law  and  tkockkdings  in  bankruptcy. 

Second.  The  Effect  must  be  to  enable  any  Creditor 
TO  Obtain  a  CiuEATER  Percentage  of  his  Debt  than  any 
OTHER  Creditor  of  the  same  class. —  The  main  object  of  the 
bankrupt  law  is  to  provide  for  the  equal  distribution  of  the 
jirojierty  of  a  debtor  among  his  creditors.  Sec.  6oa  makes 
e\erv  transfer  of  any  of  the  insolvent's  jjroperty.  by  means  of 
which  a  greater  percentage  would  be  i)aid  out  of  his  estate  to 
any  creditor,  or  on  any  claim,  than  every  other  creditor  and 
every  other  claim  of  the  same  class  would  receive  a  prefer- 
ence to  be  avoided  or  surrendered  under  other  provisions  of 
the  statute.  "  The  test  of  a  preference,  under  the  act,  is  the 
payment,  out  of  the  bankrupt's  property,  of  a  greater  per- 
centage of  the  creditor's  claim  than  other  creditors  of  the  same 
class  receive."  ^^  It  does  not  depend  upon  the  purpose  or  in- 
tent of  the  debtor  or  the  creditor.*"*  It  is  merely  the  effect  or 
result  of  the  transaction.  Payments  and  sales  in  the  usual 
course  of  business  where  the  new  sales  succeed  payments  and 
the  net  result  is  to  increase  the  bankrupt's  estate  do  not  con- 
stitute preferential  transfers.^'* 

Where  creditors  are  entitled  to  the  same  percentage  on  their 
debts  they  are  in  the  same  class,  as  unsecured  creditors  having 
provable  claims.  This  is  true  even  though  some  of  them  are 
secured  by  endorsement  or  guaranty  and  the  others  are  not.''^ 
Labor  claimants,  entitled  to  priority,  constitute  a  separate  class 
from  the  unsecured  creditors.''^  Other  classes  may  be  com- 
posed of  creditors  having  a  valid  mortgage,  lien  or  other  se- 
curities or  entitled  to  priorities  in  the  distribution  of  the  estate. 

«»Swarts     V.      Fourth      National  B.  R.   i86;   Gans  v.  Ellison    (C.  C. 

Bank  (C  C  A.  8th  Cir.),  n?  Fed.  A.     3fl      Cir.),      114     Fed.      Rep. 

Rep.  I,  8  Am.  B.  R.  673.  734,  8  Am.  B.  R.   IS3;  Kimball  v. 

«9  Pirie   v.   Trust   Co.,    182   U.    S.  Rosenhan  Co.    (C.  C.  A.  8th  Cir.), 

438.  3  Am.  B.  R.  814;  In  re  Fixen,  114  Fed.  Rep.  85,  7  Am.  B.  R.  718. 

102    Fed.    Rep.    295,    4   Am.    B.    R.  "^i  Swarts   v.    Fourth    Nat.    Bank, 

10;    In  re   Conhaim,  97   Fed.    Rep.  117  Fed.  Rep.  i,  8  Am.  B.  R.  673; 

923,   3   Am.    B.    R.   249;    Crooks   v.  Swarts    v.    Siegel,    114    Fed.    Rep. 

People's    Nat.    Bank    (N.    Y.    Sup.  looi    (on  app.  to  C.  C  A.),  8  Am. 

Ct),  3  Am.  B.  R.  238.  B.  R.  689,  117  Fed.  Rep.  13. 

70Jaquith  v.  Alden.  189  U.  S.  78;  But  see  In  re  Harpke,    116  Fed. 

In  re  Sagor  (C.  C.  A.  2d  Cir.),  121  Rep.  295,  8  Am.  B.  R.  535- 

Fed.    Rep.   658.   9   Am.    B.   R.   361;  "/m  re   Read   &  Knight,  7   Am. 

Dickson  v.   Wyman    (C.   C.  A.   1st  B    R.   in. 
Cir.),    Ill    Fed.    Rep.    726,    7    Am. 


PREFERENCES    AND    LIENS.  577 

These  secured  classes  become  material  in  actual  practice  when 
there  are  not  sufficient  funds  to  pay  the  whole  of  any  one 
class,  as  where  the  assets  are  insufficient  to  pay  all  the  labor 
claims.  In  such  case  they  must  be  paid  pro  rata  or  a  prefer- 
ence is  created. 

The  giving  of  a  leasehold  in  order  that  the  grantee  may  get 
an  advantage  over  other  creditors  is  a  preference.'^^ 

Third.  Reasonable  Cause  to  Believe,  etc. —  Under  the 
act  of  1867  the  person  receiving  the  transfer  must  at  the  time 
liave  had  reasonable  cause  to  believe  the  person  making  the 
transfer  was  insolvent.'*  Under  the  present  act  the  creditor 
to  be  benefited  must  have  reasonable  cause  to  believe  that  a 
preference  was  intended  to  be  given. "^  This  phrase  undoubt- 
edlv  includes  reasonable  cause  to  believe  that  the  debtor  is 
insolvent,  for  this  is  one  of  the  elements  of  a  preference.  It 
also  includes  a  reasonable  cause  to  believe  that  he  is  to  obtain 
a  greater  percentage  of  his  debts  than  any  other  creditor  in 
his  class,  for  this  is  another  element  of  a  preference. 

It  is  not  necessary  that  the  creditor  knows  or  even  actually 
believes  that  a  preference  is  being  given,  provided  he  has  rea- 
sonable cause  to  be  put  upon  inquiry  as  to  whether  a  prefer- 
ence is  actually  given  or  not.  Constructive  notice  is  sufficient, 
upon  the  ground  that  when  a  party  is  about  to  perform  an  act 
by  wliich  he  has  reason  to  believe  that  the  rights  of  a  third 
party  may  be  affected,  an  inquiry  as  to  the  facts  is  a  moral 
duty  rind  diligence  an  act  of  justice.  Whatever  fairly  puts 
a  ])arty  upon  inquiry  is  sufficient  notice  where  the  means  of 

^■'Carter  v.   Hobbs,  94  Fed.   Rep.  Ben.  21;  Swan  v.  Robinson,  5  Fed. 

108.  2  .\m.   B.   R.  224.  Rep.  287. 

"<  R.  S.  Sec.  5128:  Toof  v.  Mar-  •^'■- B.  A.   i8g8.  Sec.  60b;  Jacobs  v. 

tin.     13     Wall.     40;     Buchanan     v.  Van  Sickle,  123  Fed.  Rep.  340;  Tait 

Smith,  16  Wall.  277 ;  Wager  v.  Hall,  v.    National    Bank.    8    Ohio    N.    P. 

16    Wall.    584;    Scammon    v.    Cole,  Rep.  59,  2  N.  B.  N.  1145;  Hicks  v. 

No.   12433   Fed.   Cas..   s.  c.    i    Mask.  Langhorst    (Hamilton    County,    O., 

214;    Forbes    v.    Howe,    102    Mass.  Common  Pleas),  3  N.  B.  N.  528,  6 

427:    Otis    V.    Hadley,     112    Mass.  Am.    B.    R.    178;    In    re   Jacobs,    i 

100:    Graham    v.    Stark,    No.    5676  Am.  B.  R.  518;  Sebring  v.  Welling- 

Fed.  Cas.,  s.  c.  3  Ben.  520;  Foster  ton    (N.    Y.    Sup.    Ct.    App.    Div.), 

V.  Hackley,  No.  4971  Fed.  Cas.,  s.  c.  6   Am.    P..    R,   671  ;   I.cvor   v.    Sciter 

2  N.  B.  R.  406;  Sedgwick  v.  Shef-  (N.  Y.  Sup.  Cl.  App.  Div.),  8  Am. 

field,   No.    12624   Fed.   Cas.,  s.   c.  .6  B.  R.  459;  I  it  re  Dundas,  7  Am.  B. 

R.   T29,  III  Fed.  Rep.  500. 


578  LAW    AND    TROCEEDINGS    IN    BANKRUPTCY. 

knowledge  are  at  hand,  and  if  the  parly  under  such  circum- 
stances omits  to  inquire  and  proceeds  to  receive  the  transfer 
or  conveyance,  he  does  so  at  his  peril,  as  he  is  chargeable  of 
knowledge  and  of  all  the  facts,  which  by  a  proper  inquiry 
he  might  have  ascertained.'"  It  has  been  held  that  the  mere 
knowledge  that  a  debtor  was  behind  in  his  payments  is  not 
sufficient  of  itself  to  put  his  creditors  upon  inquiry  and  charge 
him  with  notice  of  facts  which  inquiry  might  disclose,'^''  nor 
the  mere  fact  of  taking  security  for  a  loan.^^ 

Mr.  Justice  Bradley,  speaking  for  the  supreme  court  in  a 
leading  case  on  this  subject,  laid  down  the  rule  with  refer- 
ence to  what  constituted  a  reasonable  cause  to  believe  a  debtor 
to  be  insolvent  under  the  former  statutes  in  the  following 
words  :  '^^  "  Some  confusion  exists  in  the  cases  as  to  the  mean- 
ing of  the  phrase  '  having  reasonable  cause  to  believe  such  a 
person  is  insolvent.'  Dicta  are  not  wanting  which  assume  that 
it  has  the  same  meaning  as  if  it  had  read  '  having  reasonable 
cause  to  suspect  such  a  person  is  insolvent.'  But  the  two 
phrases  are  distinct  in  meaning  and  effect.  It  is  not  enough 
that  a  creditor  has  some  cause  to  suspect  the  insolvency  of 
his  debtor;  but  he  must  have  such  a  knowledge  of  facts  as 
to  induce  a  reasonable  belief  of  his  debtor's  insolvency  in  order 
to  invalidate  a  security  taken  for  his  debt.  To  make  mere 
suspicion  a  ground  of  nullity  in  such  a  case  would  render  the 
business  transactions  of  the  community  altogether  too  inse- 
cure.^"    It  was  never  the  intention  of  the  framers  of  the  act 

^6  Crittenden    v.    Barton    (N.    Y.  '^»  Grant  v.  National  Bank,  97  U. 

Sup.   Ct.   App.   Div.),  5  Am.   B.   R.  S.  81.   This  is  referred  to  in  Stuckey 

775;   Wager  v.   Hall,   16  Wall.  584;  v.    Savings   Bank,    108  U.   S.   74,  as 

Peckham    v.     Burrows,    No.     10897  "  a  case  which  was  fully  considered, 

Fed.  Cas.,  s.  c.  3  Story,  544 ;  Scam-  and  which  has   since  been   followed 

mon  V.   Cole,  No.   12432  Fed.  Cas.,  by  us  as  a  leading  case  on  the  sub- 

s.  c.  3  Cliff.  472;  Graham  v.  Stark,  ject." 

No.    5676    Fed.    Cas.,    s.    c.    3    Ben.  **" /n    re    Eggert    (C.    C.    A.    7th 

520.  Cir.),  102  Fed.  Rep.  735,  4  Am.  B. 

''''In   re   Eggert    (C    C.    A.    7th  R.  449;   Lyon  v.   Clark,   129  Mich. 

Cir.),  102  Fed.  Rep.  735,  4  Am.  B.  381;   Brown  v.  Guichard    (Sup.  Ct. 

R.  449:  Hackney  v.  Raymond  Bros.,  N.    Y.),   7   Am.    B.    R.   515;    In  re 

Clarke  Co.  (Sup.  Ct.  Neb.),  10  Am.  Soudan    Mfg.    Co.    (C.    C.    A.    7th 

B.  R.  213.  Cir.),  113  Fed.  Rep.  804,  8  Am.  B. 

""^  Stedman  v.  Bank,  117  Fed.  Rep.  R.  45. 
237.  9  .^m.  B.  R.  4 


PREFERENCES    AND    LIEXS.  579 

to  establish  any  such  rule.  A  man  may  have  many  grounds 
of  suspicion  that  his  debtor  is  in  failing  circumstances,  and 
yet  have  no  cause  for  a  well-grounded  belief  of  the  fact.  He 
may  be  unwilhng  to  trust  him  further;  he  may  feel  anxious 
about  his  claim,  and  have  a  strong  desire  to  secure  it,  and 
yet  such  belief  as  the  act  requires  may  be  wanting.  Obtaining 
additional  security,  or  receiving  payment  of  a  debt  under  such 
circumstances,  is  not  prohibited  by  the  law.  Receiving  pay- 
ment is  put  in  the  same  category,  in  the  section  referred  to,  as 
receiving  security.  Hundreds  of  men  constantly  continue  to 
make  payments  up  to  the  very  eve  of  their  failure,  which  it 
would  be  very  unjust  and  disastrous  to  set  aside.  And  yet 
this  could  be  done  in  a  large  proportion  of  cases  if  mere 
grounds  of  suspicion  of  their  solvency  were  sufficient  for  the 
purpose. 

''  The  debtor  is  often  buoyed  up  by  the  hope  of  being  able 
to  get  through  his  difficulties  long  after  his  case  is  in  fact 
desperate;  and  his  creditors,  if  they  know  anything  of  his 
embarrassments,  either  participate  in  the  same  feeling  or  at 
least  are  willing  to  think  that  there  is  a  possibility  of  his 
succeeding.  To  overhaul  and  set  aside  all  his  transactions 
with  his  creditors,  made  under  such  circumstances,  because 
there  may  exist  some  grounds  of  suspicion  of  his  inability  to 
carry  himself  through,  would  make  the  bankrupt  law  an  en- 
gine of  oppression  and  injustice.  It  would,  in  fact,  have  the 
effect  of  producing  bankruptcy  in  many  cases  where  it  might 
otherwise  be  avoided. 

"  Hence  the  act,  very  wisely,  as  we  think,  instead  of  mak- 
ing a  payment  or  a  security  void  for  a  mere  suspicion  of  the 
debtr)r's  insolvency,  requires,  for  that  purpose,  that  his  cred- 
itor should  have  some  reasonable  cause  to  believe  him  insolvent. 
He  must  have  a  knowledge  of  some  fact  or  facts  calculated 
to  j)roduce  such  a  belief  in  the  mind  of  the  ordinary  intelHgcnt 
man."  The  definitif)n  given  by  the  supreme  court  to  the  phrase 
used  in  the  act  of  1867  may  fairly  be  applied  in  construing  the 
language  used  in  the  present  bankrupt  act.^^ 

»^  As  was  done  In  re  Eggert  (C.  mond  Bros.  Clarke  Co.  (Sup.  Ct. 
C.  A.  7th  Cir.),  102  Fed.  Rep.  735,  Neb.),  10  Am.  B.  R.  213;  Lyon  v. 
4  Am.  B.  R.  449;  Hackney  v.  Ray-      Clark,  129  Mich.  381. 


58o 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


Whether  a  crecHtor  has  reasonable  eause  to  beheve,  etc.,  may 
be  determined  from  the  conduct  of  the  parties  and  the  nature 
of  the  transaction. **■  This  is  often  the  only  means  of  proof. 
A  person  is  always  presumed  to  intend  what  is  the  necessary 
and  unavoidable  consequences  of  his  act.  The  acts,  knowl- 
edge and  intention  of  an  attorney  or  agent  are,  in  law,  the 
acts,  knowledge  and  intention  of  the  principal.*'' 

It  may  be  collated  from  the  decisions  that  a  person  has 
reasonable  cause  for  inquiry,  where  a  banker  allows  his  drafts 
to  go  to  protest,  suspends  payment  and  closes  his  doors  against 
depositors  and  the  creditor  has  knowledge  of  these  facts ;  **  or 
where  a  merchant  stops  payment  of  his  commercial  paper  and 
the  holder  is  comj^elled  to  bring  a  suit  to  which  no  defense  is 
put  in ;  **^  or  where  a  merchant  fails  to  meet  his  debts  as  they 
mature  in  the  ordinary  course  of  business.*"     The  existence 


saSebring  v.  Wellington  (N.  Y. 
Sup.  Ct.  App.  Div.),  6  Am.  B.  R. 
671 ;  Hackney  v.  Raymond  Bros., 
Clarke  Co.  (Sup.  Ct.  Neb.),  10 
Am.  B.  R.  213. 

83  B.  A.  1898,  Sec.  60b;  Babbitt 
V.  Kelley  (St.  Louis  Court  of 
App.),  9  Am.  B.  R.  335,  70  S.  W. 
R.  384;  In  re  Dunavant,  96  Fed. 
Rep.  542,  3  Am.  B.  R.  41 ;  In  re 
Gillette,  104  Fed.  Rep.  769,  5  Am. 
B.  R.  119;  Beattie  v.  Gardner,  No. 
1 195  Fed.  Cas.,  s.  c.  4  Ben.  479; 
Graham  v.  Stark,  No.  5676  Fed. 
Cas.,  s.  c.  3  Ben.  520;  Mayer  v. 
Herman,  No.  9344  Fed.  Cas.,  s.  c. 
10  Blatch.  256 ;  Rogers  v.  Palmer, 
102  U.  S.  263 ;  Nisbit  v.  Macon 
Co.,  12  Fed.  Rep.  686;  Ungewitter 
V.  Von  Sachs,  No.  14343  Fed.  Cas., 
s.  c.  4  Ben.  167. 

Where  money  is  collected 
through  a  collection  agency  by  an 
attorney  of  that  agency,  who  was 
not  employed  directly  by  the  cred- 
itors, his  knowledge  was  held  not 
chargeable  to  the  creditors  in  such 
a  sense  as  to  render  them  liable  to 
the   trustee   in   bankruptcy    for   the 


money  collected.     Hoover  v.  Wise, 
91    U.  S.  308. 

8*  Markson  v.  Hobson,  No.  9099 
Fed.  Cas.,  s.  c.  2  Dill.  327.  But 
if  the  bank  is  not  the  general  banker 
of  a  bankrupt,  the  rule  does  not 
apply.  Rankin  v.  National  Bank, 
No.  15568  Fed.  Cas.,  s.  c.  14  N. 
B.  R.  4. 

85  Dunning  v.  Perkins,  No.  4180 
Fed.  Cas.,  s.  c.  2  Biss.  421. 

**"  In  re  Forsyth,  No.  4948  Fed. 
Cas.,  s.  c.  7  N.  B.  R.  174;  Swan  v. 
Robinson,  5  Fed.  Rep.  287 ;  Mayer 
V.  Herman,  No.  9344  Fed.  Cas.,  s. 
c.  10  Blatch.  256;  Dunning  v.  Per- 
kins, No.  4180  Fed.  Cas.,  s.  c.  2 
Biss.  421  ;  Bartholow  v.  Bean,  18 
Wall.  635;  Wilson  v.  City  Bank,  17 
Wall.  473- 

But  the  mere  knowledge  that  a 
small  claim  remains  unsettled  does 
not  constitute  a  reasonable  cause 
to  believe,  etc.  Castle  v.  Lee,  No. 
2506  Fed.  Cas.,  s.  c.  11  N.  B.  R.  80. 
In  re  Eggert  (C.  C.  A.  7th  Cir.); 
102  Fed.  Rep.  735,  4  Am.  B.  R.  449; 
Hackney  v.  Raymond  Bros.  Clarke 
Co.  (Sup.  Ct.  Neb.),  10  Am.  B. 
R.   213;    Lyon   v.   Clark,    129   Mich. 


PREFERENCES    AND    LIENS.  581 

of  a  general  financial  crisis  should  put  a  prudent  man  upon 
inquiry  with  reference  to  doubtful  debtors,^"  or  rumors  which 
a  creditor  has  heard  about  his  debtor's  embarrassment/'*  or 
any  transfer  or  payment  made  to  a  creditor  out  of  the  ordinary 
course  of  business.*"  Where  an  execution  must  necessarily 
stop  the  debtor's  business,  it  is  sufficient  to  put  the  creditor 
upon  inquiry.""  or  knowledge  of  the  commission  of  an  act 
of  bankruptcy  on  the  part  of  the  debtor."^  The  plea  of  igno- 
rance on  the  part  of  the  creditor  will  not  relieve  him  of  liabil- 
ity when  a  small  amount  of  inquiry  would  have  given  all  the 
necessary  information."-  Nor  is  an  inquiry  of  a  person  sus- 
pected of  fraud,  who  has  every  motive  for  concealing  the 
truth,  sufficient,  when  better  and  more  reliable  sources  of 
information  are  open."'' 

Fourth.  Within  Four  Months,  etc. — In  order  that  a 
preference  be  created  under  the  bankruptcy  act  the  transfer 
must  have  been  within  four  months  before  filing  a  petition  in 
bankruptcy,  or  after  filing  the  petition  and  before  the  adjudica- 
tion.''* This  clause  was  transferred  from  Section  Gob  to  Sec. 
60a  by  the  amendment  of  Feb.  5,  1903.  By  this  change  the 
four  months  limitation  becomes  an  element  of  a  preference  and 
not  merely  an  element  of  a  voidable  preference.  Prior  to  the 
amendment  there  was  a  conflict  in  the  decisions  as  to  whether 

" /n    re    Clark   &    Dougherty,    10  365;  In  re  Palmer,  No.   10681    Fed. 

N-  B.  R.  21.  Cas.,  s.  c.  3  N.  B.  R.  283. 

s-'Golson    V.    Niehoff,    No.    5524  »"  Zahm   v.    Fry,    No.    18198   Fed. 

Fed.  Cas..  s.  c.  2  Biss.  434;  Post  v.  Cas.,  s.  c.  g  N.  B.  R.  546:  Hood  v. 

Corbin,   No.    11299   Fed.   Cas.,  s.   c.  Karper,    No.   6664    Fed.    Cas.,   s.   c. 

5   N.   B.   R.    11;  Hyde  v.  Corrigan,  5  N.  B.  R.  358;  Smith  v.  McLean, 

No.  6968  Fed.  Cas.,  s.  c.  9  N.  B.  R.  No.  13074  Fed.  Cas.,  s.  c.  to  N.  B. 

4^'^-  R.     260;     Buchanan    v.     Smith,     16 

""See  R.  S.  Sec.  5130,  which  ex-  Wall.   277. 

pressly    provided    that    such    trans-  •»»  Warren  v.   National   Bank.   No. 

fers    are    />n»ia    facie    void,     hi    re  17202  Fed.  Cas.,  s.  c.   10  Blatch.  403, 

Coleman,   No.  3021    Fed.  Cas.,  s.  c.  s.  c.  96  U.  S.  5.39. 

2   N.    B.    R.   562:   Tnttle   v.   Truax,  "2 /n   re   Wright,   No.    18071    Fed. 

No.   14277  Fed.  Cas.,  s.  c.   i   N.  B.  Cas.,  s.  c.  2  N.  B.  R.  490. 

R.  C01  :  /„  re  Meyer,  No.  9515  Fed.  •»■■»  Singer  v.  Jacobs,  11   Fed.  Rep. 

Cas.,   s.   c.   2   N.    B.   R.  422;   In   re  559. 

Beck,  No.  1205  Fed.  Cas..  s.  c.  t  N.  »■»  B.  A.  1898.  Sec.  Cx>,  as  amended 

B.    R.    588;    North    v.    House.    No.  Feb.  5.   1903,  Mayer  v.  Hellman,  91 

10310   Fed.   Cas.,  s.  c.  6  N.   B.    R.  l".    S.    496:    Alexander    v.    Gait,    9 

Fed.  Rep    149. 


582  LAW    AXD    PROCEEDINGS    IN    BANKRUPTCY. 

a  transfer  prior  to  tlie  four  months  period  was  a  preference. 
This  hccanic  material  in  determining  whether  the  preference 
must  be  surrendered  under  Section  57^  before  a  claim  could  be 
allowed.  It  is  not  material  since  the  amendment  because  only 
voidable  preferences  are  required  to  be  surrendered. 

The  acts  mentioned  in  section  60  are  not  such  as  were  for- 
bidden by  the  common  law  or  generally  by  the  statutes  of  the 
states  nor  are  they  acts  which  in  their  essential  nature  are 
immoral  or  dishonest.  In  order  to  carry  out  the  spirit  of 
the  bankrupt  system,  namely,  an  equal  division  of  the  bank- 
rupt's property  among  his  creditors,  congress  has  adopted  a 
conventional  rule  to  determine  the  validity  of  these  preferences. 
It  has  prescribed  a  limit  of  four  months.  Any  transfer  made 
within  that  time  is  fraudulent  and  voidable.  It  is  so  not 
because  such  preferences  are  morally  objectionable,  but  simply 
because  the  bankrupt  act  says  they  are.'''^ 

Prior  to  the  amendment  of  Feb.  5,  1903,  there  was  consid- 
erable conflict  in  the  decisions  of  the  courts  of  bankruptcy  as 
to  whether  the  four  months  period  began  to  run  from  the  date 
of  recording  or  registering  the  transfer  or  from  the  date  of  the 
transfer  itself.'-""'  The  amendment  provides  that  "  Where  the 
preference  consists  in  a  transfer,  such  period  of  four  months 
shall  not  expire  until  four  months  after  the  date  of  the  record- 
ing or  registering  of  the  transfer,  if  by  law  such  recording 
or  registering  is  required."  ''*''  The  construction  and  effect  of 
the  registering  and  recording  acts,  given  thein  by  the  courts 
of  the  state,  will  1)e  followed  by  the  courts  of  bankruptcy."" 

WHiere  no  recording  or  registering  is  required  under  the 
state  law,  the  general  rule  is  that  the  four  months  limitation 

»5Bean    v.    Brookmire,    No.    1168  9  Am.  B.  R.  335;  Chesapeake  Shoe 

Fed.  Cas.,  s.  c.   i   Dill.  25.  Co.  v.  Seldner,  122  Fed.  Rep.  593. 

9«  It   was  held   that   the  time  he-  ''^  B.  A.  1898,  Sec.  60a,  as  amend- 

gan  to  run   from   date  of  transfer.  ed  Feb.  5,   1903. 

In  re  Wright,  96  Fed.  Rep.   187,  2  »« /n   re    Shirley    (C.    C.    A.    6th 

Am.  B.  R.  364;  Dean  v.  Plane,  195  Cir.),  112  Fed.  Rep.  301,  7  Am.  B. 

111.  495;  In  re  Kindt,  loi  Fed.  Rep.  R.  299;  In  re  Klingaman,  loi  Fed. 

107,  4  Am.  B.  R.  148;  contra,  In  re  Rep.  691,  4  Am.   B.  R.   254;  In  re 

Klingaman,    loi    Fed.    Rep.    691,    4  Kindt,  loi  Fed.  Rep.  107,  4  Am.  B. 

Am.   B.   R.   254;  In  re  Shirley    (C.  R.    148;    Chesapeake    Shoe    Co.    v. 

C.  .\.  6th  Cir.),  112  Fed.  Rep.  301,  Seldner,  122  Fed.  Rep.  593. 
7  Am.  B.  R.  299;  Babbitt  v.  Kelley, 


PREFERENCES    AND    LIENS.  583 

begins  to  run  from  the  date  when  the  beneficiary  takes  noto- 
rious, exclusive  and  continuous  possession  of  the  property,  or 
the  date  when  the  creditors  have  received  actual  notice  of 
such  transfer.^''  This,  however,  is  only  necessary  in  cases 
where  the  absence  of  a  change  of  possession  would  justify  third 
parties  in  assuming  that  the  property  actually  belonged  to  the 
vendor."'^ 

It  has  been  held  that  where  an  agreement  to  pledge  was 
made  more  than  four  months  prior  to  bankruptcy  but  the 
goods  actually  pledged  within  that  four  months  a  preference 
was  created/-^  Where  a  creditor  in  pursuance  of  a  valid  con- 
tract executed  prior  to  the  four  months  exercised  his  rights  in 
possessing  himself  of  the  bankrupt's  property  and  making 
sale  of  it  under  such  contract  within  four  months  no  prefer- 
ence was  created/""  Where  the  creditor  had  previously  agreed 
to  receive  grain  in  payment  of  his  debt  that  the  transfer  dated 
from  the  time  when  the  warehouse  receipt  was  mailed  to  him, 
but  if  the  creditor  had  not  previously  agreed  to  receive  grain 
in  i)ayment  of  his  debt,  the  transfer  dated  from  the  time  when 
the  receipt  sent  by  mail  was  received  and  accepted  by  him."^ 
In  other  words,  it  dated  from  the  time  the  contract  was  actually 
made.  Where  four  months  have  elapsed  after  the  giving  of  a 
firm  note  by  a  person  to  pay  a  separate  debt  before  the  bank- 
ruptcy of  the  firm,  but  less  than  four  months  before  the  bank- 
ruptcy of  the  i)artner.  the  transfer  is  valid. ^°*  But  where  the 
arrangement  was  made  by  which  property  was  changed  from 
joint  to  several  after  insolvency  and  within  four  montlis  of 
bankruptcy,  it  was  held  voidable.'"'^ 

The   flatc    from    witicli    an    unauthorized    act    of   an    agent 

»" /n  rr  Klingaman,  loi  Fed.  Rep.  i"'' Brooks  v.   Scoggins,   11    N.   B. 

691,  4  Am.  B.  R.  254;  In  re  Shcri-  R.  258. 

dan,  98  Fed.  Rep.  406,  3  Am.  B.  R.  i"*/n    re    Lane,    No.    8044    Fed. 

554.     But    see    Sabin    v.    Camp.    98  Cas..    s.    c.    2    Low.    ^ii-     See    also 

Fed.  Rep.  974,  .1  Am.  B.  R.  578.  For.saith  v.  Merritt,  No.  4946  Fed. 

i"*^/*!    re    Kindt,    loi    Fed.    Rep.  Cas.,  s.  c.   i  Low.  3.16;  In  re  Shep- 

107,  4  Am.  B.  R.  148.  ard.    No.    12754    Fed.    Cas.,   s.   c.    3 

^"1  In  re   Sheridan.  98   Fed.    Rep.  Ben.  347. 

406,  3  Am.  B.  R.  554.  ito/,,   re   Waite,   No.    17044   Fed. 

^^-  Sabin   v.   Camp.   98   Fed.    Rep.  Cas.,  s.  c.  i  Low.  207 ;  In  re  Feder- 

974.  3  Am.   B.  R.  578:  In  re  Wolf.  hen.    No.    4713a    Fed.    Cas.:    In    re 

98  Fed.  Rep.  74,  3  Am.  B.  R.  555.  Johnson,   No.   7369  Fed.   Cas.,  s.  c. 

2  T^w.   129. 


584  LAW    AND    TROCEEDINGS    IN    BANKRl'PTCY. 

which  has  been  ratified  is  computed  is  the  date  of  the  act  and 
not  of  the  ratification.  This  rule  is  subject  to  the  exception 
that  intervening  rights  of  third  persons  can  not  be  defeated 
by  the  ratification/^" 

In  computing  the  four  months  the  first  day  is  excluded 
and  the  last  included,  unless  the  last  day  falls  on  a  Sunday  or 
holiday,  in  which  event  the  last  day  included  shall  be  the 
next  day  thereafter  which  is  not  a  Sunday  or  a  legal  holiday/"^ 
Holidays  are  defined  by  the  act  to  include  Christmas,  the 
fourth  of  July,  the  twenty-second  of  February,  and  any  day 
appointed  by  the  president  of  the  United  States  or  the  con- 
gress of  the  United  States  as  a  holiday  or  as  a  day  of  public 
fasting  or  thanksgiving.^"" 

If  the  transfer  is  made  within  four  months  or  before  the 
adjudication  it  may  be  avoided  and  set  aside."**  If  it  has  been 
made  prior  to  that  time  it  is  a  valid  preference,  and  the  cred- 
itor secured  thereby  will  be  protected  under  the  bankrupt 
act."**  But  where  a  transfer  is  made  by  the  debtor  after  an 
adjudication,  and  before  a  trustee  is  appointed,  it  is  not  a 
preference,  but  simply  an  tmlawful  intermeddling.  Such  a 
transfer  is  at  least  voidable. 

§   195.     Payments. 

A  payment  of  money  within  four  months  of  bankruptcy  by 
an  insolvent  to  apply  on  a  debt  past  due  is  a  preferential  trans- 
fer of  property,  irrespective  of  the  intent  of  the  parties,  where 

"6  Cook  V.  Tullis,  18  Wall.  338;  Wall.   244:   Dutclier  v.   Wright,   94 

In    re    Kansas    Manufacturing    Co.,  U.    S.    553;    /;;    re   Klingaman.    loi 

No.  7610  Fed.  Cas.,  s.  c.  9  N.  B.  R.  Fed.  Rep.  691 ;  4  Am.  B.  R.  254;  In 

76;    Strain    v.    Gourdin,    No.    13521  r?  Woodward,  2  Am.  B.  R.  233 ;  Se- 

Fed.  Cas.,  s.  c.  2  Woods,  380.  bring  v.  Wellington  (N.  Y.  Sup.  Ct. 

107  B.  A.  A.  1898,  Sec.  31  ;  Dutch-  App.  Div.),  6  Am.  B.  R.  671  :  In  re 

er  V.  Wright,  94  U.  S.  553;  hi  re  McLam,  3  Am.  B.  R.  245.  —  Fed. 

Lang,   No.  8056  Fed.   Cas.,   s.   c.   2  Rep.  — . 

N.  B.  R.  480;  Jones  v.  Stevens,  94  ""Bank  v.    Sherman,    loi    U.    S. 

Me.  582,  5  Am.  B.  R.  571;  Whitley  404;  In  re  Randall,  No.  11552  Fed. 

Grocery  Co.  v.  Roach,  115  Ga.  918.  Cas.,    s.    c.    i    Saw.    56;    Taylor    v. 

B.  A.  1898,  Sec.  I,  clause  14.  Robertson,  21   Fed.  Rep.  209;  In  re 


\0H 


i**"  Blennerhasset      v.       Sherman,  Kindt,  loi  Fed.  Rep.  107,  4  Am.  B. 

105  U.  S.  100 ;  Auffm'ordt  v.  Rasin,  R.  148 :  In  re  Wright,  96  Fed.  Rep. 

102  U.   S.  620;   Wager  v.  Hall,   16  187,  2  Am.  B.  R.  364. 
Wall.    584;    Gibson    v.    Warden,    14 


PREFERENCES    AND    LIENS.  585 

It  has  the  effect  of  enabling  a  creditor  to  obtain  a  greater  per- 
centage of  his  debt  than  other  creditors  of  the  same  class."^ 
Such  a  preferential  payment  ma}'-  be  recovered  or  required  to 
be  surrendered  before  claim  is  allowed  -in  cases  where  the 
person  receiving  it  or  to  be  benefited  thereby,  or  his  agent 
acting-  therein,  shall  have  had  reasonable  cause  to  believe  that 
it  was  intended  thereby  to  give  a  preference,""  but  not  other- 
wise."^ 

It  has  been  held  to  be  a  preference  to  pay  a  note  or  check, 
even  where  there  is  an  endorsement  by  a  solvent  party."*  If 
the  surety  pays  the  debt  of  his  principal  he  takes  it  subject 
to  the  disqualifications  and  limitations  of  the  principal  debtor, 
and  if  the  principal  creditor  had  received  preferential  payments 
it  is  as  if  the  endorser  had  received  such  preferential  pay- 
ments."^  It  should  be  observed  that  it  is  the  payment  on  a 
check  or  note  and  not  the  giving  of  it  that  constitutes  a  prefer- 
ence,"" but  giving  the  note  of  a  third  person  creates  a  pref- 
erence."' Payments  on  account  of  loans  constitute  a  preference 
although  the  loans  were  made  during  the  insolvency  and  within 
the  four  months  period."^  Where  a  bank  borrows  one  of  its 
dejKjsitor's  depositrand  gives  security  therefor,  the  giving  se- 
curity creates  a  preference.^^^  A  payment  to  a  bank  to  pay  a 
note  which  the  bank  has  discounted  is  a  preference  in  favor  of 

"'  P..  A.  1898,  Sec.  60a,  as  amend-  B.  R.  689;  Livingston  v.  Heincman 

ef]  Fed.  5,  1903;  Pirie  v.  Trust  Co.,  (C.  C.  A.  6th  Cir.),  10  .\m.   B.  R. 

182  U.  S.  4.18,  5  Am.  B.  R.  814.  39;  /"  re  Lyon   (C.  C.  A.  2d  Cir.), 

112  For   a    discussion   of    the    ele-  10  Am.  B.  R.  25,  —  Fed.  Rep.  — . 

ments  of  a  voidable  preference,  see  But  see  In  re  Levi,  121  Fed.  Rep. 

Sec.    194.  iq8:  In  re  Wyly,  116  Fed.  Rep.  38; 

"•''Sherman    v.    Luckliardt    CSup.  In  re  New,  116  Fed.  Rep.  116. 

Ct.  of  Kan.),  9  Am.  B.  R.  307.  "" /n  re  Wolf  &  Levy,   122  Fed. 

"•  Swarts  v.    Fourth    Nat.    Bank,  Rep.   127,  10  Am.  B.  R.   133. 

117  Fed.  Rep.   I,  8  Am.  B.   R.  673;  "W»  re  Crooks  v.  Nat.  Bank  (N. 

hi  re  Lyon   (C.  C.  A.  2d  Cir.),  121  Y.   Sup.   Ct.   App.   Div.),  3   j\m.   B. 

Fed.    Rep.   723,  —  Am.   B.   R.   — ;  R.  238;  Dickinson  v.  Security  Bank 

Landry   v.   Andrevt-s,   6   Am.    B.    R.  (C.  C.  A.  4th  Cir.),   no  Fed.  Rep. 

(Sup.  Ct.  R.  L),  6  Am.  B.  R.  281,  353,  6  Am.  B.  R.  551. 

22  R.  L  597;  In  re  Lyon,   114  Fed.  "•* /h  re  Colton  Export  &  Import 

Rep.  326,  7  Am.  B.  R.  412,  affirmed  Co.    (C.    C.   A.    2d   Cir.),    121    Fed. 

10  Am.  B.  R.  25.  Rep.  663,  ro  .\m.  B.  R.  25. 

"•'•Swarts    V.    Siegel     (C.    C.    A.  "» /«  re  Cobb.  96  Fed.   Rep.  821, 

8th  Cir.).  117  Fed.  Rep.   13,  8  Am.  3  Am.  B.  R.  129. 


586  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

the  person  who  had  the  note  cliscountetl.''"  Giving  an  order  on 
another  which  is  afterwards  accepted  and  paid  is  a  prefer- 
ence.^'"^ Payments  to  an  indorsee  who  holds  the  note  as 
collateral  security  for  a  debt  of  the  payee  are  payments  to  the 
payee  and  a  preference/^^  A  payment  which  relieves  a  surety 
i«  a  preference  in  favor  of  the  surety/"^  It  has  been  held  to 
be  a  preference  to  pay  any  creditor  in  full  while  insolvent 
and  leave  others  unpaid/"*  and  it  does  not  take  it  out  of  the 
general  rule  that  the  payment  was  made  to  a  holder  of  a  note 
overdue,  on  which  there  was  a  solvent  indorser,  whose  liability 
was  already  fixed/^^  or  to  pay  a  private  debt  out  of  partnership 
property/'""  or  to  pay  an  overdraft  on  a  bank/"^  or  either  direct- 
ly or  indirectly,  in  contemplation  of  the  filing  of  a  petition  by 
or  against  him,  to  pay  money  or  transfer  property  to  an  attor- 
ney and  counselor  at  law,  solicitor  in  equity  or  proctor  in 
admiralty  for  services  to  be  rendered.  Such  transaction  may 
be  reexamined  by  the  court  on  petition  of  the  trustee  or  any 
creditor,  and  shall  only  be  held  valid  to  the  extent  of  a  rea- 
sonable amount  to  be  determined  by  the  court,  and  the  excess 
may  be  recovered  by  the  trustee  for  the  benefit  of  the  estate.^^* 
But,  on  the  other  hand,  it  has  been  held  not  to  be  a  pref- 
erence to  pay  rent  for  the  purpose  of  preserving  a  valuable 
lease,^^^  or  to  make  payments  and  sales  under  a  running  ac- 

^20 /n    re    Waterberry    Furniture  ^-"/w   re   Mattot,    No.   9282   Fed. 

Co.,   114  Fed.   Rep.  255,  8   Am.   B.  Cas.,  s.  c.  16  N.  B.  R.  485. 

R.  79-  ^-^  Payne    v.    Solman.    No.    10856 

121 /m  re  Dundas,    iii    Fed.   Rep.  Fed.  Cas.,  s.  c.  14  N.  B.  R.  162;  In 

500,  7  Am.  B.  R.  129.  re  Kellar,  no  Fed.  Rep.  348,  6  Am. 

122 /n   re    Meyer,    115    Fed.    Rep.  B.   R.  621. 

997,  8  Am.  B.  R.  598.  128  B.    A.    1898,    Sec.   6od;    Furth 

123  Livingstone  v.  Heineman  (C.  v.  Stahl  (Sup.  Ct.  Pa.),  205  Pa. 
C.  A.  6th  Cir.),  120  Fed.  Rep.  786,  439,  10  Am.  B.  R.  442;  Inrehtwin, 
10  Am.  B.  R.  39.  4  Am.  B.  R.  632,  103  Fed.  Rep.  850; 

124  Fox  V.  Gardner,  21  Wall.  475 ;  In  re  Corbett,  5  Am.  B.  R.  224, 
In  re  Oregon  Bulletin  Printing  and  104  Fed.  Rep.  872. 

Publishing  Co.,  No.  10559  Fed.  Cas.,  ^^^/w  re   Pearson,  95    Fed.    Rep. 

s.  c.    13  N.  B.  R.  503;  Silverman's  425,  2  Am.   B.   R.  482;   Merchants' 

Case,    No.    12855    Fed.    Cas.,    s.    c.  Insurance  Co.,  No.  9441   Fed.  Cas., 

I  Saw.  410;  In  re  Dibblee,  No.  3884  s    c.  3  Biss.   162;  contra.  Smith  v. 

Fed.  Cas.,  s.  c.  3  Ben.  283,  s.  c.  sub  Teutonia  Ins.   Co.,   No.    131 15   Fed. 

nom  Qark  v.   Iselin,   21   Wall.   360.  Cas.,  s.  c.  6  Am.  Law  Rev.  584. 

125  Bartholow  v.  Bean,  18  Wall.  In  re  Lange,  97  Fed.  Rep.  197,  3 
635.  Am.  B.  R.  231,  Judge  Brown  said: 


PREFERENCES    AND    LIENS. 


587 


count,  where  new  sales  succeed  payments  and  the  net  result 
is  to  increase  the  indebtedness  of  the  bankrupt,  because  the 
creditor  does  not  obtain  a  greater  percentage  of  his  debt  than 
other  creditors, ^^^  or  to  pay  wages  because  if  there  are  sufficient 
assets  to  pay  all  labor  claims  of  the  same  class  in  full,  payments 
on  account  prior  to  the  bankruptcy  are  immaterial  as  each 
creditor  of  that  class  is  fully  paid,  and  therefore  there  can  be 
no  preference  of  one  over  another,"^  or  to  repay  a  bank  money 
advanced  for  a  certain  purpose  on  a  check  when  not  used  for 
such  purpose,"^  or  to  pay  money  on  account  of  interest  on 
statutory  dower,"^  or  to  pay  interest  in  advance  for  the  renew- 
al of  a  loan/^*  or  to  make  fictitious  book  entries  where  no 
actual  value  passes,^^^  to  collect  book  accounts  assigned  at 
the  time  the  credit  was  given,"**  or  to  subsequently  take  pos- 
session of  property  or  give  security  for  a  debt  in  accordance 
with  an  agreement  made  at  the  time  the  debt  was  created,"^ 
or  to  pay  an  old  debt  separate  and  distinct  from  an  indebtedness 
arising  upon  an  open  account,"^  or  to  pay  a  percentage  on 


"  Payment  of  rent  by  an  insolvent 
is  not  necessarily  a  preference.  But 
when  it  is  done  as  a  means  and  for 
the  purpose  of  carrying  on  a  busi- 
ness in  fraud  of  creditors  it  should 
be   so  regarded." 

'•"■"Jaquith  v.  Alden,  189  U.  S. 
78:  Peterson  v.  Nash  (C.  C.  A.  8th 
Cir.),  112  Fed.  Rep.  311,  7  Am.  B. 
R.  181;  In  re  H.  C.  King  Co.,  113 
I'cd.  Rep.  no,  7  Am.  B.  R.619;  Dick- 
son V.  Wyman  (C.  C.  A.  ist  Cir.), 
Ill  Fed.  Rep.  726,  7  Am.  B.  R. 
186;  hi  re  Sagor  &  Bro.  (C.  C.  A. 
2d  Cir.),  121  Fed.  Rep.  658,  9  Am. 
B.  R.  361  ;  Cans  v.  Ellison  (C.  C. 
A.  3d  Cir.),  114  Fed.  Rep.  734,  8 
Am.  B.  R.  153;  Kimball  v.  Rosen- 
ham  Co.  (C.  C.  A.  8th  Cir.),  114 
Fed.  Rep.  85,  7  Am.  B.  R.  718. 

Where  the  additional  credits  do 
not  equal  the  payments  the  differ- 
ence only  need  be  surrendered. 
Gans  V.  Ellison  (C.  C.  A.  3d  Cir.), 
114  Fed.  Rep.  734. 

1*1 /«  re  Feuerlicht.  8  Am.   B.  R. 


550;  In  re  Reed  &  Knight,  7  Am. 
B.  R.  III. 

But  see  In  re  Kohn,  7  Am.  B.  R. 
Ill  (note)  ;  In  re  Jones,  4  Am.  B. 
R-  563 ;  /"  re  Proctor,  6  Am.  B.  R. 
660. 

^^'  Dressel  v.  North  State  Lum- 
ber Co.,  119  Fed.  Rep.  531,  9  Am. 
B.  R.  541. 

i.-!.i /„  fg  Riddle's  Sons,  122  Fed. 
Rep.  559,  10  Am.  B.  R.  204. 

^•'*/n  re  Kellar,  no  Fed.  Rep. 
348,  6  Am.  B.  R.  621. 

^^^  In  re  Stcun  W'liiclo  Co.,  121 
Fed.  Rep.  939,  10  Am.  B.  R.  385. 

^^^  In  re  Little,  no  Fed.  Rep. 
621,  6  Am.  B.  R.  681  ;  Young  v. 
Upson,  IIS  Fed.  Rep.  192,  8  Am.  B. 
R.    M7. 

'■'"  .S;il)in  V.  Canip,  ()8  I-Vd.  Rep. 
974,  3  Am.  B.  R.  578. 

But  see  In  re  Sheridan,  98  Fed. 
Rep.  406,  3  Am.  B.  R.  554. 

"'• /w  re  Abram  Steers  Lumbor 
Co..  7  Am.  B.  R.  332,  112  Fed.  Rep. 
406;   In  re  Seay,  7  Am.   B.   R.  700, 


588 


LAW    AND    PROCEEDTNGS    IN    RANKRITTCY. 


claims  of  a  part  of  the  creditors  when  the  others  will  receive 
the  same  percentage/'"'  or  to  pay  unearned  premiums  on  poli- 
cies on  insurance/*"  or  a  payment  made  in  full  to  a  creditor 
by  a  third  person  as  a  friendly  act."^  The  reason  for  this  is 
that  the  fund  to  which  the  creditors  look  for  payment  is  in 
nowise  diminished.  It  has  been  held  not  to  constitute  a  prefer- 
ential i^ayment  that  where  mutual  debts  and  credits  have  been 
adjusted  in  good  faith  by  payments  by  the  debtor,"'  for  the 
acceptance  and  payment  of  a  bill  of  exchange  which  had  l>een 
given  before  insolvency  after  the  debtor's  insolvency  was  no- 
torious/" or  when  a  payment  was  made  to  a  collection  agency, 
wnose  attorney  knew  that  it  was  a  preference,  but  the  creditor 
did  not  have  cause  to  believe  it."* 


113  Fed.  Rep.  969;  In  re  Champion, 
7  Am.  B.  R.  560;  Dickson  v.  Wy- 
man,  7  Am.  B.  R.  186,  in  Fed.  726. 

In    the    case    of    Abram    Steers 
Lumber  Co.,  the  court  says : 

"The  bankrupt  was  indebted  to 
the  creditor  upon  an  open  account, 
and  at  a  date  more  than  four 
months  previous  to  the  filing  of  the 
petition  made  a  payment  upon  that 
account  of  money,  and  gave  his 
note  for  the  balance,  which  payment 
and  note  were  treated  by  the  cred- 
itor as  full  payment,  and  the  ac- 
count was  balanced  upon  his  books. 
The  debtor  was  insolvent  at  the 
time,  but  the  creditors  had  no  rea- 
sonable cause  to  believe  that  pref- 
erence was  intended.  Subsequently 
the  bankrupt  contracted  another 
debt  with  the  creditor.  The  ques- 
tion is,  whether  proof  of  that  debt 
can  not  be  allowed  without  a  sur- 
render by  the  creditor  of  the  pay- 
ment received  upon  the  previous 
debt.  We  are  of  opinion  that  the 
payment,  notwithstanding  it  was  a 
preference,  being  upon  a  distinct 
and  independent  debt  than  that 
which  is  sought  to  be  proved,  need 
not  be  surrendered  by  the  creditor. 
.  .  .  We  do  not  deem  it  neces- 
sary to  enlarge  upon  the  reasons  for 


our  conclusions  in  respect  to  these 
questions.  These  are  fully  discussed 
in  the  opinion  of  Judge  Thomas, 
who  decided  the  case  in  the  court 
below,  and  we  fully  concur  in  his 
views." 

1.H9  /„  yg  Hapgood,  No.  6044  Fed. 
Cas.,  s.  c.  2  Low.  200;  Jones  v. 
Sleeper,  No.  7496  Fed.  Cas.,  s.  c.  2 
N.  Y.  Leg.  Obs.  131. 

i-*"  Knickerbocker  Ins.  Co.  v. 
Comstock,  No.  7879  Fed.  Cas.,  s.  c. 
9  N.  B.  R.  484. 

1*1  Dressel  v.  North  State  Lum- 
ber Co..  119  Fed.  Rep.  S3i.  9  Am. 
B.  R.  541  ;  Winsor  v.  Kendell,  No. 
17886  Fed.  Cas.,  s.  c.  3  Story,  507; 
Repplier  v.  Bloodgood,  i  Sweeney 
(N.  Y.  Sup.  Ct.)  34- 

14^  Robinson  v.  Ins.  Co.  Bank, 
No.  1 1969  Fed.  Cas.,  s.  c.  9  Biss. 
117;  Hough  V.  National  Bank,  No. 
6721  Fed.  Cas.,  s.  c.  4  Biss.  349; 
Winslow  V.  Bliss,  3  Lansing  (N. 
Y.)   220. 

i*-'  hi  re  Baxter,  28  Fed.  Rep. 
452. 

i-**  Hoover  v.  Wise,  91  U.  S.  308. 

The  attorney's  knowledge  in  this 
case  was  that  of  his  principal  — 
the  collection  agency  —  and  not  the 
creditors,  who  did  not  employ  him. 


PREFERENCES    AND    LIENS.  589 

§  196.     Sales. 

The  law  does  not  recognize  that  every  sale  of  property  by 
an  embarrassed  person  within  the  period  limited  is  necessarily 
in  fraud  of  the  bankrupt  act.^*^  If  it  were  so.  no  one  would 
know  with  whom  he  could  safely  deal;  and.  besides,  a  person 
in  this  condition  would  have  no  encouragement  to  make 
proper  efforts  to  extricate  himself  from  the  difficulty. 

■  The  interdiction  in  the  act  with  reference  to  preferences 
applies  to  sales  having  a  fraudulent  object,  and  not  to  those 
with  an  honest  purpose.  Thus  the  transfer  of  property  by 
an  insolvent  to  a  creditor,  with  the  consent  of  all  his  other 
creditors,  is  not  a  preferential  sale  which  can  be  set  aside  by 
the  trustee."^  So  also  a  sale  by  a  merchant  of  his  entire  stock 
of  goods  for  full  value,  in  the  absence  of  fraud,  can  not  be 
impeached.^*'  It  has  also  been  held  that  a  bona  fide  i)urchaser 
will  be  protected  to  the  extent  of  the  actual  money  paid  as 
consideration.^*** 

In  order  to  set  aside  a  sale  on  the  ground  that  it  is  a  pref- 
erence, four  things  must  concur:  First,  the  sale  must  be 
made  by  an  insolvent  person  to  a  creditor;  second,  the  effect 
(^f  such  sale  must  be  to  enable  that  creditor  to  obtain  a 
greater  percentage  of  his  debt  than  any  other  of  sucii  cred- 
litors  of  the  same  class;  ////;-(/,  the  creditor  must  have  had 
ireasonable  cause  to  believe  that  it  was  intended  thereby  to 
give  a  preference;  and.  fourth,  the  sale  must  have  been  made 
within  four  months  before  filing  the  petition  in  bankruptcy, 
or  after  the  filing  of  the  petition  and  before  the  adjudication.^*" 
If  any  one  of  these  elements  is  wanting,  the  sale  can  not  be 
set  aside  as  a  preference.  It  should  be  borne  in  mind  that  a 
sale  which  is  fraudulent  under  the  common  or  statutory  law 

'« Tiffany    v.    Lucas.     15     Wall.  i*«JiKl.son  v.  The  Courier  Co.,  8 

421:     Rice    V.    Grafton    Mills,     117  Fed.    Rep.   422. 

Mass.    228:     Rice    v.    Melendy,    41  i*^ /„  ^^  Strenz,  8  Fed.  Rep.  311. 

Iowa,   3Q5 :    Sparhawk   v.    Richards,  i*"*  Lanca.ster    v.    Collins.    7    Fed. 

No.   13205   Fed.  Cas.,  s.  c.   12  N.  B.  Rep.    338:    Sonstihy    v.    Keeley,    11 

R.   74:   Snnstihy  v.  Keeley.   11   Fed.  Fed,   Rep.  578. 

Rep.    578:    Lanca.ster    v.    Collins,    7  '♦<•  B.    A.    1898.    Sec.    60.     For    a 

Fed.  Rep.  338;  In  re  Strenz,  8  Fed.  further   consideration    of   these   ele- 

^'■P    -^"-  ments.    see    Preferences    by    trans- 
fers.  Sec.   194. 


590  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

may    he    ;u-oi(lecl    on    anotlicr   grouiul.    alllunigh    made    more 
than  four  montlis  before  the  (iling  of  the  i)etition/°° 

Whether  a  sale  is  a  fraudulent  preference  or  not  depends 
upon  the  facts  in  the  particular  case.  It  has  been  held  to  be 
a  preferential  sale  which  could  be  avoided,  where  an  insolvent 
sold  to  a  creditor,  knowing  that  he  was  receiving  a  prefer- 
ence, all  his  real  and  personal  property,  leaving  other  cred- 
itors unprovided  for ;  ^°^  or,  under  similar  circumstances,  whef e 
a  merchant  transferred  to  one  creditor  his  entire  stock  of 
goods ;  ^'''  or  where  a  debtor  transferred  a  large  portion  of  his 
property  to  one  creditor  without  making  provision  for  an 
equal  distribution  among  his  other  creditors  ;^^^  or  where  prop- 
erty was  transferred  on  the  ground  of  exercising  a  factor's 
lien;^^*  or  a  sale  to  a  creditor  through  the  intervention  of  an 
agent  who  pays  the  purchase  price  with  notes  of  the  bank- 
rupt ;^^^  or  a  sale  in  consideration  of  an  illegal  agreement,  as 
that  creditor  would  not  prosecute  the  debtor  for  a  misde- 
meanor ;^^^  or  a  sale  to  a  bank  to  make  good  an  overdraft  ;^"  or 
generally  any  sale  the  consideration  of  which  is  a  preexisting 
debt ;  ^^*  or  where  firm  property  is  conveyed  to  a  continuing 
partner.^^"     But  the  conveyance  of  property  to  a  creditor  who 

^^^  See    Setting    aside    fraudulent  ^^*  Nudd    v.    Barrows,   91    U.    S. 

conveyances,  Sec.  203.  426. 

^^1  Foster    v.    Hackley,    No.   4971  ^^^  Fleming   v.    Andrews,    3    Fed. 

Fed.  Cas.,  s.  c.  2  N.  B.  R.  406.  Rep.  632. 

i52\Yalburn    v.    Babbit,    16   Wall.  i"*' Sharp    v.    Philadelphia    Ware- 

577;    Rison    V.    Knapp,    No.    11861  house  Co.,  10  Fed.  Rep.  379. 

Fed.   Cas.,  s.  c.   i   Dill.  187;   Smith  i"  Alderdice  v.   State  Bank,   No. 

V.    McLean,    No.    13074    Fed.    Cas.,  154  Fed.  Cas.,  s.  c.  i  Hughes,  47. 

s.   c.    10   N.   B.   R.  260;    Norton  v.  ^^^  Post  v.  Corbin,  No.  1 1299  Fed. 

Billings,  4  Fed.  Rep.  623 ;  Singer  v.  Cas.,  s.  c.  5  N.  B.  R.  1 1  ;  Ex  parte 

Jacobs,   II   Fed.  Rep.  559.  Shouse,   No.   12815   Fed.   Cas.,  s.  c. 

153  Toof  V.  Martin,  13  Wall.  40;  Crabbe,  482.     See  also  Casey  v.  La 

Wager  v.  Hall,  16  Wall.  584;  Mer-  Societe,    etc.,    No.    2496    Fed.    Cas., 

chants'  Nat.  Bank  v.  Cook,  95  U.  S.  s.   c.   2   Woods,   77 ;    Armstrong  v. 

342.  Chemical    National    Bank,    41    Fed. 

In  re  Drummond,  No.  4094  Fed.  Rep.   234. 

Cas.,  s.  c.  4  Biss.  149 ;  In  re  House,  i^^  In    re    Kindt,    loi    Fed.    Rep. 

No.  6735   Fed.  Cas.,  s.  c.   i   N.  Y.  107,  4  Am.    B.    R.    148;    Collins   v. 

Leg.   Obs.  348;   In  re  Foster,   No.  Hood,  3015  Fed.  Cas.,  s.  c.  4  Mc- 

4964  Fed.   Cas.,  s.  c.    18   N.   B.   R.  Lean,  186;  In  re  Johnson,  No.  7369 

64;   Nisbet  V.   Quinn,   7  Fed.   Rep.  Fed.  Cas.,  s.  c.  2  Low.   129;  In  re 

760.  Waite,  No.  17044  Fed.  Cas.,  s.  c.  i 


PREFERENCES    AND    LIENS.  591 

has  a  valid  lien  on  such  property  to  a  greater  amount  than 
the  value  of  it  is  not  a  preferential  sale.'"^  It  is  otherwise 
where  the  lien  is  invalid/®^ 

The  return  of  goods  which  have  been  purchased  on  credit 
creates  a  preference/^-  An  unrecorded  conditional  sale  is 
voidable  where  by  the  state  law  it  is  required  to  be  recorded/*'' 

Mr.  Justice  Field  has  aptly  observed  /*'*  "  The  act  of  con- 
gress was  designed  to  secure  an  equal  distribution  of  the 
property  of  an  insolvent  debtor  among  his  creditors,  and  any 
transfer  made  with  a  view  to  secure  the  property,  or  any  part 
of  it,  to  one.  and  thus  prevent  such  equal  distribution,  is  a 
transfer  in  fraud  of  the  act." 

§   197.     Mortgages. 

The  law  applicable  to  mortgages  and  liens  is  much  too 
extensive  to  be  discussed  at  length  in  this  treatise.  The 
present  inquiry  will  be  confined  to  what  constitutes  a  prefer- 
ence by  way  of  mortgages  under  the  bankrupt  law.  A  debt 
may  be  secured  by  a  mortgage  on  real  estate  or  personal 
property.  The  principles,  so  far  as  bankruptcy  proceedings 
are  concerned,  are  substantially  the  same  with  reference  to 
real  estate  and  chattel  mortgages. 

It  is  as  much  the  policy  of  the  bankrupt  act  to  uphold 
mortgages  when  valid,  as  it  is  to  set  them  aside  when  invalid. 
The  preference  which  the  law  condemns  is  a  preference  made 
within  the  limited  time  by  the  bankrupt  and  not  a  ])riority 
lawfully  gained  by  a  creditor.  A  mortgage  lien  valid  under 
the  state  law  and  not  within  the  provisions  of  the  bankrupt 
law  will  be  respected  and  enforced  by  a  court  of  bankruptcy.^*"* 

Low.    207;    In    re    Federhen,    No.  2    Saw.    486;    .\shuelot    Sav.    Bank 

4713a   Fed.   Cas.,  referred   to  In   re  v.  Frost,  19  Fed.  Rep.  237. 

Lane,    No.   8044   Fed.   Cas.,   s.   c.   2  ^"^  In    re    Gregg,    No.    5797    Fed. 

Low.     333.     But     see     Forsaith     v.  Cas.,  s.  c.  4  N.  B.  R.  456. 

Merritt,  No.  4946  Fed.  Cas.,  s.  c.  i  ^"^  Silberstein  v.  Stahl,  4  Am.  B. 

Saw.  336:  In  re  Shcpard,  No.  12754  R-  626;  In  re  Klingamaii,   loi    Fed. 

Fed.  Cas..  s.  c.  3  Ben.  347;  Smith  v.  Rep.  691,  4  Am.  B.  R.  254. 

McLean,  No.   13074  Fed.  Cas.,  s.  c.  '""'/h    re   Fraizer,    117   Fed.   Rep. 

i(;  N.  B.  R.  260.     See  also  Johnston  746. 

V.  Straus,  26  Fed.  Rep.  57.  '«♦  Toof  v.   Martin,   13  Wall.  40, 

i«oCoxe  V.   Hale,   No.   3310  Fed.  5i- 

Cas.,  s.  c.  ID  Blatch.  56:  Catlin  v.  '"^  B.  A.   1898.   Sec.  60  and  Sec. 

HoflFman,  No.  2521   Fed.  Cas.,  s.  c.  67^. 


59- 


LAW     AND    l>K()ri:i:i)l  XC.S    IN    BANKRUPTCY. 


'I'hus,  it  d  bankrupt  purchases  property  with  a  mortgage  lien 
on  it  which  is  vahd  betw'cen  him  and  the  vendor  it  is  valid 
against  his  trustee  in  bankruptcy/"'"' 

A  mortgage  lien  is  deemed  valid  when  made  more  than  four 
months  prior  tt)  the  tiling  of  the  i)etition  in  bankruptcy.^"^  A 
mortgage  made  within  t\)ur  months  before  filing  the  petition 
in  bankruptcy  may  be  valid  if  the  transaction  is  bona  fide  and 
for  a  ^•aluable  consideration/"^  although  the  mortgagor  in- 
tended to  use  the  money  to  create  a  preference/*'"  Thus 
it  has  been  held  valid  where  the  creditor  has  not  rea- 
sonable cause  to  believe  that  he  was  receiving  a  prefer- 
ence from  the  insolvent  debtor/"*^  So  also  a  mortgage 
may  be  valid  to  the  extent  of  the  actual  loan  made  at 
the  time  the  mortgage  was  given,  although  it  may  be  in- 
valid to  the  extent  of  preexisting  debts  secured  thereby/^^ 
A  mere  renewal  of  a  mortgage  is  not  a  preference/^'  A  mort- 
gage may  be  sustained  when  given  in  pursuance  of  a  valid 
promise  made  at  the  time  of  the  advance,  provided  it  be  shown 
that  the  promise  was  to  give  a  specific  security,  and  that  the 
promise  w^as  given  as  an  inducement  upon  which  the  advance 

166  /„  ,.g   Standard   Laundry   Co.,  io8   U.    S.    74 ;    In   re   Perrin,    No. 

112    Fed.    Rep.    126,   7    Am.    B.    R.  10995   Fed.   Cas.,   s.   c.   7  N.    B.   R. 

254.  283;    Dow    V.    Sargent,    15    N.    H. 

1""  Curry  v.  McCauley,  20  Fed.  115;  Graham  v.  Stark,  No.  5676 
Rep.  583 ;  In  re  Barman,  No.  999  Fed.  Cas.,  s.  c.  3  Ben.  520. 
Fed.  Cas.,  14  N.  B.  R.  125;  First  i^i  Paddock  v.  Fish,  10  Fed.  Rep. 
National  Bank  v.  Haire,  36  Iowa,  125 ;  United  States  v.  Griswold,  8 
443;  Judson  V.  Courier  Co.,  25  Fed.  Fed.  Rep.  496;  Tiflfany  v.  Boat- 
Rep.  705.  man's  Savings  Institution,  18  Wall. 

It   should   be  borne  in  mind  that  375 ;    Stedman  v.   Bank  of  Monroe, 

the    time    limit    under    the    original  117  Fed.  Rep.  237;  9  Am.  B.  R.  4; 

act  of  1867,  Sees.  35  and  39  (R.  S.  In    re   Durham,   114   Fed.   Rep.   750, 

Sec.  5128),  was  four  months.     But  8   .'Vm.   B.   R.    115;   City  Nat.   Bank 

this    was    changed    to    two    months  v.    Bruce    (C.   C.   A.   4th   Cir.),   109 

by  the  act  of  June  22,   1874,   Sees.  Fed.  Rep.  69,  6  Am.  B.  R.  311. 
10  and  II,  18  Stat,  at  L.  180;  Auff-  ^"^^Ddand    v.    Miller    &    Chaney 

m'ordt  V.  Rasin,  102  U.  S.  620.  Bank  (la.),  93  N.  W.  Rep.  304;  In 

!«** /n  r?  Josephson,  116  Fed.  Rep.  re    Little    River    Lumber    Co.,    92 

404,  8  Am.  B.  R.  423.  Fed.    Rep.   585,    i    Am.    B.    R.   483 ; 

109/,,    j,^    Soudan    Mfg.    Co.,    113  Chattanooga    Nat.    Bank    v.    Rome 

Fed.  Rep.  804.  8  .^m.  B.  R.  45.  Iron   Co.,    102  Fed.   755,  4  Am.    B. 

1^"  Grant  v.  National  Bank.  97  U.  R.  441. 
S.    80 :    Stuckey    v.    Savings    Bank, 


PREFERENCES    AND    LIENS.  593 

was  made.^"  But  where  a  state  statute  makes  void  as  against 
all  creditors,  an  unrecorded  chattel  mortgage,  the  giving  of  a 
chattel  mortgage  in  pursuance  of  a  contract  made  at  the  time 
a  loan  was  made  is  a  preference;^'*  and  a  general  promise  to 
give  "  security  if  required  "  will  not  support  such  a  mortgage.^'^^ 
A  mortgage  has  been  held  valid  when  given  to  secure  future 
advances  to  be  made  to  the  debtor/^**  or  where  a  mortgage  is 
taken  by  the  creditor  in  exchange  for  a  prior  valid  security.^" 
This  is  but  an  exchange  of  securities,  which  ordinarily  is  not 
deemed  a  violation  of  the  bankrupt  law  i^^**  but  if  the  security 
surrendered  to  the  bankrupt  is  of  less  value  than  the  mortgage 
given  there  is  a  preference  created  to  the  extent  of  the  differ- 
ence/^^ 

A  mortgage  upon  property  exempt  by  the  statute  is  valid 
and  the  security  is  preserved,  notwithstanding  the  bankruptcy 
of  the  debtor.^*"  Where  property  lying  in  two  states  is  mort- 
gaged in  one  deed,  it  may  be  a  valid  security  as  to  the  prop- 
erty in  one  state  and  not  as  to  the  ])ropertv  in  another.^'*^ 

In  order  to  make  a  mortgage  security  for  a  debt  a  voidable 
preference  within  the  provisions  of  the  bankrupt  law,  it  is 
necessary  that  all  the  prescribed  conditions  should  concur, 
namely:  First,  the  mortgage  must  have  been  given  by  an 
insolvent  person  to  a  creditor;  second,  the  effect  of  such  mort- 
gage must  be  to  enable  such  creditor  to  obtain  a  greater  per- 
centage of  his  debt  than  any  other  of  such  creditors  of  the 
same  class;  third,  the  creditor  receiving  the  mortgage  must 

173 /„   y^  Jackson   Iron   Manufac-  114;   Burnliisol  v.  Firman.  22  Wall, 

turing  Co.,  No.  7153  Fed.  Cas.,  s.  c.  170:    Douglass    v.    Vogelcr.    6    Fed. 

15  N.  B.  R.  438;  Burdock  v.  Jack-  Rtp.  52;  Morris  v.  Brush,  No.  9828 

son,  15  N.  B.  R.  318;  Douglass  v.  Fed.  Cas.,  s.  c.  2  Woods,  354. 

Vogeler,  6  Fed.   Rep.  52:   Gattman  iT«Cook  v.   Tullis.    18  Wall.  340; 

V.  Honea,  No.  5271  Fed.  Cas.,  s.  c.  Clark  v.   Isclin,  21    Wall.  360. 

12  N.  B.  R.  493.  iTn/„  ,.,.  :\iai,ning.   123  Fod.  Rop. 

'^*/«     re    Ronk,     11 1     I'Cd.     Rop.  181. 

154,7  Am.  B.  R.  31-     See  al.so  Sa-  ""Long    v.    Billiard,    117    U.    S. 

l)in   V.   Camp,   98   Fed.    Rep.   974,   3  617:    Schlitz    v.    Schatz,    No.    12459 

.\m.  B.  R.  578.  Fed.  Cas..  s.  c.  2  Biss.  248:  Rix  v. 

iTo  Lloyd  V.  Strobridge,  No.  8435  Capitol  Bank,  No.  11869  Fed.  Cas., 

Fed.  Cas.,  16  N.  B.  R.  197.  s.  c.  2  Dill.  367. 

1^^  Ex  parte  Ames,  No.  323  Fed.  ^"1  In  re  Soldiers'  Business.  Mcs- 

Cas.,  s.  c.  I  Low.  561.  senger  and  Dispatch  Co.,  No.  13163 

1''^  Sawyer    v.    Turpin,    91    U.    S.  Fed.  Cas.,  s.  c.  3  Ben.  204. 


594  LAW    AXn    PKOCEEDINGS    IN    BANKRUPTCY. 

have  had  roasonal)le  cause  to  beheve  that  it  was  intended  there- 
by to  give  a  i)reference ;  and.  fourth,  the  mortgage  must  have 
been  made  within  four  months  before  fihng  the  petition  in 
bankruptcy  or  after  filing  the  petition  and  before  the  ad- 
judication.^^^ 

If  any  element  of  the  combination  is  wanting,  the  mort- 
gage being  valid  under  the  state  law,  there  is  no  infringe- 
ment of  the  bankrupt  law.'*^  But  if  in  making  the  mortgage 
the  four  elements  named  above  concur,  the  mortgage  is 
deemed  a  preference,  which  may  be  avoided  and  set  aside  by 
the  trustee.^  *"*  A  mortgage  given  to  secure  a  preexisting  debt, 
although  a  promise  to  give  security  when  required  was  made 
at  the  time  the  debt  was  created,  is  invalid. ^^'^  But  it  is  other- 
wise where  the  promise  was  to  give  specific  security  as  an 
inducement  for  an  advance.^^^®  It  has  been  held  that  a  note 
of  a  partner  given  to  pay  a  firm*  debt,  which  was  secured  by 
mortgage  upon  the  individual  property  of  the  partner  was  a 
fraudulent  preference.^"  The  reason  is  that  it  was  in  effect 
an  appropriation  of  so  much  of  the  separate  estate  of  the  part- 
ner to  the  payment  of  one  creditor's  debt  to  the  prejudice 
and  wrong  of  the  other  creditors  of  the  firm,  to  whom  any 
surplus  of  such  estate,  after  the  payment  of  his  individual 
debts,  justly  belonged.  But  a  mortgage  by  a  partnership  of 
partnership  property  does  not  create  a  preference  in  favor  of 
the  mortgagee  as  against  the  trustee  in  bankruptcy  of  one  of 
the  partners.^*® 

A  mortgage  given  on  the  eve  of  bankruptcy  "  to  hinder, 

1^2  For    further    consideration    of  Cas.,   s.   c.    i   Low.   532;   Forbes  v. 

these  elements  generally,  see   Pref-  Howe,    102    Mass.    427;    Lloyd    v. 

erences    by    transfers,    Sec.    194.  Strobridge,  No.  8435  Fed.  Cas.,  s.  c. 

i83McNair    v.    Mclntyre    (C.    C.  16  N.  B.  R.  197.                                 2 

A.  4th  Cir),  113  Fed.  113,  7  Am.  B.  i**"  Douglass    v.    Vogeler,   6    Fed. 

R.    638,   and   cases   cited   above    in  Rep.    52,    and    cases    cited    in    the 

this  section.  opinion. 

184  B.  A.  1898,  Sec.  60;  Wager  v.  i^^/w   re    Parker,    11    Fed.    Rep. 

Hall,    16    Wall,    484;    Matthews    v.  397. 

Westphal,  48  Fed.  Rep.  664 ;  South-  ^^s  /„  yg  Sanderlin,  109  Fed.  Rep. 

wick  V.  Whipple.  2  Fed.  Rep.  770;  857,  6  Am.   B.  R.  384,   affirmed   in 

May  V.  LeOaire,  18  Fed.  Rep.  164;  McNair  v.  McTntyre   (C.  C.  A.  4th 

Driggs    V.    Moore,    No.    4083    Fed.  Cir.),  113  Fed.  Rep.  113,  7  Am.  B. 

Cas..  s.  c.  I  Abb.,  U.  S.  440.  R.  638. 

185 /;i   re  Conner,   No.  31 18,  Fed. 


PREFERENCES    AND    LIENS.  595 

delay  or  defraud  creditors  "  is  a  voidable  preference/^^  If 
a  chattel  mortgage,  executed  at  the  time  a  loan  is  made, 
creates  at  that  time  a  lien  on  specific  chattels,  no  preference 
is  created;  but  if  the  mortgage  was  to  an  unidentified  part 
of  a  mass,  the  lien  is  not  created  until  there  is  a  separation, 
and  at  that  time  is  for  an  antecedent  debt  and  so  a  prefer- 
ence ;^"''  the  fact  that  the  mortgage  is  not  given  to  the  creditor 
but  is  given  to  a  third  person  in  trust  for  him  does  not  pre- 
vent its  being  a  preference/^^  The  court  of  bankruptcy  will 
not  permit  a  mortgagee  to  use  the  court  for  the  purpose  of 
saving  them  the  costs  of  foreclosure  when  no  benefit  is  to  be 
derived  by  the  estate  therefrom/**- 

It  is  assumed  above  that  the  mortgage  is  valid  under  the 
state  law.  Any  mortgage  or  other  claim  which,  for  want  of 
record  or  for  other  reasons,  is  not  a  valid  lien  as  against  the 
claims  of  the  creditors  of  the  bankrupt  are  not  liens  against 
his  estate.^"^  The  validity  of  such  mortgages  is  not  affected 
by  time.  They  are  not  preferences,  but  simply  futile  at- 
tempts to  acquire  liens. ^'**  Thus  a  deed  which  purports  to 
transfer  the  title  to  land  to  a  creditor  to  secure  a  debt  but 
which  is  void  for  usury  can  not  be  enforced  against  the  other 
creditors  in  bankruptcy."*^  In  this  class  of  mortgages  may  be 
included  such  as  are  fraudulent,  and  which  could  not  be  en- 
forced in  a  court  of  equity  irrespective  of  the  bankrupt  law."" 

In  deciding  whether  or  not  the  mortgage  creates  a  valid  lien 
the  court  will  ordinarily  follow  the  law  as  laid  down  by  the 
state  courts."^  Thus  where  the  state  courts  hold  that  a 
chattel  mortgage  which  the  state  statute  required  to  be  recorded 

i8»B.    A.    1898,    Sec.    67^;    In    re  S.   100:   Stewart  v.  PlaU,  loi   U.  S. 

Steininger    Mercantile    Co.    (C.    C.  7.31  ;   Kane  v.    Rice,   No.   7609  Fed. 

A.  5th  Cir.),   107   Fed.  Rep.  669,  6  Cas.,  s.  c.  10  N.  B.  R.  469. 

Am.  B.  R.  68.  ^"*  See  Mechanics' and  other  liens, 

!»"  Bank  of  Holdridge  v.  Johnson  Sec.  200,  f>ost. 

(Neb.),  10  Am.  B.  R.  208.  i»» /»i  re   Miller,    118  Fed.  360,  9 

1"' /n  re  Wright  Lumber  Co.,  114  Am.  B.  R.  274. 

Fed.  Rep.  lou,  8  Am.  B.  R.  345-  '""  Robinson  v.   Elliott,   22  Wall. 

102 /„    ye    Cogley,    T07    Fed.    Rep.  513;  Crooks  v.   Stnart,  7  Fed.   Rep. 

73,  5  Am.  B.  R.  731.  800. 

"•''Sec.   67   of  the   act   of  July   l,  '•"■/»    ,-,•    Shirley    fC.    C.    A.    ^th 

1898,  30  Stat,  at  T.. ;  Bank  of  T.cav-  Tir),  T12  Fed.  Rep.  301,  7  Am.  B. 

enworth    v.    Hunt,    ti    Wall     301:  R.   200:  lu  re  Joscphson,   it6  Fed. 

Blennerhassett  v.    Sherman.    105   U.  Rep    404,  8  Am.   B.   R.  423. 


596  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

is  valid  ai^ainst  all  crtHlilDrs  except  llu)se  who  have  taken  steps 
{o  fasten  on  the  property  between  the  time  of  the  execution 
and  the  recortling-  of  the  mortgage  a  chattel  mortgage  recorded 
before  the  filing  of  the  petition  will  be  good  against  the 
trustee/"^  or  where  the  state  courts  hold  that  an  unrecorded 
mortgage  is  unenforceable  only  against  judgment  creditors 
the  trustee  can  avoid  it  only  to  the  extent  of  the  claims  of  such 
creditors,'""  while  if  the  state  courts  hold  such  mortgages  void 
as  to  all  creditors  the  trustee  will  be  allowed  to  set  them  aside. ^°° 
Whether  or  not  a  mortgagee  waives  or  loses  his  lien  by  at- 
taching the  mortgaged  property  would  seem  also  to  depend 
ujion  the  state  law.  Where,  however,  the  United  States  su- 
preme court  has  held  certain  kinds  of  mortgages  to  be  invalid 
as  a  matter  of  general  law  such  mortgages  will  be  set  aside 
although  the  state  courts  hold  them  good  against  other  cred- 
itors in  insolvency  proceedings.""'  Such  state  laws  may,  how- 
ever, cause  a  valid  mortgage  to  become  a  preference  under  the 
bankrupt  act.  Thus  wdiere  a  state  statute  makes  void  as 
against  all  creditors  an  unrecorded  chattel  mortgage,  the  later 
giving  of  a  chattel  mortgage  in  pursuance  of  a  contract  made 
at  the  time  the  loan  was  made  is  a  preference  though  recorded 
when  executed  f°-  so  where  a  mortgage  is  given  on  goods  in 
stock  and  to  be  acquired ;  that  on  the  goods  to  be  acquired 
is  preferential  if  the  state  law  requires  possession  to  be  taken 
before  a  mortgage  on  after  acquired  property  becomes  valid  r**^ 
and  where  a  state  statute  made  unrecorded  chattel  mortgages 
void  as  to  all  subsequent  creditors  it  was  held  that  where  the 
assets  of  the  bankrupt  covered  by  such  a  mortgage  were  not 
sufficient  to  pay  subsequent  creditors  they  take  the  whole 
fund  to  the  exclusion  of  antecedent  creditors.^"* 

In  dealing  with  mortgages  it  should  always  be  born  in  mind 
that  although  not  such  preferences  as  could  be  set  aside  under 

'»«/«    re   Shirley    (C.    C    A.   6th  200 /„    ^e    Pekin    Plow    Co.,    112 

Cir.).  112  Fed.  Rep.  301,  7  Am.  R.  Fed.  Rep.  308,  7  Am.  B.  R.  369. 

R.  299.  201 /„    r^    Hull,    IIS    Fed.    Rep. 

i»»/«    re    N.    Y.,    etc..    Printing  858,  8  Am.  B.'R.  302. 

Co.    (C.   C.   A.   2d   Cir.),    no  Fed.  202 /„    ^^    Ronk,    in    Fed.    Rep. 

Rep.  514.  6  Am.   B.  R.  615;  In  re  154,  7  Am.  B.  R.  31. 

Sewell,    III    Fed.    Rep.  791,  7   Am.  ^or* /„  ^^  g^]]    J23  Ped.  Rep.  164. 

B.  R.  133.  204  /„   ,.^  Cannon,    121    Fed.   Rep. 

582. 


PREFERENCES    AND    LIENS.  59/ 

section  60  they  may  often  be  set  aside  as  being  in  violation  of 
section  67.*"* 

§   198.     Pledges. 

A  security  by  way  of  pledge  or  pawn  is  a  species  of  mort- 
gage. It  is  confined  to  movable  goods  and  chattels  and  is 
created  by  the  mere  delivery  of  such  goods  or  chattels  to  some 
other  person  as  a  security  for  money  advanced  or  to  be  ad- 
vanced. The  possession  of  the  pledgee  is  essential.""®  A 
pledge  differs  from  a  chattel  mortgage  in  that  in  case  of  a 
mortgage  the  title  is  vested  in  the  mortgagee  subject  to  de- 
feasance upon  the  performance  of  the  condition,  while  in  the 
case  of  a  pledge  the  title  remains  in  the  pledgor  and  the 
pledgee  holds  the  possession  for  the  ])ur])oses  of  the  bail- 
rnent.^"^  It  differs  from  a  lien  in  that  it  can  be  created  only 
by  contract,  express  or  implied,  whereas  a  lien  may  arise  by 
operation  of  law."°*  It  has  been  held  that  the  giving  of  a 
pledge  within  four  months  of  the  filing  of  a  petition  in  bank- 
ruptcy, in  pursuance  of  a  prior  contract  is  a  preference,  but 
this  is  contra  to  what  is  thought  to  be  the  better  rule  in  re- 
gard to  mortgages.""'* 

Where  the  pledge  is  made  in  good  faitli  for  a  valuable  con- 
sideration, and  not  in  violation  of  the  provisions  of  the  bank- 
rupt law,  it  is  valid  and  will  be  respected  in  a  court  of  bank- 
ruptcy.'^"    Thus  wliere  insurance  ])()licies  are  efjuitably  assigned 

20B  Pollock    V.    Jones    (C.    C    A.  '-""Jones    on    Chattel    Mortgages, 

4th    Cir. ),    124    Fed.    Rep.    163,    af-  Sec.  4. 

firming  In  re  Jones,   118  Fed.   Rep.  -"**  In    Chattanooga   Nat.    Rank   v. 

673,  9  Am.   B.    R.   262;   In   re  Mc-  Rome  Iron  Co.,   102  Fed.  Rep.  755, 

Lam,  97  Fed.  Rep.  922,  3  Am.  R.  R.  4   Am.   B.   R.  441.   it   was  held   that 

245 ;    In    re    Steininger    Mercantile  an  equitahlc   right   which   is   incapa- 

Co.    (C.   C.   A.   5th   CiT.),    107   Fed.  ble  of  delivery  may   he   pledged  by 

Rep.   669.  6   Am.    B.   R.  68;    In   re  a  contract   in  writing.     This  trans- 

Schnller,   108  Fed.  Rep.  591,  6  Am.  action    was    properly    held    to    raise 

B.   R.  278.  an   equitable   lien   but   it   is   scarcely 

=">"  As   to   what   constitutes   a   de-  accurate  to  call  it  a  pledge, 

livery,    see    Casey    v.    Cavaroc,    96  2""  In   re   Sheridan,  98   Fed.   Rep. 

U.  S.  467;  Stout  V,  Milling  Co.,  13  406,  3  Am.    R.   R.  554.     See  contra 

Fed.  Rep.  802.  in    regard    tf.    mortgages,    Sabin    v. 

But   see   In    re   Wiley.   No.    17655  Camp.  08  ¥i<.\.   Rep    074-  .1   Am.   B. 

Fed.  Cas.,   s.  c.  4   Riss.    171,  where  R    5/8. 

one   chattel    was   pledged   to   secure  =*'"  Yeatman    v.    Savings    Institu- 

two  debts  to  different  persons.  tion,  95  U.   S.  764;   Jerome   v.   Mc- 


598  LAW    AND    PROCEEDINGS   IN    BANKRUPTCY. 

as  collateral  for  a  loan  there  is  no  preference  though  they  were 
not  delivered  (/.  c.  though  the  technical  pledge  was  not  made) 
until  within  four  months.'"  The  right  of  the  trustee,  in  re- 
gard to  such  a  valid  pledge,  is  either  to  redeem  the  property, 
or.  under  order  of  court,  to  sell  it  subject  to  the  lien  of  the 
pledge.''-  The  pledgee  may  proceed  upon  default  to  sell  the 
pledge  in  the  usual  way.  although  the  pledgor  may  have  been 
adjudged  a  bankrupt,'^"  and  the  court  will  not  interfere  with  a 
pledgee  selling  a  thing  pledged,  under  the  power  of  sale  given 
by  the  terms  of  his  contract  when  there  is  no  claim  that  such 
power  is  exercised  in  a  fraudulent  or  oppressive  manner."* 
Notice  of  such  sale  should  ordinarily  be  given  to  the  trustee, 
provided  he  has  been- appointed  before  the  sale.  The  pledgee 
may  rely  wholly  upon  his  security  and  refuse  to  prove  his  claim 
in  the  bankruptcy  court.  In  such  a  case  he  loses  only  the 
privilege  in  participating  in  the  distribution  of  the  bankrupt's 
estate.  He  may  surrender  his  preference  and  prove  his  claim 
as  an  unsecured  creditor.''''^ 

Where  the  pledge  is  in  fraud  of  the  bankrupt  law  it  is 
void,  and  the  trustee  may  disregard  the  contract  of  pledge  and 
recover  the  property  for  the  benefit  of  the  creditors.  In 
order  to  constitute  a  preferential  pledge  under  section  60  it 
must  have  been,  first,  pledged  by  an  insolvent  person  to  a 
creditor,  and,  second,  with  the  effect  to  enable  the  creditor  to 
obtain  a  greater  percentage  of  his  debt  than  any  other  of 
such  creditors  of  the  same  class,  and,  third,  such  creditor 
must  have  had  reasonable  cause  to  believe  that  it  was  intend- 
ed to  give  him  a  preference,  and,  fourth,  the  pledge  must 
have  been  within  four  months  before  filing  a  petition  in 
bankruptcy,  or  after  filing  the  petition  and  before  the  adjudi- 

Carter,  94  U.  S.  734 :  Clark  v.  Ise-  Bank  v.  Merchants'  National  Bank, 

lin,    21    Wall.    360;    Firth    Co.    v.  37   O.   S.   208;   Moses   v.   St.    Paul, 

Loan    and    Trust    Co.    (C.    C.    A.  67  Ala.  168;  Dowler  v.  Cushwa.  27 

4th  Cir.),   122  Fed.   Rep.  569.  Md.  354;  In  re  Little,  no  Fed.  Rep. 

211  McDonald  v.   Daskam    (C.   C.  621,  6  Am.  B.  R.  681. 

A.  7th  Cir.),  116  Fed.  Rep.  276,  8  213  jgrome  v.  McCartcr,  94  U.  S. 

Am.  B.  R.  543.  734- 

212  Yeatman    v.    Savings    Institu-  -'i4  /„   ,-^   Browne,   104  Fed.   Rep. 
tion,  95  U.  S.  764 ;  Jerome  v.  Mc-  762,  5  Am.  B.  R.  220. 

Carter.  94  U.  S.  734 ;  Clark  v.  Ise-  215  b.  A.  1898,  Sec.  57g. 

lin,  21  Wall.  360;  Dayton  National 


PREFERENCES    AND    LIENS. 


599 


cation.^^®  If  the  effect  of  the  transaction  is  not  to  give  a 
pledge,  the  creditor  stands  as  a  common  instead  of  a  preferred 
creditor  of  the  bankrupt's  estate.^^^  But  the  re-delivery  of 
negotiable  paper  to  the  pledgor  for  collection  does  not  de- 
stroy the  pledge."^^ 


§   199.     As  to  liens  generally. 

The  bankrupt  law  recognizes  and  preserves  liens  given  or 
accepted  in  good  faith,  and  not  in  contemplation  of,  or  in 
fraud  upon  the  act,  and  for  a  present  consideration  which 
has  been  recorded  according  to  law,  if  record  thereof  is  nec- 
essary to  impart  notice."^^ 

In  order  that  a  lien  be  valid  under  the  bankrupt  act  it  is- 
necessary  that,  first,  it  should  have  been  given  or  accepted  in 
good  faith  and  for  a  present  consideration,  and,  second,  that 
it  should  have  been  recorded  if  the  local  law  requires  record 
to  impart  notice.  There  is  no  four  months  limitation  to  liens 
created  other  than  by  transferring  property  or  through  legal 
proceedings.  But  claims  which,  for  want  of  record,"""  or 
for  other  reasons,  would  not  have  been  valid  liens  as 
against  the  claims  of  the  creditors  of  the  bankrupt  are  not 
liens  against  his  estate.^^* 


-^®  For  further  consideration  of 
these  elements  consult  Preferences 
bj-  transfer,  Sec.  194.  For  exam- 
ples of  invalid  pledges,  see  Ogden 
V.  Jackson,  i  Johns.  (N.  Y.)  370; 
Adams  v.  Nat.  Bank,  2  Fed.  Rep. 
174;  Casey  v.  Cavaroc.  96  U.  S. 
467. 

21T  Casey  v.  Cavaroc,  96  U.  S. 
467 ;  Adams  v.  National  Bank,  2 
Fed.  Rep.  174. 

218  Clark  V.  Iselin,  21  Wall.  360. 
But  see  Casey  v.  Cavaroc,  96  U.  S. 
467. 

2'nB.  A.  1898.  Sec.  (^7d;  In  re 
English,  122  Fed.  Rtp.  113;  In  re 
Standard  Laundry  Co.,  112  Fed. 
Rep.  126,  7  Am.  B.  R.  254;  Chat- 
tanooga Nat.  Bank  v.  Rome  Iron 
Co.,  102  Fed.  Rep.  755.  4  Am.  B.  R. 
441  :  McDonald  v.  Daskam  (C.  C. 
A.  7th  Cir.),   116  Fed.  Rep.  276,  8 


Am.  B.  R.  543;  First  National  Bank 
V.  Pa.  Trust  Co.  (C.  C.  A.  3d 
Cir.),  124  Fed.  Rep.  968,  10  Am. 
B.  R.  782;  In  re  Hanna,  105  Fed. 
I^t'P  .S87,  5  Am.  B.  R.  127;  In  re 
Graff,  117  Fed.  Rep.  343,  8  \m. 
B.  R.  744;  In  re  Nicholas,  122  Fed. 
Rip.  299.  10  Am.  B.  R.  291 ;  Mct- 
caif  V.  Barker,  187  U.  S.  165,  9* 
Am.  B.  R.  36:  In  re  Goldsmith, 
118  Fed.  Rep.  76?,,  9  Am.  B.  R. 
419:  /"  '•('  Mitchell,  116  Fed.  Rep. 
87,  8  Am.  B.  R.  324. 

220  Bank  v.  HcThert.  8  Cranch, 
36:  In  re  Brunf|uest,  No.  2055  Fed. 
Cas.,  s.  c.  7   Biss.  208. 

221  B.  .\.  1898,  Sec.  670;  Spencer 
V.  Duplan  Silk  Co.,  112  Fed.  Rep. 
638,  7  Am.  B.  R.  563 ;  In  re  Garce- 
wich  (C.  C.  A.  2d  Cir.),  115  Fed. 
Rep.  87.  8  Am.  B.  R.  149;  In  re 
N.  Y.   Economical  Printing  Co.  (C. 


600  LAW    AND    I'ROCKKDINGS    IN  .  BANKRUPTCY. 

Whenever  a  creditor  is  prevented  from  enforcing  his  rights 
as  against  a  Hen  created,  or  attempted  to  be  created,  by  his 
debtor,  who  afterwards  becomes  a  bankrupt,  tlie  tEustee  of  the 
estate  of  such  bankrupt  shall  be  subrogated  to  and  may  enforce 
such  rights  of  such  creditor  for  the  benefit  of  the  estate."^'" 

Liens  may  be  divided  into  three  classes. 

First.  Common  law  or  retaining  liens,  such  as  the  lien  of 
tradesmen  upon  the  specific  goods  in  their  hands,  for  their 
labor  and  expense  in  improving  or  altering  them  ;^^^  livery- 
stable  keepers,  for  care  and  keep  of  horses ;  "*  common  carriers 
of  goods,  for  their  services  and  expenditure  with  reference  to 
carriage  of  goods.-"°  or  inn-keei>ers,  upon  the  luggage,  car- 
riage or  horses  of  a  guest,  for  debts  incurred  while  in  their 
keeping."'"  etc..  etc. 

Scco)id.  Liens  created  by  statute,  such  as  mechanics' 
liens,  which  will  be  further  considered  hereafter.""^ 

Third.  Equitable  liens.  The  term  "lien"  is  especially 
applicable  to  the  common  law  lien,  but  it  has  by  analogy 
been  applied  to  other  cases  where  a  right  to  prepayment 
exists  out  of  the  ])articular  pr()])erty.  or  a  particular  estate 
or  interest  in  property,  either  by  contract  express  or  implied 
by  the  implication  of  a  trust  or  statute,  although  the  prop- 
erty itself  may  not  be  in  the  possession  of  or  vested  in  the 
person  claiming  the  lien.'-^ 

Liens  of  this  description  are  in  the  nature  of  equitable 
charges.      Mortgages  which  have  already  been  considered  --** 

C.   A.  2d   Cir.),   no  Fed.   Rep.  514,  21:4  Jackson   v.   Cummins,  5   M.   & 

6  Am.  B.  R.  615;  Chesapeake  Shoe  W.  342;  Judson  v.  Etheridge,  i  Cr. 

Co.  V.  Seldner  (C.  C.  A.  4th  Cir.),  &  M.  74,3. 

122   Fed.    Rep.   593,    10   Am.    B.    R.  -"-s  Aspinall    v.    Pickford,   3    B.   & 

466;  In  re  Hull,  115  Fed.  Rep.  858,  P.  44  n. ;   Rushforth   v.  Hadfield,  6 

8    Am.    B.    R.    302;    In    re    Andrae  East.    519;    Wright    v.    Snell,    5    B. 

Co.,    117   Fed.   Rep.   561,  9  Am.    B  &  Aid.  350. 

R-   135-  --'''  Mnlliner  v.   Florence,  3   Q.   B. 

222  B.  A.  1898.  Sees.  67/;  and  67/;  Div.    484:    Turrill    v.    Crawley,    13 
In   re    N.    Y.    Economical    Printing  Ad.  and   El.    (N.   S.)    197. 

Co.    (C.    C.   A.   2d   Cir.),    no  Fed.  227  Sec.  201;  ei  seq. 

Rep.   514,  6   Am.    B.   R.  615;    Pat-  -^  In  re  English,   122   Fed.   Rep. 

tern  v.  Carley  (Sup.  Ct.  N.  Y.  App.  113;  3  Pomeroy  Eq.  Jur.,  Sec.  1235; 

Div.),  8  Am.  B.  R.  482.  Walker  v.  Brown,  165  U.  S.  654. 

223  £;r  parte  Deeze.   i    Atk.   228;  220  gg^.   197,  ante. 
Franklin    v.    Hosier,    4    B.    &    Aid. 

341. 


PREFERENCES    AND    LIENS.  60I 

may  also  be  regarded  as  equitable  liens,  but  for  convenience 
they  have  been  classed  under  the  head  of  mortgages.  A 
familiar  example  of  an  equitable  lien  is  that  of  a  vendor  for 
the  purchase  money,^^"  of  a  judgment  creditor,  etc. 

Where  a  valid  lien  exists  the  lien-holder  has  the  same 
courses  open  to  him  as  any  other  preferred  creditor."^  The 
court  of  bankruptcy  may  authorize  the  trustee  to  redeem 
the  property  and  discharge  the  lien,  or  it  may  order  the  en- 
tire property  to  be  sold  and  ascertain  the  amount  of  the  debt 
secured  by  the  lien.  In  such  case  the  debt  will  be  preferred 
in  the  distribution  of  the  proceeds  and  the  purchaser  of  the 
estate  will  take  it  discharged  of  all  incumbrances.  Or,  on  the 
other  hand,  the  court  may  allow  the  trustee  to  sell  the  prop- 
erty subject  to  the  lien  on  tlie  bankrupt's  estate,  to  be  finally 
settled  without  any  determination  of  the  rights  claimed  un- 
der the  lien.  In  such  case  the  petitioner  will  retain  those 
rights  as  against  tlie  jjurchaser  of  the  property.  If  his  lien 
is  not  sufficient  to  secure  tlie  whole  debt  lie  may  jirove  the 
balance  of  such  claim  over  the  value  of  such  lien,  but  for 
only  such  excess.*''^ 

§   200.     Mechanics'  liens. 

A  meclianic's  lien  is  created  by  a  state  statute.  It  gives  a 
lien  to  material  men  and  laborers  upon  specific  property  for 
the  payment  for  materials  furnished  for  and  labor  performed 
on  that  property. 

What  constitutes  a  valid  mechanic's  lien,  when  it  attaches, 
and  what  is  necessary  to  be  done  in  order  to  complete  and 
preserve  the  lien,  varies  in  different  states.  Whether  a  me- 
chanic's lien  is  a  xalid  claim  against  the  estate  of  the  bank- 
rupt dei)ends  ujjon  the  local  law  as  construed  by  the  highest 
court  of  the  state. ^'""^     If  a  valid  lien  has  attached  under  the 

2.v(  /„    ^^    Bryan,    No.    2(/)2    I'cd.  -•'i  Sec.  202.  post. 

Cas.,  s.  c.  3  N.  B.  R.  no;  Hall   v.  -■'- R.  A.   i8(>8.  Sec.  56/). 

Scovel,  No.  5945  Fed.  Cas.,  s.  c.   10  -"'■"■  /;/    re    Emslie    (C.    C.    A.    2(1 

N.    B.    R.   295:   In   re   Brooks,    No.  Cir.),   102  Fed.  Rep.  291,  4  Am.   B. 

1943  Fed.  Cas.,  s.  c.  2  N.  B.  R.  466;  R    12^1;  In  re  Kerliy-Dennis  Co.  (C. 

In  re  Perdue.  No.  10975  Fed.  Cas.,  C.     A.     y\h     Cir),     95     Fed.     116, 

s    c.  2  N.  B.  R.   18.3;  In  re  Hnttn.  2  ,\ni.  B.  R.  402;  In  re  Coe- Powers 

No.  6960  Fed.  Cas.,  s.  c.  3  N.  B.  K.  Co.    (C.   C.  A.  6th   Cir.).   109   Fed. 

787.  550,   6   .^m.    B.    R.    I  ;    hi    re    Falls 


602  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

State  law  before  ])roceeclings  in  bankruptcy  have  been  com- 
menced the  hen  will  be  respected  by  the  court  of  bankrupt- 
cy.'-'"'  But  if  for  want  of  record  or  for  other  reasons  it  would 
not  have  been  a  valid  lien  as  against  the  claims  of  the  cred- 
itors of  the  bankrupt,  it  is  not  a  lien  against  his  estate.--'"  A 
lien  can  not  be  created  after  the  filing  of  the  petition  in  bank- 
ruptcy."^^ 

The  adoption  of  the  state  statutes  with  reference  to  liens 
is  constitutional.''"  The  uniformity  required  by  the  constitu- 
tion relates  to  national  legislation  only,  and  therefore  the 
laws  of  the  several  states  may  be  left  in  force,  and  to  such  an 
extent  as  congress  may  see  fit. 

Where  the  trustee  delays  in  electing  to  take  the  property 
subject  to  the  lien,  the  holder  of  such  lien  may  bring  a  suit 
in  the  proper  state  court  to  foreclose  it.""  The  reason  for 
this  is,  that  if  the  court  of  bankruptcy  should  abstain  from 
ascertaining  the  lien,  and  from  providing  for  its  satisfaction 
out  of  the  property  or  proceeds  of  a  sale  thereof,  the  lien 
might  be  lost  under  the  state  law.""*  Nearly  every  state, 
which  has  a  mechanics'  lien  law,  has  provided  for  bringing  a 
suit  to  enforce  the  lien  within  a  limited  time  or  the  lien  is 
lost.-^^     The  trustee  in  bankruptcy,  if  one  has  been  appointed. 

City     Shirt     Mfg.     Co.,     98     Fed.  427;    In    re    Kean,    No.    7630    Fed. 

Rep.  592 ;  3  Am.  B.  R.  437 ;  In  re  Cas.,  s.  c.  2  Hughes,  322. 

West  Norfolk  Lumber  Co.,  112  Fed.  -•"  Marston  v.  Stickney,  55  N.  H. 

Rep.  759,  7  Am.   B.  R.  648;  In  re  383;    Clifton   v.    Foster,    103    Mass. 

Georgia  Handle  Co.   (C.  C.  A.  5th  233;  Bryant  v.  Small,  35  Wis.  205; 

Cir.),  109  Fed.  Rep.  632,  6  Am.  B.  Douglass  v.  Zinc  Co.,  56  Mo.  388; 

R.    472;    South    End    Imp.    Co.    v.  Keller    v.    Denmead,    68    Penn.    St. 

Harden  (N.  J.),  52  Atl.  1127.  449- 

•-:■■'••»  B.  A.   1898,   Sec.  67a.  237*  In  Bryant  v.   Small,  35  Wis. 

In  re   Brunquest,   No.   2055   Fed.  209,    the   court   said:     "This   court 

Cas.,  s.  c.  7  Biss.  208 ;  Bank  v.  Her-  has    held    that    the    lien    exists    by 

bert,'  8  Cranch,  36.  virtue    of    the    statute 

235 /„  re  Roeber  (C.  C.  A.  2d  But,  nevertheless,  the  party  must 
Cir.),  121  Fed.  Rep.  449;  Lazzari  v.  file  his  petition  and  commence  his 
Havens,  79  N.  Y.  S.  395.  action  vi^ithin  the  period  prescribed 
238  Darling  v.  Berry,  13  Fed.  Rep.  to  enforce  it,  or  it  will  be  lost." 
668;  In  re  Beckerford,  No.  1209  This  is  the  usual  rule  in  this  re- 
Fed    Cas.,   s.   c.    I    Dill.   45;   Jn   ^^  spect. 

Jordon,    No.    7514    Fed.    Cas.,   s.   c.  -■''«  Bryant  v.  Small,  35  Wis.  205 ; 

8  N.  B.  R.  180;  In  re  Jordan,  No.  Clifton  v.  Foster,   103  Mass.  233. 
7515   Fed.   Cas.,  s.   c.    10  N.   B.   R. 


PREFERENCES    AND    LIENS.  603 

should  be  made  a  party  to  such  suit.  If  the  trustee  does  not 
appear  to  contest  either  the  suit  or  the  hen,  the  Hen  may  be 
foreclosed  and  the  property  sold.  If  he  does  appear  to  con- 
test the  suit  the  state  court  will  ordinarily  continue  the  case 
to  await  the  action  of  the  bankruptcy  court.  The  lien  is 
preserved  by  the  bringing  of  the  suit  in  the  state  court. 

The  jurisdiction  of  the  court  of  l^ankruptcy  is  sufficient  to 
enforce  a  mechanic's  lien  in  that  court,  without  any  petition 
being  filed  or  suit  instituted  in  the  state  court  to  preserve  and 
continue  it,  provided  the  bankruptcy  court  has  lawful  custody 
of  the  property  to  which  the  lien  is  claimed. "^^  Before  be- 
ginning a  suit  in  the  state  court,  if  bankruptcy  proceedings 
have  been  commenced,  an  application  should  be  made  to  the 
bankruptcy  court  for  leave  to  foreclose  the  lien  in  the  state 
court.^*"  If  that  particular  court  is  inclined  to  the  opinion  that 
its  jurisdiction  is  sufficient,  and  will  be  exercised  to  presen-e 
the  rights  of  the  lien-holder,  the  court  may  refuse  leave  with 
the  intimation  that  such  rights  will  be  preserved  by  the  court 
of  bankruptcy.  This  undoubtedly  would  be  sufficient  to  pre- 
rerve  the  lien  if  otherwise  valid. 

§   201.     Admiralty  liens. 

There  is  a  class  of  maritime  liens  for  materials  and  supplies 
furnished  to  vessels.  Where  such  a  lien  exists  a  court  of 
bankruptcy  will  enforce  it  with  the  same  effect  as  it  would 
have  in  admiralty.'*^  A  court  of  bankruptcy  will  also  enforce 
a  lien  for  supplies  and  materials  furnished  to  a  vessel,  founded 
upon  a  state  statute,  and  not  of  a  strictly  maritime  character.*" 

23»  B.    A.    Sec.    2.;    Cliaiinccy    v.  Cas.,  s.  c.  4  Biss.  518;  In  re  ScoU, 

Dyke    Bros.    (C.    C.    A.   8th   Cir.),  No.   12517  Fed.  Cas.,  s.   c.   i   Abb. 

119  Fed.  Rep.  i,  8  Am.  B.  R.  444;  U.    S.    336;    In    re    Kirkland,    No. 

South    End    Imp.    Co.    v.    Harden  7842  Fed.  Cas.,  s.  c.   12  Am.  Law. 

(N.  J.),  52  Atl.   1 127;  In  re  Lem-  Rep.  300. 

mon   &    Gale    Co.    (C.    C.    A.    6th  '^*~In   re    Scott,   No.    12517    Fed. 

Cir.),  112  Fed.  Rep.  206,  7  .\m.  B.  Cas.,  i  Abb.  U.  S.  336.     This  prin- 

R.  291 ; /n  re  Kellogg,  113  Fed.  Rep.  ciple     is    also    recognized     in     The 

120.  7  Am.  B.  R.  623.  Edith,  94  U.  S.  518:  The  Belfast,  7 

2<*>/«    re    Cook,    No.    3151    Fed.  Wall.    624;    Leon    v,    Galceran,    11 

Cas.,  s.  c.  3  Biss.  it6.  Wall.  185. 

2*1  The   Ironsides,   No.   7069   Fed. 


604  I-AW     AM)    rUOC  KKDIXCS    IN    BANKRUPTCY. 

§   202.     Rights  of  a  secured  creditor. 

A  "  secured  creditor  "  is  a  creditor  who  has  security  for 
his  deht  upon  the  property  of  the  hankrupt  of  a  nature  to  be 
assignable  under  the  bankrupt  act,  or  who  owns  such  a  debt 
for  which  some  indorser,  surety,  or  other  persons  secondarily 
liable  for  the  bankrupt  has  such  security  upon  the  bankrupt's 
assets.-"*^ 

Where  a  creditor  has  received  security  for  his  debt  valid 
under  the  bankrupt  act,  three  courses  are  open  to  him,  pro- 
vided the  trustee  does  not  elect  to  redeem  by  paying-  the  debt 
or  to  take  the  property  as  assets  of  the  bankrupt,  subject  to 
the  preference.     They  are : 

First.  The  secured  creditor  may  rely  upon  his  lien  and 
neither  prove  his  debt  in  bankruptcy  nor  release  his  security 
In  such  case  the  security  is  preserved,  notwithstanding  the 
bankruptcy  of  the  debtor."''* 

Second.  The  secured  creditor  may  rely  upon  his  security 
and  prove  for  such  sum  as  may  be  owing  above  the  value  of 
his  security."*^  The  value  of  securities  held  by  secured  cred- 
itors is  determined  by  converting  the  same  into  money,  ac- 
cording to  the  terms  of  the  agreement,  pursuant  to  which 
such  securities  were  delivered  to  such  creditors,  or  by  such 
creditors  and  the  trustee,  by  agreement,  arbitration,  com- 
promise or  litigation,  as  the  court  may  direct,  and  the  amount 
of  such  value  credited  upon  such  claims,  and  a  dividend  paid 
only  on  the  unpaid  balance."*** 

Third.  A  secured  creditor  may  surrender  his  security  and 
then  prove  his  debt  as  an  unsecured  creditor.'*^  In  1813  Lord 
Eldon  said  :"*^  "  The  practice  has  been  long  established  in 
bankruptcy  not  to  suffer  a  creditor  holding  a  security  to 
prove,  unless  he  will  give  up  that  security,  or  the  value  has 

243  B.  A.  1898,  Sec.  I,  clause  23.  Cas.,  s.  c.  i  Low,  532;  In  re  Kipp, 

24*  Long    V.    BuUard,    117    U.    S.  No.   7836,  Fed.   Cas.,  s.  c.  4  N.   B. 

617;    Dudley  v.   Elaston,   104  U.   S.  R.  593;  In  re  Leland,  No.  8230,  Fed. 

103;   McHenry  v.  La  Societe  Fran-  Cas.  s.  c.  7  Ben.   156;  In  re  Stepl - 

caise,  95  U.  S.  58 ;  Porter  v.  Lazear,  ens,   No.    13365,   Fed.    Cas.,   s.    c.    3 

109  U.  S.  84.  Biss.    187;   In    re   Evans,    No.   4552, 

24''  B.  A.  1898,  Sec.  56&.  Fed.  Cas.,  s.  c.  3  N.  B.  R.  261. 

24«  B.  .A..  1898,  Sec.  S7h  -**  In  ex  parte  Smith,  2  Rose,  64. 

24T  7,1  re  Conner,  No.  3 118,   Fed. 


PREFERENCES    AND    LIENS.  605 

been  ascertained  by  the  sale  of  it.  The  reason  is  obvious; 
till  his  debt  has  been  reduced  by  the  proceeds  of  that  sale, 
it  is  impossible  correctly  to  say  what  the  actual  amount  of  it 
is.  and  with  this  further  consideration  that,  in  the  event  of 
any  doubt  attaching  upon  his  right  to  retain  the  security,  he 
is  enabled  in  a  contest  with  the  rest  of  the  creditors  to  sustain 
his  title  in  a  situation  of  predominate  advantage."  The 
bankruptcy  act  of  1867"^"  expressly  provided  for  the  appli- 
cation of  the  rule,  as  does  the  present  English  bankrujitcy 
act.--'° 

The  trustee  may,  however,  elect  to  take  the  property  of  the 
bankrupt  subject  to  the  valid  liens  of  creditors. '"^^  In  such  case 
the  court  may.  in  its  discretion,  order  the  property  sold,  sub- 
ject to  the  lien  or  free  from  the  lien."-  If  it  is  sold  subject  to 
the  lien  the  creditor  still  has  his  claim  preserved  against  the 
new  purchaser.  If  it  is  sold  free  of  the  lien  he  has  his  claim 
preserved  against  the  trustee  for  the  amount  of  his  debt.  The 
trustee  is  authorized  to  convey  property  to  the  purchaser.-^^ 

i;  203.  Suits  to  set  aside  fraudulent  conveyances  and  prefer- 
ences. 
The  trustee  is  authorized  to  sue  for  and  recover  that  which 
was  conveyed  in  fraud  of  the  rights  of  creditors  or  its  value.-^* 
It  makes  no  difference  whether  the  conveyance  is  construct- 
ively fraudulent  under  a  statute  of  frauds  or  under  a  special 
provision  of  the  bankrupt  law."''*  The  trustee  is  also  author- 
ized  to  set  aside  all    fraudulent   preferences   wlu'ch   creditors 

"In  Cooke's  Bankrupt  Laws  the  crty.  Sec.  149,  ante;  Gibson  v.  War- 
rule  in  bankruptcy  is  attributed  to  den,  14  Wall.  244;  Jerome  v.  Mc- 
legislative  enactment,  and  is  thus  Carter,  94  U.  S.  734. 
stated:  'The  aim  of  the  legislatures  -'-2  Houston  v.  City  Bank,  6  How. 
in  all  the  statutes  concerning  bank-  486:  Fowler  v.  Hart,  13  How,  37^; 
rupts  beiuK  that  the  creditors  hi  re  Sanborn,  3  Am.  B.  R.  54; 
should  have  an  equal  proportion  of  hi  re  Gcrdos,  102  Fed.  Rep.  318,  4 
the  bankrupt's  effects,  creditors  of  Am.  P..  R.  346;  fii  re  Stycr,  3  .\ni. 
every  dcRrce  must  come  in  equal-  B.  R.  424,  98  Fed.  Rep.  290;  lit  re 
ly.'"  Lord  Coltcnham,  in  Mason  v.  Gerry,  112  I'cd.  Rep.  957,  7  Am.  B. 
BogK.  2  Myl.  &  Cr.  446.  R.  461. 

2«»  R.   S.   Sec.  5084.  ^•-■'  B.  A.  iSf)8.  Sec.  7or. 

2'''"  Act  of  1883,  46  and  47  Vict.  c.  -■■*  P,.  A.  1S08.  Sees.  67^  and  70e; 

52,  Sec.  3Q,  clauses  9  to   16,  I'.urr    v.    Hopkins.    No.    2192,    Fed. 

2*^1  See    Title   to   bankrupt's   prop-  Cas..   s.    c.   6   Biss.    245. 


6o6  I-A\V    AM)    I'KOCEEDINGS    IN    BANKRUPTCY. 

have  received  ami  to  recover  the  property  or  its  vahie  from 
such  persons."'''"  The  proceedings  in  these  two  chisses  of  cases 
are  substantially  the  same  and   will  be  considered   together. 

The  trustee  must  bring  the  suit."^'^  It  can  not  be  maintained 
by  a  creditor. -^^ 

Whom  the  Trustee  Represents. —  For  most  purposes 
the  trustee  represents  the  bankrupt,  but  in  respect  to  suits  to 
avoid  fraudulent  preferences  and  conveyances  he  represents 
the  general  or  unsecured  creditors.  In  such  cases  he  has  all 
the  rights  of  a  judgment  creditor,  as  well  as  the  powers  spe- 
cifically conferred  by  the  bankrupt  act."^"*  Hence,  what  would 
have  been  an  invalid  conveyance  or  preference  at  the  suit  of 
a  creditor  is  voidable  as  against  the  trustee.-''^  In  cases  of  this 
nature  the  trustee  has  nothing  to  do  with  the  disputes  of 
secured  creditors  among  themselves,  unless  it  becomes  neces- 
sary for  him  to  interfere  in  order  to  settle  their  rights  in  the 
general  estate  or  to  determine  whether  there  is  an  excess  of 
property  over  what  is  required  for  the  purposes  of  the  secur- 
ity."^®  The  trustee's  duties  in  this  respect  relate  chiefly  to 
the  interests  of  the  general  creditors. 

The  bankrupt  act  provides  that,  in  case  it  is  for  the  benefit 
of  the  general  estate,  the  trustee  may  be  subrogated  to  the 
rights  of  a  particular  creditor  for  the  benefit  of  all  the  cred- 
itors. Thus,  whenever  a  creditor  is  prevented  from  enforc- 
ing his  rights  as  against  a  lien  created,  or  attempted  to  be 
created,  by  his  debtor,  who  afterwards  becomes  a  bankrupt, 
the  trustee  of  the  estate  of  such   bankrupt   shall  be  subro- 

255  B.   A.   Sec.  6ob.  -•"'  Dudley   v.    Easton,    104   U.    S. 

250  Trimble  v.  Woodhead,   102  U.  103 ;    Harvey    v.    Crane,    No.    6178, 

S.  647;   Glenny  v.   Langdon,  98  U.  Fed.  Cas.,  s.  c.  2  Biss.  496;  In  re 

S.   20;    Allen   &   Co.   v.    Montgom-  Morrill,   No.   9821,   Fed.    Cas.,  s.  c. 

ery,   48   Miss.    loi ;    In    re    Meyers,  2    Saw.    356;    Smith    v.    Ely,    No. 

No.   9518,    Fed.    Cas.,    s.   c.    2   Ben.  13044,   Fed.   Cas.  s.  c.   10  N.  B.   R. 

424;  In  re  Gray,  47     App.  Div.   (N.  553;  In  re  Gray,  47  App.  Div.   (N. 

Y.)    554,  3  Am.   B.   R.  647;   Falco  Y.)  554,  3  Am.  B.  R.  647;  Falco  v. 

V.    Kaupisch    Creamery   Co.    (Ore.)  Kanpisch   Creamery   Co.    (Ore.)    70 

70  Pac.  R.  286.  Pac.  R.  286. 

257  Moyer    v.    Dewey,    103    U.    S.  '■'■*  McHenry  v.  La  Societe  Fran- 

301;   Glenny   v.   Langdon,  98  U.   S.  caise,  95  U.   S.  58;   Dudley  v.  Eas- 

20;  King  V.  Dietz,  12  Penn.  St.  156;  ton,  104  U.  S.  99. 
Lane  v.   Nickerson,  99  111.  284. 


PREFERENCES    AND    LIENS.  607 

gated  to  and  may  enforce  such  rights  of  such  creditor  for  the 
benefit  of  the  estate.-'"' 

So  also  a  preference  created  by  a  levy,  judgment,  attach 
ment  or  other  lien  obtained  through  legal  proceedings  against 
a  person  who  is  insolvent  at  any  time  within  four  months 
prior  to  the  filing  of  a  petition  in  bankruptcy  against  him  is 
ordinarily  null  and  void.  But  the  court  may,  upon  notice, 
order  that  the  right  under  such  levy,  judgment,  attachment 
or  other  lien  shall  be  preserved  for  the  benefit  of  the  estate, 
and  thereupon  the  same  may  pass  to  and  be  preserved  by  the 
trustee  for  the  benefit  of  the  estate."''^ 

It  will  be  observed  that  neither  of  the  provisions  referred 
to  above  militate  against,  but  especially  protect,  a  bona  fide 
purchaser  for  a  fair  present  consideration,  and  also  a  creditor 
who  has  honestly  received  a  preference,  which  is  valid  under 
the  act. 

In  What  Courts  such  Proceedings  m.\y  be  Instituted. 
—  A  difference  of  opinion  existed  for  some  time  with  reference 
to  the  extent  of  the  jurisdiction  of  a  court  of  bankruptcy  over 
suits  to  recover  fraudulent  conveyances  and  preferences.  The 
question  was  finally  settled  by  the  supreme  court,  which  held 
that  a  court  of  bankruptcy  had  no  jurisdiction,  without  the 
proposed  defendant's  consent,  to  entertain  proceedings  to  re- 
cover property  conveyed  to  the  defendant  by  the  bankrupt  in 
fraud  of  the  bankrutpcy  act."""  By  tlie  amendment  of  Feb. 
5.  1903,  jurisdiction  was  conferred  upon  the  courts  of  bank- 
ruptcy of  suits  for  the  recovery  of  property  under  Sec.  6ob, 
Sec.  Goc  and  Sec.  yoc.  In  respect  to  this  class  of  suits  the 
courts  of  bankruptcy  and  the  state  courts  now  liave  concurrent 
jurisdiction.  It  has  been  held  that  this  is  true  even  where  the 
adjudication  of  bankruptcy  was  before  the  passage  of  the 
amendment  of  Feb.  5.  1903.  authorizing  such  suits  to  be 
brought  in  courts  (jf  bankiuptcy.""' 

z""  B.  A.  1898,  Sec.  67c.  2«'»  Pond     v.     N.     Y.     Exchange 

2«>  R.  A.   i8q8,  Sees.  67c  and  f.  Bank.    10  .^m.  B.   R.  343.    124  Fed. 

="2  Bardes     v.     Ilawarden     Bank,  Rep.  992;  In  re  Knickerbocker,  121 

178    U.    S.    524;    Mitchell    v.    Mc-  Vcd.  Rep.  1004. 

Clure,    178    U.    S.    539;    Hicks    v.  But  .see  In  re  llartman,   121  Fed. 

Knost,  178  U.  S.  541;  Wall  v.  Cox,  Rep.  940. 

181  U.  S.  244. 


6o8  LAW    AND    TROCEEDINCS    IN    HANKRl'PTCY. 

It  is  sometimes  the  case  that  the  court  of  bankruptcy  in 
which  the  original  proceedings  are  i)ending  can  not  obtain 
jurisdiction  of  the  person  and  subject-matter  for  the  reason 
that  it  is  beyond  the  reach  of  its  process.  In  such  cases  it  is 
necessary  to  go  into  a  court  wliich  has  jurisdiction.  The 
trustee  may  maintain  such  a  suit  in  a  court  of  bankruptcy  in 
a  district  other  than  that  in  which  the  decree  of  bankruptcy 
was  made.-^"*  A  bill  or  petition  for  this  purpose  should  show 
what  proceedings  have  taken  place  in  the  principal  court  with 
reference  to  the  commencement  of  the  proceedings  and  the 
adjudication  of  bankruptcy,  etc.  Suits  of  this  character  are 
not  dependent  upon  the  citizenship  of  the  parties. 

Suits  to  avoid  a  preference  or  conveyance  may  be  main- 
tained in  the  circuit  courts  of  the  United  States  only  when 
they  fall  within  the  provisions  of  section  23  with  reference 
to  citizenship  and  the  amount  involved.  Under  the  act  of 
1867  such  suits  might  be  prosecuted,  irrespective  of  the  citi- 
zenship of  the  parties,  on  the  ground  that  a  federal  question 
was  involved.^®®  But  the  rule  is  clearly  changed  by  the  pro- 
visions of  section  23.^®'' 

Pleading  and  Practice  in  Suits  to  Recover  Property. 
—  To  recover  property  conveyed  by  the  bankrupt  in  fraud  of 
the  act,  either  as  a  preference  or  a  fraudulent  conveyance,  is 
not  a  proceeding  in  bankruptcy.""^  It  must  be  a  plenary  suit 
at  law  or  in  equity  according  to  the  nature  of  the  case.^""-  Such 
suits  may  be  actions  at  law  in  ejectment,  trover,  assumpsit,  etc., 
or  suits  in  equity,  as  a  bill  to  set  aside  a  fraudulent  convey- 


26< /n    re    Peiser,    115    Fed.    Rep.  bank  v.  Bigelow,  92  U.  S.  179;  Dud- 

199,  7  Am.   B.  R.  690;  Lathrop  v.  ley  v.  Easton,  104  U.  S.  103;   Sec. 

Drake,  91   U.    S.   516;    Sherman    v.  25,  ante. 

Bingham,    No.    12762,    Fed.    Cas.,   s.  ""^  Goodier    v.    Barnes,    94    Fed. 

c.  3  Clif.  552;  Ex  parte  Martin,  No.  Rep.  798,  2  Am.  B.  R.  328. 

9149,    Fed.    Cas.,    s.   c.   5    Law   Rep.  -"«  Pond  v.  N.  Y.  Exchange  Bank, 

158.     See  also  ancillary  jurisdiction,  10  Am.  B.  R.  343,  124  Fed.  Rep.  992. 

Sec.   21,   ante.  ^^^  In  re  Knickerbocker,   121   Fed. 

266  Smith  V.  Mason,  14  Wall.  419;  Rep.    1004;   Louisville   Trust   Co.  v. 

Marshall    v.    Knox,    16    Wall.    551;  Comingor,  184  U.  S.  18;  Jaquith  v. 

Lathrop    v.    Drake,   91    L'.    S.    516;  Rowley,    188   U.   S.   620. 
Eyster  v.  Gaff,  91   U.  S.  521 ;  Bur- 


PREFERENCES    AND    LIENS.  609 

ance,  etc.*^*'  It  has  been  held  that  an  action  for  assumpsit  will 
not  lie  but  that  the  action  should  be  one  of  trover.''^ 

The  suit  should  be  prosecuted  by  the  trustee  and  it  is  not 
necessary  for  him  to  obtain  an  order  from  the  court  of  bank- 
ruptcy in  order  to  maintain  such  a  suit."^"  The  right  to  main- 
tain such  a  suit  is  not  barred  by  his  failure  to  contest  the  claim 
presented  by  the  preferred  creditor  against  the  bankrupt's  es- 
tate,"'"' because  such  a  proceeding  is  not  7'cs  judicata. 

The  plaintiff  should  allege  in  his  bill  or  petition  facts  essen- 
tial to  show  that  the  conveyance  was  made  while  the  bankrupt 
was  insolvent  "'*  and  within  four  months  of  bankruptcy,  and 
that  the  person  receiving  it  had  reasonable  cause  to  believe 
that  he  was  receiving  a  preference.*'^ 

It  has  been  held  that  he  should  allege  that  the  assets  in 
the  trustee's  hands  are  insufficient  to  satisfy  the  claims  of 
the  creditors.*'*'  No  demand  is  necessary  before  beginning 
an  action  to  recover  property  transferred  in  fraud  of  the 
act."^ 

In  a  suit  to  set  aside  a  preference  or  a  conveyance  the  bur- 
den of  proof  is  on  the  trustee  to  establish  that  the  preference 
or  transfer  is  fraudulent  under  the  bankrupt  act.^^**    It  is  proper 

270  Pond  V.  N.  Y.  Exchange  Bank,  B.  R.  459;  Brown  v.  Giiichard  (Sup. 

10  Am.  B.  R.  343,  124  Fed.  Rep.  992;  Ct.  N.  Y.),  7  Am.  B.  R.  515  :    Taft 

Wall   V.   Cox,   loi   Fed.   Rep.  403,  5  v.     Fourth     Nat.     Bank     (Sup.     Ct. 

Am.  B.  R.  727,  reversed  on  another  Cin.)    2  N.   B.   N.   1145,  8  Ohio  N. 

point,  181  U.  S.  244.  P.  Rep.  59. 

-'»  Lyon  V.  Clark,  129  Mich.  381  ;  -"«  Mueller  v.  Brus.s.  112  Wis.  406. 

Weeks   v.   Fowler    (N.   TL )    53   Atl.  -^^  Goldberg      v.      Harlan      (Ind. 

Rpp-  .S43-  App.)  67  N.  E.  Rep.  707;  Tredway 

-"''•' Chism  V.  Bank  of  Friar's  Point  v.    Kaufman,    21    Pa.    (Super.    Ct.) 

(Sup.  Ct.  of  Miss.)  5  Am.  B.  R.  56.  256. 

"7^  Buder    v.    Columbia    Distilling  =^7**  Barbour   v.    Priest,    103    U.    S. 

Co.   (Ct.  of  App.,  St.  Louis)   70  S.  293;   Crane  v.   Penny,  2  Fed.    Rep. 

W.  Rep.  508,  9  Am.  B.  R.  331.  187;  Webb  v.  Sachs,  No.  17325,  Fed. 

'-^■*  Deland    v.    Miller    &    Chaney  Cas.,  s.  c.  4  Saw.  158;  In  re  Black, 

Bank    (la.),   93    N.    W.    Rep.   304;  No.    1457,    Fed.    Cas.,   s.    c.    2    Ben. 

Severin    v.    Robinson     (Ind.    .^pp.)  196.     As   to  what   evidence   may  be 

60  N.  E.  Rep.  966.  used  to  establish  a  fraudulent  pref- 

"•'"' Crooks  V.   People's  Nat.  Bank,  erence,  sec  Rosenthal  v.  Walker,  in 

3  .^m.   B.   R.   238;   hi  re   Blair,   102  U.     S.     185;     Hicks    v.     Langhorst 

Fed.    Rep.   987,   4   Am.    P..    R.   220;  (ll.-imilion  Co.,  O..  Com.   Pleas)   6 

Peck  V.  Connell   (Supr.  Ct.  oi  Pa.)  .\m.    I'..    R.    178;    Dutton    v.    Cloar 

8  Am.   B.   R.  500;  Lcvor  v.   Seiter  (Tex.  Cir.  App.)  65,  S.  W.  70. 
(Sup.  Ct.  N.  Y..  App.  Div.)  8  Am. 


6lO  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

to  permit  a  party  to  testify  as  to  his  intention  in  making  the 
transfer."'"  A  schedule  of  liabiHties  filed  in  a  bankruptcy 
proceecHng  is  not  competent  evidence  on  an  issue  between 
the  trustee  and  a  third  jicrson  as  to  the  financial  condition  of 
the  bankrupt  months  before  bankruptcy."'"' 

Where  a  preference  is  set  aside  the  creditor's  debt  is  extin- 
guished by  a  discharge,  unless  he  comes  in  and  proves  his 
debt  like  any  other  creditor.-®^ 

The  Order. —  The  decree  annulling  a  fraudulent  convey- 
ance or  transfer  may  contain  a  direction  for  a  conveyance  by 
a  person  holding  title  to  the  trustee  in  bankruptcy.-""  Under 
the  present  act  it  may  be  doubted  if  it  is  necessary  to  direct 
such  a  conveyance  because  the  title  is  vested  in  the  trustee 
by  operation  of  law.  If  the  purchase  was  joint  the  judgment 
or  decree  of  recovery  should  be  joint. -*^  Where  real  estate 
has  been  conveyed  to  a  bona  fide  purchaser  by  bankrupt's 
grantee  before  commencement  of  suit  to  recover,  the  judgment 
should  not  provide  that  the  conveyance  from  bankrupt  be  set 
aside,  as  this  would  cloud  the  bona  Me  purchaser's  title.""* 

It  has  been  held  that  an  assignee  for  the  benefit  of  creditors 
who  has  proceeded  under  the  state  law  to  distribute  the  prop- 
erty of  the  bankrupt  can  not  be  held  personally  liable  for  the 
assets  which  came  into  his  hands  and  were  distributed.  But 
the  trustee  "  must  seek  his  remedy  against  those  who  have 
received  payments  from  the  defendant  in  contravention  of  the 
bankrupt  act."  ""^  A  conveyance  or  transfer  should  be  set  aside 
in  toto  when  the  trustee  elects  to  avoid  it  at  all.'"** 

The  express  provision  of  the  bankrupt  act  is  that  the  trus- 
tee may,  in  case  of  a  fraudulent  preference  or  transfer,  recover 

-''^  Hackney    v.     Raymond    Bros.  -■*•'  Schulenburg  v.  Kabwrech,  No. 

Clarke  Co.  (Sup.  Ct.  Neb.),  lo  Am.  12487,   Fed.    Cas.,   s.  c.  2  Dill.    132. 

B.  R.  213.  ^""^  Skillin  v.  Maibrunn,  78  N.  Y. 

2^0  Hackney     v.     Raymond     Bros.  Siipp.  436. 

Clarke  Co.  (Sup.  Ct.  Neb.),  10  Am.  2>i5  Cragin  v.  Thompson,  No.  3320, 

B.  R.  213.  Fed.    Cas.,    s.    c.    2    Dill.    513,    per 

281  See  Provable  Debts,  Chap.  Judge  Dillon ;  In  re  Cohn,  No. 
XIII.  2966,    Fed.   Cas.,    s.   c.   6    N.    B.    R. 

282  Keating  v.  Keefer,  No.  7635,  379;  Jones  v.  Kinney,  No.  7473, 
Fed.  Cas.,  s.  c.  5  N.  B.  R.  133;  Fed.  Cas.,  s.  c.  5  Ben.  259;  An- 
Burkholder  v.  Stump,  No.  2165,  shutz  v.  Hoerr,  i  Fed.  Rep.  594-5- 
Fed.   Cas.,  s.  c.  4   N.   B.   R.   597.  ^^'^  Wehl  v.  Wald,  3  Fed.  Rep.  93. 


PREFERENCES    AND    LIENS.  6ll 

the  property  or  the  vakie  of  it  from  the  person  so  receiving  it 
or  so  to  be  benefited  by  it.-"*'  Where  property  has  been  sold 
at  a  judicial  sale,  or  where  a  bona  fide  sale  for  a  valuable  con- 
sideration has  been  subsequently  made  by  the  person  taking  the 
property  in  fraud  of  creditors,  it  can  not  be  recovered  in 
specie.  The  only  remedy  of  the  trustee  is  for  the  value  of  it. 
The  measure  of  damages  in  such  cases  is  the  actual  value  of 
the  property  at  the  time  of  the  conveyance.-^^  The  trustee  is 
not  bound  by  the  price  paid  by  a  purchaser  at  a  judicial  sale 
or  otherwise  as  the  value  of  the  property.  All  kinds  of  dam- 
ages are,  strictly  speaking,  for  the  jury,  and  however  clear 
and  plain  may  be  the  rule  of  law  on  which  the  damages  are  to 
be  founded,  the  act  of  finding  is  for  it.^^" 

287  B.  A.  1898,  Sec.  60b  and  Sec.  macher,  29  Penn.  St.  40;  Davis  v. 
70^-  Anderson,  No.  3623,  Fed.  Cas.,  s.  c. 

288  Frank  v.  Musliner,  28  N.  Y.  L.  6  N.  B.  R.  145 ;  In  re  Rosenberg, 
J.  765,  9  Am.  B.  R.  229;  Clarion  No.  12055,  Fed.  Cas.,  s.  c.  3  Ben. 
Bank  v.  Jones,  21  Wall.  339;  Con-  366;  Smith  v.  Kehr,  No.  13071,  s. 
rad   V.    Insurance    Co.,  6   Pet.   274 ;  c.  2  Dill.  50. 

Comly    V.    Fisher,    No.    3053,    Fed.  ^sa  Aider    v.    Keighley,    15    M.    & 

Cas.,  s.  c.  Taney,  121;  Marshall  v.  W.  117;  Clarion  Bank  v.  Jones,  21 
Knox,  16  Wall.  559;  Eby  v.  Scho-      Wall.  325. 


6i2  i.Aw   AM)  i"R()ci:i:i)iNc;s  in   uankkuptcy. 


chaptp:r  XIX. 

EXAMINATIONS. 

§  204.     When  a  bankrupt  may  be  examined. 

The  bankrupt  may  be  examined  when  he  is  present  at  the 
first  meeting  of  his  creditors  and  at  such  other  times  as  the 
court  shall  order.'  The  order  referring  a  case  to  a  referee 
must  name  a  day  upon  which  the  bankrupt  shall  attend  be- 
fore the  referee.^  For  convenience  the  same  day  is  usually 
selected  as  that  upon  which  the  first  creditors'  meeting  is 
held.  The  examination  may  be  had  at  any  time  after  the 
petition  is  filed  either  in  voluntary  or  involuntary  bank- 
ruptcy.^ The  first  examination  is  regularly  made  at  the  first 
creditors'  meeting. 

A  bankrupt  may  be  examined  as  many  times  as  the  judge  or 
referee  shall  order.  The  fact  that  one  creditor  has  examined 
the  bankrupt  is  no  reason  for  withholding  the  privilege  from 
another  creditor.*  The  referee  should,  in  the  exercise  of  a 
sound  discretion,  so  regulate  the  time,  manner  and  courses  of 
examination,  as  to  protect  the  bankrupt  from  annoyance, 
and  oppression,  and  mere  delay.  At  the  same  time  full  and 
fair  opportunity  should  be  allowed  to  the  creditors  to  inquire 
into  such  matters  as  the  statute  permits.^  Where  one  full 
examination  of  the  bankrupt  has  been  made,  a  subsequent 
examination  will  not  (jrdinarily  be  permitted  except  for  cause." 


*  B.  A.  i8q8,  Sec.  7,  clause  9.  •''  In  re  Horgan  (C.  C.  A.  2d  Cir.), 
Compare  R.  S.   Sec.  5086.  98  I'>d.  Rep.  414,  3  Am.  B.  R.  253; 

-Gen.   Ord.   12;    B.   A.    1898,  55Z?.  In   re  Mellen,  97    Fed.   Rep.   326,   3 

■'■  In  re   Price,  91    Fed.   Rep.   635,  .Am.  B.  R.  226. 

I  Am.  B.  R.  419.  "  In    re    Frisbie,    No.    5131,    Fed. 

*  In  re  Price,  91  Fed.  Rep.  635,  Cas.,  s.  c.  13  N.  B.  R.  349;  In  re 
I  Am.  B.  R.  419;  In  re  Mellin,  97  Isidor,  No.  7105,  Fed.  Cas.,  s.  c. 
Fed.  Rep.  326,  3  Am.  B.  R.  226;  2  Ben.  123;  In  re  Frizelle,  No.  5153, 
In  re  Adams,  No.  40,  Fed.  Cas.,  s.  Fed.  Cas.,  s.  c.  5  N.  B.  R.  122;  In 
c.  3  Ben.  7;  In  re  Gilbert,  No.  5410,  re  Price,  91  Fed.  Rep.  635,  i  Am. 
Fed.   Cas.,   s.  c.    i   Low.  340;  In  re  B.   R.  419. 

Vogel,    No.    16984,    Fed.    Cas.,   s.   c. 
5  N.  B.  R.  393. 


EXAMINATIONS.  613 

Where  an  examination  is  sought  or  carried  on  for  the  purpose 
of  gratifying  mahce  or  mere  curiosity,  it  may  be  arrested.' 

An  examination  may  be  adjourned  to  a  day  certain,  but  if 
it  is  adjourned  without  day  a  new  notice  of  examination  is 
necessary.'* 

It  will  sometimes  be  necessary  to  determine  at  what  stage 
in  the  proceedings  does  the  right  to  examine  the  bankrupt 
cease.  There  can  be  no  doubt  that  this  right  extends  up  to 
the  final  adjudication  upon  his  application  for  a  discharge.** 
The  hearing  upon  a  petition  for  a  discharge  may  be  contin- 
ued for  the  purpose  of  affording  an  opportunity  to  examine 
the  bankrupt  in  a  proper  case."  It  has  been  held  that  a 
bankrupt  can  be  compelled,  after  his  discharge,  to  submit 
to  an  examination.^^  This  was  a  matter  of  express  enactment 
in  the  act  of  1867."*  There  is  no  limitation  in  the  statute  of  the 
court's  jurisdiction  over  his  person  in  respect  to  the  time  of 
his  discharge.  The  language  of  section  21  authorizes  the 
court,  by  order,  to  require  the  bankrupt  to  appear  in  court  or 
before  a  referee  or  the  judge  of  any  state  court,  to  be  exam- 
ined concerning  the  acts,  conduct,  or  property  of  a  bankrupt 
whose  estate  is  in  process  of  administration  in  bankruptcy. 
The  only  limitation,  with  reference  to  time,  seems  to  be  that 
the  estate  shall  still  be  in  the  process  of  administration.  There 
can  be  no  doubt  of  the  right  to  examine  a  bankrupt,  upon  a 
proper  ai)])licatinn  being  made  for  that  purpose,  after  his 
discharge  is  suspended  or  vacated. 

If.   at  the  time  of  preferring  his  petition,   the  debtor  shall 
be  imprisoned,   the  court,   upon   application,   may  order   him 

^ /n    re    Salkcy.    No.    12252,    Fed.  '* /h  rr  Westfall  Bros.  Co.,  8  Am. 

Cas.,  s.  c.  5  Biss.  486.  B.  R.  431.     But  a  contrary  rule  pre- 

*  In  re   Price,   i    Am.    P>.    R.  419,  vailed  under  the  Act  of  1867.     In  re 

91  Fed.  Rep.  635.  Dean,   No.  3701.  Fed.   Cas.,  s.  c.  3 

"Gen.  Ord.   12;  In  re  Solis,   No.  N.  B.  R.  768:  In  re  Jones,  No.  7449, 

13165.  Fed.   Cas.,  s.  c.  4  Ben.   143;  Fed.  Cas.,  s.  c.  6  N.  B.  R.  386;  In 

In    re    Vetterlein,    No.    16926,    Fed.  re  Witkowski,  No.  17920,  Fed.  Cas., 

Cas.,  s.  s.  5  Ben.  7;  In  re  Frizellc,  s.  c.   to  N.  B.  R.  209;  In  re  Dole, 

No.   5132,   Fed.   Cas..   s.    c.   5    N.   B.  No.  3964.  Fed.  Cas..  s.  c.  11   Blatcli. 

^-  IIQ-  499.     See    also    in    re    Heath,     No. 

"•/«    re    Seckcndorf,    No.     12600,  6.304,  Fed.  Cas.,  s.  c.  7  N.  B.  R.  448. 

Fed.    Cas.,   s.   c.   2   Ben.   462;   In   re  n*  R.  S.  Sec.  5104. 
Mawson.  No.  93210,  Fed.  Cas.,  s.  c. 
I  N.  B.  R.  271. 


6l4       1  '^^V  -^^'l^  PROCEEDINGS  IN  BANKRUPTCY. 

to  be  pnHhicecl  upon  /mhcas  corpus,  by  tbe  jailor  or  any  offi- 
cer in  whose  custoch'  he  may  be,  before  the  referee,  for  the 
purpose  of  testifying  in  any  matter  relating  to  his  bank- 
ruptcy/" 

Where  the  bankrupt  is  about  to  leave  the  district  in  which 
he  resides  or  has  his  principal  place  of  business,  to  avoid 
examination,  he  may  be  arrested  and  kept  in  custody,  not 
exceeding  ten  days,  until  he  shall  be  examined  and  released 
or  give  bail  to  appear  for  examination,  from  time  to  time, 
not  exceeding  in  all  ten  days,  as  required  by  the  court,  and 
for  his  obedience  to  all  lawful  orders  made  in  reference 
thereto.^''  It  has  been  held  that  a  court  of  bankruptcy  is  with- 
out power  to  make  an  order  for  the  extradition  of  a  bankrupt, 
after  he  had  escaped  into  another  district,  for  the  purpose  of 
an  examination,^*  and  that  a  bankrupt  can  not  be  examined 
by  the  order  of  a  court  of  bankruptcy  in  a  district  other  than 
the  one  in  which  the  bankruptcy  is  pending  in  the  exercise  of 
ancillary  jurisdiction.^^ 

§  205.     When  persons  other  than  bankrupts  may  be  examined. 

The  statute  expressly  authorizes  the  referee  to  exercise  the 
powers  vested  in  courts  of  bankruptcy  for  the  administering 
of  oaths  to,  and  the  examination  of  persons  as  witnesses,  and 
for  requiring  the  preduction  of  documents  in  proceedings 
before  them,  except  the  power  of  commitment.^" 

A  court  of  bankruptcy  may,  upon  application  of  any  officer, 
bankrupt  or  creditor,  by  order  require  any  designated  person, 
including  the  bankrupt  and  his  wife,  to  appear  in  court  or 
before  a  referee  or  the  judge  of  any  state  court,  to  be  exam- 
ined concerning  the  acts,  conduct  or  property  of  a  bankrupt 
whose  estate  is  in  process  of  administration  under  this  act, 
provided,  that  the  wife  may  be  examined  only  touching  busi- 
ness transacted  by  her  or  to  which  she  is  a  party,   and  to 

12  Gen.  Ord.  30;  In  re  Gilbert,  2  ported)  but  affirmed  in  re  Hassen- 
N.  B.  N.  378.  bu?ch  (C.  C.  A.,  6th  Cir.)   108  Fed. 

13  B.  A.   1898,  Sec.  gb.     For  pro-  Rep.   35,   47   C.    C.   A.    177. 
ceedings   to    detain   a   bankrupt    for  ^''/n   re   Williams,    123   Fed.   Rep. 
examination,   see  When  a  bankrupt  321,  10  Am.  B.  R.  538. 

may  be  arrested.  Sec.  219.  i"  B.  A.  1898,  Sec.  38,  clause  2. 

1*  In    re    Hassenbusch     (not    re- 


EXAMIXATIOXS.  615 

determine  the  fact  whether  she  has  transacted  or  been  a  party 
to  any  business  of  the  bankrupt." 

The  language  of  these  provisions  is  very  general.  They 
give  the  referee  power  to  summon  any  person  who  could 
give  evidence  in  a  court  at  law.^*  They  authorize  the  exam- 
ination of  them  upon  all  matters  which  are  likely  to  arise  in 
respect  to  the  bankrupt  or  his  property.  The  only  limita- 
tion as  to  time  within  which  this  power  may  be  exercised  is 
that  the  estate  shall  be  in  process  of  administration  in  bank- 
ruptcy. The  judge  or  referee  may  therefore  summon  a  wit- 
ness at  any  time  after  the  commencement  of  proceedings 
until  the  estate  is  closed  by  order  of  court.  The  referee  of 
course  can  only  summon  witnesses  while  the  case  is  pending 
before  him  upon  reference. 

Prior  to  the  amendment  of  Feb.  5,  1903,  only  persons,  who 
were  competent  witnesses  under  the  laws  of  the  state  in  which 
the  proceedings  were  pending,  could  be  examined. ■^^  This  is 
the  rule  with  reference  to  examination  of  witnesses  in  pro- 
ceedings instituted  prior  to  the  amendment.  A  wife  not  com- 
petent to  testify  under  the  law  of  the  state  cannot  be  compelled 
to  testify  in  such  bankruptcy  proceedings.^"  In  proceedings 
instituted  since  the  amendment  of  Feb.  5,  1903,  the  competency 
of  witnesses  under  the  state  law  is  immaterial.  A  wife  may 
be  examined  only  touching  business  transacted  by  her  or  to 
which  she  is  a  party  and  to  determine  the  fact  whether  she 
has  transacted  or  been  a  party  to  any  business  of  the  bank- 
rupt's." 

§  206.     How  to  obtain  an  order  for  an  examination. 

The  judge  or  referee  may  make  the  order  for  an  examina- 
tion." The  referee  usually  makes  the  order  for  examination 
after  the  order  requiring  the  bankrupt  to  attend  before  the 
referee,  which  is  made  by  the  judge  in  the  order  of  reference.'"' 

"B.  A.  1898,  Sec.  2ia  as  amended  i    Am.    B.    R.   419;   In   re  Westfall 

Feb.   5,    1903.    32    Stat,    at    L.    797.  Bros.  Co.,  8  Am.  B.  R.  431. 

Compare    R.    S.    Sec.    50R7.  20 /„   ^e   JeflFer.son,  96   Fed.    Rep. 

I'*  This   includes  a   trustee   in    in-  826.  3  Am.  B.  R.  174;  In  re  Fowler, 

solvency   under   a   state  proceeding.  93  Fed.  Rep.  417,  i  Am.  B.  R.  555. 

See  In  re  Pursell,  114  Fed.  Rep.  371,  21  B.  A.  1898,  Sec.  21a  as  amended 

8  Am.  B.  R.  96.  Ftb.  5.  1903.  :S2  Stat,  at  L.  797. 

i»/m  re  Price,  91    Fed.  Rep.  635,* 


6l6  LAW    AND    PROCEEDINGS    IN    BANKRliPTCY. 

Coders  for  examinations  of  a  bankrupt  subsequent  to  the  first 
one  are  regularly  made  only  upon  ai)plication  and  for  cause 
shown."* 

It  has  been  held  that  a  court  of  bankruptcy  has  no  special 
ancillary  power  under  the  bankruptcy  statute  to  make  an  order 
on  the  application  of  the  trustee  of  a  bankrupt  whose  estate 
is  being  administered  in  another  district,  requiring  persons 
residing  within  the  district  to  appear  before  a  referee  for 
examination  concerning  the  acts,  conduct,  and  property  of  the 
bankrupt,  A  court  having  charge  of  the  administration  of  a 
bankrupt's  estate  has  power  to  order  that  any  person  having 
knowledge  "  concerning  the  acts,  conduct,  or  property  of  the 
bankrupt,"  but  who  resides  without  the  district  or  state,  and 
more  than  loo  miles  from  the  court,  shall  be  examined  before 
a  commissioner  in  accordance  with  the  provisions  of  the  gen- 
eral statutes  or  practice  in  equity  cases,  and  that  persons  so 
(Tdered  to  be  examined  may  be  compelled  by  proper  process, 
as  in  other  cases,  to  appear  and  testify.^"* 

The  application  for  an  order  requiring  the  bankrupt  or  other 
person  to  appear  for  examination  may  be  made  by  any  officer, 
bankrupt  or  creditor.^"  A  receiver  ^^  or  a  trustee  ''''*  are  such 
officers.  A  creditor  is  entitled  to  an  order  for  an  examination 
before  he  has  filed  proof  of  his  claim  in  set  form.^"  The  ref- 
eree should  be  satisfied  that  the  party  applying  for  the  order 
is  in  fact  a  creditor  of  the  bankrupt.  It  seems  sufficient  proof 
if  the  party  is  named  in  the  schedules  attached  to  the  petition 
in  bankruptcy.^" 

The  application  is  usually  made  by  petition  or  motion.  The 
petition  must  designate  the  persons  to  be  examined,  but  it  need 

"B.    A.    1898,    Sec.    21;    Sec.    I,  26  B.  A.  1898,  Sec.  21. 

clause  7 ;  Sec.  38,  and  Official  Form  -'^  In  re  Fixen,  96  Fed.  Rep.  748, 

No.  28,  see  Form  No.  47,  post.  2  Am.  B.  R.  822. 

23  Gen.  Ord.  12.  28 /„    yg    Howard,    95    Fed.    Rep. 

2*/m   re    Frisbie,    No.    5131,    Fed.  415,  2  Am.  B.  R.  582. 

Cas.,  s.  c.   13   N.  B.  R.  349;  In  re  ^^  In  re  Jehu,  94  Fed.   Rep.  638, 

Isidor,  No.  7105,  Fed.  Cas.,  s.  c.  2  2  Am.  R.  R.  498;  In  re  Walker,  96 

Ben.  123;  In  re  Frizelle,  No.  5133,  Fed.  Rep.  550.  3  Am.  B.  R.  35;  In 

Fed.   Cas.,  s.  c.  5  N.  B.  R.   122.  re  Price,  91    Fed.   Rep.  635,    i   Am. 

25  In  re  Williams,   123   Fed.   Rep.  B.   R.  419. 

321.  3"/n   re  Jehu,   94   Fed.   Rep.   638, 

This  was  done  in  re  Carley,   106  2  .^m.  B.  R.  498. 
Fed.  Rep.  862,  5  Am.  B.  R.  554. 


EXAMINATIONS.  617 

not  specify  the  particular  matters  concerning  which  an  ex- 
amination is  sought.'^  In  a  proper  case  a  letter  or  a  verbal 
request  may  be  sufficient  upon  which  to  make  the  order  for 
examination.^^  Less  proof,  of  course,  is  required  from  an 
officer,  as  a  trustee,  than  from  a  creditor.^^  The  proceeding 
is  ex  parte,  and  no  previous  notice  is  required  to  be  given  to 
any  party.^^  The  form  of  the  order  for  an  examination  of  a 
bankrupt  is  prescribed  by  the  supreme  court.^*  It  should  be 
entered  of  record  among  the  proceedings  before  the  referee. 

§  207.  Notice  of  examination  to  bankrupts,  creditors  and  wit- 
nesses. 

A  copy  of  the  order  for  examination  of  the  bankrupt,  signed 
by  the  referee,  should  be  delivered  to  the  bankrupt  as  soon  as 
may  be."*^  A  copy  of  the  order  is  used  in  place  of  a  summons 
or  subpoena.  Where  service  is  made  upon  a  bankrupt  by 
delivering  him  a  copy  of  the  order,  proof  of  service  may  be 
made  by  affidavit  of  the  person  delivering  it  or  by  a  written 
acceptance  of  service  by  the  bankrupt.  If  the  bankrupt  ap- 
pears, he  waives  any  irregularity  in  the  service.  A  bankrupt 
is  a  party  to  the  proceedings,  and  is  required  to  comply  with 
all  lawful  orders  of  the  judge  or  referee.'"'  If  he  disobeys  or 
resists  any  lawful  order  of  a  referee,  he  is  liable  to  be  com- 
mitted by  tlie  judge  for  contempt." 

The  bankrujjt  can  not  be  required  to  attend  at  or  for  an 
examination  at  a  place  more  than  one  hundred  and  fifty 
miles  distant  from  his  home  or  principal  place  of  business,  un- 
less ordered  by  the  court  or  a  judge  thereof  for  cause  shown."" 
He  is  not  entitled  to  witness  fees  in  any  case.^"  But  he  is  al- 
lowed his  actual  ex|)enses  from  the  estate  when  examined  or 

31  In    re   Howard,    95    Fed.    Rep.  «"  B.  A.   1898.  Sec.  7,  clause  2. 

415,  2  Am.  B.  R.  582.  ■■''  V>.  A.  1898.  Sec.  410  and  Sec.  2, 

»2/n  re  McBrien,   No.  8665,  Fed.  clause   16. 

Cas.,  s.  c.  2  Ben.  513.  ''"*  B.  A.   iH^A  Sec.  7,  clanse  9. 

83 /m  re  Macintire,  No.  8821,  Fed.  •■"»/«    re    Okell,    No.    10475.    Fed. 

Cas.,  s.  c.   I   Ben.  277.  Cas.,   s.   c.   2    Ben.    144;    lit    re    Mc- 

•■'*  OfTicial  Form  No.  28 ;  see  Form  Nair,   No.   8907,   Fed.   Cas.,  s.  c  a 

No.  47,  tost.  N.  B.  R.  _'i9. 

•"•'••  Official      I-nrni     No.     28.       See 
Form  No.  47,  post. 


6l8  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

required  to  attend  at  any  place  other  tlian  the  city,  town  or  vil- 
lage of  his  residence/" 

\Mien  the  bankrupt  is  present  before  the  court  or  referee  he 
may  be  examined  without  previous  notice  being  given  him.*^ 
In  other  cases  the  bankrupt  is  entitled  to  a  reasonable  notice 
of  his  examination. 

A  reasonable  notice  is  such  time  as  will  enable  him  to  reach 
and  appear  before  the  court  or  referee  with  such  knowledge  as 
may  be  under  his  control  upon  the  matters  of  the  investigation 
or  information  asked  for.  "  This  depends  upon  the  circum- 
stances and  facts  surrounding  the  bankrupt,  the  distance  he 
is  from  the  court  or  the  place  of  his  examination,  and  also  upon 
what,  if  any,  particular  facts  he  is  to  be  examined.  If  the 
defendant  is  a  merchant,  and  has  been  doing  a  large  and  com- 
plicated business,  and  he  is  notified  that  his  examination  is  to 
cover  his  entire  business  operations,  a  reasonable  time  would 
manifestly  be  much  longer  than  in  a  case  where  the  notice  of 
examination  was  in  regard  to  a  few  items  of  his  property."  *" 

The  referee  is  also  required  to  give  at  least  ten  days'  notice 
to  all  creditors  of  all  examinations  of  the  bankrupt.*^  This 
notice  is  regularly  sent  by  mail  to  the  respective  addresses  of 
the  creditors  as  they  appear  in  the  list  of  creditors  of  the  bank- 
rupt, or  as  afterwards  filed  with  the  papers  in  the  case  by  the 
creditors.**  The  creditors  may  waive  notice  in  writing.*^  No 
notice  to  creditors  of  the  examination  of  witnesses,  other  than 
the  bankrupt,  is  required. 

Where  a  person  is  not  a  party  to  the  proceedings,  and  there- 
fore not  bound  to  obey  the  orders  made  therein,  he  must  be 
brought  before  the  court  for  examination  by  process  of  sum- 
mons. A  bankrupt,  as  has  just  been  stated,  is  a  party,  and 
need  not  be  served  with  summons.  A  creditor  who  has  proved 
his  claim  is  bound  to  obey  all  the  orders  of  the  court  touching 
his  alleged  debt,  and  therefore  may  be  summoned  by  service 
of  a  copy  of  the  order  for  an  examination  of  him  in  respect 

'toB.  A.   i8g8,  Sec.  7,  clause  9.  ^2 /„  ^^  Bromley  &  Co.,  3  N.  B. 

<i  B.  A.  1898,  Sec.  7,  clouse  9 ;  In      R.  692-3. 
re  Bromley  &  Co.,  3  N.  B.  R.  86;  ^--B.  A.   1898,  Sec.  58a. 

In  re   Brandt,   No.   1812,   Fed.   Cas.  **  B.  A.  1898,  Sec.  58a ;  Gen.  Ord. 

s.  c.  2  N.  B.  R.  215.  21,  par.  2. 

«B.  A.   1898,   Sec.  58a. 


EXAMINATIONS.  619 

to  his  claim/*'  The  form  of  summons  is  prescribed.*'  This 
must  issue  out  of  court  under  the  seal  thereof  and  be  tested 
by  the  clerk.**  Blanks  with  the  signature  of  the  clerk  and 
the  seal  of  the  court  may  be  furnished  to  the  referees  upon 
application.*" 

The  summons  may  be  served  by  any  person.  The  return 
is  in  the  form  of  an  affidavit  of  personal  service  prescribed  in 
Form  No.  30. 

It  may  be  served  upon  witnesses  living  without  the  district 
but  within  one  hundred  miles  of  the  place  of  testifying.^"  But 
no  person  can  be  required  to  attend  as  a  witness  before  a  ref- 
eree at  a  place  outside  of  the  state  of  his  residence,  and  more 
than  one  hundred  miles  from  such  place  of  residence,  and  only 
in  case  his  lawful  mileage  and  fee  for  one  day's  attendance 
'.hall  be  first  paid  or  tendered  to  him." 

A  person  who  disobeys  a  summons  to  appear  before  a  ref- 
eree to  be  examined  as  a  witness  may  be  punished  for  con- 
lempt." 

l\  208.     How  an  examination  is  made. 

At  the  time  and  i)lace  appointed,  the  bankrupt,  creditor  or 
other  witness  must  present  himself  for  examination.  The 
bankrupt  can  not  refuse  to  be  sworn  by  reason  of  his  claim- 
ing that  he  has  an  off-set  which  extinguishes,  or  that  the  stat- 
ute of  limitations  has  run  against,  the  claim  of  the  creditor 
upon  whose  application  he  is  to  be  examined.  So  long  as 
the  debt  stands  proved  and  unimpeached  the  l)ankrupt  may 
be  sworn  and  eximined."*^     A  person  is  exeni])t  from  arrest  (^r 

*"  Gen.    Orel.    21,    par.    6;    In    re  ^-B.  A.  1898,  Sec.  41  and  Sec.  2, 

Kylcr,  No.  7956,  Fed.   Cas.,  s.  c.  2  clause   16. 

Ben.     414;     In     re     Paddock,     No.  •'"'•'*/»  re  Kingsley,  No.  781H,  ]'\-d. 

10657,  Fed.   Cas.,  s.  c.  6  N.  B.  R.  Cas.,  s.  c.  6  I'.en.  300;  In  re  Win- 

132;  In  re  Pease,  29  Fed.  Rep.  593.  ship,    No.    17878,   Fed.   Cas.,  s.  c.  7 

♦^Oflficial      Form      No.     30,     see  Ben.    194;   In   re   Howard,  95    Fed. 

Form  No.  49,  pnsL  Rep.  41S.  2  Am.  B.  R.  582. 

♦^Gen.  Ord.  3;  Official  I'orm  No.  An      examination      was      allowed 

30.  see  Form  No.  49,  i>osi.  when  the  creditor's  claims  had  been 

■•»  Gen.   Ord.    3.  proved     and     protest     filed     against 

""R.   S.   Sec.   876;   In   re  Wood-  them.     In  re  I'.elden,  No.  1241,  Fed. 

ward.  No.   18000,  Fed.  Cas.,  s.  c.  8  Cas.,  s.    c.  4   N-    H-   R-   I94-     /«  ''^ 

Ben.   112.  Scott,  95  Fed.  Rep.  815,  I  Am.  B.  R. 

^1  B.   A.    1898,   Sec.  41a.  49,  it  was  held  that  a  witness  was 


620  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

service  of  process  while  attending  as  a  witness  before  the  judge 
or  referee.''* 

The  testimony  before  a  referee  is  usually  taken  orally.  It 
is  the  duty  of  the  referee,  upon  application  of  any  party  in 
interest,  to  preserve  the  evidence  taken,  or  the  substance  there- 
of, as  agreed  upon  by  the  parties  before  them  when  a  sten- 
ographer is  not  in  attendance.^^  In  practice,  the  evidence  taken 
before  a  referee  is  usually  taken  down  in  writing  by  him  or 
under  his  direction  in  the  form  of  narrative,  unless  he  deter- 
mines the  examination  should  be  taken  by  question  and  an- 
swer.'"' He  is  authorized,  upon  the  application  of  the  trustee, 
to  employ  a  stenographer  at  the  expense  of  the  estate  at  a 
compensation  not  to  exceed  ten  cents  per  folio  for  reporting 
and  transcribing  the  evidence.^^ 

/  The  examination  of  witnesses  before  the  referee  may  be  con- 
ducted by  the  party  in  person  or  by  his  counsel  or  attorney, 
and  the  witnesses  shall  be  subject  to  examination  and  cross 
examination,  which  shall  be  had  in  conformity  with  the  mode 
now  adopted  in  courts  of  law.^* 

A  witness  is  not  entitled  to  be  attended  or  represented  by 
counsel  during  his  examination.^®  The  bankrupt,  being  a  party 
to  the  proceedings,  is  entitled  to  have  the  assistance  of  counsel. 
The  true  rule,  with  reference  to  what  assistance  he  is  entitled 
to,  is  thus  stated  by  Judge  Lowell :  "  The  questions  to  a 
bankrupt  are  usually  concerning  matters  of  fact,  and  in  tht; 
vast  majority  of  cases  involve  nothing  requiring  advice  or  con- 
sultation ;  and  the  presence  of  counsel,  with  the  right  to  object 
to  improper  cjuestions,  and  to  uphold  the  rights  of  the  bankrupt 
in  substantially  the  same  manner  that  he  would  do  if  his  client 

bound  to  take  the  oath  although  not  Fed.  Cas.,  s.  c.   i   Ben.  496;  In   re 

bound     to      answer      incriminating  Leachman,   No.  8157,   Fed.   Cas.,  s. 

questions.  c.  i  N.  B.  R.  391 ;  In  re  Bragg,  No. 

^*  In  re  Kimball,   No.   7767,   Fed.  1799,   Fed.   Cas.,   s.   c.   5   Law   Rep. 

Cas.,    s.    c.    2    Ben.    38.      See    also  323. 

Service  of  subpoena,   Sec.   73,  ante.  ^'^  In  re  Comstock,  No.  3080,  Fed. 

^^  B.  A.  i8q8,  Sec.  39,  clause  9.  Cas.,  s.  c.  3  Saw.  517;  In  re  Fred- 

^^  Gen.  Ord.  22.  enberg,    No.   5075,    Fed.    Cas.,    s.    c. 

''^  B.  A.   1898,  Sec.  38,  clause  5.  2  Ben.  133;  In  re  Stuyvesant  Bank, 

"^^  Gen.  Ord.  22.  No.    13582,   Fed.   Cas.,   .s.   c.  6  Ben. 

The    bankrupt    may    be    cross-ex-  :'^^ ;  In  re  Feinberg,  No.   4716,  Fed. 

amined,  see  in  re  Levy,   No.  8296,  Cas.,  s.  c.  3  Ben.   162. 


EXAMINATIONS.  62I 

were  called  to  the  stand  in  his  own  cause  in  any  other  court, 
and  with  the  further  reserved  right  to  advise  with  him  concern- 
insf  his  answers  when  the  referee  can  see  cause  therefor,  meets, 
as  it  seems  to  me.  all  the  requirements  of  justice  in  this  re- 
gard." ""  The  wife  of  the  bankrupt  is  not  entitled  to  the  as- 
sistance of  counsel  any  more  than  any  other  witness,  and  the 
bankrupt's  counsel  has  no  right  to  advise  her  while  under  ex- 
amination.''^ Where  time  is  needed  to  refresh  the  memory  by 
referring  to  books  or  papers,  or  for  the  production  of  any  writ- 
ten instruments  or  documents,  it  should  be  granted."" 

When  objections  are  made  to  questions  and  answers  in  the 
course  of  the  examination,  the  grounds  of  the  objection  and 
the  ruling  of  the  referee  should  be  noted  by  the  referee.  It 
has  been  held  that  one  creditor  has  no  right  to  interpose  any 
objections  to  the  examination  of  the  bankrupt  by  anc^ther 
creditor."'^  With  reference  to  the  power  of  the  referee  to  de- 
cide whether  a  question  is  incompetent,  immaterial  or  irrel- 
evant, it  should  be  observed  that  there  is  a  distinction  be- 
tween the  general  order  under  the  present  act  and  that  under 
the  act  of  1867.  General  order  10,  under  the  act  of  1867,  ex- 
pressly provided  that  the  register  "  shall  not  have  power  to 
decide  on  the  competency,  materiality  or  irrelevancy  of  the 
question."  General  order  22.  under  the  present  act,  follows 
very  closely  the  language  of  general  order  10,  of  the  act  of 
1867,  but  omits  the  words  (|uotcd.  The  present  statute  ex- 
pressly authorizes  the  referee  to  perforin  such  i)art  of  the 
duties,  except  as  to  questions  arising  out  of  a])plications  of 
bankrupts,  which  shall  be  prescribed  by  the  rules  and  orders 
of  the  courts  of  bankruptcy  in  their  respective  districts,  ex- 
cept as  otherwise  provided  by  the  statute.''  It  would  there- 
fftre  seem  tliat  referees  have  power  to  pass  upon  the  compe- 
tency, relevancv  or  materiality  of  any  oucstion  in  the  course 

'■"hi   re  Tanner,   No.    13745.   T^«l.  «' /«    re    Schonl)erK.    Nn.     12477, 

Ois..    s.    c.    I    Low.    215.      Sec   also  Fed.  Cas.,  s.  c.  7  Hen.  211. 

in   re  Jiidson,   No.   7562,   Fed.   Cas.,  "'-'/«   re  Tanner,   No.   13745.   I'>d- 

s.   c.   2  Ben.   210;   In   re  Lord,   No.  Cas.,   s.   c.    i    Low.   215. 

8502,    Fed.    Cas.,    s.    r.    3    N.    B.    R.  "•'' /»i  re  Winship.  No.  17878,  Fed. 

243.     See  in  re  Cobb,  7  Am.  B.  R.  Cas.,  s.  c.  7  ^^^'i-   194- 

104,  as  to  the  right  of  bankrupt  to  «<  B.  A.    1898,   Sec.  38,  par.  4- 
cross-examine  witnesses. 


62 J  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

of  an  examination,  subject  to  have  tlie  question  reviewed  by 
the  judge  upon  certificate.'"^'  The  more  convenient  practice 
would  seem  to  be  for  the  referee  to  make  his  ruHng,  and 
thereupon  require  the  question  to  be  answered.  If  his  ruHng 
be  against  the  question,  and  the  court  should  reverse  his  find- 
ing, it  would  not  be  necessary  to  have  a  reexamination  of  the 
witness;  if  the  court  should  afifirm  such  ruling,  the  answer  may 
properlv  be  disregarded.  The  examination  should  continue, 
and  the  question  be  certified  after  the  deposition  is  completed, 
to  prevent  delay. 

In  case  a  witness  refuses  to  be  sworn  or  to  answer  any  par- 
ticular question,  the  referee  should  rule  upon  the  question.  If 
either  party  is  dissatisfied  with  his  ruling,  he  may  have  the 
question  certified  to  the  judge  for  review.®"  The  examination 
may  be  adjourned  pending  the  decision  of  the  judge  upon  such 
question. 

Where  a  bankrupt  or  a  witness  refuses  to  answer  a  ques- 
tion when  ordered  to  do  so  by  the  referee,  the  matter  may 
also  be  brought  to  the  attention  of  the  judge  upon  an  appli- 
cation to  commit  for  contempt.**^  So  also  where  the  bank- 
rupt makes  an  unsatisfactory  answer  which  is  untrue,  as  that 
"he  does  not  remember,"  or  "is  unable  to  tell,"  the  court 
may  commit  him  for  contempt.  In  England  it  has  been  held 
that  a  bankrupt  may  be  committed  by  the  court  for  answers 
upon  his  examination,  which  on  the  whole  are  unsatisfactory, 
and  which  do  not  really  and  truly  impart  imformation, 
which  the  bankrupt  must  possess ;  as  where  his  answers  are 
so  clearly  of  an  improbable  character  that  they  can  not  be 


«5  Gen.  Ord.  27 ;  B.  A.  1898,  Sec.  B.  A.  1898,  Sec.  39,  clause  5 ;  In  re 

39,  clause  5.    In  re  ClifFe,  3  Am.  B.  Reakirt,  No.  11614,  Fed.  Cas.,  s.  c. 

R.    257,   97    Fed.    Rep.    540 ;    In    re  7  N.  B.  329 ;  In  re  Patterson,  No. 

Howard,  95  Fed.  Rep.  415,  2  Am.  10814,  Fed.  Cas.,  s.  c.   i    Ben.  448; 

B.   R.   582;    In   re   Shera,    114   Fed.  In  re  Woodward,  No.   17999,   Fed. 

Rep.  207,  7  Am.  B.  R.   552;  In  re  Ca.s.,  s.   c.  3   N.  B.   R.    719;   In  re 

Lipset  Levittan  &  Co.,  9  Am.  B.  R.  Pioneer  Paper  Co.,  No.  11 178,  Fed. 

32.  Cas.,  s.  c.  7  Ben.  250. 

««  Gen.  Ord.  27.  Official  Form  56,  s?  b.  A.  1898,  Sec.  41a  and  h. 

see  Form  No.  136  post. 


EXAMINATIONS.  623 

believed.*^^  In  one  case  ""  bankrupts  were  committed  for  con- 
tempt because  they  refused  to  account  for  more  than  twenty 
thousand  dollars'  worth  of  property  which  had  been  traced  into 
their  possession.  Where  a  bankrupt  withdraws  from  the  office 
of  the  referee  before  the  completion  of  his  examination,  he 
may  be  punished  for  contempt.'^''  It  has  been  held  that  a  state 
court  has  no  jurisdiction  to  punish  a  party  for  perjury  com- 
mitted in  the  course  of  an  examination  before  a  referee." 

\\'hen  the  examination  is  completed,  the  deposition  must 
be  read  over  to  the  witness  and  signed  by  him  in  the  presence 
of  the  referee.'-  The  referee  must  note  upon  the  deposition 
any  question  objected  to,  wdth  his  decision  thereon;  and  the 
court  may  deal  with  the  costs  of  incompetent,  immaterial  and 
irrelevant  depositions,  or  any  parts  of  them,  as  may  be  just."' 

The  examination  may  be  adjourned  from  time  to  time  as 
may  suit  the  convenience  of  the  parties. 

The  testimony  of  a  bankrupt  should  be  admitted  in  evidence 
even  where  he  failed  to  sign  it.^* 

§  209.     Upon  what  topics  the  bankrupt  may  be  examined. 

The  bankrupt  may  be  examined  concerning  the  conducting 
of  his  business,  the  cause  of  his  bankruptcy,  his  dealings  with 
his  creditors  and  other  persons,  the  amount,  kind  and  where- 
abouts of  his  property,  and,  in  addition,  all  matters  which  may 
affect  the  administration  and  settlement  of  his  estate.'''^ 

He  must  answer  all  questions  relating  to  these  subjects  fully 

<•«  Ex    parte    Lord,     16    Mces.    &  565;  Iti   re  Dresser,  No.  4077,  Fed. 

W.    462;    In   re    Bradbury,    11    Jur.  Cas.,   s.   c.   3   N.   B.   R.   557;   In  re 

r  189,  s.  c.   14  C   B.  15;   In  re  Tay-  Mooney,   No.  9748,  Fed.  Cas.,  s.  c. 

ilor,    8    Ves.    328:    F.x    parte    Now-  14  Blatch.  204. 

Ian,    6    Durn.    &    East,    58,   s.    c.   6  ^^ /«   re   Vogel,    No.    16984,    Fed. 

T.  R.  118.     As  to  the  power  of  the  Cas.,  s.  c.  5  N.  B.  R.  393. 

English   rule  upon  American  cases,  ''  State    v.    Pike,    15    N.    H.    83. 

see   in   re   Mooney,    No.  9748,   Fed.  Consult  Commonwealth  v.  Walker, 

Cas.,  s.  c.  14  Blatch.  204.  108,   Mass.  .309. 

•"»/n   re   Salkey,   No.    12253,   Fed.  '^'Gen.  Ord.  22. 

Cas.,  s.  c.  6  Biss.  269,  affirmed  on  ^^  Gen.   Ord.  22. 

petition    for   habeas    corpus   to   dis-  "• /h  re  P.ard,   108  Fed.   Rep.  208, 

charge    the    prisoners.     No.     12254,  5  Am.  B.  R.  810. 

Fed.  Cas.,  s.  c.  6  Biss.  280.  ■"■' B.    A.    1898.    Sec.    7,    clause   9. 

Consult     also     in     re     TIow.     No.  Compare  R.  S.  Sec.  5086. 

6747,  Fed.   Cas.,  s.  c.    18  N.  B.  R. 


0J4  L-^^V    AND    I'ROCEEDINGS    IN    BANKKUPTCY. 

and  completely.'"  A  large  latitude  of  inquiry  is  allowed  in 
the  examination  of  the  bankruj)t  and  other  persons  closely  con- 
nected with  iiini  in  his  business  dealings  for  the  purpose  of 
discovering  the  assets  and  unearthing  frauds  and  upon  any 
reasonable  surmise  that  they  have  the  assets  of  the  debtor." 
Where  questionable  proceedings  have  been  disclosed  greater 
latitude  in  the  prosecution  of  inquiries  should  be  allowed."'' 
Where  a  bankrupt  fails  to  testify  fully  and  fairly  and  truth- 
fully, the  court  or  referee  is  at  liberty  to  accei)t  his  testimony 
as  it  may  seem  to  be  supported  by  other  witnesses,  or  if  un- 
worthy of  credit  it  may  be  rejected  altogether.'^" 

The  bankrupt  may  be  examined  with  reference  to  propertjr 
which  has  come  into  his  possession  and  not  been  accounted 
for,^**  or  with  relation  to  his  wife's  property  if  it  is  shown 
that  he  may  possibly  have  an  interest  in  it,**^  or  any  other 
I)roperty  in  which  he  may  possibly  have  an  interest,^'  or  in 
reference  to  matters  which  transpired  before  the  creation  of 
the  debt,**^  or  for  the  purpose  of  eliciting  facts  to  be  used  in 
opposing  his  discharge.^*  When  he  seeks  to  be  discharged, 
he  must  submit  himself,  if  required,  to  be  examined,  with  a 
view  to  show  whether  he  has  made  a  full  and  fair  surrender 
of  his  property  and  statement  of  his  debts.*"'  But  it  is  not 
competent  for  the  referee  to  summon  witnesses  who  may  know, 
or  be  suspected  of  knowing,  facts  pertinent  to  or  that  might 
be  serviceable  in  the  preparation  of  specifications  against  his 

■^8  In  re   Salkey,   No.    12253,  Fed,  Rrien,   No.  8666,  Fed.  Cas.,  s.  c.  3 

Cas.,   s.  c.   6   Biss.  269.  Ben.  481. 

"/„    re    Horgan    (C.    C.    A.,    2d  "i /n    re    Horgan    (C.    C.    A.,   2d 

Cir.)  98  Fed.  Rep.  414,  3  Am.  B.  R.  Cir.)  98  Fed.  Rep.  414,  3  Am.  B.  R. 

253 ;  In  re  Foerst,  93  Fed.  Rep.  190,  253 ;    In    re   Craig,    No.    3323,    Fed. 

I  Am.  B.  R.  259;  In  re  Carlcy,  106  Cas.,   s.    c.   4   N.    B.   R.    50;    In   re 

Fed.   Rep.   862,   5    Am.   B.   R.    554;  Clark,   No.  2805,  Fed.  Cas.,  s.  c.  4 

People's  Bank  v.  Brown  (C.  C.  A.,  N.    B.    R.   237. 

3d  Cir.)    112  Fed.  Rep.  652,  7  Am.  ^^  In  re  Bonesteel,  No.  1628,  Fed. 

B.  R.  475;  In  re  CliflFe,  97  Fed.  Rep.  Cas.,  s.   c.  2   N.   B.   R.  330;   In  re 

540,  3  Am.  B.  R.  257.  Brundage,  100  Fed.  Rep.  613,  4  Am. 

^^  In  re  Foerst,  93  Fed.  Rep.  190,  B.  R.  47 ; 

I  Am.  B.  R.  259.  ^-^  In    re    Craig,    No.    3322,    Fed. 

■^^  In  re  Tudor,  100  Fed.  Rep.  796,  Ca.s.,  s.  c.  3  Ben.  353. 

4  Am.   B.   R.   78;   In  re  Leslie,   irg  ^^/m    re    Brandt,    No.    1812,    Fed. 

Fed.  Rep.  406.  Cas.,  s.   c.  2   N.    B.   R.   215 ;  In  re 

'*'*  In   re   Salkey,   No.    12253,   Fed.  Price,  91  Fed.  Rep.  635. 
Cas.,   s.   c.   6   Biss.   269;   In   re   Mc- 


EXAMINATIONS.  625 

discharge.^^  In  regard  to  such  facts,  a  creditor  is  left  to  estab- 
lish them  on  the  trial  as  parties  do  in  ordinary  trials  at  law. 
It  is  not  a  sufficient  excuse  for  not  answering  a  question  put 
to  the  bankrupt  that  he  has  replied  to  it  at  a  former  exam- 
ination held  at  the  instance  of  some  other  creditor  or  the  as- 
signee."^ 

On  the  other  hand,  a  bankrupt  can  not  be  examined  touch- 
ing matter  wholly  irrelevant  to  and  not  bearing  on  his  bank- 
ruptcy. The  bankrupt  must,  however,  plead  his  privilege,  if 
any  privilege  legally  exists,  to  the  particular  questions  pro- 
pounded.*" He  is  privileged  from  being  examined  in  respect 
to  property,  which  he  has  acquired  since  the  adjudication  in 
the  bankruptcy  proceedings ;  *^  and  also  w' ith  reference  to  proj)- 
erty  which  he  does  not  own  or  have  an  interest  in.''^  He  can 
not  be  examined  upon  matters  simply  to  gratify  malice  or 
curiosity.**" 

The  bankrupt  can  not  be  compelled  to  answer  a  question  the 
answer  of  which  will  tend  to  incriminate  him.""  The  witness 
may  rely  on  that  pcirtion  of  the  fifth  amendment  of  the  con- 
stitution of  the  United  States  which  declares  that ""'  no  person 
shall  be  compelled  in  any  criminal  case  to  be  a  witness 
against  himself."  ''^  The  bankruptcy  act  provides  that  "  no 
testimony  given  by  him  shall  be  ofifered  in  evidence  against 
him  in  any  criminal  proceeding."  "-'  The  reason  for  the  rule 
is  that  this  prtn-ision  does  not  grant  him  the  immunity  con- 
templated by  Sec.  5  of  the  constitution.  It  can  have  no  other 
effect  than  to  protect  the  bankrupt  against  the  use  of  his  testi- 
mony in  any  prosecution  in  the  courts  of  the  United  States. 

'*■•  In    re    Vogel,    No.    16984,    Fed.  117  Fed.  Rep.  356,  9  Am.  B.  R.  104; 

Cas.,  s.  c.  5  N.  B.  R.  393.  In    re    Scott,   95    Fed.    Rep.   815,    i 

•""/h  re  Mellen,  97  Fed.  Rep.  326,  Am.  B.  R  49;  In  re  Shera,  114  Fed. 

3  Am.  B.  R.  226.  Rep.  207,   7  Am.   B.   R.  552:   In   ;<• 

*■'' In     re     Patterson,     No.     10815,  Walsh.    104    Fed.    Rep.    518;    In    rr 

Fed.   Cas.,   s.   c.    i    Ben.   508;    In  re  Franklin    Syndicate,    T14    W'i\.    \<i-\\. 

Levy,   No.   8296,   Fed.   Cas     s.   c.    I  205 ;    In    re    Rosscr,    96    Fed.    Rep. 

Ben.  496.  305,  2  .'\m.  B.  R.  755. 

8'*/m    re    Van    Tuyl,    No.    16880,  But  .see  Mackcl  v.  Rochester    (C. 

Fed.  Cas.,  s.  c.   i   N.  B.   R.  636.  C.  A.,  9th  Cir.)    102  Fed.  Rep.  314, 

*•" /«   re   Salkey.   No.    12252,   Fed.  4  Am.  B.  R.  i. 

Cas.,  s.  c.  5  Biss.  486.  "' Connselman    v.    liitclicock,    142 

""//I   re   Nachman,    114   I'"ed.    Rep.  U.    S.    .S62. 

995.  8  Am.  B.  R.  180:  In  re  Kanter,  "s  B.  A.  1898,  Sec.  7a. 


626  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

It  would  be  no  answer  to  a  prosecution  which  might  be  insti- 
tuted in  the  state  courts  which  are  not  created  by  acts  of  con- 
gress and  which  prescribe  their  own  rules  of  proceeding  inde- 
pendently of  congress.  It  has  been  held  that  the  bankrupt 
waives  the  privilege  to  refuse  to  deliver  the  books  of  account 
kept  by  him  to  his  trustee  on  the  ground  that  the  matter  con- 
tained therein  might  tend  to  incriminate  him  by  filing  a 
voluntary  petition  in  bankruptcy."^  He  may  be  required  to 
state  whether  he  has  played  cards  or  faro  or  any  other  games 
of  chance  with  certain  persons  prior  to  the  proceedings  in 
bankruptcy  although  the  answer  may  tend  to  degrade  him."" 

§  210.  Upon  what  topics  witnesses,  other  than  bankrupts, 
may  be  examined. 

When  a  witness  is  brought  before  the  referee  he  may  be  ex- 
amined concerning  "  the  acts,  conduct,  or  property  of  a  bank- 
rupt whose  estate  is  in  the  process  of  administration."  ^^ 

Such  witnesses  must  answer  all  questions  concerning  the 
acts,  conduct,  or  property  of  the  bankrupt,  and  their  dealings 
with  him,  £ven  though  their  answers  may  furnish  evidence 
to  be  used  in  a  civil  case  brought,  or  to  be  brought,  on  behalf 
of  the  trustee."®  In  respect  to  the  subject  prescribed  by  the 
statute  upon  which  he  may  be  examined,  the  parties  are  en- 
titled to  a  full  discovery  and  disclosure  by  him."^  Thus  a 
person  who  has  purchased  claims  against  a  bankrupt  may  be 
examined  in  respect  to  the  consideration  paid  therefor  and 
where  he  obtained  the  money."*  A  president  may  be  required 
to  give  the  consideration  of  a  judgment  obtained  by  his  bank."" 

»3  In  re  Sapiro,  92  Fed.  Rep.  340,  B.  R.  246 ;  In  re  Qiffe,  3  Am.  B.  R. 

I  Am.  B.  R.  296.  257,  97  Fed.  Rep.  540. 

9* /ji  re  Richards,  No.  11769,  Fed.  »' /m    re    Stuyvesant    Bank,    No. 

Cas.,  4  Ben.  303.  13582,    Fed.   Cas.,   s.   c.   6  Ben.  33; 

9!i  B.  A.  1898,  Sec.  210  as  amended  In  re  Trask,  No.   14141,  Fed.  Cas., 

Feb.   5,    1903,    32    Stat,    at  L.    797;  s.  c.  7  Ben.  60;  In  re  Lathrop,  No. 

People's  Bank  v.  Brown   (C.  C.  A.,  8106,  Fed.  Cas.,  s.  c.  4  N.  B.  R.  93. 

3d  Cir.)  112  Fed  Rep.  652,  7  Am.  B.  »« /«  re  Lathrop,   No.  8106,  Fed. 

R.  475;  In  re  Carley,  106  Fed.  Rep.  Cas.,    s.   c.   4   N.    B.    R.   93;    In   re 

862,  5  Am.  B.  R.  554-  Trask,   No.   14141,  Fed.   Cas.,   s.   c. 

o«/m  re  Fay,  No.  4708,  Fed.  Cas.,  7   Ben.   60. 

s.  c.  3  Ben.  660;  In  re  Pioneer  Pa-  »» /w  re   Pioneer   Paper  Co.,   No. 

per  Co.,  No.  11 178,  Fed.  Cas.,  s.  c.  11178,  Fed.  Cas.,  s.  c.  7   N.  B.   R. 

7  N.  B.  R.  250;  Garrison  v.  Mark-  250. 
ley,  No.  5256,  Fed.  Cas.,  s.  c.  7  N. 


EXAMINATIONS.  627 

It  is  no  excuse  for  not  answering,  that  his  answer  would  re- 
veal his  own  private  business  unnecessarily,  and  possibly  to 
his  prejudice  in  another  suit  then  pending.^'^'^  A  witness  may 
be  required  to  produce  books  of  account  and  other  papers  re- 
lating to  the  affairs  of  the  bankrupt/°^  But  a  person  is  not 
required  to  answer  an  irrelevant  question  not  relating  to  any 
matter  of  fact  in  issue  where  the  answer  would  tend  to  degrade 
him."== 

The  amendment  of  1903  provides  "  that  the  wife  may  be 
examined  only  touching  business  transacted  by  her  and  to 
which  she  is  a  party,  and  to  determine  the  fact  whether  she 
has  transacted  or  been  a  party  to  any  business  of  the  bank- 
rupt." '''^ 

Although  a  witness  is  required  to  disclose  all  matters  touch- 
ing the  trade,  property  and  conduct  of  a  bankrupt,  he  is  en- 
titled to  the  usual  privileges  and  exemptions  in  regard  to 
answering  questions."*  The  question  of  privilege  of  com- 
munications most  frequently  arises  with  reference  to  attorneys 
at  law.  A  person  who  claims  to  have  acted  as  counsel  for  a 
bankrupt  can  not.  on  that  ground,  refuse  to  be  sworn  as  a 
witness."^  The  privilege  can  not  be  interposed  until  a  ques- 
tion is  asked  which  invades  the  ])rivilege.  Tlic  privilege  of 
attorneys  extends  only  to  information  derived  from  their  clients 
as  such.  Information  derived  from  other  persons,  or  sources, 
although  derived  or  obtained  while  acting  as  attorney  is  not 
privileged.""  The  principle  of  the  rule  does  not  apply  to  the 
discovery  of  facts  within  the  knowledge  of  the  attorney,  which 

i'^/m  re  Trask,   No.    14141.    Fed.  ^''*  fn  re  Krciiscr,  No.  7942,  Fed. 

Cas.,   s.    c.   7   Ben.  60:   f>i    re   Dan-  Cas.,  s.  c.  2  Low.  182. 

forth,   No.  3560,   Fed.   Cas.,  s.  c.    i  i"'-  In   re   Woodward,    No.    17999, 

Pa.  Law  J.   148.  Fed.  Cas.,  s.  c.  4  Ben.  102. 

"»'  In    re    Fixcn    &    Co.,   96   Fed.  i""  People's    Bank   v.    Brown    (C. 

Rep.   748,  2  Am.   B.   R.  822;  In  re  C.  A.,  .vl   Cir.)    112  Fed.  Rep.  652. 

Carley,  106  Fed.  Rep.  862,  5  Am.  B.  7  Am.  B.  R.  475 ;  In  re  O'Donohoc, 

R-  554  No.  10435,  Ft-'d.  Cas.,  s.  c.  3   N.  B. 

i^^/m    re   Lewis,    No.    8312,    Fed.  R.  245;  In  re  Bellis,  No.  1274,  Fed. 

Cas.,  s.  c.  4  Ben.  67.  Cas.,  s.  c.  3  Ben.  386  (partial  report 

^03  B.     A.      1898.     Sec.     20a     as  only),  s.  c.  3  N.  B.  R.   199;  In  re 

amended    Feb.   5,    1903.   .32   Stat,   at  Aspinwall,  No.  591.  Fed.  Cas.,  s.  c. 

L.  797;  In  re  Foerst,  93  Fed.  Rep.  7  Ben.  433:   Spenceley  v.   Sclnilen- 

190,  I   Am.  B.  R.  259;  In  re  Wor-  berg,  7  East.  357. 
rell,  125  Fed.  Rep.  159. 


628  LAW     AND    I'KOrKKDINGS    IN    BANKRrPTCY. 

were  not  coninuuiicatcil  or  conruled  to  liini  by  his  client,  al- 
though he  became  acquainted  with  the  facts  while  engaged  in 
his  professional  duty  as  the  attorney  of  the  client.  Thus  he 
may  be  required  to  answer  ({uestions  in  regard  to  the  acts 
relating  to  a  conveyance  of  land  to  and  by  him/"^  or  the 
superintendence  of  an  auction  sale  of  a  stock  of  goods  and  the 
disposition  of  the  proceeds,"**  or  whether  he  drew  or  directed 
the  drawing  of  a  certain  deed,""  or  a  certain  declaration  of 
trust  between  the  bankrupt  and  certain  persons  named,""  or 
whether  at  a  certain  date  the  witness  received  any  checks  drawn 
to  the  order  of  the  bankrupt  by  a  certain  named  person  and 
what  disposition  was  made  of  such  checks  so  received,'""  or 
what  affairs  of  the  bankrupt  were  the  subject  of  conversation 
between  him  and  other  persons."" 

Where  a  witness  declines  to  testify  on  the  ground  of  privi- 
leged communication  it  is  for  the  court,  and  not  for  the  wit- 
ness, to  determine  wdiether  the  communication  is  privileged.^" 
For  this  purpose  the  w-itness  may  be  subjected  to  such  ques- 
tions as  may  be  necessary  to  enable  the  court  to  determine  the 
question, 

A  person  other  than  the  bankrupt  can  not  be  compelled  to 
give  testimony  which  may  tend  to  incriminate  him.'^' 

Evidence  taken  before  a  referee  in  bankruptcy  may  be  used 
in  civil  suits  jjcnding  in  either  state  or  federal  courts  for  the 
purpose  of  impeaching  a  witness.^^^ 

§  2ioa.     Examination    of    witnesses    residing    without     the 
district. 

A  witness,  who  resides  beyond  the  district  or  state^  and 
more  than  one  hundred  miles  from  the  court,  can  not  be 
compelled  to  appear  for  examination  before  a  referee  of  the 
court  in  which  bankruptcy  proceedings  are  pending.''"'  The 
examination  of  such  witnesses  may  be  by  deposition. 

if'/n    re    Bellis,    No.    1274,    Fed.  Ji"  People's   Bank  v.   Brown,    112 

Cas.,   s.   c.   3   Ben.  386    (partial   re-  Fed.  Rep.  652,  7  Am.  B.  R.  475- 

port  only),  s.  c.  3  N.  B.  R.  199-  '"  ^"  '"''  Smith.  7  Am.  B.  R.  213. 

108 /n    re   O'Donohoe,   No.    I0435,  "2  Fed.  Rep.  509. 

Fed.  Cas.,  s.  c.  3  N.  B.  R.  245.  "^Knowlton  v.  Mosely,  105  Mass. 

"»/m  re  Aspinwall,  No.  SQi,  Fed.  136. 

Cas.,  s.  c.  7  Ben.  433-  "''  ^-  ^-   '^'  ^^^-  4^'^- 


EXAMINATIONS.  629 

The  bankrupt  act  provides  that  the  right  to  take  depositions 
in  proceedings  under  this  act  shall  be  determined  and  enjoyed 
according  to  the  United  States  laws  now  in  force,  or  such  as 
may  be  hereafter  enacted  relating  to  the  taking  of  depositions, 
except  as  herein  provided."*  The  United  States  laws  make 
ample  provision  for  such  examinations.  Depositions  de  bene 
esse  may  be  taken,"^  or  a  dcdiuuis  potestatuui  or  a  commis- 
sion may  be  issued/^"  or  depositions  may  be  taken  under  the 
equity  rules."'  Ample  provision  is  made  for  the  issuance  of  a 
subpoena  by  the  clerk  of  any  court  of  the  United  States  where 
the  witnesses  reside,  to  take  the  testimony  of  such  absent  wit- 
nesses before  a  commissioner  appointed  by  the  court  where  the 
proceedings  are  pending  and  a  neglect  or  refusal  to  attend  or 
testify  can  be  enforced  l)y  the  jndge  of  the  court  which  issues 
the  subpoena."*^  A  subpoena  duces  tecum  may  be  had  and  en- 
forced in  such  an  examination.""  The  subpoena  may  run  to 
any  district  within  one  hundred  miles  of  the  place  of  holding 
court.'""* 

It  seems  therefore  that  a  court  having  charge  of  the  ad- 
ministration of  a  bankrupt's  assets,  may  order  that  any  person 
having  knowledge  "  concerning  the  acts,  conduct  or  property 
of  a  bankrupt,"  but  who  resides  beyond  the  district  or  state 
and  more  than  one  hundred  miles  from  the  court,  shall  be 
examined  before  a  commissioner  appointed  for  the  purpose.'"' 
Any  officer,  bankrupt  or  creditor  may  a])ply  to  the  court  ad- 
ministering the  bankrupt's  assets  for  an  order  to  take  the  depo- 
sitions of  a1)sent,  as  well  as  resident,  witnesses.'""  The  court 
will  then  make  an  order,  in  a  proper  case,  for  a  commission 
to  issue  to  a  referee  or  other  person  residing  in  the  same  dis- 
trict as  tlic  witnesses,  authorizing  liini  to  take  the  depositions. 
Notice  of  the  taking  of  the  depositions  must  be  filed  with  the 
referee  in  every  case.'"'  When  depositions  are  to  be  taken  in 
opposition   to  the  allr)wance  of  a  claim   notice  must  also  be 

i'«B.  A.  1898,  Sec.  2\b.  '-"  K.  S.  Sec.  876. 

"BR.  S.  Sec.  863.  121/,,  ,.f  Williams,  123  Fed.  Rep. 

""  R.  S.  Sec.  866.  321;    In    re    Carley,    106    Fed.    Rep. 
iM<.  S.  Sees.  862.  917;  Eq.  Rules      862,  5  Am.  B.  R.  554. 

67  and  71.  '2*B.      ,^.      1898,     Sec.     21a     as 

"^  R.  S.  Sec.  868.  amended  Feb.  5.  1903,  i2  Stat,  at  L. 

""R.   S.  Sees.  868,  869.  797- 


6^0  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

served  upon  the  claimant,  and  when  in  opposition  to  a  dis- 
charge notice  must  be  served  upon  the  bankrupt. '"•' 

If  the  witness  refuses  to  answer  a  ciuestion  the  judge  of  the 
bankruptcy  court  in  the  district  in  which  the  examination  is 
lieing  had  is  the  proper  person  to  whom  to  apply  to  compel  the 
witness  to  answer.^"* 

1^  2iob.     When  testimony  upon  an  examination  may  be  used. 

Testimony  taken  upon  the  examination  of  the  bankrupt  is 
taken  in  the  whole  pending  proceeding  and  may  be  introduced 
and  read  upon  the  hearing  of  a  petition  for  a  discharge. ^'"^ 
But  where  a  claimant  was  not  in  fact  a  party  and  could  not 
exercise  the  right  of  cross  examination  at  the  time  the  wit- 
nesses were  examined,  the  witnesses,  including  the  bankrupt, 
must  be  recalled  unless  the  party  consents  to  the  use  of  the 
testimony  as  it  appears  in  the  proceedings.^-** 

Evidence  taken  before  a  referee  in  bankruptcy  may  be  used 
in  civil  suits  pending  in  either  state  or  federal  courts  for  the 
purpose  of  impeaching  a  witness.  But  testimony  taken  in  one 
proceeding  can  not  be  used  as  evidence  in  another  proceeding 
except  by  the  consent  of  parties.^^^ 

123  B.  A.  1898,  Sec.  21c.  631,  5  Am.  p.  R.  434;  /«  re  Bard, 

12* /n    re    Carley,    106    Fed.    Rep.  108  Fed.  Rep.  208,  5  Am.  B.  R.  810. 

862,  5  Am.  B.   R.  554;  R.  S.  Sees.  ^-^  In    re    Keller,    109    Fed.    Rep. 

868,  869.  118,   6   Am.    B.   R.   334. 

125 /„    re    Wilcox    (C.    C.    A.,   2d  127 /„,.(,  Rosenberg,  116  Fed.  Rep. 

Cir.)    109  Fed.  Rep.  628,  6  Am.  B.  402,  8  Am.  B.  R.  624. 

R.  362;  In  re  Cooke,  109  Fed.  Rep. 


THE    BANKRUPT DUTIES,    PROTECTIOX,    ETC.  63 1 


CHAPTER  XX. 

THE  BANKRUPT— DUTIES,  PROTECTION  AND  EXTRADITION. 

§211.     Who  is  a  bankrupt. 

The  word  ' '  bankrupt ' '  as  used  in  the  bankrupt  act  is  de- 
lined  to  "  inchide  a  person  against  whom  an  involuntary  peti- 
tion or  an  application  to  set  a  composition  aside  or  to  revoke 
a  discharge  has  been  filed,  or  who  has  filed  a  voluntary  peti- 
tion, or  who  has  been  adjudged  a  bankrupt."  ^ 

§  212.     His  duty  to  attend  meetings. 

The  bankrupt  must  attend  the  first  meeting  of  his  cred- 
itors, if  directed  by  the  court,  or  a  judge  thereof,  to  do  so.* 
But  he  is  not  required  to  attend  the  first  or  any  subsequent 
meeting'  of  his  creditors  unless  specially  ordered  to  do  so. 
And  in  no  case  can  he  be  required  to  attend  such  meeting  at 
a  place  more  than  one  hundred  and  fifty  miles  distant  from 
his  home  or  principal  place  of  business.'  The  bankrupt  is 
entitled  to  his  actual  expenses  from  the  estate  when  required 
to  attend  at  any  place  other  than  the  city,  town,  or  village 
of  his  residence.'*  i^)Ut  he  can  not  ])e  allowed  illegitimate  ex- 
penses,  for  gambling-  and  traxcling  expenses.'' 

It  is  the  duty  of  the  l)ankrui)t  to  attend  the  hearing  upon 
his  application  ff)r  a  discharge,  if  filed,  without  an  order  of 
court,  or  service  of  notice,  or  process."  He  can  not  object  to 
attending  on  acconnt  df  the  distance,  where  the  hearing  is  at 
the  regular  place  of  holding  court. 

S   213.     Duty  to  comply  with  the  orders  of  the  court. 

It  is  expressly  made  the  dnty  ot'  the  bankrupt  lo  eomi)ly 
with   all   lawful   orders   of  the   ccnnl.'      The  courts   of   bank- 

1  B.  A.   1898,  See.  I,  clause  4.  ^'Jn  ir  'liulnr,   100  Ind.  Ri-p.  796, 

'■'B.  A.   1898,  Sec.  7,  clause   i\  In  4  Am.   P..  K.  78;  In  re  Wilson,   116 

re  Eagles,  99  F.  695,  3  Am.    1'..   K.  I'ed.  Kcp.  419,  8  .\m.  P>.  R.  612. 

733-  "  15.   A.    1898,   Sec.   7,  clause   i. 

•"•  See  in  re  Dumahaiif,   Xfi.  4124,  ^  B.    .'\.    1898,    Sec.    7,    clause    2. 

Fed.  Cas.,  s.  c.  15   Blatch.  20.  Compare   R.    S.   Sec.   5104. 

••  B.     .'\.     1898,     Sec.     7     (proviso 
clause). 


632  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

riiptcy  are  eiiiix)\vered  to  enforce  obedience  by  bankrupts  to 
such  orders  by  tine  or  imprisonment  or  by  tine  and  imprison- 
ment.^ 

An  order  of  court  "  does  not  mean  a  written  order  always, 
but  only  an  exercise  of  authority  constituting  a  require- 
ment." "  Where  an  order  has  actually  been  made  by  the  court 
including  a  referee  ^"  it  is  binding  upon  the  bankrupt  until  it 
is  set  aside  or  reversed,  even  though  the  court  making  it  is 
without  jurisdiction.'^  It  is  not  for  the  bankrupt  to  decide 
whether  the  order  is  lawful  or  not  and  then  act  according  to 
his  own  decision. '■  or  under  the  advice  of  counsel.'^  Where 
a  bankrupt  has  used  due  diligence  to  comply  with  an  order  of 
court  he  is  not  guilty  of  contempt.'* 

A  person  is  subject  to  the  orders  of  a  court  of  bankruptcy 
whenever  he  has  been  duly  served  with  process  or  a  legal 
notice,  or  whenever  he  has  voluntarily  submitted  himself  to 
the  jurisdiction  of  the  bankruptcy  court.  This  he  may  do  by 
filing  a  petition  '^  or  by  proving*  a  debt  ^°  or  by  entering  a  volun- 
tary appearance." 

The  statute  ex])ressly  authorizes  a  court  of  bankruptcy  to 
make  the  order  adjudging  a  person  to  be  a  bankrupt;"  to 
direct  him  to  attend  meetings  of  creditors  '"  and  to  examine 
claims,""  to  execute  papers."'  or  order  him  to  be  arrested  and 
kept  in  custody.^"  or  to  appear  for  examination ;  ^^  and  gener- 
ally to  make  such  orders,  issue  such  process,  and  enter  such 

8  B.    A.    1898,    Sec.    2,    clause    13.  i*  In  re  Carpenter,  No.  2427,  Fed. 

See    Contempt,    Chap.    XXII.  Cas.,  s.  c.  i  N.  B.  R.  299. 

"  Bridges  v.  Slieldon,  7  Fed.  Rep.  ^•'''  In  re  Harris,  3  N.  Y.  Leg.  Ob.s. 

45-  152. 

"'B.  A.  1898,  Sec.  i;  clause  7,  and  i" /n    re    Kyler,    No.    7956,    Fed. 

Sec.  41.  Cas.,  s.  c.  2  Ben.  414. 

11  See  Worden  v.  Searles,  121  U.  "^"^  In   re   Ulrick,   No.    14327,   Fed. 

S.    14;    In    re  Eaton,   51    Fed.   Rep.  Cas.,  s.  c.  3  Ben.  355;  In  re  Kirt- 

804.  land.   No.   7851,  Fed.   Cas.,  s,  c.   10 

1-  See    Atlantic    Co.    v.    Dittman  Blatch.  515. 

Co.,  9  Fed.  Rep.  317.  1*  B.  A.  1898,  Sec.  2,  clause  i. 

'•■'  Burr  V.  Kimback,  29  Fed.  Rep.  i"  B.  A.   1898,  Sec.  7,  clause  i. 

432;  U.  S.  V.  Memphis,  etc.,  R.   R.  20  b.  A.  1898,  Sec.  7  (next  to  last 

Co.,  6  Fed.  Rep.  238;  Goodyear  v.  clause). 

Muller,  No.  5577,  Fed.  Cas.,  s.  c.  5  21  r    \    jggg^  Sec.  7,  clause  4. 

Blatch.    429;    Ulman    v.    Ritter,    72  22  b.  A.  1898,  Sec.  9. 
Fed.   Rep.    1000;    Societe  v.    Distill- 
ing Co.,  42  Fed.  Rep.  96. 


THE    BANKRUPT DUTIES,    PROTECTION,    ETC.  633 

judgments  in  addition  to  those  specifically  provided  for  as 
may  be  necessary  for  the  enforcement  of  the  provisions  of 
the  act.-^  Thus  the  court  may  order  a  bankrupt  to  deliver  to 
tlie  trustee  money  or  other  property,  which  is  properly  a  part 
of  his  assets  and  apparently  in  his  possession.-^  The  differ- 
ent lawful  orders  which  a  court  of  bankruptcy  may  make 
with  reference  to  the  bankrupt  are  much  too  numerous  to  be 
collated  at  this  point,  even  if  it  were  possible  to  do  so.  When 
such  an  order  is  made  it  is  the.duty  of  the  bankrupt  to  comply 
with  its  terms. 

§   214.     Duty  with  respect  to  claims  against  his  estate. 

It  is  made  the  duty  of  a  bankrupt  to  examine  the  correct- 
ness of  all  proofs  of  claims  filed  against  his  estate."*'  But  he 
can  not  be  required  to  examine  them  except  when  presented 
to  him.  unless  ordered  by  the  court,  or  a  judge  thereof,  for 
cause  shown. -^  In  case  any  person  has  to  his  knowledge 
proved  a  false  claim  against  his  estate  it  is  his  duty  to  dis- 
close that  fact  immediately  to  his  trustee.-**  In  fact,  it  is  his 
duty  immediately  to  inform  his  trustee  of  any  attempt,  by  his 
creditors  or  other  persons,  to  evade  the  provisions  of  the  act, 
coming  tf)  his  knowledge.^® 

§   215.     Duty  to  execute  papers. 

It  is  tile  duty  (ji  the  bankrupt  to  execute  and  deliver  such 
papers  as  may  be  ordered  by  the  court.''"  Under  this  j^rovi- 
sion  the  cf)urt  may  order  the  bankrupt  to  execute  and  deliver 
to  the  trustee  the  proper  ])apers,  to  enable  him  to  prosecute 
or  defend  suits  pending  in  the  state  courts,  in  his  own  nam** 

2-'B.    A.    1898,    Sec.    7,    clause   9,  C  A.,  5th   Cir.)   96  Fed.   Rep.   192, 

and   Sec.  2ifl.  2  Am.  R.  R.  787;  In  re  Felson,  124 

2*  P..  A.   1898,  Sec.  2,  clause   15.  Fed.   Rep,  2SS. 

26/,,    re    Rosser    (C.    C.    A.,   8th  20  b.   A.   1808,  Sec.  7,  clause  3. 

rir. )    loi   Fed.  Rep.  562.  4  Am.  B.  273.  A.  1898,  Sec.  7   (last  clause 

R.    153;    Ripon    Knittinp    Wks.    v  but  one). 

Schreibcr,  loi  F"cd.  Rep.  810,  4  Am.  2s  p>    a^    jg^   j^^^.  ^^  clause  7;  In 

B.  R.  299:  In  re  .SchlesinRcr  (C.  C.  re    Ankeny.    100    I'"ed.    Rep.    614,    4 

A..   2d   Cir.)    102  Fed.    Rep.    117,  4  Am.  B.  R.  72. 

Am.   B.   R.  361:  /"  re  Wilson,   116  -"  B.    A.    1898.    Sec.    7,    clause   6. 

Fed.  Rep.  419,  8  Am.  B.  R.  612;  /«  •■"•  B.    A.    i8t>8.    Sec.    7,    clause   4. 

re  Greenberp,   to6  Fed.   Rep.  496.  5  Compnrr    R.    S.    Sec.    5051. 
Am.   B.   R.  840;  In  re  Purvine   (C. 


634  LAW    AND    PROCEEDIiNGS    IN    BAxXKRUPTCY. 

ill  the  same  manner  and  witli  the  like  effect  as  they  might 
have  been  prosecuted  or  defended  by  the  bankrupt.^^ 

As  the  bankrupt  statute  has  no  extra-territorial  effect,  real 
estate  situated  in  a  foreign  country  does  not  vest  in  the  trus- 
tee by  virtue  of  the  act.""^*  It  is  therefore  made  the  duty  of 
the  bankrupt  to  execute  to  his  trustee  transfers  of  all  of  his 
property  in  foreign  countries."''^ 

§  216.     Duty  to  prepare  a  schedule  of  his  debts  and  assets. 

For  the  purpose  of  advising  the  court,  its  officers  and  per- 
sons interested  in  his  estate,  the  bankrupt  is  required  to  file 
a  statement  of  his  financial  condition.  The  act  makes  it  his 
duty  to  "  prepare,  make  oath  to,  and  file  in  court  within  ten 
days,  unless  further  time  is  granted,  after  the  adjudication, 
if  an  involuntary  bankrupt,  and  with  the  petition  if  a  volun- 
tary bankrupt,  a  schedule  of  his  property,  showing  the  amount 
and  kind  of  property,  the  location  thereof,  its  money  value  in 
detail,  and  a  list  of  his  creditors,  showing  their  residences,  if 
known,  if  unknown,  that  fact  to  be  stated,  the  amounts  due 
each  of  them,  the  consideration  thereof,  the  security  held  by 
them,  if  any,  and  a  claim  for  such  exemptions  as  he  may  be 
entitled  to,  all  in  triplicate,  one  copy  of  each  for  the  clerk,  one 
for  the  referee,  and  one  for  the  trustee."  ^* 

The  requisites  of  a  schedule  are  further  considered  in  con- 
nection with  the  proceedings  in  voluntary  and  involuntary 
bankruptcy.  ^^ 

§  217.     Duty  to  submit  to  an  examination. 

It  is  made  the  duty  of  the  bankrupt,  when  present  at  the 
first  meeting  of  his  creditors,  and  at  such  other  times  as  the 
court  shall  order,  to  submit  to  an  examination  concerning  the 
conducting  of  his  business,  the  cause  of  his  bankruptcy,  his 
dealings   with  his  creditors  and   other   persons,   the  amount, 

31  See  in  re  Clark,  No.  2798,  Fed.  3*  b.  A.  1898,  Sec.  7,  clause  8. 

Cas.,  s.  c.  4  Ben.  88;  Clark  v.  Bin-  ^^In  voluntary  bankruptcy,  Chap, 

ninger,   39  How.    Prac.   363;    Sam-  IX,  a«/r;  in  involuntary  bankruptcy, 

son  V.  Burton,  No.  12285,  Fed.  Cas.,  Chap.    X,    ante;    in    bankruptcy    of 

s.   c.   5   Ben.   325.  partnership,    Chap.    XI,    ante.      See 

^2  Okey  V.   Bennett,   11   How.  33;  also  in  re  Soper,  i  Am.  B.  R.  193; 

Barnett  v.  Poole,  23  Texas,  517.  Gen.  Ords.   V   and  IX. 

83  B.  A.   1898,  Sec.  7,  clause  5. 


THE    BANKRUPT DUTIES,    PROTECTION,    ETC.  635 

kind  and  whereabouts  of  his  property,  and,  in  addition,  all 
matters  which  may  affect  the  administration  and  settlement  of 
his  estate;  but  no  testimony  given  by  him  shall  be  offered  in 
evidence  against  him  in  any  criminal  proceeding.^^  This  sub- 
ject is  further  considered  in  another  place.^^ 

§   218.     Protection  from  arrest. 

A  bankrupt  is  exempt  from  arrest  upon  civil  process  ex- 
cept in  the  following  cases :  First,  when  issued  from  a  court 
of  bankruptcy  for  contempt  or  disobedience  of  its  lawful  or- 
ders; second,  when  issued  from  a  state  court  having  jurisdic- 
tion, and  served  within  such  state,  upon  a  debt  or  claim  from 
which  his  discharge  in  bankruptcy  would  not  be  a  release; 
and  in  such  case  he  shall  be  exempt  from  such  arrest  when  in 
attendance  upon  a  court  of  bankruptcy  or  engaged  in  the  per- 
formance of  a  duty  imposed  by  the  act.^* 

The  object  of  this  provision  is  obviously  to  protect  a  bank- 
rupt from  arrest  in  a  suit  founded  on  a  debt  from  which  a 
discharge  in  bankruptcy  will  l)e  a  release.^"  A  court  of  bank- 
ruptcy has  no  power  to  cause  the  arrest  of  a  bankrupt  for  debt, 
A  state  court  can  cause  the  arrest  of  a  bankrupt  only  on  judg- 
ments not  affected  by  bankruptcy  proceedings,  when  such  ar- 
rest is  permitted  by  laws  of  the  state  where  the  process  is 

««  B.  A.   1898,  Sec.  7,  clause  9.  from  which  the  language  of  general 

8T  Sec   Examination  of  the  Bank-  order  30  is  evidently  taken.     In  re 

rupt,  Chap.  XIX,  ante.  Glaser,  No.  5474,  Fed.  Cas.,  s.  c.  2 

3»  B.  A.   1898,  Sec.  90,  Gen.  Ord.  Ben.  180,  it  was  held  that  the  pro- 

30.    Compare  R.  S.  Sec.  5107.    In  re  visions  of  general   order  27,  so  far 

Dresser,    124  Fed.   Rep.  915;   In   re  as    they     authorize    the    discharge, 

Lewensohn,  99  Fed.  7;^,  affirmed  in  from  arrest  or  imprisonment,  of  a 

104  Fed.  Rep.  1006,  44  C.  C.  A.  309-  bankrupt       arrested       on       process 

3«  Gen.  Ord.  30  provides  for  the  foundcfl  on  a  claim  provable  in 
release  if  a  debtor  is  committed  bankruptcy,  where  the  claim  was 
after  the  filing  of  his  petition  upon  one  from  which  his  discharge  in 
process  in  any  civil  action  founded  bankruptcy  will  not  release  him, 
upon  a  claim  provable  in  bank-  were  not  warranted  by  the  bank- 
ruptcy.  It  is  clear  that  claims  may  ruptcy  act  of  1867. 
be  provable  in  bankruptcy  which  That  the  bankrupt  can  not  be  re- 
are  not  released  by  discharge.  In  leased  from  iinprisonment  if  the  ar- 
this  respect  the  general  order  must  rest  is  based  upon  any  debt  from 
give  way  to  the  terms  of  the  statute.  which  a  discharge  would  not  be  a 
This  was  the  interpretation  of  gen-  release,  consult  in  re  Kimball,  No. 
eral  order  27  under  the  act  of  1867,  7767.  Fed.  Cas.,  s.  c.  2  Ben.  38;  In 


636  LAW    AND    PROCEliDINGS    IN    BANKRUPTCY. 

issued  and  served.*"  In  such  cases  he  is  exempt  from  such 
arrest  when  in  attendance  upon  a  court  of  bankruptcy  or  en- 
gaged in  the  performance  of  duty  imposed  by  the  bankruptcy 
act.  A  bankrupt  is  not  protected  from  arrest  on  execution  on  a 
judgment  for  costs  rendered  against  him  in  a  state  court  after 
adjudication  in  bankruptcy.*^ 

The  protection  of  a  debtor  from  arrest  upon  civil  process 
is  co-extensive,  in  point  of  time,  with  the  proceedings  in  bank- 
ruptcy. The  exemption  is  Hmited  to  bankrupts.  The  pro- 
tection Ijegins  as  soon  as  the  debtor  is  deemed  bankrupt  under 
the  statute.  The  act  itself  defines  the  word  "bankrupt"  to 
"  include  a  person  against  whom  an  involuntary  petition  or  an 
application  to  set  a  composition  aside  or  to  revoke  a  discharge 
has  been  filed,  or  who  has  filed  a  voluntary  petition,  or  who 
has  been  adjudged  a  bankrupt."  *'  It  is  therefore  clear  thar 
it  is  not  necessary  that  the  debtor  shall  have  been  adjudged  a 
bankrupt.  The  protection  from  arrest  begins  immediately 
upon  filing  a  petition,  either  in  voluntary  or  involuntary  bank- 
ruptcy. It  extends  during  the  whole  period  of  the  pendency 
of  the  proceedings  in  bankruptcy.*^  The  debtor  is  not  en- 
titled to  protection  from  arrest,  or  to  relief  if  arrested,  by 
virtue  of  the  provision  quoted  above,  after  the  termination  of 
the  proceedings  for  discharge.** 

The  protection  of  a  bankrupt  is  expressly  stated  to  be  an 
exemption  from  arrest  upon  civil  process.  The  exemption  ex- 
tends to  arrests  upon  any  civil  process.  There  is  no  distin:- 
tion  between  an  arrest  on  mesne  and  final  process.*^     But  there 

re  Whitehouse,  No.  17564,  Fed.  Cas.,  907,  6  Am.  B.  R.  80;  In  re  Marcus, 

s.  c.  I  Low.  429;  In  re  Migel,  No.  (C.  C.  A.,  ist  Cir.)    105  Fed.  Rep. 

9538,    Fed.    Cas.,   s.   c.   2   N.    B.    R.  907,  5  Am.  B.  R.  365. 

481;  In  re  Kimball,  No.  7769  Fed.  *^  In   re    Marcus    (C.    C.    A.,    ist 

Cas.,   s.  c.  6  Blatch.  292,  affirming  Cir.)    105  Fed.  Rep.  907,  5  Am.  B. 

No.  7768,  Fed.  Cas.,  s.  c.  2  Ben.  554 ;  R.  365. 

In  re  Seymour,  No.  12684,  Fed.  Cas.,  *•  B.  A.  1898,  Sec.  i,  clause  4. 

s.   c.    I    Ben.   348;    In    re   Robinson,  *^  In  re  Lewensohn,  99  Fed.  Rep. 

No.  1 1939,  Fed.  Cas.,  s.  c.  6  Blatch.  -ji;    affirmed,    104    Fed.    Rep.    1006, 

253;    In    re    Patterson,    No.    10817,  44    C.    C.    A.    309. 

Fed.   Cas.,  s.   c.  2  Ben.   155;  In  re  **In  re   Kimball,   No.  7768,  Fed. 

Williams,  No.  17700,  Fed.  Cas.,  s.  c.  Cas.,  s.  c.  2  Ben.  554,  6  Blatch.  292; 

2  Biss.  233.  see  also  in  re  Dole,  No.  3964,  Fed. 

*o  Knott  V.  Putnam.  107  Fed.  Rep.  Cas.,  s.  c.  11  Blatch.  499. 


THE    BANKRUPT DUTIES.    PROTECTION,    ETC.  637 

is  nothing  in  the  statute  to  prevent  a  bankrupt  being  arrested 
and  imprisoned  upon  criminal  process.*® 

The  protection  afforded  a  bankrupt,  by  section  9  of  the 
act,  does  not  apply,  where  the  arrest  was  made  prior  to  the 
commencement  of  the  bankruptcy  proceedings,  although  he 
may  be  in  custody,  or  in  prison  after  the  petition  is  filed. *^ 
It  is  a  bankrupt,  and  not  a  debtor,  who  is  exempt  from  arrest. 
The  bankrupt  is  exempt  from  arrest  only  and  not  from  im- 
prisonment. Section  9.  therefore,  does  not  authorize  a  court 
of  bankruptcy  to  release  a  bankrupt  from  custody  or  imprison- 
ment where  he  was  arrested  prior  to  the  filing  of  the  petition.^' 
Where  the  arrest  is  made  after  the  petition  is  filed,  the  court 
may  release  him  on  a  writ  of  habeas  corpus.*'^  A  bankrupt  out 
on  bail  is  deemed  under  arrest,  to  all  intents  and  purposes, 
the  same  as  if  he  had  not  been  released  upon  bail.*''  He  may 
be  surrendered  to  the  jailor  by  his  bail.  A  court  of  bank- 
ruptcy can  not,  in  such  case,  order  his  release.  So  akso  the 
restoring  a  debtor  to  confinement,  from  which  he  had  obtained 
a  temporary  relief,  ])en(ling  an  ai)peal,  is  not  an  arrest  within 
the  meaning  of  the  clause  under  consideration.^"  And  a  jailor 
has  the  right  to  pursue  a  bankrupt,  who  has  escaped,  and 
retake  him.  Such  a  person  is  still,  in  law,  and  for  the  benefit 
of  the  jailor,  considered  to  l)e  in  custody. ^^ 


*^  In  re  Wiggers,  No.  17623,  Fed.  Bank  v.  Hatch,  57  N.  H.  460;  Hus- 

Cas.,  s.  c.  2  Biss.  71 ;  In  re  Mifflin,  sey  v.  Danfortli,  yy  Me.  17. 

I    Penn.   Law  Jour.   146.  *'*  Sec.  220,  t^ost. 

*' Sec   Stockwcll    V.   Silloway,    105  ■•"/;;    re    Cheney,    No.    2636,    Fed 

Mass.  517.  Cas.,  s.  c.  5  Law   Rep.   19;  Hazle- 

*''  In   re  Claiborne,   109  I'\d.   Rep.  ton    v.    Valentine,    No.    6287,    Fed. 

74,  5  Am.  B.  R.  812;  In  re  Walker,  Cas.,  s.  c.  i  Low.  270;  In  re  Rank, 

No.    17060,   Fed.  Cas.,  s.  c.   i   Low.  No.    11566,   Fed.  Cas.,  s.  c.   Crabbe, 

222;    Hazleton    v.    Valentine,    No.  493;     Stockwell     v.     Silloway,     100 

6287,   Fed.   Cas.,  s.  c.    I   Low.  270;  Mass.  287.     But  see  Foxall  v.  Levi, 

Minon   v.   Van   Nostrand,  No.  9642,  No.  5015,  Fed.  Cas.,  s.  c.  i  Cranch, 

Fed.  Cas.,  s.  c.  i  Low.  458,  affirmed  C.    C.    139;   Lingan    v.    Bayley,    No. 

in  No.  9641,  Fed.  Cas.,  s.  c.  Holmes,  8370,   Fed.   Cas.,  s.   c.    i   Cranch,   C. 

251;  In   re  Cheney,  No.  2636,  Fed.  C.  112. 

Cas.,   s.    c.    5    Law    Rep.    19;   In    re  '■•"Stockwell      v.      Silloway,      100 

Rank,    No.    11566,    Fed.    Cas.,   s.    c.  Mass.  287. 

Crabbe,    493;    /"    re    Hoskins,    No.  '•'  Aiulcrsoii   v.    Ilrunpton,   i   B.   & 

6712,   Fed.   Cas.,   s.  c.   Crabbe,  466;  Aid.  308. 


638  LAW    AXl)    PROCEEDINGS    IN    BANKRUPTCY. 

§   219.     When  a  bankrupt  may  be  arrested. 

A  bankrupt  may  be  arrested  upon  a  criminal  process  issued 
from  a  court  of  bankruptcy,  or  other  court  of  the  United  States, 
or  a  state  court.  His  exemption  is  Hmited  to  arrests  on  civil 
process/"  Power  is  expressly  conferred  upon  the  courts  of 
bankruptcy.^^  and  the  circuit  courts,^*  to  arraign,  try,  and  pun- 
ish bankrupts  for  violations  of  the  bankrupt  statute.  There 
is  no  limitation  or  restriction  upon  state  courts  with  respect 
to  arrests  or  punishment  of  bankrupts  convicted  of  crimes  or 
misdemeanors  under  the  state  laws.^^ 

A  bankrupt  may  be  arrested  upon  civil  process,  either  mesne 
or  final,  in  three  classes  of  cases. 

First:  For  Contempt. —  A  bankrupt  may  be  arrested 
upon  civil  process,  when  issued  from  a  court  of  bankruptcy, 
for  contempt  or  disobedience  of  its  lawful  orders.*'"  This  in- 
cludes contempts  committed  before  a  referee  and  the  disobe- 
dience of  a  lawful  order,  process,  or  writ  of  a  referee."^  The 
power  to  enforce  obedience  by  bankrupts  to  all  lawful  orders, 
by  fine  or  imprisonment,  or  by  fine  and  imprisonment,  is  ex- 
pressly conferred  upon  courts  of  bankruptcy.®^  Thus,  the  bank- 
rupt is  brought,  at  all  times,  within  the  control  and  disposition 
of  the  court. 

Second  :  Upon  a  Debt  not  Released  by  a  Discharge. — 
A  bankrupt  may  be  arrested  upon  civil  process,  issued  from 
a  state  court  having  jurisdiction,  and  served  within  such  state, 
upon  a  debt  or  claim  from  which  his  discharge  in  bankruptcy 
would  not  be  a  release,  and  in  such  case  he  is  exempt  from  such 
arrest  when  in  attendance  upon  a  court  of  bankruptcy  or  en- 
gaged in  the  performance  of  a  duty  imposed  by  the  act.*'^     Such 


^'^  B.  A.    1898,  Sec.  9.  defined     to     "'  mean    the    court    of 

^^  B.    A.    1898,    Sec.    2,    clause   4,  bankruptcy    in    which    the   proceed- 

and  Sec.  29.  ings  are  pending,  and  may  include 

5*B.   A.   1898,   Sec.   23c.  the    referee."      B.    A.    1898,    Sec.    i, 

55  See   Stockwell  v.   Silloway,  105  clause  7. 

Mass.  517.  "-  B.   A.    1898,   Sec.  2,  clauses   13 

COB.  A.   1898,   Sec.   ga.  and  16. 

«iB.  A.   1898,   Sec.  41a,  and   Sec.  '=•' B.  A.  1898,  Sec.  ga;  In  re  Mar- 

2,  clause    16.  cus    (C.  C.   .\.,    ist  Cir.),   105  Fed. 

"  Its  "    equals    "  court's  "    and    is  Rep.  907,  5  Am.  B.  R.  365. 


THE    BANKRUPT DUTIES.    PROTECTION      ETC.  639 

arrests  can  be  made  only  in  states  where  such  proceedings  are 
authorized  by  the  state  law. 

In  order  that  a  bankrupt  may  be  arrested  on  civil  process 
issued  by  a  state  court,  first,  it  must  be  served  within  the 
state  in  which  the  court  issuing  it  is  held;  and,  second,  the 
suit  must  be  founded  upon  a  debt  or  claim  from  which  a  dis- 
charge in  bankruptcy  will  not  release  him.  The  statute  pro- 
vides ®*  that  "  a  discharge  in  bankruptcy  shall  release  a  bank- 
rupt from  all  of  his  provable  debts,"^  except  such  as.  first,  are 
due  as  a  tax  levied  by  the  United  States,  the  state,  county, 
district,  or  municipality  in  which  he  resides;  second,  are  judg- 
ments in  actions  for  frauds,  or  obtaining  property  by  false 
pretenses,  or  false  representations,  or  for  willful  and  malici(3us 
injuries  to  the  person  or  property  of  another ;  third,  have  not 
been  duly  scheduled  in  time  for  proof  and  allowance,  with  the 
name  of  the  creditor,  if  known  to  the  bankrupt,  unless  such 
creditor  had  notice  or  actual  knowledge  of  the  proceedings  in 
bankruptcy;  or.  fourth,  were  created  by  his  fraud,  embezzle- 
ment, misappropriation,  or  defalcation  while  acting  as  an 
officer  or  in  any  fiduciary  capacity." 

Where  the  debt  is  one  from  which  a  discharge  will  not  re- 
lease the  bankrupt,  and  the  process  is  served  within  the  state 
in  which  the  court  is  held,  he  can  not  be  relieved  by  a  court  of 
bankruptcy."^  This  rule  is  subject  to  an  important  exception, 
namely,  that  a  bankrupt  can  not  be  arrested  when  in  attend- 
ance upon  a  court  of  bankruptcy,  or  engaged  in  the  perform- 
ance of  a  duty  imposed  l)y  the  act."     This  exemption  is  not 


«*B.  A.  1898,  Sec.  17.  What  debts  s.  c.  2  Ben.  38;  In  re  Seymour,  No. 

are  not  discharged  are  further  con-  12684,   Fed.  Cas.,  s.  c.   i   Ben.  348; 

sidered  in  another  place.    See  Sees.  In    re    Patterson,    No.    10817,    Fed. 

288,   et   seq.,  post.  Cas.,  s.  c.  2  Ben.  15S;  /«  re  Pettis, 

«6  As  to  what  debts  arc  prnvabie,  No.    11046,   Fed.   Cas.,   s.  c.   7  Am. 

see  Chap.  XIII.  Law    Reg.   695;    Harter  v.   Harlan, 

68 /n   re    Marcus    (C.    C.    A.,    1st  2  N.  B.  R.  238;  In  re  Devoe,  No. 

Cir.)    105  Fed.  Rep.  907,  5  Am.  B.  3843,   Fed.   Cas.,  s.  c.   i   Low.  251; 

R.  36s;  In  re  Freche,  109  Fed.  Rep.  In  re  Alsberg,   No.  261,  Fed.  Cas., 

620,  6  Am.  B.  R.  479;  In  re  Glaser,  s.  c.  16  N.  B.  R.  116. 
No.  5474.  Fed.  Cas..  s.  c.  2  Ben.  180;  "  B.  A.  1898,  Sec.  9a,  clause  2. 

In  re  Kimball,  No.  7767,  Fed.  Cas., 


640  LAW    AND    I'kOCEEDINGS    IN    BANKRIPTCY. 

restricted  to  jiarticular  occasions  wlien  the  bankrupt's  physical 
attendance  in  court  is  required,  or  he  is  actually  engaged  upon 
some  required  duty  and  the  court  may  release  him  from  arrest 
upon  his  furnishing  bond  to  obey  the  orders  of  the  court  and 
not  depart  from  the  jurisdiction  during  the  continuance  of  such 
exemption.'^'* 

Third:  For  an  Examination. —  A  bankrupt  may  be  ar- 
rested, under  certain  circumstances,  and  held  in  custody  for 
purposes  of  examination.  The  statute  provides  "  the  judge 
may  at  any  time  after  the  filing  of  a  petition  by  or  against  a 
person,  and  before  the  expiration  of  one  month  after  the 
qualification  of  the  trustee,  upon  satisfactory  proof  by  the  affi- 
davits of  at  least  two  persons  that  such  bankrupt  is  about 
to  leave  the  district  in  which  he  resides  or  has  his  principal 
place  of  business  to  avoid  examination,  and  that  his  departure 
will  defeat  the  proceedings  in  bankruptcy,  issue  a  warrant  to 
the  marshal,  directing  him  to  bring  such  bankrupt  forthwith 
before  the  court  for  examination."  ^^ 

It  will  be  observed  that  this  provision  providing  for  the 
arrest  and  detention  of  a  bankrupt  is  quite  limited.  There  is 
no  j)rovision  for  the  seizure  of  property.  The  bankrupt  can 
only  be  arrested  when  he  is  about  to  leave  the  district  to  avoid 
an  examination  and  thereby  defeat  the  proceedings.  It  has 
been  held  that  an  order  can  not  be  made  after  the  bankrupt  has 
actually  fled  from  the  district  as  a  ground  for  an  order  of 
extradition.'^"  If  he  is  about  to  depart  for  other  purposes, 
such  as  to  better  his  condition,  it  would  seem  that  this  provision 
would  not  apply  to  him.  The  warrant  must  be  issued  within 
one  month  after  the  qualification  of  the  trustee.  He  can  not 
be  held  in  custody  more  than  ten  days,  and  can  not  be  impris- 
oned during  that  period. 


«"  In    re   Dresser,    124   Fed.    Rep.  «"  B.  A.  1898,  Sec.  gb.     Compare 

915 ;  In  re  Lewensohn,  99  Fed.  Rep.      R.  S.  Sec.  5024. 
73,  affirmed   104  Fed.  Rep.    1004,  44  '"  In    re   Ha.ssenbusch    (C.    C.    A., 

C.  C.  A.  309.  6th  Cir.)   108  Fed.  Rep.  35,  47  C.  C. 

A.   177. 


THE    BANKRUPT DUTIES,    PROTECTION,    ETC.  64I 

Proceedings  for  a  warrant  are  properly  instituted  by  a  pe- 
tition or  motion  supported  by  affidavits  or  depositions  of  at 
least  two  persons.  The  prayer  should  not  be  included  in 
the  petition  in  bankruptcy,  but  should  be  a  separate  motion 
or  petition.^  The  affidavits  or  depositions  should  show  the 
facts,  and  not  mere  opinions  or  belief  of  the  affiants  or  depo- 
nents. The  material  facts  should  be  stated  upon  personal 
knowledge,  and  not  upon  information  and  belief.^ 

Satisfactory  proof  of  this  character  must  be  introduced  to 
show,  first,  that  the  bankrupt  is  about  to  leave  the  district 
in  which  he  resides  or  has  his  principal  place  of  business ;  ^ 
second,  that  he  is  leaving  the  district  to  avoid  examination ; 
and,  third,  that  his  departure  will  defeat  the  proceedings  in 
bankruptcy. 

The  court  will  probably  admit  counter  affidavits  to  be  filed 
by  tlie  bankrupt,  if  he  desires  to  take  issue  with  the  peti- 
tioning creditors.  This  was  manifestly  the  intent  of  con- 
gress. It  is  provided  that  the  warrant  issue  only  "  upon  sat- 
isfactory proof."  and  also  "  if  upon  hearing  the  evidence  of 
the  parties  it  shall  appear  to  tlie  court  or  judge  thereof  that 
the  allegations  are  true,  and  that  it  is  necessary,  lie  shall  or- 
der the  marshal."  etc.  This  implies  that  evidences  may  be 
introduced  by  both  parties,  and  that  a  hearing  shall  l)c  had. 
The  intent  of  congress,  with  reference  to  the  arrest  and  de- 
tention of  a  bankrupt,  as  gathered  from  the  whole  provision, 
is  not  to  ])ermit  persecution  of  the  bankru])t  or  a  detention 
for  an  unreasonable  time,  nor  an  arrest,  unless  the  ])roof 
shows  conclusively  the  tliree  elements  mentioned  above.  At 
least  a  bankrupt  is  entitled  to  a  licaring  before  lie  is  ordered 
to  be  kept  in  custody. 


'  In   re   McKibben,  No.  8859,   Fed.  •''  As  to  the  meaning  of  the  words 

Cas.,  s.  c.  12  N.  B.  R.  97  ;/>!  rr  Had-  "about    to    leave,"    consult    Jackson 

ley,  No.  5894,  Fed.  Cas.,  s.  c.  12  N.  v.   Htirke,  4  Heiskell    (Tenn.)   614; 

B.  R.  366.  Meyers    v.    Farrell,    47    Miss.    283; 

2/n  re  McKibben,  No.  8859,   Fed.  Elliott   v.   Keith,   32  Mo.   App.  585; 

Cas.,  s.  c.  12  N.  B.  R.  97  ; /«  rr  Had-  Bennet  v.  Avant,  2  Sneed   (Tenn.) 

ley,  No.  58f;4.  Fed.  Cas.,  s.  c.   12  N.  152. 
B.  R.  366. 


642  1"\W    AND    I'KOCKKDINGS    IN    BANKRl'PTCY. 

The  affidavits  or  depositions  may  be  taken  before  a  ref- 
eree; an  officer  authorized  to  administer  oaths  in  proceedings 
before  the  courts  of  the  United  States,  or  under  the  laws  of 
the  state  where  the  same  are  to  be  taken ;  or  a  diplomatic  or 
consular  officer  of  the  United  States  in  any  foreign  country. 
Any  person  conscientiously  opposed  to  taking  an  oath  may, 
in  lieu  thereof,  affirm.  Any  person  who  shall  affirm  falsely 
shall  be  punished  as  for  the  making  of  a  false  oath.' 

"If  upon  hearing  the  evidence  of  the  parties  it  shall  ap- 
pear to  the  court  or  the  judge  thereof  that  the  allegations 
are  true  and  that  it  is  necessary,  he  shall  order  such  marshal 
to  keep  such  bankrupt  in  custody  not  exceeding  ten  days, 
but  not  imprison  him,  until  he  shall  be  examined  and  re- 
leased or  give  bail  conditioned  for  his  appearance  for  exam- 
'ination,  from  time  to  time,  not  exceeding  in  all  ten  days,  as 
required  by  the  court,  and  for  his  obedience  to  all  lawful  or- 
ders made  in  reference  thereto."^  The  arrest  is  in  no  man- 
ner for  security  or  satisfaction  of  a  creditor's  debt.  It  is 
simply  to  secure  the  attendance  of  the  respondent  from  time 
to  time,  for  a  period  of  ten  days,  as  the  court  shall  order,  for 
an  examination.  It  is  to  that  purpose  and  no  other  that  bail 
is  required  of  him.* 

§  220.  Proceedings  to  release  a  bankrupt  from  imprisonment. 
Habeas  corpus. 
A  bankrupt  may  apply  to  a  court  of  bankruptcy  for  a  re- 
lease from  imprisonment,  when  he  has  been  arrested  after 
the  commencement  of  proceedings  in  bankruptcy.'  It  is 
immaterial  whether  the  process  for  arrest  was  issued  by  a 
state  or  a  federal  court.  It  has  been  held  that  when  the 
arrest  is  made  by  a  state  court  the  application  for  release 
should  be  made  to  that  court,  in  order  to  avoid  a  conflict  of 
jurisdiction.^     The  refusal  of  a  state  court  to  grant  a  release 

1  B.  A.  1898,  vSec.  20.  throp,  No.  17900,  Fed.  Cas.,  s.  c.  5 

2B.  A.  1898,  Sec.  9<^; /^/ >r  vShee-  Law   Rep.   24;  U.  S.  v.  Dobbins, 

ban.  No.  12737,  Fed.  Cas.,  s.  c.  8,  No.   14971,  Fed.  Cas.,  s.  c.  5  Law 

N.  B.  R.  345.  Rep.    81  ;     In    re    Wiggers,     No. 

»/«   re  Glaser,  No.   5474,    Fed.  17623,  Fed.  Cas.,  s.  c.  2  Biss.  71. 
Cas.,s.  c.  2  Ben.  180;  exparle'^lW-  *  In  re  O'Mara,  No.  10509,  Fed. 

lin.   No.  9537,   Fed.   Cas..  s.  c.    i  Cas.,  s.  c.  4  Biss.  506;  /«  r*?  Migel, 

Penn.    Law   J.    146;    In   re  Win-  No.  95387,  Fed.  Cas.,  s.  c.  2  N.  B. 

R.  481. 


THE    BAXKRfPT DUTIES.    PROTECTIOX.    ETC.  643 

can  not  be  considered  as  final  and  binding.^  It  is  the  duty 
of  the  court  of  bankruptcy  to  see  that  a  suitor  within  its 
jurisdiction  is  protected  in  the  manner  contemplated  by  law. 
After  a  bankrupt  has  received  his  discharge  in  bankruptcy, 
the  state  court  will,  ordinarily,  upon  proper  application,  re- 
lease him  from  arrest,-  or  the  bankrupt  may  apply  to  the 
court  of  bankruptcy.^  A  court  of  bankruptcy  of  one  dis- 
trict may  enjoin  a  creditor  from  proceeding  with  an  arrest 
made  in  another  district,  if  the  creditor  is  within  the  juris- 
diction of  the  court  making  the  order.* 

The  proper  course  to  pursue  is  to  apply  for  a  writ  of  ha- 
beas corpus. "•  The  application  for  a  writ  is  regularly  made 
to  the  judge  of  the  bankruptcy  court  by  a  petition  signed 
by  the  bankrupt,  for  whose  relief  it  is  intended,  setting 
forth  the  facts  concerning  the  detention  of  him,  in  whose 
custody  he  is  detained,  and  by  virtue  of  what  claim  or 
authority,  if  known.  The  facts  set  forth  in  the  complaint 
should  be  verified  by  the  oath  of  the  person  making  the 
application. 

The  judge,  to  whom  the  application  is  made,  will  award  a 
writ  of  habeas  corpus,  unless  it  appears  from  the  petition 
itself  that  the  party  is  not  entitled  to  it.''  The  writ,  so 
issued,  is  directed  to  the  person  in  whose  custody  the  party 
is  detained.  The  person  to  whom  the  writ  is  directed  makes 
a  return  of  it  by  certifying  the  true  cause  of  the  detention 
of  the  bankrupt.  He  then  brings  the  bankrupt  before  the 
judge  who  granted  the  writ.  A  day  is  set  for  the  hearing  of 
the  case.  At  this  hearing  the  bankrupt  may  deny  any  of 
the  facts  set  forth  in  the  return,  or  may  allege  any  other 
facts  that  may  be  material  in  the  case.  Such  denials  or  al- 
legations should  lie  made  under  oath.  Tlie  return  and  all 
suggestions  made  against  it  may  be  amended  by  the  leave  of 
the  court  before  or  after  they  are  filed,  so  that  thereby  the 

1  In  re  Wigpers,  No.  17623,  Fed.  » In  re  Simpson,  No.  12879,  Fed. 
Cas.,  s.  c.  2  Bi.s.s.  71 ;  In  re  Will-      Cas.,  s.  c.  2  N.  B.  R.  47. 

iams.  No.   17700,  Fed.  Cas.,  s.  c.  6  ^  Hazellon  v.Valentine,  N0.6287, 

Biss.  233.  Fed.  Cas.,  s.  c.  i  Low.  270. 

2  Jones  V.  Emerson,  i  Gaines  •'•  yS'.r /or/^  Williams,  No.  17700, 
(N.  Y.)  487;    Com.stock  v.  Grout,  Fed.  Cas.,  s.  c.  6  Hiss.  233. 

17  Vt.  512.  "  Ex  parte  Milligan,  4  Wall.  1 10. 


644  '-^^^     ^^'*    I'KOrKKDIXCIS    IX     HANKRl'PTCY. 

material  facts  may  be  ascertained.  The  court  or  judge  pro- 
ceeds in  a  summary  way  to  determine  the  facts  of  the  case 
by  hearing  the  testimony  and  arguments,  and  thereupon  to 
dispose  of  the  party  as  law  and  justice  requires. 

Where  the  arrest  is  made  upon  process  issued  from  a  state 
court  it  is  not  clear  how  far  a  court  of  bankruptcy  will  go 
behind  the  face  of  the  papers,  if  at  all,  to  determine  ques- 
tions of  fact  on  which  the  petitioner's  right  to  discharge  or 
the  creditor's  right  to  continue  the  imprisonment  depends. 
The  statute  contains  no  directions  as  to  the  specific  evidence 
required.  There  is  a  conflict  of  authority  on  this  point  in 
the  decision  under  the  act  of  1867. 

Some  judges  were  of  the  opinion  that  the  scope  of  inquiry 
should  be  limited  to  the  question  whether  the  state  court 
had  founded  its  arrest  on  a  claim  which,  on  the  face  of  the 
papers  which  were  filed  before  it  as  the  foundation  for  the 
arrest,  was  a  claim  from  which  the  debtor  would  not  be  dis- 
charged in  bankruptcy.'  The  theory  of  this  position  was 
that  the  complaint  or  affidavits  and  facts  stated  therein  in  the 
state  proceedings  were  binding  upon  the  bankruptcy  court. 
Judge  Bradford,  after  referring  to  the  cases  tending  to  limit 
the  scope  of  the  inquiry,  aptly  observed  :^ 

"Where  the  liberty  of  the  prisoner  depends  upon  the  fact 
that  his  debt  is  dischargeable  by  his  discharge  in  bank- 
ruptcy, and  he  tenders  proof  to  maintain  the  allegation,  is  it 
not  a  strange  proposition  that  he  shall  be  denied  the  right  to 
prove  his  right  to  release  from  imprisonment,  because  an 
ex  parte  affidavit  has  been  made  in  the  state  courts  that  he 
had  contracted  the  debt  under  such  circumstances  of  fraud  as 
that  his  debt  would  not  be  released  by  his  discharge  in  bank- 
ruptcy? This  appears  strange,  because  it  affects  the  personal 
liberty  of  the  bankrupt.  But  the  rights  of  the  creditors  to 
arrest  for  debts  not  dischargeable  in  bankruptcy  are  equally 
sacred,  and  the  proposition  to  me  is  equally  strange  that  they 
should  be  denied  the  power  to  hold  under  arrest  one  legally 

1  bi   re  Valk,   No.    16814,    Fed.  affirmed  in  No.  7769,  Fed.  Cas.,  s. 

Cas.,  s.  c.  3  Ben.  431  ;  In  re  Rob-  c.  6  Blatch.  292  ;  In  re  Devoe,  No. 

inson,  No.  11939,  Fed.  Ca.s.,  s.  c.  3843,  Fed.  Cas.,  s.  c.  i   Low.  251. 

6  Blatch.  253;  In  re  Kimball,  No.  2  Jn  re  Alsberg,  No.   261,    Fed. 

7768,   Fed.  Cas.,   s.   c.  2  Ben.  554,  Cas.,  16  N.  B.  R.  116. 


THE    BANKRUPT DUTIES.    PROTECTION.    ETC.  645 

arrested  for  other  reasons  filed  than  those  which  will  release 
the  debt,  when  they  make  the  allegation,  and  offer  to  sustain 
it  by  proof,  that  the  petitioner  can  not  bring  himself  within 
the  exemption  from  arrest  granted  by  congress,  by  reason  of 
the  fact  that  the  debt  on  which  he  was  arrested  was  con- 
tracted in  fraud." 

On  the  other  hand,  there  were  judges  who  thought  that  it 
was  the  duty  of  the  court  of  bankruptcy  to  examine  dili- 
gently all  legal  evidence  brought  before  it,  from  any  quarter 
whatever,  tending  to  show  that  a  debt,  not  dischargeable  by 
the  discharge  of  the  bankrupt,  had  or  had  not  been  con- 
tracted.^ The  theory  of  this  position  was  that  the  cases  in 
which  the  bankrupt  was  exempt  from  arrest,  and  also  cases 
in  which  the  creditor  was  entitled  to  have  his  imprisonment 
continued,  were  expressly  stated  in  the  bankrupt  law.  The 
liability  to  imprisonment  or  immunity  from  the  same  de- 
pended upon  whether  the  debt,  for  which  the  bankrupt  was 
arrested  by  the  state  authority,  was  dischargeable  or  not  by 
the  discharge  in  bankruptcy.  It  did  not  depend  in  any  de- 
gree upon  the  reason  or  grounds  of  arrest  given  in  the  affi- 
davits filed  in  the  state  court.  What  was  the  nature  of  the 
debt,  upon  which  the  arrest  was  founded,  was  deemed  a  ques- 
tion which  the  bankruptcy  court  had  a  right  to  determine. 
The  bankrupt  law  being  paramount,  and  giving  exclusive 
jurisdiction  to  the  bankruptcy  court,  it  was  considered  the 
duty  of  that  court  to  see  that  a  suitor  within  its  jurisdiction 
was  protected  in  the  manner  contemplated  by  law.  The 
statements  made  in  a  declaration  or  complaint  or  affidavit 
filed  in  a  state  court  were  therefore  held  not  to  be  binding 
upon  the  court  of  bankruptcy. 

It  should  be  observed,  however,  that  where  a  judgment 
has  been  rendered  in  an  action  for  fraud  in  a  state  court,  the 
bankruptcy  court   is   bound   by  the  judgment.-      The  bank- 

'  In  re    Williams,      No.    17700,  di.sapproved    of    his    decision  in 

F"cd.   Cas.,  s.  c.  6  Bi.ss.  233 ;  fn  re  these  cases.     See  in  re  Kimball, 

Alsberg,  No.  261,  Fed.  Cas.,  s.  c.  No.   776S,   Fed.   Cas.,  s.  c.  2  Ben. 

16   N.    B.   R.    116;    ///  re   Glaser,  554. 

No.  5474,  Fed.   Cas.,   s.  c.   2  Ben.  -' ///   ;r    Patterson,    No.     10817, 

180;    Fn   re    Kimball,     No.    7767,  Fed.  Cas.,   s.  c.  2  Ben.  155;  In  re 

Fed.  Cas..  s.  c.  2  Ben.  38.     Judjje  Whitehouse,  No.  17564,  Fed.  Cas., 

Blatchford,  who  decided  the.se  last  s.    c.     i     Low.    429;    Shuman    v. 

two    cases,    afterwards  expressly  Strau.ss,  52  N.  Y.  404. 


646  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

ruptcy  court  will  not  reverse  the  tlnding  of  a  state  court.  In 
such  cases  the  court  will  look  to  the  record  of  the  state  court 
to  see  if  material  and  traversable  allegations  of  fraud  appear, 
which  must  have  been  found  true  in  order  to  render  the  judg- 
ment. 

When  a  bankrupt  is  arrested  upon  civil  process,  issuing  from 
a  court  of  bankruptcy,  pending  bankruptcy  proceedings,  the 
order  of  the  court  should  be  to  release  the  prisoner.  The  only 
exception  to  this  rule  is  when  the  arrest  and  commitment  is  for 
contempt  or  disobedience  of  its  lawful  orders. 

\\'hen  the  bankrupt  is  arrested,  by  the  authority  of  the  state 
law,  and  claims  immunity  and  privilege  from  arrest,  he  must 
make  it  appear  to  the  satisfaction  of  the  court  that  his  case 
comes  within  the  exemption  or  privilege  granted.  If  he  does, 
he  should  l)e  discharged  from  arrest.^  If  he  does  not,  he 
should  be  remanded  into  custody.^  If  he  makes  it  appear  that 
his  debt  is  dischargeable;  that  is,  that  it  is  not  tainted  with 
any  of  the  kinds  of  frauds  enumerated  in  section  17  of  the  act, 
which  prevent  its  being  released  by  the  discharge  of  the  bank- 
rupt, or  if  the  arrest  was  made  when  he  was  in  attendance  upon 
a  court  of  bankruptcy,  or  engaged  in  the  performance  of  a  duty 
imposed  by  tlie  act,  he  is  within  the  exemptions  extended  by 
section  9.  If  he  can  not  do  this,  he  is  not  within  the  privilege 
or  exemption,  and  must  be  remanded  into  custody. 

If  a  court  of  bankruptcy  orders  the  release  of  a  bankrupt 
in  custody  of  a  state  officer,  such  officer  is  obliged  to  release 
him  and  can  not  be  punished  therefor  by  the  state  court.^ 

§  221.     Extradition  of  bankrupts. 

Whenever  a  warrant  for  the  apprehension  of  a  bankrupt  has 
been  issued,  and  he  is  found  within  the  jurisdiction  of  a  court 
other  than  the  one  issuing  the  warrant,  he  may  be  extradited 
in  the  same  manner  in  which  persons  under  indictment  are 
extradited  from  one  district  within  which  a  district  court  has 
jurisdiction  to  another."* 

1  Knott  V.  Putnam,  107  Fed.  Rep.  Hurst,  No.  6924,  Fed.  Cas.,  s.  c.   i 

907,  6  Am.  B.  R.  80.  Wash.   C.  C.   186,  4  Dall.  387;  Ly- 

2/n  re  Freche,  109  Fed.  Rep.  620,  ell  v.  Goodwin,  No.  8616,  4  McLean, 

6  Am.  B.  R.  479;  In  re  Claiborne,  29;  Thomas  v.  Hudson,  13  Mecs.  & 

109  Fed.  Rep.  74,  5  Am.  B.  R.  812;  W.  353,  816,  884;  Norton  v.  Walker, 

In  re  Marcus   (C.  C.  A.,  ist  Cir.),  3  Ex.  480. 
105  Fed.  Rep.  907,  5  Am.  B.  R.  365-  *  B.  A.   1898,  Sec.    10  and   Sec.  2 

3 /h   re   Kimball,    No.    7767,    Fed.  clause   14;  In  re  Hassenbusch    (C. 

Cas.,    s.    c.    2    Ben.    38;    Ex    parte  C.   A.,  6th  Cir.)    108  Fed.  Rep.  35, 

47  C.  C.  A.  177. 


THE    BANKRUPT DUTIES.    PROTECTION,    ETC.  647 

The  extradition  of  a  bankrupt  may  be  required  when  a 
warrant  is  issued  for  his  arrest,  in  case  he  is  accused  of  or 
indicted  for  an  offense  under  the  bankrupt  act,  or  in  case  he 
is  charged  with  contempt,  or  for  the  purpose  of  detaining 
him  for  any  examination.  In  order  to  support  extradition 
proceedings  it  is  necessary  that  a  warrant  shall  have  been 
issued  for  his  arrest,  and  that  he  be  found  beyond  the  juris- 
diction of  the  court  issuing  it  and  within  the  jurisdiction  of 
another  court  of  bankruptcy.  Proceedings  in  extradition 
cases,  under  a  treaty  between  the  United  States  and  a  foreign 
government,  stands  on  a  wholly  different  footing.'  Such 
proceedings  are  not  expressly  adopted  by  the  bankrupt  act. 

The  bankrupt  statute  adopts  the  provisions  relating  to 
transferring  a  person  under  an  indictment,  from  one  district 
to  another.  The  only  authority  for  holding  a  person  under 
indictment,  to  bail  in  one  district  to  answer  in  another  dis- 
district,  or  upon  his  failure  to  give  bail  to  order  him  to  be 
removed  into  another  district  where  the  offense  is  to  be  tried, 
is  found  in  section  1014  of  the  revised  statutes.  This  pro- 
vision is  as  follows: 

"  For  any  crime  or  offense  against  the  United  States,  the 
offender  may,  by  any  justice  or  judge  of  the  United  States, 
or  by  any  commissioner  of  a  circuit  court  to  take  bail,  or  by 
any  chancellor,  judge  of  a  supreme  or  superior  court,  chief 
or  first  judge  of  common  pleas,  mayor  of  a  city,  justice  of 
the  peace,  or  other  magistrate,  of  any  state  where  he  may  be 
found,  and  agreeable  to  the  usual  mode  of  process  against 
offenders  in  such  state,  and  at  the  expense  of  the  United 
States,  be  arrested  and  imprisoned,  or  bailed,  as  the  case 
may  be,  for  trial  before  such  court  of  the  United  States  as 
by  law  has  cognizance  of  the  offense.  Copies  of  the  process 
shall  be  returned  as  speedily  as  may  be  into  the  clerk's 
office  of  such  a  court,  together  with  the  recognizances  of  the 
witnesses  for  their  appearance  to  testify  in  the  case.  And 
where  any  offender  or  witness  is  committed  in  any  district 
other  than  where  the  offense  is  to  be  tried,  it  shall  be  the 
duty  of  the  judge  of  the  district  where  such  offender  or  wit- 
ness is  imprisoned,  sea.sonably  to  issue,  and  of  the  marshal 

'  R.  vS.  Sees.  5270-52.S0;  hi  re  sBlatch.  414;  hire  Manning.  44 
Henrich,  No.  6369,  Fed.  Cas.,  s.  c.      Fed.  Rep.  275. 


648  I-AW     AM)    PROCKEDINGS    TX     HA  X  KRl'l'TCY. 

to  execute,  a  warrant  for  his  removal  to  the  district  where 
the  trial  is  to  be  had." 

When  a  warrant  for  the  arrest  of  a  bankrupt  has  been 
issued,  and  he  is  found  in  another  district,  he  may  be  reached 
by  proceedings  under  this  section.  He  may  be  arrested  there 
and  transferred  in  the  usual  manner  under  this  section.  He 
can  not,  however,  be  arrested  upon  the  warrant  originally 
issued,  because  it  will  not  run  into  another  district.'  All 
proceedings  for  arrest,  bail,  commitment  and  removal  are 
held  in  the  district  in  which  the  bankrupt  is  found,  and  not 
in  the  district  in  which  the  original  warrant  was  issued,* 

§  222.  Proceedings  to  remove  a  bankrupt  from  one  district  to 
another. 
The  proceeding  contemplated  in  section  1014  is  an  orig- 
inal and  independent  proceeding  in  the  district  where  the 
bankrupt  is  found.  It  is  based  upon  the  order  of  court  for  a 
warrant  or  upon  an  indictment  previously  issued  by  the  court 
having  jurisdiction  of  the  cause.  The  section  expressly  pro- 
vides that  the  proceeding  shall  be  "agreeably  to  the  usual 
mode  of  process  against  offenders  in  such  state."  It  seems 
that  the  effect  of  the  section  is  to  adopt  the  familiar  common 
law  proceeding  upon  complaint  for  the  arrest  and  commitment 
of  offenders  b>  the  committing  magistrates,  subject  to  this 
provision,  adopting  procedure  of  the  several  states,  which  is, 
of  course,  itself  subordinate  to  the  provisions  of  the  consti- 
tution of  the  United  States.^  Although  the  procedure  is  not 
exactly  the  same  in  all  states,  it  is  substantially  so. 

§  223.     Proceedings  before  a  United  States  commissioner. 

The  proceedings  are  regularly  instituted  by  a  complaint 
under  oath,  made  before  a  United  States  commissioner,*  or 
any  magistrate  mentioned   in  section  1014.      The  oath   may 

'  Ex  parte    Graham,  No.  5657,  affirmed,  53  Fed.  Rep.  13,  s.c.  3  C. 

Fed.  Cas.,  s.  c.  3  Wash.  C.  C.  456;  C.  A.  394;     U.  S.   v.   Brawner,    7 

In  re  Manning,  44  Fed.  Rep.  275;  Fed.  Rep.  86. 

In  re  Dana,  68  Fed.  Rep.  886.  3  West  v.  Cabell,  153  U.   S.  87; 

2/«  re  Dana,  68  Fed.  Rep.  886;  U.  S.  Const.,  4th  Amend't. 

In  re  Manning,  44  Fed.  Rep.  275;  <For    form   of    complaint,    see 

In  re  Burkhardt,  33  Fed.  Rep.  25;  Loveland's  Forms  of  Federal  Prac- 

U.  S.  V.  Fowkes.  49  Fed.  Rep.  50,  tice,   No.  870. 


THE    BAXKRLPT DLTIES.    PROTECTION,    ETC.  649 

be  made  by  any  person  having  knowledge  of  the  facts. 
Ordinarily,  a  certified  copy  of  the  indictment  or  the  order  of 
court,  and  a  warrant  furnished  to  the  United  States  attorney 
for  the  district  in  which  the  bankrupt  is  found,  is  sufficient 
to  justify  a  referee  in  bankruptcy  or  other  person  making  the 
required  aflBdavit.  Thereupon  the  commissioner  issues  a 
warrant,  directed  to  the  marshal  of  the  district,  commanding 
him  to  arrest  the  bankrupt  and  bring  him  before  a  commit- 
ting magistrate.  A  commissioner  is  not  authorized  to  issue 
a  warrant  except  upon  a  complaint  on  oath.'  The  oath 
should  be  made  within  the  district.  An  indictment  found 
by  a  grand  jury,  or  an  information  or  an  order  of  court,  in 
another  district,  is  not  such  a  complaint  on  oath  as  is 
required  to  authorize  a  warrant  for  arrest.^ 

The  bankrupt  is  then  arrested  and  brought  before  the  com- 
missioner. He  thereupon  pleads.  If  his  plea  is  guilty  he 
should  be  held  to  bail  or  committed.  If  his  plea  is  not 
guilty  he  may  waive  examination  or  demand  a  hearing. 
Unless  he  waives  examination  he  is  entitled  to  a  speedy 
hearing.  At  the  examination  before  the  commissioner  evi- 
dence may  be  introduced  for  and  against  the  bankrupt  and 
counsel  may  be  heard.  The  magistrate  must  determine  the 
identity  of  the  prisoner,  and  his  probable  guilt.  If  he  is 
satisfied  as  to  these  two  questions,  it  is  his  duty  to  admit  the 
bankrupt  to  bail  for  trial  before  such  court,  as  by  law  is 
cognizant  of  the  offense.''  If  the  bankrupt  fails  to  tender  a 
sufficient  bail,  the  magistrate  may  then  commit  him  to  the 
custody  of  the  marshal  to  await  a  warrant  for  his  removal. 
If,  on  the  other  hand,  there  is  no  probable  cause  of  his  guilt 
or  his  identity  is  not  established,  the  bankrupt  is  entitled  to 
be  discharged  by  the  commissioner.  When  the  bankrupt  is 
discharged  or  admitted  to  bail  by  the  magistrate,  extradition 
proceedings  are  at  an  end.  Further  steps  are  necessary  onlv 
when  the  bankrupt  is  committed  to  custody." 

'  The  fourth  amendment  to  the  184.     For    form    of    warrant,    see 

constitution  of  the  United  vStates  Loveland's     T'orms     of      I'ederal 

provides  that  "  no  warrants  shall  Prncticc,  No.  871. 

issue    but   upon    probable    cause,  »  U.  S.  v.  Jacobi,  No    15460,  Fed. 

supported    by    oath    or    afTirma-  Cas..  s.  c.  i  F'lip.  108;  /«  r<?  Bailey, 

tion."     vSee  U.  S.  v.    Turcaud,  20  No.  730,  Fed.  Cas.,  s.  c.  i  VVoolw. 

Fed.   Rep.  621.  422;   U.  S.  v.  Shepard.  No.  16273, 

*Bagnall    v.    Ablenian,    4    Wis.  Fed.  Cas..  s.  c.  i  Abb.  U.  S.  431. 


650  LAW     .\.\n    I'ROCEliniNGS    IN    BANKRUPTCY. 

§  224.     Proceedings  before  the    judge    for  an  order  of  removal. 

When  the  bankrupt  has  been  committed  to  the  custody  of 
the  marshal,  the  United  States  attorney  appears  before  the 
judge,  usually  attended  by  the  marshal  with  the  prisoner, 
and  makes  an  application  for  an  order  or  a  warrant  of  re- 
moval. This  should  be  done  as  soon  as  possible  after  the 
commitment  by  the  commissioner. 

The  order  or  warrant  of  removal  is  not  issued  as  a  matter 
of  course.  It  is  the  duty  of  the  judge  to  determine  judicial- 
ly whether  the  prisoner  ought  to  be  taken  to  another  district 
for  trial  or  whether  he  is  entitled  to  his  freedom.  The  prac- 
tice in  the  several  districts  is  not  uniform  as  to  how  far  the 
judge  will  go  in  his  inquiry  before  he  takes  action  in  the 
shape  of  an  order,  either  granting  or  refusing  the  transfer  of 
the  prisoner.  He  must,  in  any  case,  be  satisfied  with  the 
proof  of  the  identity  of  the  prisoner.  And  if  no  opposition 
is  made  he  may  rely  upon  the  finding  of  the  commissioner 
in  respect  to  probable  cause  of  guilt.  But  he  is  not  obliged 
to  do  so.  The  judge  may  allow  an  examination  de  novo 
before  him  upon  the  facts  to  determine  this  question.'  At 
such  a  hearing  it  seems  to  be  not  only  the  right  but  the  duty 
of  the  judge  to  look  into  the  indictment  and  probably  into 
an  order  of  court  so  far  as  to  be  satisfied  that  an  offense  is 
charged,  which  may  be  lawfully  tried  in  the  forum  to  which 
it  is  claimed  the  accused  should  be  removed.'^ 

The  Indictment  as  Evidence. — How  much  weight 
should  be  given  an  indictment  as  evidence  of  probable  guilt 
has  been  frequently  considered  by  the  courts.  After  review- 
ing most  of  the  cases  on  this  point,  Judge  Brown  thus  states 
the  rule  in  re  Dana :' 

"An  indictment  found  in  another  district,  though  not 
primary  evidence  of  the  facts  stated  iu  it,  may,  however,  be 
secondary  evidence  of  a  mpre  or  less  persuasive  character. 
It  contains  the  finding  of  a  body  specially  constituted  by  law 

1 /«  re  Dana,  68  Fed.  Rep.  886;  51    Fed.  Rep.  213;  In  re  Doig,  4 

In  re  Wolf,  2-]  Fed.  Rep.  606.  Fed.  Rep.   193;  U.  S.  v.  Brawner, 

« Horner  v.  U.  S.,  44  Fed.  Rep.  7  Fed.  Rep.  86;  U.  S.  v.  Rogers, 

677,  s.  c.  143  U.  S.  214;  Callan  v.  23  Fed.  Rep.  658. 
Wilson,  127  U.  S.  540;  In  re  Pal-  sgg  Fed.  Rep.  896. 

liser,  136  U.  S.  261 ;  In  re  Terrell, 


THE    BANKRUPT DUTIES,    PROTECTIOX.    ETC.  65  I 

to  inquire  into  offenses ;  it  is  required  to  be  based  either  up- 
on examination  of  witnesses,  or  upon  the  knowledge  of  the 
grand  jury  itself;  it  is  a  record  of  their  presentment  or  com- 
plaint, and  purports  to  be  made  upon  oath,  and  is  delivered 
to  the  court  upon  their  oath  to  make  true  presentments. 
Beyond  that  jurisdiction  it  may,  therefore,  be  received  a? 
any  complaint  on  information  and  belief  would  be  received, 
and  its  sufficiency  should  be  judged  by  the  same  rules.  The 
question  of  probable  cause,  the  magistrate  must  himself  de- 
termine from  all  the  facts  ascertained  by  him.  The  judg- 
ment of  a  foreign  grand  jury  is  not  to  be  a  substitute  for  his 
own.  If  the  narrative  of  facts  contained  in  the  indictment 
is  clear,  consistent,  and  unambiguous  in  showing  the  com- 
mission to  the  offense  charged,  I  think  it  may  be  regarded  as 
equivalent  to  a  deposition  of  the  facts  ascertained  by  the 
grand  jury  upon  the  sworn  examination  of  the  witnesses 
whose  names  are  indorsed  on  it;  and  as  such,  sufficient  ev- 
idence for  the  issue  of  the  warrant  of  arrest,  under  section 
1014,  when  other  evidence  of  the  facts  is  not  conveniently 
attainable ;  and  hence  it  is  also  sufficient  for  commitment,  if 
examination  is  waived,  or  when  the  averments  of  the  indict- 
ments are  not  contradicted. 

"But  indictments  are  often  of  quite  different  character. 
An  indictment  is  not,  in  fact,  prepared  or  designed  as  an 
affidavit  or  a  deposition.  It  is,  in  reality,  a  charge,  an  accu- 
sation, a  pleading,  designed  to  put  the  defendant  on  trial. 
Though  presumed  to  embody  the  material  facts  proved  be- 
fore a  grand  jury,  it  is  not  necessarily  confined  to  those  facts. 
It  is  drawn  up  by  the  district  attorney  as  a  legal  accusation. 
It  is  not  formally  verified.  The  matters  stated  in  it  are  not 
necessarily  stated  as  they  were  proved  before  the  grand  jury; 
they  may  be  pleaded  according  to  their  legal  effect;  i.  <?. ,  as 
the  district  attorney  may  understand  their  legal  effect.  Le- 
gal inferences  are  often  stated  as  facts — facts  and  law  indis- 
tinguishably  blended;  and  in  the  use  of  different  counts  for 
the  same  actual  offense,  although  by  a  legal  fiction  the  differ- 
ent counts  are  supposed  to  relate  to  different  offenses,  the  law 
tolerates  such  inconsistencies  and  even  coiUradictions  in  in- 
dictments, as  in  a  deposition  would  constitute  perjury.  An 
indictment  that  appears  on   its  face  to  be  of    this  character 


652  LAW    AXn    PRdCF-EDINGS    IN    HANKRUPTCY. 

can  not  be  deemed  or  treated  as  equivalent  to  a  deposition  or 
an  affidavit  of  facts,  because  it  plainly  is  not  designed  to  be 
so  treated,  and  its  form  and  contents  forbid  it  to  be  so  re- 
garded. It  must  be  judged  by  its  statements  altogether,  and 
if  taken  as  a  whole,  it  is  contradictory  on  material  points;  it 
becomes  worthless  as  an  affidavit  of  facts,  however  perfect  as 
a  pleading;  and  such  an  indictment  is,  therefore,  insufficient 
as  a  foundation  for  removal  proceedings." 

In  view  of  this  ruling  in  re  Dana,  it  would  seem  that  a 
United  States  attorney  must  be  prepared  to  prove  substan- 
tially the  same  facts  upon  an  extradition  proceeding  that  he 
must  prove  upon  an  examination  of  a  person  charged  with  a 
criminal  offense,  but  not  indicted. 

§  225.     The  order  of  court  granting  or  refusing  a  warrant. 

If  the  judge  is  satisfied  with  the  proof  of  the  identity  of 
the  prisoner  and  of  the  probable  cause  of  his  guilt,  he  issues 
an  order  or  warrant  for  removal.^  This  warrant  is  directed 
to  the  marshal  of  the  district  within  which  the  prisoner  is 
found  and  the  extradition  proceedings  had.  It  commands 
him  to  remove  the  prisoner  to  the  particular  district  where 
the  offense  is  to  be  tried  and  deliver  him  to  the  United 
States  marshal  of  the  district  or  some  other  proper  officer 
authorized  to  receive  the  prisoner.  Only  one  writ  or  war- 
rant  is  necessary  to  remove  a  prisoner  from  one  district  to 
another.^  A  marshal  of  the  district  where  the  prisoner  is 
found  may  deputize  the  marshal  of  the  district  in  which  the 
trial  is  to  be  held  to  exqcute  the  warrant  of  removal." 

If  upon  the  hearing  it  appears  that  the  removal  should 
not  be  made,  the  judge  will  refuse  the  warrant  and  order  the 
prisoner  discharged.*  He  may  admit  the  party  to  bail,  and 
should  do  so  if  the  party  can  furnish  bail,  and  to  this  end  he 
may  reduce  or  increase  the  bail  fixed    by  the  commissioner.^ 

1  For  form  of  warrant,  see  Love-  »  U.  S.  v.  Fletcher,  147  U.  S. 
hind's    Forms    of   Federal    Practice,      664. 

872.  */«  re  Dana,   68  Fed.  Rep.  886; 

Horner  v.  U.  S.  143,  U.  S.  207;  U.  S.  v.  Rogers,  23  Fed.  Rep.  658. 

In  re  Burkhardt,  33  Fed.  Rep.  25;  '^  U.  S.  v.  Brawner,    7  Fed.  Rep. 

U.  S.  V.  White,  25  Fed.  Rep.  716.  86;  U.  S.  v.  Rogers,  23  Fed.  Rep. 

2  R.  S.  Sec.  1029.  661 ;  Jn  re  Wolf,  27  Fed.  Rep.  615. 


THE    BANKRUPT DUTIES,    PROTECTION,    ETC.  653 

§  226.     Habeas  corpus. 

If  a  bankrupt  is  unlawfully  held  in  custody  he  may  be  re- 
leased upon  a  writ  of  habeas  corpus.'^  General  order  30  pro- 
vides that  if  the  debtor  is  "  committed  after  the  filing  of  his 
])etition  upon  process  in  any  civil  action  founded  upon  a  claim 
provable  in  bankruptcy,  the  court  may.  upon  like  application, 
discharge  him  from  such  imprisonment.  If  the  petitioner,  dur- 
ing the  pendency  of  the  proceedings  in  bankruptcy,  be  arrested 
or  imprisoned  upon  process  in  any  civil  action,  the  district 
court,  upon  his  application,  may  issue  a  writ  of  habeas  corpus 
to  bring  him  before  the  court  to  ascertain  whether  such  process 
has  been  issued  for  the  collection  of  any  claim  provable  in 
bankruptcy,  and  if  so  provable  he  shall  be  discharged;  if  not, 
he  shall  be  remanded  to  the  custody  in  which  he  may  lawfully 
be.  Before  granting  the  order  for  discharge  the  court  shall 
cause  notice  to  be  served  upon  the  creditor  or  his  attorney,  so  as 
to  give  him  an  opportunity  of  ajipearing  and  being  heard  be- 
fore the  granting  of  the  order." 

This  general  order,  like  general  order  27  under  the  act  of 
1867,  provides  for  a  release  when  the  debtor  is  committed  in 
a  civil  action  founded  upon  a  claim  provable  in  bankruptcy 
instead  of  claims  released  by  a  discliarge  as  provided  by  the 
statute.'''  In  this  respect  the  order  and  statute  conflict,  and  the 
statute  must  control.^ 

^   227.     Abatement. 

The  death  or  insanity  of  a  bankrupt  does  not  abate  the  pro- 
ceedings, but  the  same  are  conducted  and  concluded  in  the 
same  manner,  so  far  as  possible,  as  though  he  had  not  died  or 
become  insane.  Provided,  that  in  case  of  death  the  widow 
and  children  shall  be  entitled  to  all  rights  of  dower  and  allow- 
ance fixed  by  the  laws  of  the  state  of  the  bankrupt's  residence.* 

'Gen.  Ord.  .30;  In  re  Terrell,  51  2  b.   A.    1898,   Sec.  ga.     Compare 

Fed.    Rep.    213;    U.    S.    v.    Fowkes,  Sec.   26  of  the   act   of    1867.   R.    S. 

49  Fed.  Rep.  50,  affirmed  in  53  Fed.  Sec.  5107. 

Rep.    13.  s.  c.  3  C.   C.   A.  394.  3  See  Protection  from  arrest,  page 

In    RaRnall    v.    Ableman,   4    Wis.  635,   note   39,   ante. 

T63,  a  writ  was  granted  by  a  state  *  R.  A.  1898.  Sec.  8.     As  to  prac- 

conrt    releasing    a    prisoner    in    the  tice  in  case  of  insanity  of  bankrupt, 

custody  of  a  U.  S.  marshal.  lu   re  Burke.    107   Fed.   Rep.  674.   5 


654       I^-^^^'  ''^^^^    I'KDCEEDINGS  IN  BANKRUPTCY. 

Proceedings  do  not  abate  where  a  bankrupt  died  after  the  filing 
of  a  petition  and  before  the  return  day/'  In  such  cases  time 
may  be  allowed  the  administrator  and  creditors  to  appear  and 
answer  the  petition/ 

The  death  or  removal  of  a  trustee  does  not  abate  any  suit 
or  proceeding  which  he  is  prosecuting  or  defending  at  the 
time  of  his  death  or  removal,  but  the  same  may  be  proceeded 
with  or  defended  by  his  joint  trustee  or  successor  in  the  same 
manner  as  though  the  same  had  been  commenced  or  was  being 
defended  by  such  joint  trustee  alone  or  by  such  successor." 

Am.  B.  R.  843;  In  re  Eisenberg,  117  ^  In  re  Hicks,  107  Fed.  Rep.  910, 
Fed.  Rep.  786,  8  Am.  B.  R.  551.      6  Am.  B.  R.  182. 

6  B.  A.  1898,  Sec.  46. 


OFFENSES.  655 


CHAPTER   XXI. 

OFFENSES. 
§  228.     Generally. 

The  bankrupt  statute  prescribes  that  certain  acts  shall 
constitute  offenses,  and  provides  penalties  therefor.'  The 
crimes  or  offenses  defined  in  the  act  are  misdemeanors^  as 
distinguished  from  felonies. 

A  person  may  be  liable  to  prosecution  under  a  state  or 
federal  law,  if  the  offense  has  been  committed  in  bankruptcy 
proceedings,  as  perjury.  Where  a  person  makes  himself 
liable  to  such  punishment  or  penalty,  it  is  probable  that  he 
may  be  proceeded  against  under  such  state  or  federal  statute 
or  under  the  bankrupt  act.^  But  he  can  not  be  punished 
twice  for  the  same  offense. 

It  will  be  observed  that  the  present  act  does  not  make  it 
an  offense  to  obtain  goods  by  false  pretenses  prior  to  being 
adjudged  a  bankrupt.  It  seems  that  congress  has  left  such 
offenses  to  be  dealt  with  under  the  state  law.  The  rule  was 
otherwise  under  the  act  of  1867.* 

§  229.     Misappropriation  of  property  by  the  trustee. 

It  is  made  an  offense  under  the  bankrupt  statute  for  any 
person  to  knowingly  and  fraudulently  appropriate  to  his 
own  use,  embezzle,  spend  or  unlawfully  transfer  any  property 
or  secrete  or  destroy  any  document  belonging  to  a  bankrupt 
estate  which  came  into  his  charge  as  trustee.' 

The  object  of  this  provision  is  to  protect  the  bankrupt  and 
the  creditors  in  case  of  a  dishonest  trustee.  Rut  it  should  be 
observed   that  the  perversion  of  the  assets  must   be  tainted 

'  H.  A.  1898,  Sec.  29.     Compare  "Commonwealth  v.  Walker,  108 

R.  vS.  vSec.  5132.  Mass.  309.     Hut  see  State  v.  Pike, 

«  U.  S.  V.  Block,  No.  14609,  Fed.  15  N.  H.  83. 

Cas.,   s.  c.  4  Saw.  211;    U.   S.   v.  *  R.  S.  Sec.  5132,  clauses  9  and 

Prescott,  No.  16084,  Fed.  Cas.,  s.  10. 

c.   2    Biss.   325;   U.  S.   V.  Latorre,  ■' li.  A.  1898,  Sec.  29a. 
No.  15567,  Fed.  Cas.,  s.  c.  8  Blatch. 
134- 


656  LAW     AM)    I'UOCliEDINGS    IN    BANKRUPTCY. 

with  fraud  or  done  unlawfully  or  with  evil  intent  to  be  an 
otYense.  An  honest  mistake  is  not  sufficient  to  warrant  an 
infliction  of  the  penalty,  although  the  results  to  the  assets  are 
equally  disastrous. 

The  penalty  for  this  offense  is  imprisonment  for  a  period  not 
exceeding  live  years.^ 

A  trustee  can  not  be  compelled  to  give  testimony  which  may 
tend  to  show  that  he  has  misappropriated  the  funds  of  the 
bankrupt's  estate." 

§   230.     Concealment  of  property  by  a  bankrupt. 

Another  offense  is  to  knowingly  and  fraudulently  conceal 
while  a  bankrui)t,  or  after  his  discharge,  from  his  trustee  any 
of  the  property  belonging  to  his  estate  in  bankruptcy.''  To 
conceal  is  defined  by  the  act  to  "  include  secrete,  falsify  and 
mutilate."  * 

The  act  of  concealment  must  ^e  done  knowingly  and  fraud- 
ulently.^ Thus,  where  property  is,  in  fact,  concealed  in  specie, 
or  where  the  title  is  concealed  by  a  colorable  conveyance  to 
prevent  it  passing  into  the  possession  of  the  trustee,  it  clearly 
comes  within  this  provision,  and  is  an  offense  under  the  act. 
If,  however,  the  bankrupt  actually  transfers  his  property,  al- 
though it  is  done  fraudulently  to  keep  it  from  his  creditors, 
still,  if  he  does  not  reserve  any  right  to  a  reconveyance  or  any 
beneficial  interest,  that  is,  unless  a  secret  trust  in  favor  of 
himself  is  established,  there  is  no  concealment  if  the  property 
is  omitted  from  his  schedules,"  but  if  the  facts  show  that  the 
bankrupt  reserved  any  beneficial  interest  for  himself,  there  is 

1  B.   A.    1898,   Sec.   29a.  Pierce,   103  Fed.  Rep.  64,  4  Am.  B. 

-In  re  Smith,   112  Fed.  Rep.  509,  R.  554. 

7  Am.   B.  R.   213.  ^  In    re    Dauchy,    122    Fed.    Rep. 

3  B.  A.  1898,  Sec.  29^,  clause  i.  688;  In  re  McGurn,   102  Fed.  Rep. 

•*  B.  A.   1898,  Sec.   I,  clause  22.  743,  4  Am.  B.  R.  459;  In  re  Good- 

5  In  re   Freund,  98  Fed.   Rep.  81,  ale,  109  Fed.  Rep.  783,  6  Am.  B.  R. 

3  Am.  B.  R.  418;  Smith  v.  Keegan,  493;  In  re  Fitchard,   103  Fed.   Rep. 

Ill   Fed.  Rep.   157,  7  .A.m.  B.  R.  4;  742,  4  Am.  B.  R.  609;  In  re  Cornell, 

In   re   Pierce,   103   Fed.   Rep.  64,  4  97  Fed.  Rep.  29,  3  Am.  B.  R.   172; 

Am.    B.   R.   554;    In   re   Kaiser,   99  In  re   Crist,   116  Fed.   Rep.    1007,  9 

Fed.  Rep.  68g,  3  Am.  B.  R.  767;  In  Am.    B.    R.    i;   In   re   Howell,    105 

re  Blalock,  1 18  Fed.  Rep.  679,  9  Am.  Fed.   Rep.   594,  5   Am.   B.   R.  414a. 

B.   R.   266:    In   re   Beebe,    116   Fed.  But  see  in  re  Skinner,  97  Fed.  Rep. 

Rep.  48.  8  .^m.  B.  R.  597.  190,  3  Am.  B.  R.  163. 


OFFENSES.  657 

a  concealment.'  Where  a  preference  has  been  given  or  a  trans- 
fer made  within  four  months  prior  to  the  fihng  of  the  petition, 
it  is  not  in  itself  male  fides,  and  under  the  present  act,  the 
bankrupt  is  not  guilty  of  the  offense  of  concealment  in  not 
setting  forth  such  property  in  his  schedule. 

It  is  not  an  offense  punishable  under  the  act  to  omit  to  name 
property  in  the  schedule  by  accident  or  mistake,**  or  property 
which  the  debtor  did. not  know  that  he  owned,"  or  a  mass  of 
obsolete  and  worthless  claims  and  demands  on  which  no  action 
could  be  maintained,^"  or  property  which  the  l)ankru]it,  in  good 
faith,  thought  did  not  pass  to  the  trustee,^^  or  where  the  evi- 
dence does  not  show  a  legally  consummated  gift  or  transfer.^- 
The  fact  that  a  bankrupt's  interest  in  land  is  doubtful  and  if  it 
exists  may  be  exempt  does  not  prevent  its  omission  from  the 
schedule  being  a  concealment,  but  is  evidence  to  be  consid- 
ered in  determining  whether  or  not  there  was  fraudulent  in- 
tent.'" 

A  claim  for  alimony  which  has  not  gone  to  judgment  is  not 
property  which  passes  to  the  trustee  and  its  omission  from  the 
schedule  is  therefore  not  an  offense,'*  nor  is  the  concealment  of 
property  acqin'red  after  adjudication;'"^  it  has  also  been  said 
that  there  can  be  no  concealment  under  the  act  when  the  title 
to  all  the  bankrupt's  property  passed  to  a  receiver  before  bank- 
ruptcy proceedings.'"  The  offense  of  concealment  can  not 
be  imputed,  so  where  tlie  husband  of  an  innocent  bankrupt 
conceals  property  the  bankrupt  is  not  guilty  of  an  offense.'^ 

The  failure  to  include  in  the  schedule  money  in  bank,  after 

■^  In  re  Welch,    100   I'cd.   Rep.  65,  "  /;/    re    Parker,    No.    10720,    Fed. 

3  Am.  B.  R.  9.? ;  In  re  Remis,   104  Cas.,  s.  c.  4  Biss.  501. 

Fed.  Rep.  672,  5  Am.  B.  R.  36;  In  ^'^  In  re  Pearce,  21   Vt.  611. 

re  Becker,  106  Fed.  Rep.  54,  5  Am.  "  Riigely    v.    Robin.son,    19    Ala. 

B.    R.    438;    Bragasa    v.    St.    Louis  404;  In  re  Adams,  104  Fed.  Rep.  72, 

Cycle,  107  Fed.  Rep.  77,  5  Am.  B.  R.  4  Am.  B.  R.  696. 

700;    In    re   Wilcox    (C.    C.   A.,   2d  '^/n  re  Lecuw,  3  Am.  B.  R.  41R. 

Cir.)    log  Fed.   Rep.  628,  6  Am.   R.  '•''/«  re    lOdd,   IT2  I'ed.  Rep.  315, 

R.   362;    In   re   Gammon,    109   Fed.  7  Am.   B.   R.  770. 

Rep.  312,  6  Am.   B.   R.  482;   In  re  ^*  In  re  Le  Claire,  124  Fed.  Rep. 

Quackenbiish,   102  Fed.   Rep.   282,  4  654. 

Am.  B.  R.  274.  'f*/;!  re  Parisli,  122  Fed.  Rep.  553. 

** /«   re   Whetmorc,   fy)    VvA.    Rep.  '" /n  re  Lesser  f  C.  C.  A.,   2d   Cir.), 

703,  3  Am.   B.  R.  700;  In  rr   Mor-  114  Fed.  Rep.  83,  8  Am.  B.  R.  15. 

row,  97  Fed  Rep.  574,  3  Am.  B.  R.  »t  In  re  Meyers,  105  Fed.  Rep.  353, 
263. 


658  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

the  bankrupt's  attenticni  has  been  called  to  it,  amounts  to  a 
concealment  although  if  it  had  been  included  the  assets  would 
not  amount  to  the  exemptions/^  or  be  sufficient  to  pay  for 
the  proceedings/"^  In  the  absence  of  any  explanation,  the  omis- 
sion of  property  of  value  from  the  schedule  after  being  ad- 
vised that  it  should  include  all  property,  is  sufficient  to  show 
a  fraudulent  concealment.""  So  also  is  the  failure  to  schedule 
an  interest  in  remainder  under  a  will  and  the  knowingly  send- 
ing to  a  false  address  the  notice  to  a  creditor,"^  and  the  selling- 
of  goods  at  wholesale  as  soon  as  purchased  and  paying  the 
proceeds  to  a  friend,^"  and  the  payment  of  debts  due  to  relatives 
when  such  debts  were  not  kept  in  books  of  account.^^  An  un- 
explained shrinkage  of  assets  is  evidence  of  concealment  ^*  and 
is  held  to  raise  a  presumption  and  to  throw  the  burden  strongly 
on  the  bankrupt.-^  If  accompanied  by  a  failure  to  keep  ac- 
count books  there  is  sufficient  proof  of  a  concealment/*^  but 
a  decision  based  merely  on  the  fact  that  there  was  an  unex- 
plained shrinkage  is  incorrect  when  the  only  evidence  to  show 
that  there  ever  were  such  assets  is  a  statement  to  a  mercantile 
agency.'^ 

Circumstances  to  establish  concealment  depend  more  or  'ess- 
upon  the  circumstances  of  each  particular  case.^^     Speaking  of 

5   Am.   B.   R.  4 ;  In  re  Hyman,  97  R.  800 ;  In  re  Morgan,  loi  Fed.  Rep- 
Fed.  Rep.  195,  3  Am.  B.  A.   169.  982,  4  Am.  B.  R.  402. 

18 /w  re  Royal,  112  Fed.  Rep.  135,  -^  In    re     Mendelsohn,     102    Fed. 

7  Am.  B.  R.   106.  Rep,    119,  4  Am.  B.  R.   103;  In   re 

i»  In  re  Lowenstcin,  106  Fed.  Rep.  Ablowich,  99  Fed.   Rep.   81,  3   Am. 

51,  2  Am.  B.  R.  193.    See  also  in  re  B.   R.   586;   In   re  O'Gara,  97  Fed. 

Roy,  96  Fed.  Rep.  400,  3  Am.  B.  R.  Rep.  932,  3  Am.  B.  R.  349. 

37.  -~  In   re   Lesser    (C.    C.    A.,   2nd 

20Osborn   v.    Perkins    (C.   C.   A.,  Cir.)    IT4  Fed.    Rep.  83,  8  Am.   B. 

ist  Cir.),  112  Fed.  Rep.  127,  7  Am.  R.  15. 

B.    R.    250.  -**  In     the     following     cases     the 

21 /n  re  Roosa,  119  Fed.  Rep.  542,  bankrupt  was  held  to  have  concealed 

9  Am.  B.  R.  531.  property:       In    re    Otto,    115    Fed. 

"/h   re   Holstein,   114   Fed.   Rep.  Rep.  860,  8  Am.  B.  R.  305,  753;  In 

794,   8   .^m.    B.   R.    147.  re    Kenyon,    112    Fed.    Rep.    658,    7 

-^  In  re  Greenberg,  114  Fed.  Rep.  .^m.   B.   R.    527;   In  re   Bullwinkle^ 

773,  8  Am.  B.  R.  94.  Ill  Fed.  Rep.  364,  6  Am.  B.  R.  756; 

24 /n  re  Leslie,  119  Fed.  Rep.  406,  In  re  Grossman,  ill  Fed.  Rep.  507,. 

9  Am.  B.  R.   561.  6   Am.   B.  R.  510;  In  re  Hoffman^ 

25 /n  re  Cashman,  103  Fed.   Rep.  102  Fed.  Rep.  979,  4  Am.  B.  R.  331; 

67,  4  Am.  B.  R.  326;  In  re  Finkle-  In  re  Quackenbush,   102  Fed.   Rep. 

stein,  loi   Fed.  Rep.  418,  3  Am.  B.  282,  4  Am.  B.   R.  274;  In  re  Bra- 


OFFEXSES.  659 

a  charg-e  of  concealing  property  to  defeat  a  discharge,  Judge 
Blatchford  said :  -'' 

"  A  fraud  of  the  kind  here  alleged  is  one  that  can  seldom 
be  proved  by  other  than  circumstantial  evidence.  The  par- 
ties to  the  transaction  are  generally,  as  in  this  case,  the  only 
witnesses,  and  if  their  stories  are  to  be  believed  as  told,  no 
fraud  can  be  established.  External  evidence  is  not  to  be  had, 
and  the  truth  must  be  reached  by  examining  the  evidence  of 
the  alleged  parties  to  the  fraud,  and  weighing  its  probabilities, 
and  scrutinizing  its  general  tenor  and  manner.  The  deter- 
mination of  the  question  of  fraud  or  no  fraud  must,  under  such 
circumstances,  depend  upon  the  impression  made  by  the  evi- 
dence of  the  parties  concerned.  Of  course  those  who  would 
commit  such  a  fraud  would  swear  falsely  to  carry  it  through. 
If  their  positive  testimony  to  the  honesty  of  the  transaction  is 
overborne  by  badges  and  indicia  of  fraud,  deduced  from  their 
own  testimony,  the  conclusion  must  be  that  there  was  fraud. 
If  their  positive  testimony  to  the  honesty  of  the  transaction 
is  true,  and  there  was  no  fraud,  there  will  not  be  found  in  their 
testimony  any  badges  and  indicia  of  fraud  sufficient  to  overbear 
such  positive  testimony."  The  charge  of  concealment  ought 
to  be  substantiated  either  by  direct  testimony,  or  by  such  facts 
as  afford  unequivocal  circumstantial  evidence  of  it.  It  cer- 
tainly ought  not  to  be  taken  to  be  true  upon  any  slight  or  am- 
biguous presumptions,  nor  upon  any  state  of  facts  which  do 
not  clearly,  and.  indeed,  almost  necessarily,  call  for  such  an 
inference.^**     It  should  be  borne  in  mind  that  the  degree  of 

gasa,   103  Fed.  Rep.  936,  4  Am.   B.  R.  R.  217:  /;;  re  Hansen,  107  Fed. 

R.    519;    In    re    Heyman,    104    Fed.  Rep.   252:   5   .\iti.   B.   R.  747;   In   re 

Rep.  677,  4  Am.   B.   R.  735;  In  re  Slingluff,  105  Fed.  Rep.  502.  5  Am. 

Wood,  98  Fed.  Rep.  972,  3  Am.  B.  B.    R.   76;   In   re  Adams,    104  Fed. 

R.  572;  /n  r^  Semmel,  118  Fed.  Rep.  Rep.   72,  4   .\m.    B.    R.  696:    In    re 

487,  9  Am.  B.  R.  351.  Locks,    104    Fed.    Rep.    783,    5    Am. 

In  the  following  cases  the  bank-  B.  R.   136;  Fellows  v.  Freudenthal, 

rupt  was  held  not  to  have  concealed  102  Fed.  Rep.  731.  4  Am.  B.  R.  490; 

his  property:     Fields  v.  Kartcr  (C.  In   re   Freimd,  98   Fed.   Rep.   81,  3 

C.  A.,  5th  Cir.)    115  Fed.  Rep.  950,  Am.  B.  R.  418;  hi  re  Le  Claire,  124 

8  .^m.  B.  R.  351;  In  re  Miner,  114  Fed.  Rep.  654,  10  Am.  B.  R.  — 
Fed.  Rep.  998,  8  Am.  B.  R.  248 ;  In  ^o  /„  fg  Goodridge,  No.  5547,  Fed. 

re   Howden,    iii    Fed.   Rep.   723,   7  Cas.,  s.  c.  2  N.  B.  R.  324. 
Am.   B.  R.   191 ;   In  re  Bryant,   104  ^^  In   re  Lafleche,    109    Fed.    Rep. 

Fed.  Rep.  789.  5  Am.  B.  R.  1 14 ;  In  307,  6  Am.  B.  R.  483 ;  In  re  Green- 

rc  Conn,  108  Fed.  Rep.  525;  6  Am.  berg,   114   Fed.    Rep.   yy^,  8   .'\m.   B. 


66o  LAW    AM)    l'Ut)CEEDINGS    IN    BANKRUPTCY. 

proof  here  spoken  of  is  not  that  necessary  to  convict  the  bank- 
rnpt.  but  that  necessary  to  sustain  specifications  in  opposition 
to  discharge.  To  convict,  the  proof  must  be  beyond  a  reason- 
able doubt. 

The  penalty  for  this  offense  is  imprisonment  for  a  period  not 
to  exceed  two  years."'^ 

^  231.     False  oath  or  account. 

It  is  an  ofTense  to  knowingly  and  fraudulently  make  a  false 
oath  or  account  in,  or  in  relation  to,  any  proceeding  in  bank- 
ruptcy.^^*    An  oath  includes  an  affirmation.''" 

An  offense  under  this  provision  may  arise  in  connection  with 
any  oath  or  al^rmation  made  in  any  part  of  the  proceedings, 
as  an  oath  to  a  schedule  filed  by  a  bankrupt,  an  oath  to  prove 
the  debt  of  a  creditor,  an  oath  made  to  an  account  by  a  trustee, 
or  a  deposition  or  testimony  given  by  any  person  in  the  course 
of  the  proceedings.  The  essential  elements  are  that  it  be 
made  knowingly  and  fraudulently,^^  that  it  be  false,  and  that 
it  be  in,  or  in  relation  to,  a  proceeding  in  bankruptcy.^*  It  is 
not  an  offense  punishable  under  the  act  to  unintentionally  make 
a  false  statement  under  oath,  and  it  would  seem  that  Sec.  7, 
sub.  9.  protects  the  bankrupt  if  he  intentionally  makes  a  false 
oath  on  his  examination.''^  The  mere  uiiderstatement  or  over- 
statement in  schedule,  of  the  amount  of  debts  does  not  warrant 
the  conclusion  that  the  bankrupt  was  misrepresenting  the  con- 
dition of  his  estate;^"  nor  is  proof  that  the  bankrupt  made 

R.  94;  III  re  Howden,  in  Fed.  Rep.  Am.  B.  R.  554;  In  re  Kaiser,  99  Fed. 

723.  7  .\m.  R.  R.  191;  In  re  Ferris,  Rep.  689,  3   Am.   B.    R.   767;   In  re 

105  Fed.  Rep.  356,  5  Am.  B.  R.  246;  Blalock,   118  Fed.   Rep.  679,  9  Am. 

In  re   Gaylord,   106  Fed.   Rep.  833,  B.  R.  266;  In  re  Beebe,  116  Fed.  Rep. 

5  Am.  B.  R.  410;  In  re  Corn,  106  48,  8  Am.  B.  R.  597. 

Fed.    Rep.    143,   5    Am.    B.   R.   478;  »* /n    re    Blalock,    118    Fed.    Rep. 

In   re  Fitchard,   103  Fed.   Rep.   742,  679,  9  Am.   B.   R.  266;   Bauman  v. 

4  Am.  B.  R.  609;  In  re  Steed,  107  Feist  (C.  C.  A.  8th  Cir.),  107  Fed. 

Fed.    Rep.    682,    6    Am.    B.    R.    73 ;  Rep.  83,  5  Am.  B.  R.  703. 

In    re    Leslie,    119    Fed.    Rep.    406;  ■''^ /n    re    Gaylord    (C.    C.    A.    2d 

In   re   Blalock,    118   Fed.    Rep.   679,  Cir.).  112  Fed.  Rep.  668,  7  Am.  B. 

9  Am.  B.  R.  266.  R.  I ;  In  re  Dow's  Estate,  105  Fed. 

8^  B.  A.  1898,  Sec.  29b.  Rep.  889,  5  Am.  B.  R.  400;  In  re 

31*  B.   A.    1898,   20b,   clause  2.  Goodale,  109  Fed.  Rep.  783,  6  Api. 

32  B.  A.   1898,  Sec.   I.  clause  17.  B.    R.   493;    In    re    Marx,    102   Fed. 

33 /rt  re  Freund,  98  Fed.  Rep.  81,  Rep.  676,  4  Am.  B.  R.  52. 

3  Am.  B.  R.  418;  Smith  v.  Keegan,  ^« /n  re  Miner,  114  Fed.  Rep.  988, 

III   Fed.  Rep.  157.  7  Am.  B.  R.  4;  8  .^m.  B.  R.  248. 
In  re   Pierce,    103  Fed.   Rep.   64,  4 


OFFENSES.  66 1 

Statements  contrary  to  his  oath,  proof  that  the  oath  was  false/^^ 
The  fact  that  the  bankrupt  files  amended  schedules  including 
property  left  out  of  the  first  schedules  is  evidence  that  the  false 
oath  to  the  first  was  not  knowingly  made,  but  is  not  conclu- 
sive, and  if  the  first  was  knowingly  made,  the  amended  sched- 
ule would  not  work  a  cure.^^  Where  the  offense  of  conceal- 
ment is  committed  by  omitting  assets  from  the  schedule  there 
must  necessarily  be  a  false  oath  as  the  schedule  must  be  verified 
by  the  bankrupt.^®  An  indictment  charging  perjury  for  omit- 
ting assets  from  schedules  is  defective  unless  it  charges  di- 
rectly that  there  was  other  property/" 

So  also  a  person  who  is  required  to  make  an  account  is 
guilty  of  an  offense  punishable  under  the  act  who  knowingly 
and  fraudulently  makes  a  false  one,  not  necessarily  under  oath. 
This  includes  the  schedule  of  a  bankrupt,  the  reports  of  the 
trustee,  receiver  and  Dther  ofincers  of  tlie  court,  and  any  person 
or  persons  refjuired  by  the  court  to  furnish  an  account  of  prop- 
ety  or  funds.  An  honest  mistake  or  an  omission  is  not  suffi- 
cient evidence  of  guilt.  It  must  have  been  intentional,  and 
for  the  purpose  of  deceiving  to  render  the  person  making  it 
guilty  of  an  offense. 

The  penalty  for  this  offense  is  imprisonment  for  a  period 
not  exceeding  two  years. ''^ 

§   232.     Presenting  false  claims. 

It  is  an  offense  ])unishable  luidcr  the  bankrupt  statute  to 
knowingly  and  fraudulently  present  under  oath  any  false  claim 
for  proof  against  the  estate  of  a  bankrupt,  or  use  any  such  claim 
in  composition  personally  or  by  agent,  proxy,  or  attorney,  or  as 
agent,  proxy,  or  attorney.'*^ 

The  essential  elements  of  this  offense  are:  First,  the  pre- 
senting of  a  false  claim  under  oath  for  proof  against  the  es- 
tate of  the  bankrupt  or  to  use  any  such  claim  in  composition; 
aufl.  secondly,  to  do  so  knowingly  and  fraudulently.  If 
either  of  these  elements  is  wanting,  it  is  not  a  punishable  of- 
fense.    The  offense  may  be  committed  not   only  by  the  per- 

"  P,aiim;m  v.   Feist    (C.  C.  A.  8th  486.    7    Am.    I'..    R.    762. 
Cir.),    107   Fed.   Kcp.  H.i,   5   Am.    B.  ■•"  liartlitt    v.    I'liitcd    .St,ites    (C. 

R.  703.  C.  A.  Qth  Cir.).   106  Fed.   Rep.  884, 

•'"' /w  rr  Eaton,  no  Fed.  Rep.  731,  5    Am.    P..    H.    678. 
6  Am.   P..   R.   531.  "'  IV    A.    i8f)8.   Sec.   2q/.. 

39 /n    re    Stnddart,    114    I'ed     Rep.  '•-P..    A.    1898,   Sec.   2f)b,  clause  3. 


662  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

son,  who  owns  the  claims,  or  who  is  to  be  benefited  by  prov- 
ing it,  but  may  be  committed  by  any  agent,  proxy  or  attor- 
ney who  actually  presents  the  false  claim,  knowing  it  to  be 
false  and  with  intent  to  practice  a  fraud  upon  the  real  cred- 
itors. 

The  penalty  for  this  offense  is  imprisonment  for  a  period 
not  to  exceed  two  years.  ^ 

§  233.     Receiving  property  from  a  bankrupt. 

It  is  a  punishable  offense  to  knowingly  and  fraudulently 
receive  any  material  amount  of  property  from  a  bankrupt 
after  the  filing  of  the  petition,  with  intent  to  defeat  the  act.^ 

The  gist  of  the  offense  created  by  this  clause  is  to  receive 
property  from  a  bankrupt  after  bankruptcy  proceedings  have 
been  commenced,  with  intent  to  keep  property  from  the  trus- 
tee. The  bankrupt,  who  so  transfers  property,  is  guilty  of 
the  offense  of  concealing  property  under  the  first  clause  of 
section  29.  This  clause  makes  the  person  receiving  such 
property  also  guilty  of  an  offense  punishable  under  the  act. 
The  offense  can  not  be  committed  unless  a  petition  has  been 
filed  in  a  court  of  competent  jurisdiction  in  which  a  trustee 
can  be  appointed.'^  It  is  also  essential  that  the  person  re- 
ceiving the  property  does  so  knowingly  and  fraudulently 
with  intent  to  defeat  the  act. 

The  penalty  for  this  offense  is  imprisonment  for  a  period 
not  to  exceed  two  years.* 

§  234.     Extorting  money  for  forbearing  to  act. 

It  is  a  punishable  offense  under  the  bankrupt  act  to  know- 
ingly and  fraudulently  extort  or  attempt  to  extort  any  money 
or  property  from  any  person  as  a  consideration  for  acting  or 
forbearing  to  act  in  bankruptcy  proceedings.^ 

Under  the  former  acts  it  was  held  that  acting  or  forbearing 
to  act  in  bankruptcy  proceedings  was  not  such  a  consider- 
ation as  would  support  a  note.'  But  the  present  statute  goes 
further;  it  makes  it  an  offense  punishable  by  imprisonment 
for  a  period  not  to  exceed  two  years. ^ 

'  B.  A.  1898,  Sec.  29<5.  5B.  A.  1898,  vSec.  2<^b,  clause  5. 

2  B.  A.  1898,  Sec.  29<5,  clause  4.  «  Rice  v.  Maxwell,  13  Smead.s  & 

3  See  U.  S.  V.  Latorre,  No.  15567,  M.  (21  Miss.)  289;  Bell  v.  Leggett, 
Fed.  Cas.,  s.  c.  8  Blatch.  134.  3  Selden  (7  N.  Y.)  178. 

♦B.  A.  1898,  Sec.  29/5.  7B.  A.  1898,  Sec.  29(5. 


OFFENSES.  663 

§  235.     Offenses  by  referees. 

The  bankrupt  statute  specifies  three  ofEenses  which  may  be 
committed  by  a  referee.  They  are,  if  he  knowingly,  firsts 
acts  as  a  referee  in  a  case  in  which  he  is  directly  or  indirectly 
interested ;  or,  second,  purchases,  while  a  referee,  directly  or 
indirectly,  any  property  of  the  estate  in  bankruptcy  of  which 
he  is  referee;  or,  third,  refuses,  while  a  referee  or  trustee,  to 
permit  a  reasonable  opportunity  for  the  inspection  of  the  ac- 
counts relating  to  the  affairs  of,  and  the  papers  and  records 
of,  estates  in  his  charge  by  parties  in  interest  when  directed 
by  the  court  so  to  do.  ^ 

It  is  not  an  offense  to  refuse  to  permit  an  inspection  of 
books,  etc.,  unless  such  an  inspection  has  been  ordered  by 
the  court.  If  an  inspection  is  denied  by  the  referee  or  trustee 
it  is  assumed  that  the  refusal  is  based  on  some  good  ground. 
If  it  is  not,  upon  application  to  the  court,  an  inspection 
will  be  allowed.  A  refusal  by  the  referee  or  trustee  after 
the  order  of  court  is  an  offense. 

The  penalty  in  case  of  any  of  the  offenses  mentioned  in 
this  section  is  a  fine  not  to  exceed  five  hundred  dollars  and  a 
forfeiture  of  the  office  of  referee.'  The  office  becomes  vacant 
immediately  upon  conviction. 

^  236.     What  court  has  jurisdiction  of  criminal  proceedings. 

Proceedings  to  punish  for  offenses  under  the  bankrupt  act 
may  be  instituted  in  a  court  of  bankruptcy  or  a  circuit  court 
of  the  United  States.  In  the  general  grant  of  powers,  con- 
ferred by  section  two  of  the  act,  upon  the  courts  of  bank- 
ruptcy, it  is  provided  that  they  "  are  hereby  invested,  within 
their  respective  territorial  limits  as  now  established,  or  as 
they  may  be  hereafter  ciianged,  with  such  jurisdiction  at 
law  and  in  equity  as  will  enable  them  to  exercise  original 
jurisdiction  in  bankruptcy  proceedings,  in  vacation  in  cham- 
bers and  during  their  respective  terms,  as  they  are  now  or 
may  be  hereafter  held,  to  ....  fourth^  arraign,  try, 
and  punish  bankrupts,  oflficers,  and  other  persons,  and  the 
agents,  officers,  members  of  the  board  of  directors  or  trustees, 
or  other  similar  controlling  bodies,  of  corporations,  for  viola- 
tions of  this  act,  in  accordance  with   the  laws  of  procedure 

»  B.  A.  1898,  Sec.  29^. 


664  lAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

of  the  Ignited  States  now  in  force,  or  such  as  may  be  here- 
after enacted,  regulating  trials  for  the  alleged  violation  of 
laws  of  the  Ihiited  States,"  and  section  twenty-three  c  pro- 
vides that  "  the  United  States  circuit  courts  shall  have  con- 
current jurisdiction  with  the  courts  of  bankruptcy,  within 
their  respective  territorial  limits,  of  the  offenses  enumerated 
in  this  act." 

The  court  for  the  district  within  which  the  offense  is  com 
mitted  has  jurisdiction  to  punish  for  the  offense. 

§  237.     Practice  and  procedure. 

Proceedings  to  punish  a  person  for  an  offense  under  the 
bankrupt  act  are  criminal  in  their  nature.  In  such  trials  and 
proceedings  the  bankrupt  act  expressly  adopts  "the  laws  of 
procedure  of  the  United  States  now  in  force,  or  such  as  may 
be  hereafter  enacted,  regulating  trials  for  the  alleged  viola- 
tion of  laws  of  the  United  States."'  So  also  the  right  to 
submit  an  alleged  offense  under  the  act  to  a  jury  is  deter- 
mined and  enjoyed  according  to  the  United  States  laws  now 
in  force,  or  such  as  may  be  hereafter  enacted,  in  relation  to 
trials  by  jury.^ 

Criminal  proceedings  in  bankruptcy  are  regularly  insti- 
tuted by  an  indictment  found  by  a  grand  jury.  But  it  has 
been  held  that  where  the  crime  is  not  infamous,  within  the 
meaning  of  that  term  as  used  in  the  fifth  amendment  to  the 
constitution,  the  person  committing  it  may  be  prosecuted  by 
mformation.'  It  would  seem  that  all  offenses  under  the 
present  bankrupt  act,  except  those  punishable  by  fine  only, 
are  infamous  within  the  definition  of  that  term  given  by  the 
supreme  court. '  It  has  been  said  that  "the  question  is  whether 
the  crime  is  one  for  which  the  statutes  authorize  the  court  to 
award  an  infamous  punishment,  not  whether  the  punish- 
ment ultimately  awarded  is  an  infamous  one.  When  the 
accused    is    in    danger  of    being  subjected    to   an  infamous 

IB.  A.  1898,  Sec.  2^c.  parte  Wilson,   114    U.   S.  424,  ri 

2  B.  A.  1888,  Sec.  19^.  seq.     See  also  Medley,  Petitioner, 

3U.  S.  V.  Block,  No.  14609,  Fed.  134   U.  S.    160;  Mackin  v.  U.   S., 

Cas.,  s.  c.  4  Saw.  211.  117  U.  S.  348;  Parkinson  v.  U.  S. 

<See  the  discussion  of  this  sub-  121   U.  S.  281;  U.  S.  v.  De  Walt, 

ject  by  Mr.  Justice    Gray   in   ex  128  U.  S.  393. 


OFFENSES. 


66: 


punishment  if  convicted,  he  has  the  right  to  insist  that  he 
shall  not  be  put  upon  his  trial  except  on  the  accusation  of  a 
grand  jury."  ' 

General  averments  in  an  indictment  are  not  sufficient.  It 
must  show  an  offense,  and  must  convey  to  the  accused  the 
information  necessary  to  enable  him  to  make  his  defense.* 
It  is  not  sufficient  in  an  indictment  to  aver  that  proceedings 
in  bankruptcy  were  duly  commenced.  It  must  be  pleaded 
and  proven,  in  order  to  convict,  that  a  petition  in  bankruptcy 
was  presented  to  the  bankruptcy  court  by  a  certain  creditor, 
naming  him,  and  also  the  amount  of  the  debt  of  such  peti- 
tioning creditor,  and  the  alleged  cause  of  bankruptcy,  and 
the  adjudication  of  bankruptcy.  It  must  appear  affirma- 
tively that  the  creditor  had  a  right  under  the  law  to  prose- 
cute proceedings  in  bankruptcy.  The  amount  of  his  debt 
must  appear,  otherw'ise  the  court  would  have  no  jurisdiction.* 
The  word  "feloniously"  should  not  be  used,  as  the  offense 
is  only  a  misdemeanor.  It  has  been  held  that  a  failure  to 
allege  specifically  that  the  property  concealed  was  the  prop- 
erty of  the  bankrupt  at  the  time  of  the  adjudication,  was  a 
formal  defect  and  not  fatal. '^  The  proceedings  subsequent  to 
the  indictment  are  such  as  are  regularly  had  in  criminal 
cases  in  federal  courts,  a  general  consideration  of  which  is 
not  within  the  scope  of  this  work. 

The  language  with  reference  to  who  may  be  punished  by  a 
court  of  bankruptcy  includes  bankrupts,  officers,  and  other 
persons,  and  the  agents,  officers,  members  of  the  boards  of 
directors,  trustees  and  other  similar  controlling  bodies,  of 
corporations.*  This  language  is  undoubtedly  broad  enough 
to  include  all  persons  who  conspire  with  the  bankrupt  to 
commit  the  offenses  mentioned  in  the  act.''  The  indictment 
must  be  found  or  information  filed  within  one  year  from  the 
commission  of  the  offense.* 

Mil    ex   parte   Wilson,    114    U.    S.  •"' U.    S.    v.    Jackson,    2    I'cd.    Rep. 

426.  502. 

2P.artIett  v.  U.   S.,   106  Fed.   Rep.  '  I'..   .\.    1K98,   Sec.  2,  clause  4. 

884,  5  Am.  B.  R.  678;  U.  S.  V.  La-  '-See  U.  S.  v.   Bayer,   No.    14547. 

torre,    No.    15567,    Fed.    Cas.,    s.    c.  Fed.   Cas.,   s.   c.  4  Dill.  407. 

8  Blatch.  134;  U.  S.  v.  Prescott,  No.  Consult  U.  S.  v.  Stevens,  44  Fed. 

16084,    Fed.   Cas.,  2  Hiss.  325.  Rep.    132;  U.   S.  v.   Snyder,  8  Fed. 

Consult    al.so    Reg.    v.    Lands,    2,2,  Kcp-  805,  s.  c.  14  Fed.  Rep.  554;  U. 

Eng.    Law    and    Eq.    536;    Rex     v.  S.  v.  Houghton,  14  Fed.  Rep.  544. 

Jones,    24    E.    C.    L.    156;    Reg.    v.  "  B.    A.    1898,    Sec.   29^. 
Ewington,   41    E.    C.    L.    178;    Reg. 
V.  Bovd.  =;  Cox  Cr.  Cas.  .';o2. 


666 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


CHAPTER  XXII. 

PROCEEDINGS  TO  PUNISH  FOR  CONTEMPT. 

§  238.     The  power  to  commit. 

The  power  to  punish  for  contempt  is  inherent  in  all  courts 
of  the  United  States.^  But  the  power  is  expressly  conferred 
upon  courts  of  bankruptcy  to  enforce  obedience  by  bankrupts, 
officers  and  other  persons  to  all  lawful  orders,  by  fine  or 
imprisonment,  or  fine  and  imprisonment,  and  to  punish  per- 
sons for  contempts  committed  before  referees.^  A  referee  has 
no  power  to  punish  a  contempt.^ 

A  court  of  bankruptcy  may  undoubtedly  punish  a  person 
who  has  misbehaved  in  the  presence  of  the  court ;  *  or  so  near 
thereto  as  to  obstruct  the  administration  of  justice,  as  on  a 
piazza  adjoining  the  court-room,^  or  in  a  jury-room  or  hall,* 


1  Ex  parte  Robinson,  19  Wall. 
510. 

2  B.  A.  1898,  Sec.  2,  clauses  13 
and  16,  and  Sec.  41. 

In  Boyd  v.  Glucklich  (C.  C.  A. 
8th  Cir.),  116  Fed.  Rep.  131,  8  Am. 
B-  R.  393-  the  court  construing  this 
section   said : 

"  By  reference  to  section  41  it 
will  be  seen  that  'the  things  for- 
bidden in  this  section,'  concerning 
which  the  referee  is  required  to  cer- 
tify the  facts  to  the  judge,  include 
only  those  things  which  would  be 
punishable  as  contempts  by  all 
courts  of  record.  They  are  the 
common  and  familiar  heads  for  the 
exercise  of  this  jurisdiction  by  all 
courts  of  record.  No  new  or  en- 
larged jurisdiction  is  conferred,  and 
no  power  to  impose  a  punishment 
which   might   not   rightly   and    law- 


fully be  imposed,  on  a  similar  state 
of  facts,  by  any  other  United  States 
court.  Any  act,  matter,  or  thing 
which  any  United  States  court 
may  punish  as  a  contempt  may 
be  punished  as  such  by  a  court 
of  bankruptcy ;  and  any  act,  mat- 
ter, or  thing  which  cannot  be  pun- 
ished as  a  contempt  by  other  United 
States  courts  cannot  be  punished 
as  such  by  a  court  of  bankruptcy." 

•■'B.   A.    1898,    Sec.   41. 

*  U.  S.  V.  Patterson,  26  Fed.  Rep. 
509;  Blight  V.  Fisher,  No.  1542, 
Fed.   Cas.,  s.   c.    Pet.   C.  C.  41. 

^  United  States  v.  Carter,  No. 
14740,  s.  c.  3  Cranch,  C.  C.  423 ; 
Ex  parte  Salkey,  No.  12253,  Fed. 
Cas.,  s.  c.  6  Biss.  269,  affirmed  on 
petition  for  habeas  corpus.  No. 
12254,  Fed.  Cas.,  s.  c.  6  Biss.  280. 

"  See  In  re  Savin,  131  U.  S.  267. 


CONTEMPT.  667 

or  before  a  referee,"  or  where  there  has  been  misbehavior  of 
any  officer  of  the  court  in  his  official  transactions,  as  where 
one  of  its  officers  refuses  to  pay  over  money  due  from  him  in 
his  official  capacity,*  or  where  a  witness  refuses  to  be  sworn 
according  to  law,"  or  where  a  witness  refuses  to  answer  ques- 
tions in  court  or  before  a  referee,^"  or  where  there  has  been 
disobedience  or  resistance  by  a  bankrupt,  officer,  or  other  per- 
son, to  any  lawful  writ,  process,  order,  rule  or  decree,  or  com- 
mand of  the  court,^^  or  where  the  bankrupt  after  filing  petition 
surrendered  mortgaged  property  to  the  mortgagee,^-  or  where 
the  bankrupt  withdraws  from  the  office  of  the  referee  before 
the  completion  of  his  examination/^ 

It  is  a  contempt  to  disobey  or  resist  any  lawful  process  of 
the  court  duly  served,  as  a  subpcena  to  a  witness  to  testify  in 
court,^*  or  before  a  referee,^^  or  to  produce  written  docu- 
ments,^" or  a  final  decree  or  interlocutory  order  of  the  court. 

Where  a  person  has  used  due  diligence  to  comply  with  the 
orders  of  the  court,  he  is  not  guilty  of  contempt.^^  It  has 
been  said  that  an  order  of  court  "  does  not  mean  a  written 
order  always,  but  only  an  exercise  of  authority  constituting 
a  requirement."  ^^  The  question  as  to  whether  the  act  con- 
stitutes a  contempt  rif  an  order  of  court  usuallv  arises  how- 
ever ujKjn  a  writing,  as  upon  an  order  to  deliver  propertv  by 

'R.    A.    1898,    Sec.   2,   clause    16;  i*  B.   A.    1898,   Sec.   2Ta;   Carmen 

Sharon  v.  Hill,  24  Fed.    Rep.   726;  v.  Emerson,  71  Fed.  Rep.  264,  s.  c. 

United    States    v.    Anonymous,    21  18   C.    C   A.   38;    United   States   v. 

Fed.  Rep.  761.  Caldwell,    2    Dall.    333;    Nnrris    v. 

^  In  re  Pittman,  No.   11 184,   Fed.  Hassler,   22,    Fed.    Rep.    581;    In   re 

Gas.  s.  c.   I   Curtis   186;  Jeffries  v.  Ellcrbe,  13  Fed.  Rep.  530. 

Laurie,    27    Fed.    Rep.    198;    In    re  ^^  r    ^    jg^g^   Sec.  210  and   Sec. 

Pascal,     ro    Wall.    491 ;    Bogart    v.  41  ;    In   re   Howard,   95    Fed.    Rep. 

Supply  Co..  27  Fed.  Rep.  722.  415,  2  Am.  B.  R.  582;  In  re  Spof- 

»B.     A.     1898,    Sec.    210,-    In    re  ford,    62    Fed.    Rep.    443;    Johnson 

Howard,  95   Fed.   Rep.   415,  2  Am.  Steel    Co.    v.    N.    B.    Steel    Co.,    48 

B.  R.  582.  Fed.    Rep.    191 ;    In    re    Allen,    No. 

10  B.  A.  1898,  Sec.  2ifl.  208  Fed.  Cas.,  s.  c.  13  Blatch.  271. 

"B.   A.    1898,   Sec.   2,  clause   13;  i"  R.   A.  1898.  Sec.  41. 

Mueller    v.    Nugent,    184    U.    S.    i,  it/„  ,-(.  Carpenter,  No.  2427,  Fed. 

7   Am.   B.   R.   224.  Cas.,  s.  c.  i  N.  B.  R.  299. 

i"/h    re    Arnett,    112    Fed.    Rep.  1**  F^ridges  v.  Sheldon,  7  Fed.  Rep. 

770,   7  Am.   B.  R.  522.  45. 

'•'  In    re    Vogel.    No.    16984,    Fed. 
Cas.,  s.  c.  5  N.  B.  R.  393. 


668  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

the  bankrupt,^"  or  an  order  of  injunction.  It  should  be  ob- 
served that  it  is  tMily  hiwful  orders,  the  disobedience  of  which 
may  be  punished  for  contempt.  The  court  has  powe'r  to  order 
a  bankrupt  to  pay  over  to  his  trustee  money  found  to  be  in 
his  possession  or  control  and  properly  belonging  to  his  estate, 
and  if  the  bankrupt  fails  to  obey  such  order,  the  court  may 
commit  him  for  contempt  until  he  complies.""  The  same  rule 
has  been  applied  in  cases  of  an  agent  or  bailee  of  property  of 
the  bankrupt,-^  or  in  case  of  failure  to  produce  books  of  ac- 
count when  ordered.-"  If,  however,  the  court  is  without  power 
to  make  the  order  it  is  without  power  to  punish  for  a  dis- 
obedience of  it."^  Where  the  person  having  possession  of  prop- 
erty claimed  by  the  bankrupt,  sets  up  an  adverse  claim  in  him- 
self to  the  property,  he  is  entitled  to  a  plenary  suit."^  In  such 
cases  he  can  not  be  required  to  answer  a  rule  to  show  cause 
in  a  summary  proceeding  for  disobedience  of  an  order  to  turn 
over  to  the  trustee  such  property."^ 

The  courts  have  frequently  been  called  upon  in  the  exer- 
cise of  general  jurisdiction  to  determine  what  constitutes 
contempt  of  court  in  the  disobedience  or  resistance  of  an  in- 
junction order.  Generally,  to  do  the  thing  enjoined  is  con- 
tempt, and  it  has  been  held  to  be  a  violation  of  an  injunc- 
tion for  the  person  enjoined  to  be  present  at  the  commission 
of  the  act  aiding  and  abetting,  although  not  actually  taking 
part  in  it,^*  or  to  do  the  act  enjoined  as  agent  or  servant  of 

19  Mueller  v.  Nugent,  184  U.  S.  i,  2  Am.  B.  R.  787;  In  re  Gerstel,  10 

7  Am.  B.  R.  224;  In  re  Salkey,  No.  Am.    B.    R.  411. 

12254,   Fed.   Cas.,  s.  c.  6  Biss.  280 ;  -1  Mueller   v.    Nugent,    184   U.    S. 

In    re    Peltasohn,    No.    10912,    Fed.  i,  7  Am.   B.   R.  224 

Cas.,  s.  c.  4  Dill.  107;  In  re  Speyer,  22 /„    ^g    Wilson,    116    Fed.    Rep. 

No.  13239,  Fed.  Cas.,  s.  c.  6  N.  B.  R.  419,  8  Am.  B.  R.  612. 

255.  2.3  Louisville    Trust    Co.    v.    Com- 

20 /m    re    Rosser    (C.    C.    A.    8th  ingor,  184  U.  S.  18,  7  Am.  B.  R.  421. 

Cir.),  loi   Fed.  Rep.  562,  4  Am.  B.  24  D^nj^^    v.    Gray,    3    Fed.    Rep. 

R.    153;    Ripon    Knitting    Wks.    v.  868;    St.   John's    College  v.    Carter, 

Schreiber,    loi     Fed.    Rep.    810,    4  8  Law  Journ.   Eq.  N.    S.  218;   So- 

Am.   B.   R.  299;   In  re    Schlesinger  ciete  v.  Distilling  Co.,  42  Fed.  Rep. 

(C.   C.  A.  2d   Cir.),   102   Fed.   Rep.  96. 

117,  4  \m.  B.  R.  361 ;  In  re  Wilson,  In  In  re  Wall,  13  Fed.  Rep.  818, 

116  Fed.  Rep.  419,  8  km.  B.  R.  612;  the    court    sid :      "I    am    too    well 

In  re  Greenberg,  106  Fed.  Rep.  496,  aware  of  his  influence  in  this  com- 

5  Am.  B.  R.  840;  In  re  Purvine  TC.  munity   not  to  know  that  his  pres- 

C.  -A..   5th  Cir.),  96  Fed.  Rep.   192,  ence    would    be    ample    encourage- 


CONTEMPT. 


669 


another  person.-''  The  mere  fact  that  a  person  did  not  think 
that  his  act  amounted  to  a  violation  of  the  injunction  is  no 
defense,""  nor  the  fact  that  he  acted  under  advice  of  counsel.-' 
But  where  the  violation  of  an  injunction  order  is  not  willful 
this  fact  may  be  considered  in  mitigation  of  the  punishment 
to  be  imposed.-^  It  is  well  settled  that  a  showing  made  by  a 
respondent  that  he  is  unable  to  do  an  act  required  of  him  upon 
an  order  to  show  cause  is  a  sufficient  answer.-"'  It  matters  not 
for  the  purpose  of  such  a  proceeding  that  the  inability  to  do 
the  thing  required  may  be  in  consequence  of  his  own  fault  aris- 
ing from  a  mere  misconception  of  his  rights  or  committed  be- 
fore the  court  took  jurisdiction  of  the  matter  ;  the  court  can  not 
compel  an  impossibility. 

The  power  of  the  court  of  bankruptcy  to  punish  for  the  dis- 
obedience of  its  orders  extends  only  to  such  orders  as  actually 
exist,-"'"  and  after  the  person  enjoined  has  had  notice.^^  An 
order  actually  made  by  the  court  is  binding  until  reversed 
or  set  aside,  even  though  the  court  making  it  is  without  juris- 
diction.^^ 


ment  to  others  on  such  an  occasion. 
It  is  not  alone  by  words  that  one 
advises  and  encourages,  and  the  fact 
of  his  presence  and  action  is  suf- 
ficient not  only  to  find  an  encourag- 
ing thereby,  but  raise  the  presump- 
tion on  his  doing  the  same  by 
words." 

2'-  Dunks  V.  Gray,  3  Fed.  Rep. 
868;    41    Vt.    246. 

2"  Atlantic,  etc.,  Co.  v.  Dittmar 
Co.,  9  Fed.  Rep.  316. 

"  Burr  V.  Kimbark,  29  Fed.  Rep. 
432;  United  States  v.  Memphis,  etc., 
R.  R.  Co.,  6  Fed.  Rep.  238;  Good- 
year V.  Mullee,  No.  5577,  Fed.  Cas., 
s.  c.  5  Blatch.  429;  Ulman  v.  Ritter, 
72  Fed.  Rep.  1000;  Socicte  v.  Dis- 
tilling Co.,  42  Fed.  Rep.  96. 

28  Morss  V.  Sewing  Machine  Co., 
38  Fed.  Rep.  482;  Iowa  P.nrb  Wire 
Co.  V.  Southern  Co.,  30  I-'ed.  Rep. 
615. 

zoRoyd  V.  Glucklich  (C.  C.  A. 
8th  Cir.),  116  Fed.  Rep.  131.  «  Am. 


B-  R-  393;  In  re  Fclson,  124  Fed. 
Rep.  288;  Ex  parte  Comingor  (C. 
C.  A.  6th  Cir.),  107  Fed.  Rep.  898, 
5  Am.  B.  R.  537;  Hendryx  v.  Fitz- 
patrick,  19  Fed.  Rep.  810,  814.  per 
Lowell  and  Nelson,  Judges ;  In  re 
Chiles,  22  Wal.  157,  168;  Kane  v. 
Haywood,  66  N.  C.  I ;  In  re  Haus- 
man  (C.  C.  A.  2(1  Cir.),  121  Fed. 
Rep.   984. 

•'"/t.r  parte  Buskirk,  72  Fed.  Rep. 
14;  s.  c.   18  C.  C.  A.  410. 

^'  In  re  Cary,  10  I'Vd.  Rep.  622. 
.See  notes  to  this  case  for  discus- 
sion of  contempt;  In  re  Schwartz, 
14  Fed.  Rep.  787;  Ulman  v.  Ritter, 
72  Fed.  Rep.  looo;  Toledo,  etc,  R. 
R.  Co.  V.  Penii.  Co..  54  Fed.  Rep. 
746. 

32  Worden  v.  Searls,  ui  U.  S. 
14;  /;/  ;v  Faton.  51  l-'ed.  Ren.  804; 
Wagner  v.  U.  S.  (C.  C.  A.  6th 
Cir.),  104  Fed.  Rep.  133,  4  Am. 
B.  R.  596. 


670  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

In  the  ordinary  case  of  advising  clients  if  an  attorney  gives 
it  in  good  faith  and  in  the  honest  beHef  that  his  advice  is  well 
founded  and  in  the  just  interest  of  his  client,  he  can  not  be 
held  for  contempt  for  error  in  judgment."'^  Where  judicial 
action  is  alleged  to  have  been  induced  l)y  the  advice  of  counsel 
complained  of,  on  the  ground  that  there  is  conspiracy  between 
the  state  court  and  the  attorneys  to  obstruct  the  administra- 
tion of  justice,  the  attorneys  can  not  be  punished  for  con- 
tempt.^^ 

§  239.     Nature  of  the  proceedings. 

Proceedings  for  contempt  are  of  a  twofold  nature,  crim- 
inal and  civil.  For  the  purpose  of  punishing  the  guilty  party 
for  his  disrespect  to  the  court  or  its  order  the  proceeding  is 
criminal.^*  As  a  means  of  compelling  obedience  to  some  law- 
ful order  requiring  the  party  to  perform  some  act  or  duty 
required  of  hirii,  and  which  he  refuses  to  perform,  the  pro- 
ceedings may  be  civil  or  criminal. ^^  Thus  if  the  respond- 
ent had  in  his  possession  property,  and  is  ordered  to  deliver 
it  to  the  court,  or  some  person  named  by  the  court,  within  a 
fixed  time,  and  he  willfully  refuses  to  obey  the  order,  it  be- 
ing within  his  power  to  do  so,  then  a  civil  process  of  con- 
tempt may  be  resorted  to  as  a  means  of  compelling  obedience 
to  the  order  of  the  court,  and  the  party  refusing  to  obey  may 
be  confined  and  imprisoned  until  he  performs  the  act  re- 
quired of  liim  or  shows  that  it  is  not  in  his  power  to  do  it.^'^ 

^'  In    re    Watts    and    Sachs,    igo  ing  should   be   criminal    in    form   it 

U.  S.   I.  would  make  no  difference.    A  crim- 

^*  New  Orleans  v.  Steamship  Co.,  inal    sentence    for    the   benefit   of   a 

20  Wall.  393 ;  Ex  parte  Kearney,  7  private   person    is   to   be   treated   as 

Wheat.  38 ;  In  re  Manning,  44  Fed.  civil   to    all    intents   and   purposes." 

Rep.   27s ;    United    States  v.   Berry,  See   also    observation    of    Mr.    Jus- 

24  Fed.  Rep.  780 ;  In  re  EUerbe,  13  tice  Miller  in  In  re  Chiles,  22  Wall.  - 

Fed.   Rep.    530.  168. 

35  See  Worden  v.   Searls,   121   U.         ^e  /„  yg  Salkey,   No.    12254,   Fed. 

S.  26;   Hays  V.  Fischer,   102  U.  S.  Cas.,  s.   c.  6  Biss.  280;  In  re   Pel- 

122;  In  re  Graves,  29  Fed.  Rep.  60;  tasohn.  No.   10912,   Fed.   Cas.,  s.  c. 

4    Blackstone's    Com.    285;    Wells,  4    Dill.    107;    In    re    Speyer,    No. 

Fargo    &    Co.    v.    Oregon    Co.,    19  13239,  Fed.   Cas.,  s.   c.  6   N.   B.   R. 

Fed.  Rep.   20.  255  ;  In  re  Graves,  29  Fed.  Rep.  60 ; 

In    Hendryx    v.     Fitzpatrick,     19  Hendryx     v.     Fitzpatrick,     19    Fed. 

Fed.  Rep.  810,  on  page  813,  Judge  Rep.  813 ;  In  re  Chiles,  22  Wall.  168. 
Lowell  observed:  "If  the  proceed- 


CONTEMPT.  671 

He  may  also  be  proceeded  against  criminally,  because  the 
disrespect  being  willful,  it  is  an  offense  against  the  govern- 
ment. 

^  240.     Practice,  pleadings  and  procedure. 

The  mode  of  proceeding  in  a  court  of  bankruptcy  to  de- 
termine whether  a  constructive  contempt  has  been  committed 
should  conform  to  the  established  practice  in  like  cases  in 
all  other  United  States  courts  as  near  as  may  be,  and  what  is 
legally  sufficient  to  purge  a  contempt  in  the  other  courts  of 
the  United  States  is  sufficient  to  purge  the  like  contempt  in  a 
court  of  bankruptcy.^" 

It  is  proper  and  probably  better  practice  to  bring  the  ques- 
tion of  contempt  to  the  attention  of  the  court  by  a  petition 
or  motion  for  rule  to  show  cause.  The  practice  in  the  federal 
courts  in  contempt  proceedings  has  been  far  from  uniform  in 
this  respect. 

In  case  the  proceedings  are  instituted  to  punish  a  con- 
tempt committed  before  a  referee  they  are  commenced  by  a 
certificate  of  the  referee. ^^  The  judge  thereupon,  in  a  sum- 
mary manner,  hears  the  evidence  as  to  the  acts  complained 
of,  and  if  it  is  such  as  to  warrant  him  in  so  doing,  pun- 
ishes such  person  in  the  same  manner  and  to  the  same  ex- 
tent as  for  a  contempt  committed  before  the  court  of  bank- 
ruptcy, or  commits  such  person  upon  the  same  conditions  as 
if  the  doing  of  the  forbidden  act  had  occurred  with  refer- 
ence to  the  process  of,  or  in  the  presence  of.  the  court.''** 

The  petition  or  motion  may  be  entitled  and  filed  in  the 
original  action. '""*  Where  the  proceeding  is  criminal,  and 
punishment  is  asked  for,  it  may  be  instituted  in  the  name  of 
the  United  States.'*"  The  ])etition  should  state  the  names  of 
the  persons  to  be  attached  :*'  the  specific  acts  of  commission 

87  Boyd    V.    Glncklich    (C.    C.    A.  son    R.    S.   Co.,   16  Fed.   Rep.   853; 

8th  Cir.),  116  Fed.  Rep.  131,  8  Am.  United    States  v.    iMiirphy,  44   Fed. 

B.  R.  393.  Rep.  39- 

8«  B.   A.    1898,   Sec.  41&.     Sec  U.  ■••  Creditors  v.  Cozzcns,  No.  3378, 

S.  V.  Anonymous,  21  Fed.  Rep.  761.  Fed.   Cas.,    s.   c.   3   N.   B.   R.   281 ; 

30  See  Creditors  v.   Cozzens,   No.  American  Construction   Co.  v.   Rail 

3378,  Fed.  Cas.,  s.  c.  3  N.  B.  R.  281.  Road  Co.,  52  Fed.  Rep.  937. 

<•  As  in  United   States  v.  Atche- 


672  LAW    AND    rR()CEEDINGS    IN    BANKRl'PTCY. 

or  omission  which  constitute  the  contempt  ;■*'  when  and  where 
committed  ;^"'  that  the  order,  if  any,  was  lawful,  and  the 
date  made  and  by  whom ;  the  allowance  or  grant  of  an  injunc- 
tion, if  any,  when  and  l)y  whom,  and  that  it  had  been  issued 
on  the  terms  specified  and  within  the  limits  imposed,  and  had 
been  duly  served  in  the  mode  required  by  it,  and  by  the 
proper  officer.  In  some  cases  it  is  necessary  to  charge  that 
the  acts  complained  of  were  done  "  willfully  and  contemptu- 
ously," and  "  with  full  notice  and  knowledge."  ** 

The  prayer  or  request  of  the  petition  or  motion  should  be 
for  an  order  or  rule  requiring  the  contemnor  to  appear  in 
court  at  a  certain  time  and  place,  and  show  cause  why  he 
should  not  be  attached  and  punished  for  contempt. 

The  facts  stated  in  the  petition  should  be  verified  by  an 
affidavit,  and  a  motion  should  be  supported  by  affidavits 
setting  forth  the  facts.  A  copy  of  the  petition  or  motion 
and  affidavits  should  generally  be  served  upon  the  contemnor 
personally.*'^ 

The  court  will  ordinarily  order  a  rule  to  show  cause  to 
issue  if  a  prima  facie  case  is  made.  It  is  not  necessary 
that  the  matter  alleged  as  the  foundation  for  the  charge 
appear  in  the  rule  to  show  cause,  because  the  rule  is  served 
merely  as  a  basis  for  process.  The  rule  to  show  cause 
should  be  personally  served  on  the  contemnor.  The  attach- 
ment to  take  the  body  of  the  contemnor  is  rarely  resorted  to, 
for  the  reason  that  if  he  appear  on  the  day  specified  it  is  not 
necessary,  and  if  he  does  not  appear  the  rule  may  be  made 
absolute,  and  if  convicted  he  may  be  arrested  under  a  war- 
rant or  a  mittimus.     But  when  there  is  danger  that  the  con- 

*2  Toledo  C   C.  R.   Co.  v.    Penn.  Rail  Road  Company,  52  Fed.  Rep. 

Co.,   54   Fed.    Rep.    747.      See    also  938;   United    States  v.    Murphy,  44 

In  re  Swan,   150  U.  S.  637;  In  re  Fed.  Rep.  40;  Gray  v.  Chicago,  etc., 

Sawyer,  124  U.  S.  207.  R.  R.  Co.,  No.  5713,  Fed.  Cas.,  s.  c. 

*^  See  United  States  v.  Berry,  24  Woolw.  63.     Bnt  see  Fanshawe  v. 

Fed.  Rep.  780;  In  re  Litchfield,   13  Tracy,  No.  4643,  Fed.  Cas.,  s.  c.  4 

Fed.  Rep.  868-9.  Riss.  490. 

*'-  See      statement      in      affidavits  In    Smith   v.    Belford    (C.    C.    A 

charging  In  re   Sawyer,   124  U.    S.  6th  Cir.),  106  Fed.  Rep.  658,  5  Am. 

207;  Toledo,  etc.,  Ry.  Co.  v.  Penn.  B.  R.  291,  the  want  of  notice  wa-o 

Co.,  54  Fed.  Rep.  751.  held  error. 

<^  American    Construction    Co.    v. 


CONTEMPT. 


^7Z 


temnor  will  flee  from  the  district,  the  attachment  has  been 
issued  immediately  upon  instituting  the  jiroceedings."  In 
one  case,  at  least,  a  rule  has  been  issued  requiring  him  "  to 
appear  in  court  forthwith  to  show  cause."  *" 

To  the  rule  to  show  cause,  the  contemnor  may  make  re- 
turn or  answer  under  oath  before  the  day  set  for  hearine-  in 
which  he  may  deny  the  allegations  of  the  petition  or  admit 
them,  or  admit  them  and  justify  his  action.*^  The  denials 
in  the  return  or  answer  are  not  conclusive.''^  At  common 
law  the  sworn  answer  was  not  to  be  controverted  as  to  mat- 


■*"  This  was  done  in  Thomas  v, 
C.  N.  O.  &  T:  P.  R.  R.  Co.,  in  re 
Phelan,  62  Fed.  Rep.  817,  and  the 
person  was  brought  directly  to 
court  and  admitted  to  bail,  al- 
though this  does  not  appear  in  the 
report  of  the  case. 

But  consult  the  observation  of 
Judge  Drummond  in  Fanshawe  v. 
Tracy,  No.  4643,  Fed.  Cas.,  s.  c.  4 
Biss.  490. 

*^  This  was  done  in  Toledo,  etc., 
R.  Co.  V.  Penn.  Co.,  54  Fed.  Rep. 
751.  But  see  Boyd  v.  Glucklich 
(C.  C.  A.  8th  Cir.),  116  Fed.  Rep. 
131,  8  Am.  B.  R.  393. 

**•  This  was  done  In  re  Swan, 
150  U.  S.  639;  In  re  Sawyer,  124 
U.  S.  207;  In  re  .\ycrs,  123  U.  S. 
456. 

In  Boyd  v.  Glucklich  (C.  C.  A. 
8th  Cir.),  116  Fed.  Rep.  131,  8  Am. 
B.  R.  393,  the  court  said:  "Dis- 
patch in  judicial  proceedings  is  com- 
mendable, but,  in  proceedings  in- 
volving the  liberty  of  a  citizen, 
he  has  a  right  not  only  to  be  in- 
ff)rmed  of  the  precise  claim  against 
him,  but,  after  receiving  that  infor- 
mation, he  has  a  right  to  a  reason- 
able time  to  prepare  his  answer 
and  present  his  proofs,  and,  lastly, 
10  be  heard  by  cotmscl  on  the  law 
and  facts  of  the  case.  While  pro- 
ceedings in  bankruptcy  may  be  sum- 
mary, they  .should  not  be  too  sum- 
mary ;   in  other   words,  they  should 


not  be  so  summary  as  to  deprive 
the  bankrupt  of  those  fundamental 
rights  and  privileges  that  belong 
to  every  citizen,  among  which  are 
the  right  to  be  advised  of  the  de- 
mand made  upon  him,  and  the 
right,  after  being  so  advised,  to 
have  a  reasonable  time  to  prepare 
his  defense  and  produce  his  wit- 
nesses. The  Bankrupt  Act  does 
not  do  away  with  these  rights,  and 
no  citizen  forfeits  them  by  being 
adjudged    a    bankrupt." 

♦^2  High  on  Injunctions,  1455; 
United  States  v.  .Anonymous,  21 
Fed.   Rep.   "jd-j. 

In  Ripon  Knitting  Works,  loi 
Fed.  Rep.  810,  4  Am.  B.  R.  299, 
Judge  llanford  said:  "One  of 
the  principal  grounds  of  defense 
upon  which  the  respondent  relies 
is  contained  in  his  answer  denying 
that  he  has  any  money.  His  an- 
swer is  not  conclusive,  but  the  rule 
in  such  cases  requires  that  the  denial 
be  overcome  by  evidence  proving 
beyond  a  reasonable  doubt  that  the 
bankrupt  actually  has  the  present 
possession  or  control  of  money,  or 
that  any  alleged  transfer  or  other 
disposition  of  it  is  a  mere  subter- 
fuge which  docs  not  prevent  him 
from  producing  it."  See  also  U.  S. 
V.  Sweeney,  95  Fed.  Rep.  434 ; 
In  re  Purvinc,  2  Am.  B.  R. 
787,  il  C.  C.  A.  446,  96 
Fed.  Rep.  192;  In  re  Mayer,  3  Am. 


6/4  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

ters  of  fact.'"'  Mr.  justice  Curtis,  however,  adds  to  this  state- 
nicut,  "  there  were  certain  precedents  for  the  introduction  of 
other  kinds  of  proof."  ^^  The  court  may  pronounce  judgment 
and  make  the  rule  absolute  if  no  answer  is  filed,  or  if  the 
answer  admits  facts  which,  in  the  opinion  of  the  court,  con- 
stitute contempt,  or  if  a  justification  is  deemed  insufficient. 

When  a  sufficient  return  or  answer  has  been  made,  the 
parties  appear  before  the  court  at  the  time  specified  for  the 
hearing.  Both  parties  may  present  testimony  by  witnesses 
examined  orally ''-  or  by  affidavits.*^^  The  contemner  may  ap- 
pear in  person  or  by  counsel,  and  may  file  his  own  affidavit 
in  his  own  behalf,  or  with  his  consent  be  examined  upon 
written  interrogatories.^*  But  he  can  not  be  compelled  to 
testify  against  himself.  After  the  evidence  has  been  adduced, 
the  court  will  hear  arguments  of  counsel  and  determine  the 
facts  for  itself,  of  it  may  refer  them  to  a  referee.  The  question 
of  commitment  can  not  be  left  to  the  discretion  of  the  referee.'^^ 

If  the  court  finds  the  proofs  do  not  support  the  charge  of 
contempt,  the  proper  judgment  is  to  dismiss  the  rule,  and  if 
the  contemner  has  been  arrested  and  is  in  the  custody  of  the 
marshal  or  admitted  to  bail,  also  to  discharge  the  person. 
If  no  cause  is  shown  why  he  should  not  be  punished  for  con- 
tempt, the  court  should  order  the  rule  to  be  confirmed  and 
made  absolute,  and  adjudge  the  person  guilty  of  contempt  and 
fix  his  punishment.     It  is  good  practice  for  the  judgment  to 


B.  R.  533,  98  Fed.  Rep.  839 ;  In  re  281 ;    Randall  v.   Brigham,  7  Wall. 

Gerstel,    10  Am.   B.    R.  411;   In  re  540. 

Shachter,  9  Am.  B.  R.  449.  ^3  Mexican   Ore    Co.   v.    Mexican 

'•"^  In  re  Pittman,  No.   11 184,  Fed.  Co.,     47     Fed.     Rep.     353;     United 

Cas.,  I  Curtis,   186,  per  Mr.  Justice  States  v.  Anonymous,  21  Fed.  Rep. 

Curtis;    United    States    v.    Dodge,  76-7;    United    States    v.    Atcheson, 

No.   14975,  Fed.   Cas.,  s.  c.  2  Gall.  etc.,  R.   S.   Co.,    16  Fed.   Rep.  855; 

313;    4    Blackstone's    Com.    286-7;  United    States   v.   Justices,    10   Fed. 

In  re  May,  i  Fed.  Rep.  743.  Rep.  461. 

°i /n  re  Pittman,  No.  11 184,  Fed.  ^■^  See  Savin,  petitioner,  131  U.  S. 

Cas.,  s.  c.   I   Curtis,  186,  and  cases  269;    Cuddy,    petitioner,    131    U.    S. 

collated.  281. 

52  Savin,  petitioner,  131  U.  S.  267,  -'•'  Smith  v.  Belford   (C.  C.  A.  6th 

279;    Cuddy,    petitioner,    131    U.    S.  Cir.),   106  Fed.  Rep.  658,  5  Am.   B. 

R.  291. 


CONTEMPT.  675 

recite  the  offense,  but  it  is  not  necessary,  if  it  describes  the 
offense  charged  by  reference  to  other  proceedings/'" 

The  power  of  the  court  to  punish  contempts  of  their  au- 
thority is  limited  to  fine  or  imprisonment  or  fine  and  imprison- 
ment;^^ but  there  is  no  limit  to  the  extent  of  either  fine  or 
imprisonment.  But  it  has  been  held  that  a  bankrupt  can  not 
be  imprisoned  indefinitely,  when  it  is  not  certainly  known  that 
he  has  property  which  he  has  been  ordered  to  surrender.^^  A 
court  can  not  disbar  an  attorney  for  contempt.^®  It  can  not 
punish  contempt  committed  in  any  other  court.*^" 

When  a  fine  is  imposed  as  punishment,  the  contemner 
may  be  ordered  to  stand  committed  until  the  fine  and  cost 
be  paid,"^  and  such  an  order  is  not  in  conflict  with  statutes 
prohibiting  imprisonment  for  debt."^ 

W'hen  the  judgment  of  the  court  be  imprisonment  or  fine 
and  commitment  until  paid,  a  warrant  or  mittimus  is  issued. 
It  recites  that  the  contemner  has  been  convicted  of  a  con- 
tempt of  court,  and  should  specify  particularly  where  and 
how  long  the  contemnor  is  to  be  imprisoned,  and  what  he  is 
to  do  to  entitle  him  to  discharge.  Thus  it  may  command 
tlie  marshal  to  take  the  body  of  the  contemnor  and  keep  him 
in  custody  until  he  shall  have  paid  into  court  the  amount  of 
the  fine,  together  with  the  fees  of  the  marshal  thereon,"^  or 
it  may  specify  a  particular  ])lace  and  term  of  imprisonment, 
and  command  tlic  marshal  to  take  the  body  of  the  person 
and  commit  the  same  to  such  place  of  confinement.^^ 

The  rule  with  reference  to  the  power  of  the  court  com- 
mitting a  contemnor  to  release  him  by  a  subsequent  order 
seems  to  be.  that  in  case  of  a  criminal  contem])t,  being  an 
offense  against  the  United   States,   and   the  commitment  but 


^8  Fischer  v.  Hayes,  6  Fed.   Rep.  Rep.  722;  Jeffries  v.  Laurie,  27  Fed. 

70;    Loveland's    Forms    Fed.    Prac.,  Rep.  198;  Fischer  v.  Hayes,  6  Fed. 

Nos.   718-729.  Rep.  63;   Ripon   Kniltinp  Works  v. 

"^^  B.  A.  1898,  Sec.  2,  clause  13.  Schrciber,  loi  Fed.  Rep.  810,  4  Am. 

■**/>»    re    Taylor,    114    Fed.    Rep.  B.  R.  299. 

607,  7  Am.  B.   R.  410.  «3  Fischer  v.  Hayes,  7  Fed.   Rep. 

^^  Ex   parte    Robinson,    19    Wall.  98.      For    form    of    mittimus,    see 

512.  Loveland's  Forms  Fed.  Prac,  Nos. 

^'*  Ex  parte  P>radley,  7  Wall.  2,72.  7.30,  731. 

"1  See  In  re  Tyler,  149  U.  .S.  180.  "■♦  Loveland's    I'orms    Fed.    Prac, 

^2  Bogart  V.   Supply  Co.,  27  Fed.  No.  731. 


676  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

an  execution  of  the  judgment  of  conviction,  the  court  has  no 
l)0\vei'  to  discharge  or  remit  the  sentence."^  But  it  falls 
within  the  pardoning  i)Ower  of  the  president  by  the  consti- 
tution.'"' Where  the  proceeding  is  of  a  civil  nature,  the 
court  has  power  to  release  the  person.*^^ 

Where  a  person  has  been  imprisoned  for  contempt,  relief 
is  usually  sought  by  habeas  corpus.''^  The  person  may  be 
discharged  if  the  order  of  commitment  was  utterly  void,"'"* 
otherwise  not.^" 

An  order  to  pay  over  to  a  trustee  money  or  property  of  the 
estate  of  the  bankrupt  and  adjudging  the  party  .disobeying  such 
an  order  to  be  in  contempt  may  be  reviewed  as  to  matters  of 
law  by  the  circuit  courts  of  appeals/'  It  has  been  held  that 
contempt  proceedings  are  not  a  part  of  the  original  case,  but 
separate  and  distinct  therefrom,  and  the  order  of  the  court, 
a  judgment  in  a  criminal  case,  and  therefore  reviewable  upon 
a  writ  of  error  by  the  court  of  appeals." 

65 /«    re    Mullee,    No.    991 1,    Fed.  dy,  petitioner,   131   U.   S.   280,  286; 

Cas.,  s.  c.  7  Blatch.  23.  E-r    parte    Kearney,    7   Wheat.    38; 

66  Dixon's  Case,  3  Atty.  Gen.  0pp.  In  re   Eaton,   51   Fed.   Rep.  804. 
622;    Rowan's    Case,    4    Atty.    Gen.  7i  Mueller  v.  Nugent,  184  U.  S.  i, 

Opp.   458 ;    Conger's   Case,    4   Atty.  7  Am.  B.  R.  224 ;  Boyd  v.  Glucklich, 

Gen.  Opp.  317.  116  Fed.  Rep.  131,  8  Am.  B.  R.  393- 

e^Hendryx  v.  Fitzpatrick,  19  Fed.  '^■■' Gould  v.  Sessions  (C.  C.  A.,  2d 

Rep.  810.  Cir.),  67  Fed.   Rep.   163;  Butler  v. 

68 /n  re  Watts  and  S.achs,  190  U.  Fayerweather    (C.   C.  A.,  2d   Cir.), 

S    I ;  In  re  Freche,   109  Fed.  Rep.  91  Fed.  Rep.  458;  Gary  Mfg.  Co.  v. 

620,  6  Am.  B.  R.  479;  Jn  re  Clai-  Acme  Co.   (C.  C.  A.,  2d  Cir.),  108 

borne,   109  Fed.  Rep.  74,  5  Am.  B.  Fed.    Rep.    873;    Westinghouse    Air 

R    gi2.  Brake  Co.  v.  Christianson  Engineer- 

'^^Ex  parte  Terry,  128  U.  S.  289;  ing  Co.  (C.  C.  A.,  2d  Cir.),  123  Fed. 

Ex  parte  Fisk,  113  U.  S.  713.  Rep-  632;   Bullock  Electric  &  Mfg. 

70  In  re  Tyler    149  U.  S.  180 ;  Sa-  Co.  v.  Westinghouse   Elec.   &   Mfg. 

vin,  petitioner,  131  U.  S.  267;  Cud-  Co.    (C.  C.  A.,  6th  Cir.),  127   Fed. 

Rep.  — . 


COMPOSITIONS    AND    ARBITRATIONS.  6/7 


CHAPTER  XXIII. 

COMPOSITIONS  AND  ARBITRATIONS. 

§  241.     The  general  nature  of  a  composition. 

The  theory  of  a  composition  is  that  the  cash  value  of  the 
bankrupt's  estate  is  substantially  divided  among  the  creditors 
in  proportion  to  their  respective  debts. 

The  bankrupt  presents  a  list  of  the  names  of  his  creditors 
and  the  amount  due  each  of  them,  the  amount  of  his  assets 
and  the  rate  per  centum  he  is  willing  to  pay  on  these  debts 
as  a  compromise,  in  consideration  of  his  discharge  from  the 
balance  due  each  creditor.  His  creditors  consider  the  sub- 
ject, thus  presented,  after  the  debtor  has  been  examined  under 
oath.*  The  whole  matter  being  thus  before  them,  they  re- 
solve that  their  interests  require  that  a  compromise  shall  be 
made,  and  that,  if  the  debtor  will  pay  them  a  certain  per- 
centage of  their  debts,  they  will  accept  it  in  satisfaction  and 
he  shall  be  discharged.  They  deliberately  resolve,  upon  an 
understanding  of  all  the  facts,  that  this  is  all  that  his  prop- 
erty can  be  made  to  pay. 

Some  one  must  decide  the  question  of  the  amount  of  the 
dividend  and  of  the  discharge.  Some  one  must  say  that  the 
debt  of  an  opposing  creditor  shall  be  discharged  without  pay- 
ment in  full.  Congress  has  provided  that  the  debtor  and  a 
majority  of  his  creditors,  in  number  and  amount,  may  deter- 
mine these  questions  if  they  can  agree  upon  a  compromise.' 
The  minority  of  the  creditors  must  submit  to  the  terms 
agreed  upon  by  the  majority.  The  terms  of  the  compromise 
are  subject  to  be  approved  or  disapproved  by  the  judge.  The 
rights  of  those  who  are  not  called  upon  or  who  dissent  may 
be  fully  protected  by  objections  properly  taken  and  presented 
to  the  judge  at  the  time  of  the  application  for  an  order  con- 
firming the  composition.  The  property  is  distributed  under 
the  direction  of  the  court. 

'  B.  A.  1898,  Sec.   12.     Compare  R   S.  Sec.  5103. 


6j!^  LAW    AXn    PROCEEDINGS    IX    KAXKRUPIXV. 

This  is  a  much  shorter  and  less  expensive  method  of  set- 
tling the  bankrupt's  estate  than  if  the  whole  machinery  of 
the  court,  in  a  full  bankruptcy  proceeding,  is  called  into  use. 
Where  the  bankrupt  and  a  majority  of  his  creditors  fail  to 
agree  upon  terms  of  compromise,  or  where  the  court  refuses 
to  approve  the  terms  agreed  upon,  the  estate  is  administered 
in  bankruptcy  as  otherwise  provided  by  the  statute. 

§  242.  The  power  of  congress  to  provide  for  compositions- 
Provisions  for  facilitating  arrangements  between  bankrupts 
and  their  creditors  by  composition  was  first  introduced  in  the 
United  States  by  an  amendment  to  the  act  of  1867,  passed 
June  22,  1874.1  The  bankrupt  acts  of  1800,  1841,  and  the 
original  act  of  1867  contained  no  provisions  for  a  composi- 
tion by  a  bankrupt  with  his  creditors. 

As  soon  as  the  amendment  of  1874  was  passed,  it  was  at- 
tacked upon  the  ground  that  congress  had  exceeded  its  power 
and  was  not  authorized  by  the  constitution  to  provide  for  a 
composition  by  a  bankrupt  with  his  creditors  for  less  than 
the  full  amount  of  his  debts.  The  question  came  before  INIr. 
Justice  Hunt,  who  sustained  the  validity  of  the  provision  in 
the  amendment  of  1874.^  Upon  principle,  as  well  as  author^ 
ity,  the  present  provision  for  a  composition  can  not  be  suc- 
cessfully attacked  on  the  ground  of  being  in  contravention  of 
the  con-^titution  of  the  United  States.' 

jj  243.  Composition  provisions  should  not  be  construed  broadly. 
It  has  been  said*  that  "the  composition  clause  of  the  law 
should  receive  a  strict  construction,  because  it  is  in  plain 
derogation  of  common  right.  It  compels  the  dissenting  mi- 
nority of  creditors  to  accept  just  as  much  upon  their  claims  as 
the  debtor  and  the  requisite  majority  see  fit  to  resolve  that 
all  shall  accept.      It  takes  from  the  minority  the  common 

1  18  Stat,  at  L.  182.  Sec.  17.     The  Chambcrlin,    No.    2580,    Fed.    Cas., 

provision  of  this  amendment,  relat-  s.  c.  9  Ben.  149. 

ing   to   compositions,   is    set   out   in  "As   to   the   extent   of   the   power 

parallel    columns    with    the    English  of   congress   to   pass   bankrupt   laws 

act  of  1868,  in  re  Scott,  No.  125 19,  generally,  consult  Chap.  II. 

Fed.  Cas.,  s.  c.  15  N.  B.  R.  72,.  ^  in   re   Shields,    No.    12784,    Fed. 

•■"In   re  Reiman,   No.   11675,   Fed.  Cas.,  s.  c.  4  Dill.  588;  In  re  Frear, 

Cas,    s.    c.    12    Blatch.    562;    in    re  10  Am.  B.  R.   199;  In  re  Rider,  90 

Fed.  Rep.  808,  3  Am.  B.  R.  178. 


COMPOSITIONS    AND    ARBITRATIONS.  679 

right  of  making  their  own  terms  with  their  debtor,  and  re- 
leases the  obHgation  of  the  latter  to  them  against  their  will, 
and  upon  terms  imposed  by  the  majority.  Certainly,  there- 
fore, the  provisions  of  this  clause  should  not  be  extended  by 
construction  to  embrace  more  than  the  words  clearly  and 
manifestly  import."  If  the  proceedings  are  not  had  in  accord- 
ance with  the  provisions  the  court  can  not  confirm  a  compo- 
sition.^ 

^  244.     When  a  bankrupt  may  offer  terms  of  composition. 

A  bankrupt  may  offer  terms  of  composition  to  his  credit- 
ors after,  but  not  before,  he  has  been  examined  in  open  court 
or  at  a  meeting  of  his  creditors  and  filed  in  court  the  sched- 
ule of  his  property  and  list  of  his  creditors,  required  to  be 
filed  by  bankrupts." 

The  statute  does  not  limit  the  right  to  offer  terms  of  com- 
position to  any  particular  class  of  bankrupts.  Any  bank- 
:-upt  is  entitled  to  offer  terms  of  compromise  to  his  creditors. 
The  right  extends  to  corporations  ^  and  to  partnerships.* 
Any  member  of  a  ])artnership,  which  has  been  adjudged 
bankrupt,  may  submit  a  proposition  of  composition  to  the 
creditors  of  the  firm  and  to  his  individual  creditors.^ 

Tt  will  be  observed  that  there  is  a  limitation  in  respect  to 
the  time  at  which  such  an  offer  may  be  made.  A  bankrupt 
is  not  entitled  to  make  such  an  offer  before  he  has  been  ex- 
amined in  o])en  court  or  at  a  meeting  of  his  creditors,  and 
filed  in  court  a  schedule  nf  his  property  and  a  list  of  his 
creditors.  Such  an  offer  may  be  made  at  any  time  after  he 
has  complied  with  these  cunditions. 

A  further  limitation  exists  in  actual  practice.  No  compo- 
sition can  be  effected  until  claims  have  been  ]iroved  by  cred- 
itors, with  whom  the  compromise  may  be  made."     Creditors 

1 /h  re  Frcar,  10  Am.  B.  R.  199.  »  Pool   v.    McDonald,    No.    11268, 

2?..    A.    i8<)8,    Sec.    I2fl.  Fed.  Cas.,  s.  c.  15  N.  B.  R.  560. 

•■' /«    re    Weber,    No.    17330,    Fed.  " /»i   re   Rider,   90  Fed.   Rep.   80S, 

Cas.,  s.  c.  13,  N.  B.   R.  529-  .3  Am.   B.   R.   178;  hi  re  Frear,   to 

♦Pool    V.    McDonald,    No.    11268,  Am.  B.  R.   190,  120  VvA.  Rep.  07S; 

Fed.   Cas.,   s.   c.    15   N.   B.   R.    560;  In   re  Hilbnrn,    104   Fed.   Rep.   866, 

In  re  Spades,  No.  13 196,  Fed.  Cas.,  4  Am.  B.  R.  74T. 
s.  c.  6  Biss.  448. 


68o  LAW    AND    PROCEEDINGS    IN     BANKRUPTCY. 

seldom  prove  claims  l)ch>re  the  first  meeting,  at  which  the 
bankrupt  is  regularly  examined  and  a  trustee  appointed. 
Hence,  in  practice,  a  composition  can  rarely  be  effected  until 
after  an  adjudication  and  appointment  and  qualification  of  a 
trustee. 

The  debtor  will  not  ordinarily  be  permitted  to  make  a 
second  application  for  contirmation  in  case  the  first  one  is 
denied.  Where  the  court  refused  to  permit  a  composition 
on  the  ground  that  the  offer  was  not  sufficiently  large,  the 
debtor  was  permitted  in  one  case  to  make  a  better  offer  and 
a  second  application  for  confirmation,  which  was  granted. 
He  was  not  i)ermitted  to  make  the  second  application  in  that 
case  until  he  had  shown  good  reason  for  not  having  previ- 
ously made  a  better  offer.  Under  the  act  of  1867  it  was 
held  that  a  refusal  to  grant  a  discharge  was  not  an  estoppel 
to  proceedings  in  composition.*  It  may  be  doubted,  how- 
ever, if  such  is  the  rule  under  the  present  statute.  Section 
1 2d  of  the  act  provides  that  "  the  judge  shall  confirm  a  com- 
position if  satisfied  that the  bankrupt 

has  not  been  guilty  of  any  of  the  acts  or  failed  to  perform 
any  of  the  duties  which  shall  be  a  bar  to  a  discharge."  It 
would  therefore  seem  that  if  a  discharge  had  been  refused, 
that  such  an  adjudication  would  be  a  bar  to  a  subsequent  ap- 
plication for  confirmation  of  a  composition. 

§  245.     Creditors'  meeting  to  consider  terms  of  composition. 

Whenever  a  bankrupt  is  satisfied  that  a  sufficient  number 
of  creditors  will  accept  his  offer  of  terms  of  composition  he 
may  apply  to  the  court  for  a  meeting  of  the  creditors  to  con- 
sider the  proposition  for  composition.  The  application  is 
made  by  petition. **  The  petition  should  be  entitled  in  the 
court  and  cause,  and  state  the  per  centum  which  the  bank- 
rupt offers  to  pay,  and  that  he  believes  it  will  be  accepted  by 
a  majority  in  number  and  in  value  of  the  creditors  whose 
claims  are  allowed,  and  pray  that  a  meeting  of  the  creditors 

''In  re  Whipple,  No.  17513,  Fed.  Cas.,  s.  c.  9  Ben.  247;  /n  re  Jo- 
Cas.,  s.  c.   II   N.   B.  R.  524.  seph,  24  Fed.  Rep.  137. 

*  In    re    Odell,    No.    10427,    Fed.  "  Official     Form      No.     60.      See 

Form  No.  107,  ^osl. 


COMPOSITIONS    AND    ARBITRATIONS.  68l 

may  be  duly  called  to  act  upon  such  proposal  for  a  composi- 
tion.    The  petition  should  be  signed  by  the  bankrupt. 

This  petition  may  be  presented  to  the  judge  or  to  the 
referee.  Upon  such  petition  an  order  is  regularly  passed  di- 
recting a  meeting  of  the  creditors  to  be  called.  Thereupon 
the  referee  should  give  the  creditors  at  least  ten  days'  notice 
by  mail  of  the  time  and  place  of  holding  the  meeting.^"  At 
this  meeting  the  proposal  for  a  composition  is  voted  upon 
by  the  creditors.  All  unsecured  creditors  and  secured  cred- 
itors, to  the  extent  of  the  balance  of  their  debts  after  having- 
deducted  the  amount  of  their  securities,  which  have  been 
proved  and  allowed,  are  entitled  to  vote. 

In  the  case  of  an  of¥er  of  compromise  by  a  partnership  or 
one  of  the  partners,  both  the  firm  and  individual  debtors 
may  vote."  The  state  of  the  respective  debts  and  funds  may 
be  such  as  to  justify  this  course,  and  where  they  are  so.  it 
simplifies  the  proceeding  very  materially.  Birt  if  one  of  any 
class  of  the  creditors  perceives  that  the  other  class  is  about 
to  force  upon  him  an  unjust  composition  he  can  demand  a 
separate  vote  and  so  protect  himself  by  calling  to  his  assist- 
ance those  who  compose  the  class  to  which  he  belongs." 

The  creditors  are  required  to  pass  the  resolution  for  a  com- 
position by  a  majority  vote  in  number  and  amount  of  the 
claims  allowed.^"'  The  resolution  must  be  reduced  to  writing 
and  should  be  signed  by  the  creditors,  who  accept  the  terms 

^^  B.   A.    1898,   Sec.  58a.     But  see  not.     It  is  not  essential  that  proofs 

In  re  Frear,  10  Am.  B.  R.  199.  shall    be    made    before,    or    at    the 

"  Poo!   V.   McDonald,  No.    11268,  first  meeting.   They  may  be  made  at 

Fed.   Cas.,  s.   c.    15   N.   B.   R.   560;  any  time  within  a  year.  .  .  .    After 

In  re  Spades,  No.  13196,  Fed.  Cas.,  the  terms  are  thus  made  known  to 

s.  c.  6   Biss.  448.  all  the  creditors  they  have  a  reason- 

^2  In   re   .Spades,   No.    1.3196,   Fed.  able    time    to    decide    whether    they 

Cas.,   s.    c.   6    Biss.   448.  will   accept   the   oflFer   or   not.      But 

1^  B.   A.    1898,   Sec.   56a.  in    order    to    qualify    themselves    to 

In  In  re  Rider,  90  Fed.  Rep.  808,  vote  upon  the  proposition  they  are 
3  Am.  B.  R.  178,  Judge  Coxe  said:  required  to  prove  their  claims.  The 
"After  the  bankrupt  has  been  ex-  reason  for  this  is  obvious;  it  ex- 
amined and  filed  a  list  of  his  cred-  eludes  from  the  voting  all  but  bona 
itors  he  '  may  offer  terms  of  com-  fide  creditors ;  it  excludes  all  those 
position  to  his  creditors.'  This  who  are  too  indifferent  to  present 
plainly  implies  that  the  offer  should  their  claims  and  all  whose  claims 
be  made  to  all  his  creditors,  whether  arc  uiiliqiu'daterl,  fictitious  or  ex- 
llicy    have    proved    their    debts    or  orbitant ;    it   gives   all   creditors   no- 


682  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

offered,  together  with  the  amount  of  each  claim  proved  and 
allowed." 

If  not  a  sufficient  number  of  creditors  attend  this  meeting 
the  bankrupt  may  circulate  the  resolution  among  the  cred- 
itors, who  have  proved  claims,  and  thus  secure  a  majority  in 
number  of  all  the  creditors  whose  claims  have  been  allowed, 
which  number  represents  a  majority  in  the  amount  of  such 
claims.  The  statute  requires  the  acceptance  to  be  in  writing. 
It  is  not  necessarily  obtained  at  a  meeting  of  creditors.^^ 
Creditors  having  once  accepted  a  composition  offered  will  not 
be  permitted  to  withdraw  their  consent,  in  the  absence  of 
fraud  or  misrepresentations.^® 

§  246.     Application  for  confirmation. 

The  court  is  expressly  authorized  to  confirm  or  reject  com- 
position between  debtors  and  their  creditors.^*'*  The  bankrupt 
must. apply  to  the  judge  and  not  to  the  referee  for  the  order 
confirming  the  composition.^^ 

Before  such  an  application  can  be  made  the  bankrupt  is 
required  to  do  three  things. 

First.  He  must  file  an  acceptance  of  his  offer  of  compro- 
mise in  writing  by  a  majority  in  number  of  all  creditors 
whose  claims  have  been  allowed,  which  must  represent  a 
majority  in  amount  of  such  claims. ^^  The  manner  of  obtain- 
ing the  consent  of  his  creditors  is  considered  in  the  last  sec- 
tion and  need  not  be  repeated. 

Second.     He  must  deposit  the  consideration  to  be  paid  by 

tice,    no   maUer   what   may    be    the  214;   In   re   Scott,    No.    12519,   Fed. 

nature  of  their  claims,  and  permits  Cas.,   s.  c.   15   N.   B.  R.   73. 

them   to   qualify,   if  they   desire   to  As    to    adjourning    the    meeting 

do   so,   and   assent   to  the    compro-  when  the  best  interests  of  the  cred- 

mise  or  oppose  it,  or  if  they  so  elect,  itors   require   it,   see   In  re  Cheney, 

they  may  simply  withhold  their  as-  No.  2637,  Fed.  Cas.,  s.  c.  19  N.  B. 

sent."  R.   16. 

See  also  In  re  Frear,  10  Am.  B.  i"  In  re  Levy,  b  Am.  B.  R.  299. 

R.    199,    120   Fed.   Rep.   978;    In  re  i«*  B.   A.   1898,   Sec.  2,  clause  9; 

Hilbom,   104  Fed.  Rep.  866,  4  Am.  In  re   Hilborn,   104   Fed.   Rep.  866, 

B.   R.    741.  4  Am.   B.   R.   741. 

14 /n  re  Frear,  10  Am.  B.  R.  199,  ^^  B.   A.   1898,   Sec.  38,  clause  4; 

120  Fed.  Rep.  978.  Gen.  Ord.   12. 

15  Consult    In    re    Spillman,    No.  is  B.    A.    1898,    Sec.    12&;    In    re 

13242,  Fed.  Cas.,  s.  c.   13  N.  B.  R.  Frear,  10  Am.  B.  R.  199. 


COMPOSITIONS    AND    ARBITRATIONS.  683 

the  bankrupt  to  his  creditors  in  such  a  place  as  may  be  desig- 
nated by  the  judge,  and  the  same  must  be  subject  to  the  order 
of  the  judge/^ 

Third.  He  must  also  deposit  the  money  necessary  to  pay 
all  debts  which  have  priority,  and  the  costs  of  the  proceedings, 
in  such  place  as  may  be  designated  by  the  judge,  and  the 
same  must  be  subject  to  the  order  of  the  judge.^* 

If  the  bankrupt  fails  to  do  any  of  these  things  before  apply- 
ing for  an  order  of  confirmation  his  application  should  be 
disregarded. 

The  consideration  should  be  substantially  equivalent  to  the 
cash  value  of  the  bankrupt's  estate,  that  is,  what  his  estate 
would  pay  in  bankruptcy.  Otherwise  the  object  of  a  com- 
position is  evaded.  The  theory  of  a  composition  is  that  the 
cash  value  of  the  bankrupt's  estate  is  substantially  divided 
among  the  creditors  in  proportion  to  their  respective  debts. 
It  is  established  by  all  experience  that  a  man  can  make  more 
out  of  his  own  assets  than  a  trustee  of  more  general  capacity 
than  he,  and  entirely  honest,  can  possibly  realize.  There 
may  be  a  margin  in  many  cases  which  the  debtor  may  save 
by  offering  less  than  he  might  offer,  and  more  than  his  cred- 
itors could  obtain  by  process  of  law." 

The  statute  does  not  declare  of  what  the  consideration 
must  consist.  Manifestly  it  should  be  of  such  a  nature  that 
it  can  1)e  readily  distributed  by  the  judge.  The  most  con- 
venient form  of  consideration  is  money.  But  an  honest 
debtor  has  no  money.  He  has  paid  in  all  his  money  as  well  as 
his  other  property  as  a  part  of  his  estate.  If  he  is  required 
to  deposit  a  money  consideration  in  all  cases,  few  composi- 
tions could  be  effected.  In  such  cases  he  is  usually  depend- 
ent upon  his  friends. 

A  practicable  consideration  consists  in  promises  to  i)ay 
money  at  specified  dates,  secured  by  notes,  reorganization 
bonds,  or  other  negotiable  pa])er,^"  or  possibly  stock  in  a  new 

^*£-r    parte    Jewett,     No.     7302,  -"Consult    In    re    LanRdon,    No. 

Fed.  Cas.,  s.  c.  2  Low.  393;  In   re  805R,   Fed.   Cas.,  s.  c.  2   Low.  387; 

Whipple.  No.  17513,  Fed.  Cas.,  s.  c.  In  re  Reimen,  No.  11673,  Fed.  Cas., 

II    N.    B.    R.    524;    In    re    Weber  s.   c.    7    Ren.    455,   affirmed    in    No. 

Furniture  Co.,  No.  17330,  Fed.  Cas.,  11675,    Fed.    Cas.,    s.    c.    12    Blatch. 

s.  c.  13  N.  B.  R.  529.  562;   In   re  Lewis,   No.   8314,   Fed. 


684  l-AW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

company.  Creditors  who  have  confidence  in  their  debtor 
may  be  wilhng.  and  may  consider  it  for  their  own  best  in- 
terests to  accept  a  paper  consideration  and  permit  the  bank- 
rupt to  continue  his  business.  That  negotiable  paper  may 
be  used  is  implied  by  section  14c  of  the  act,  which  provides 
that  "  the  confirmation  shall  discharge  the  bankrupt  from 
his  debts  other  than  those  agreed  to  be  paid  by  the  confirm- 
ation of  the  composition."  It  is  significant  that  the  word 
"  consideration  "  is  used,  and  in  the  next  clause  relating  to 
debts  having  priority  and  the  cost  of  the  proceedings  the 
word  "  money  "  is  used,  as  if  congress  intended  to  make  a 
distinction  in  the  character  of  the  two  deposits. 

It  will  be  observed  that  money  only  can  be  deposited  for 
the  purpose  of  paying  debts  which  have  priority  and  the  cost 
of  the  proceeding. ^^  A  suf^cient  sum  to  pay  the  debts  which 
have  priority  and  the  costs  of  the  proceeding  must  be  depos- 
ited. This  is  one  of  the  conditions  precedent  to  obtaining  a 
confirmation  of  the  composition.'"^  The  rule  seems  to  have 
been  otherwise  under  the  act  of  1867.^^ 

When  the  bankrupt  has  complied  with  the  conditions  men- 
tioned above  he  may  apply  for  a  confirmation  of  the  com- 
position. The  application  is  made  by  petition  addressed  to 
the  judge. ^*  It  should  state  that  the  bankrupt  has  been 
examined  in  open  court  or  at  a  meeting  of  his  creditors; 
that  he  has  filed  in  court  a  .schedule  of  his  property  and  list 
of  his  creditors;  that  he  has  offered  terms  of  composition  to 
his  creditors,  which  have  been  accepted  in  writing  by  a 
majority  in  number  of  all  creditors  whose  claims  have  been 
allowed,  which  number  represents  a  majority  in  the  amount 
of  such  claims;  and  that  the  consideration  to  be  paid  by  the 
bankrupt  to  his  creditors,  the  money  necessary  to  pay  all 
debts,  the  costs  of  the  proceedings,  and  the  amount  thereof, 
have  been  deposited  subject  to  the  order  of  the  judge,  in  a 

Cas.,  s.  c.    14  N.  B.  R.   144;  In  re  ^^  In    re    Chamberlin,    No.    2580, 

Hurst,  No.  6925,  Fed.  Cas.,  s.  c   i  Fed.  Cas.,  s.  c.  9  Ben.  149. 

Flipp.    162;    In    re    Wronkow,    No.  ^*Gtn.    Ord.    12;    Official    Form 

18105,  Fed.  Cas.,  s.  c.  15  Blatch.  38.  No.   61;    see   Form   No.    iii,   post; 

21  B.  A.   1898,   Sec.   \2h.  B.  A.    1898,  Sec.  38,  clause  4, 

22 /n  re  Harris,  9  Am.   B.   R.  20, 
117  Fed.  Rep.  575. 


COMPOSITIONS    AND    ARBITRATIONS.  685 

certain  depository,  naming  it,  and  conclude  with  a  prayer 
that  the  court  confirm  the  said  composition.  The  petition 
is  signed  by  the  bankrupt  without  verification. 

The  judge  fixes  a  date  and  place,  with  reference  to  the 
convenience  of  the  parties  in  interest,  for  the  hearing  of 
such  application  for  the  confirmation  of  the  c^miposition.  The 
creditors  are  entitled  to  have  at  least  ten  days'  notice  by  mail 
of  such  hearing.'-^  This  notice  may  be  served  by  the  referee 
or  by  the  clerk  as  the  judge  may  direct.  The  notice  is  usually 
in  the  form  of  an  order  to  show  cause  why  the  comix)sition 
should  not  be  confirmed. 

§  247.     Objections   to  a  confirmation. 

General  creditors  are  entitled  to  object  to  a  confirmation  of 
a  composition  but  secured  creditors  are  not  entitled  to  object. 
They  have  no  interest  in  the  general  fund.  A  trustee  is  not 
authorized  to  interfere  in  such  proceeding  beyond  furnishing 
such  information  concerning  the  estate  under  his  charge  and 
the  administration  thereof  as  may  be  requested.  He  can  not 
object  to  a  confirmation.""  If  the  creditors  interested  in  com- 
position proceedings  fail  to  attend  to  their  interest  in  time  the 
courts  will  not  relieve  them  from  the  consequences  of  their 
neglect.  exce])t  they  made  a  clear  case  for  ecjuitable  interfer- 
ence in  their  behalf.*' 

WHien  a  creditor  desires  to  ojjpose  the  application  of  a 
bankrupt  for  the  confirmation  of  a  com])osition  he  must  en- 
ter his  appearance  in  opposition  thereto  on  the  day  when  the 
creditors  are  required  to  show  cause,  and  must  file  a  specifi- 
cation in  writing  of  the  grounds  f)f  his  o])])ositioii  within  ten 
days  thereafter,  unless  tlic  time  sh.ill  l)e  enlarged  by  special 
order  of  the  iudge.*"  The  form  of  tlie  siKfcification  in  oppo- 
sition to  a  confirmation  is  substantially  the  same  as  in  opposi- 
tion to  a  discharge.^" 

2f'  B.    A.    1898,   Sic.   58fl.  the   mcctinp   called    to   consider   the 

2«  Ross    V.    Saunders    (C.  C.    A.  proposal    for    composition. 

Tst  Cir.).  105  Fed.  Rep.  915,  5  Am.  -"*  Gen.   Ord.  32. 

P,    R.   .l?0.  ^"Sec.    280.    f>nst:    Oflficial    Forin 

■•'" /»(     rr     Wronkow,     Nr>.  18105,  No.    58;    sec    Form    No.    157,    />oj/.* 

Vc<\    Cas..    ^.   r.    15   Rlatch.   38:   the  City    National    Hank    of    Dallas    v. 

ol.ieclinR    creditor    did    not  attend  Doolitlle    fC.    C.    A.    5th    Cir.),    107 


686  LAW    AND    PROCEEDINGS    IN    BANKRUrTCY. 

There  are  three  general  grounds  for  opposing  ihe  confirma- 
tion of  composition  by  a  bankrupt  by  his  creditors.     They  are : 

First.  That  the  composition  is  not  for  the  best  interests 
of  the  creditors. 

Second.  That  the  bankrupt  has  been  guilty  of  an  act  or 
failed  to  perforn^  some  of  the  duties  which  would  be  a  bar  to 
his  discharge  and 

Third.  That  the  composition  has  been  procured  by 
fraud.''' 

First:  Because  not  for  the  Interest  of  the  Credit- 
ors.—  The  first  ground  of  opposition  to  a  confirmation  is 
that  it  is  not  for  the  interest  of  the  creditors.^^  The  interest 
to  be  considered  is  that  of  all  the  general  creditors  and  not 
any  particular  creditor  or  class  of  creditors.  It  is  the  creditors 
who  have  proved  their  claims  at  the  time  the  matters  are  being 
considered. 

The  statute  evidently  imposes  upon  the  judge  the  duty  of 
examining  the  offer  and  acceptance  and  ascertaining  whether 
the  composition  is  for  the  best  interests  of  the  creditors.  The 
question  is,  not  whther  the  debtor  might  have  offered  more, 
but  whether  his  estate  would  pay  more  in  bankruptcy.'^  In 
determining  this  question  the  court  should  consider  the  amount 
of  debts,  the  amount  and  character  of  the  assets,  the  nature 
of  the  business  that  is  to  l)e  carried  on,  and  many  other  cir- 
cumstances. If  the  court  is  satisfied  upon  the  hearing  that  the 
composition  offered  would  pay  creditors  very  consider^ibly  less 
than  they  miglit  reasonably  be  expected  to  realize  in  the  admin- 
istration of  the  assets  in  due  course,  then  the  composition  is 
not  for  the  best  interest  of  creditors.  In  determining  this 
question  the  courts  will  doubtless  be  influenced  by  the  con- 
sideration that  a  man  can  ordinarily  do  better  with  his  own 
property,  and  realize  more  therefrom,  than  can  be  obtained  in 

Fed.   Rep.   236,   5    Am.   B.    R.    736;  Low.  404;   In  re  Weber  Furniture 

Adler  v.  Jones   (C.  C.  A.  6th   Cir.),  Co.,    No.    17330,   Fed.   Cas.,   s.  c.    13 

109  Fed.  Rep.  967,  6  Am.  B.  R.  245.  N.   B.   R.   529,   reversed   on  appeal, 

30  B.  A.   1898,   Sec.   I2d.  No.  17331,  Fed.  Cas.,  s.  c.  13  N.  B. 

"IB.   A.    1898,   Sec.   I2d.  R.  559;  In   re  Reiman,   No.    11673, 

"2  Ex  parte  Jewett,  No.  7303,  Fed.  Fed.  Cas.,  s.  c.  7  Ben.  455,  on  ap- 

Cas.,  s.  c.  2  Low.  393;  In  re  Whip-  peal,  No.  11675,  Fed.  Cas.,  s.  c.   I2 

pie,   No.    17513,   Fed.    '^^s .   s.    c.   2  Blatch.   562. 


COMPOSITIONS    AND    ARBITRATIONS.  687 

course  of  judicial  proceedings  with  compulsory  sales  and 
expense  of  administration.'*''  In  England  the  determination  of 
the  creditors  is  final,  in  the  absence  of  fraud,  and  it  has  been 
said  that  ^*  "  it  will  be  found  that  the  practical  administra- 
tion of  our  -law  must  be  very  similar."  The  fact  that  a 
majority  of  the  creditors  have  consented  to  the  terms  offered 
by  the  bankrupt,  is  prima  facie  evidence  that  it  is  for  the 
best  interest  of  all,  and  the  burden  of  proof  is  then  upon  the 
dissenting  creditors  to  show  cause  for  not  confirming  the 
composition.^^ 

How  far  congress  intended  to  protect  creditors  against 
each  other,  and  how  far  the  court  is  to  inquire  into  motives 
are  questions  of  no  little  difficulty.  The  law  which  enables 
a  majority  of  creditors  to  accept  a  composition  with  their 
debtor,  to  which  other  creditors  do  not  consent,  and  so  to 
bind  such  dissentients,  assumes  as  an  essential  condition  that 
it  shall  be  in  all  respects  just.  Some  creditors  may  agree 
to  the  composition  without  much  inquiry,  upon  the  ground 
that  bankruptcy  is  to  be"  avoided  at  all  risks;  some  out  of 
kindness  to  the  bankrupt;  some  from  a  conviction  that  the 
offer  is  for  their  own  interest  as  distinguished  from  general 
interest.  Mr.  Bacon,  chief  judge  in  bankruptcy,  speaking 
on  this  point,  said.'"'  "  benevolence,  generosity  and  forbear- 
ance may  be  well  exercised  —  with  this  restriction,  however, 
that  the  practice  of  these  moral  virtues  is  not  made  at  the 
[expense   of  other   people.     To   hold   the  contrary  would  be 

83Adler  v.  Jones    (C.   C.   A.  6th  er   Furniture   Co.,   No.    I7330,   Fed. 

Cir.),  109  Fed.  Rep.  967,  6  Am.  B.  Cas.,  s.  c.  2  Low.  404,  reversed  on 

R.  245 ;  hi  re  Arrington  Co.,  8  Am.  appeal  on  the  ground  that  the  com- 

B.  R.  64.  113  Fed.  Rep.  498.  position    was    fyriwa    facir    evidence 

3<  Ex     parte    Jewett,     No.     7303,  which  was  not  rehuttcd  hy  the  evi- 

Fed.    Cas.,    s.    c.    2    Low.    393,    and  dence;    No.    17331,    1*"^-"^.   Cas.,   s.    c. 

quoted  with  approval  in  In  re  Web-  13  N.  B.  R.  559.     As  to  the  weiphl 

er.    No.    1 733 1,    Fed.    Cas.,   s.   c.    13  to   I)e   given    an    acceptance   l)y   tlio 

N.  B.  R.  559.  requisite  majority  of  creditors,  who 

"''•  Adler  v.   Jones    (C.   C.   A.  6th  arc   acquainted    with    all    the    facts, 

Cir.),  109  Fed.  Rep.  967,  6  Am.  B.  see    also    In    re    Greenebaum,    No. 

R.    245.      In    re    Arrington    Co.,    8  5769,   Fed.   Cas.,  s.  c.   I   Chi.   Law. 

Am.  B.  R.  64,  86  out  of  89  creditors  Jour.   599. 

accepted  the  terms  of  composition,  '"'  Ex   parte   Williams,    10  L.    R. 

and  only  one  objected.    In  re  Web-  Eq.  61. 


088  LAW     AM)    I'KOt  Ki:i)lN(.;S    IN    BANKRUPTCY. 

tlirectly  opposed  to  tlie  coninioiiest  principles  of  justice  and 
lioiicsty." 

Whether  the  comi)Osition  is  for  the  best  interests  of  the 
creditors  usually  turns  ui)on  the  (piestion  of  the  adequacy  or 
inadequacy  of  the  terms  otifereil.'^  Where  the  court  was  satis- 
fied that  the  net  assets  would  amount  to  eighteen  thousand 
dollars,  and  the  debtor  offered  to  divide  eleven  thousand  dol- 
lars, the  court  refused  to  confirm  the  composition.^®  Where 
it  was  shown  that  a  debtor  could  pay  more  than  seven  shil- 
lins^s  in  the  ixwnd  and  offered  to  pay  one  shilling,  and  f(Xir 
creditors  out  of  \\\e  iiad  agreed  to  the  arrangement,  the 
court  set  aside  the  deed  of  arrangement."'" 

In  determining  the  question  whether  the  proposed  compo- 
sition is  for  the  best  interests  of  creditors  the  judge  is  vested 
with  the  exercise  of  discretion.  It  is  nevertheless  a  sound 
judicial  discretion.*" 

Second:  Because  of  Grounds  w^hich  w^ould  Bar  a 
Discharge. —  The  second  ground  for  opposing  a  confirma- 
tion is  that  the  bankrupt  has  been  guilty  of  an  act  or  failed 
to  perform  some  of  the  duties  which  would  be  a  bar  to  his 
discharge."  A  bankrupt  is  not  entitled  to  a  discharge  when 
he  has  ( i )  committed  an  offense  punishable  by  imprison- 
ment as  herein  provided;  or  (2)  with  fraudulent  intent  to 
conceal  his  true  financial  condition,  and,  in  contemplation  of 
bankruptcy,  destroyed,  concealed,  or  failed  to  keep  books  of 
account  or  records  from  w'hich  his  true  condition  might  be 
ascertained.*'  These  grounds  are  discussed  in  connection  with 
an  application  for  a  discharge,  to  wdiich  the  reader  is  referred.*^ 

s^Adler  v.  Jones    (C.   C.   A.  6th  604;  Ex  parte  Levy  &  Co.,  11  L.  R. 

Cir.),  109  Fed.  Rep.  967,  6  .-Km.  B.  Eq.  619. 

R.  245.  40Adler  v.  Jones    (C.   C.   A.  6th 

3** /n  re  Whipple,  No.  17513,  Fed.  Cir.),  109  Fed.  Rep.  967,  6  Am.  B. 

Cas.,   s.   c.   2   Low.    404.      See   also  R.  245. 

ej: />ar/^  Jewett,  No.  7303,  Fed.  Cas.,  ^i  B.    A.    1898,    Sec.    12c?;    In    re 

s.  c.  2  Low.  393 ;  In  re  Reiman,  No.  Goodwin,    10   Am.    B.    R.    252,    122 

1 1673,  Fed.  Cas.,  s.  c.  7  Ben.  455.  Fed.  Rep.  11 1.     The  rule  under  the 

^^  Ex   parte    Williams,    10    L.    R.  act   of    1867   was   otherwise.     In   re 

Eq.  57.    Consult  also  ex  parte  Cow-  Haskell,   No.  6192,   Fed.   Cas.,  s.   c. 

en,  2  L.   R.  Chan.   .App.  563:   Hart  11  N.  B.  R.  164;  In  re  Becket,  No. 

V.  Smith,  4  L.  R.  Q.  B.  61 ;  Ex  parte  1210,  Fed.  Cas.,  s.  c.  2  Woods,  173. 

Greaves,  5   L.   R.   Chan.   App.   326;  •*- B.  A.    1898,   Sec.   14&. 

Ex  parte   Duigman,    11    L.   R.    Eq.  *3  gees.  281-283. 


COMPOSITIONS    AND    ARBITRATIONS.  689 

By  the  amendment  of  Feb.  5,  1903/*  the  grounds  for  refus- 
ing a  discharge  were  amended  to  prevent  a  discharge  when  the 
bankrupt  has,  first,  committed  an  offense  punishable  by  im- 
prisonment as  herein  provided ;  or,  second,  with  intent  to 
conceal  his  financial  condition,  destroyed,  concealed,  or  failed 
to  keep  books  of  account  or  records  from  which  such  condition 
might  be  ascertained ;  or,  third,  obtained  property  on  credit 
from  any  person  upon  a  materially  false  statement  in  writing 
made  to  such  person  for  the  purpose  of  obtaining  such  prop- 
erty on  credit;  or,  fourth,  at  any  time  subsequent  to  the  first 
day  of  the  four  months  immediately  preceding  the  filing  of 
the  petition  transferred,  removed,  destroyed,  or  concealed,  or 
permitted  to  be  removed,  destroyed,  or  concealed  any  of  his 
property  with  intent  to  hinder,  delay,  or  defraud  his  creditors ; 
or,  fifth,  in  voluntary  proceedings  been  granted  a  discharge  in 
bankruptcy  within  six  years;  or,  sixth,  in  the  course  of  the 
proceedings  in  bankruptcy  refused  to  obey  any  lawful  order 
of  or  to  answer  any  material  question  approved  by  the  court. 
These  objections  can  be  made  to  confirming  a  composition  only 
in  cases  begun  since  the  amendment. 

The  statute  does  not  limit  the  time  for  making  a  composi- 
tion to  that  within  which  a  discharge  may  be  granted.  It 
would  therefore  seem  that  an  objection  to  the  confirmation 
upon  the  ground  that  a  discharge  was  barred  by  limitation 
of  time  would  not  be  sufficient  to  prevent  the  confirmation  of 
a  composition.  The  refusal  to  confirm  a  composition  must 
be  founded  upon  acts  or  an  omission  to  perform  duties 
which  would  bar  a  discharge,  and  not  merely  for  the  reason 
that  an  application  for  a  discharge  can  not  be  made. 

Third:  Because  it  was  Obtained  by  Fraud. —  It  is  an 
essential  condition  to  the  validity  of  a  composition  that  it 
shall  be  in  all  respects  just.  Any  taint  of  fraud,  whether  it  con- 
sists in  concealment,  misrepresentation,  inequality  or  injustice 
wholly  vitiates  the  comiK)siti()n  and  frees  the  persons  who 
would  otherwise  be  bound  by  it. 

The  court  will  not  hesitate  to  refuse  to  confirm  a  compo- 
sition when  the  debtor  has  deceived  the  creditors  into  an 
agreement,   which   they  would  probably  not  have  made   had 

**  B.  A.  1898,  Sec.  14&,  as  amended  Feb.  5,  1903,  32  Stat,  at  L.  797. 


690  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

the  facts  been  honestly  and  fairly  before  them.  Thus  it  is 
a  good  ground  for  opposing  a  confirmation  that  a  creditor  is 
induced  to  sign  an  acceptance  by  reason  of  a  present  con- 
sideration (^r  an  expectation  of  advantage  offered  by  the 
bankrupt/''*  or  by  a  third  person,  without  the  actual  knowl- 
edge of  the  bankrupt,  when  the  relation  of  such  person  to 
the  bankrupt  is  such  as  to  arouse  suspicion,  as  an  employee 
or  a  relation.'*''  But  the  mere  fact  that  a  brother  procures  an 
assignment  of  claims  openly  will  not  prevent  a  confirmation 
when  it  appears  after  throwing  out  his  claims  that  a  major- 
ity of  the  creditors  have  accepted  the  terms  offered.**'  A 
bankru])t  may  induce  his  friends  to  pay  more  in  composition 
than  his  estate  would  pay  in  bankruptcy.  Such  a  composi- 
tion should  be  confirmed.*^  A  creditor  may  purchase  claims 
for  the  purpose  of  using  them  in  opposing  a  composition.*® 

Where  the  requisite  majority  of  the  creditors  agree  to  a 
composition  for  much  less  than  the  bankrupt  is  able  to  pay, 
fraud  may  be  presumed.  Either  the  assenting  creditors  know, 
or  they  do  not  know,  that  the  debtor  is  able  to  pay  a  com- 
position of  a  larger  amount  than  that  which  he  has  proposed. 
If  they  do  not  know  the  debtor's  means,  it  can  only  be  by 
reason  of  the  debtor's  suppression  of  facts  material  and  essen- 
tial to  the  exercise  by  them  of  their  free  will,  and  in  such  a 
case  they  would  be  entitled  to  repudiate  the  consent,  which 
was  obtained  from  them  by  such  suppression.  If  on  the  other 
hand  they  do  know  the  extent  of  the  debtor's  ability  to 
satisfy  the  debts  due  to  them  and  other  creditors,  and  agree 
to  release  —  and  join  in  compelling  unwilling  creditors  to  re- 
lease —  the  debtor  upon   payment   of  a  composition  grossly 

***  In  re  Sawyer,  No.  12395,  Fed.  leave  to   call   a  new   meeting.     Be- 

Cas.,   s.    c.  2   Low.  475 ;  In   re  Ja-  tween   the   order  of  the  court  and 

cobs.  No.  7159,  Fed.  Cas.,  s.  c.   18  the  time  of  calling  a  new  meeting 

N.  B.  R.  48.  an    opposing    creditor    purchased    a 

■*5  In  re   Bennett,   No.    1312,   Fed.  sufficient   number  of  claims  to   de- 

Cas.,  s.  c.  8  Ben.  561.  feat  the  confirmation.     Judge  Low- 

•♦o/n  re  Walshe,  No.   171 18,  Fed.  ell  said:    "I  think  some  illegal  mo- 

Cas.,  s.  c.  2  Woods,  225.  tive    should    be    shown   beyond   the 

*' In  re  Snelling,  No.  13140,  Fed.  mere  desire  to  defeat  the  composi- 

Cas..  s.  c.  19  N.  B.  R.  120.  tion  upon  the  ground  that  it  is  not 

■*"  In    re   Jewett,    No.    7303,    Fed.  for  the  best  interests   of  the  cred- 

Cas.,  s.  c.  2  Low.  393,  the  court  re-  itors  to  accept  it." 
fused  to  confirm  a  composition  with 


COMPOSITIONS    AXD    ARBITRATIONS.  69I 

disproportionate  to  the  debtor's  means,  they  wilHngly  and  in- 
tentionally make  themselves  parties  to  a  fraud  by  which  the 
dissentient  creditors  are  prejudiced.  In  such  cases  the  court 
should  refuse  to  confirm.*"  Where  a  bankrupt's  assets  are 
so  trifling  that  practically  there  would  be  no  dividend,  a  com- 
position may  be  successfully  opposed  against  an  attempt  by 
friendly  creditors  to  force  a  composition  upon  opposing  cred- 
itors.'** 

It  is  undoubtedly  a  good  ground  for  not  confirming  a  com- 
position if  any  person  has  used  a  false  claim  in  composition 
personally  or  by  agent,  proxy,  or  attorney,  or  as  agent,  proxy, 
or  attorney.^^  Such  person  also  is  liable  to  imprisonment  for 
a  period  not  to  exceed  two  years  for  the  offense.^^ 

Where  fraud  exists  the  creditors  are  not  bound  to  raise  the 
question  at  the  time  of  confirmation.  Fraud  vitiates  the 
whole  confirmation  and  constitutes  the  ground  for  setting 
it  aside.  The  objections  founded  upon  fraud  may  be  raised 
either  at  the  time  of  confirmation  or  upon  an  application  to 
set  aside  a  confirmation  previously  made.  Cases  upon  the 
(question  of  whether  a  confirmation  may  be  set  aside  or  not 
may  be  profitably  consulted  in  this  connection. °"  It  is  obvious 
that  fraud  sufficient  to  set  aside  a  composition  is  sufficient 
to  prevent  a  confirmation. 

§  248.     The  hearing  of  objections. 

When  objections  are  properly  taken  to  the  confirmation  of 
a  composition  there  should  be  a  hearing  before  the  judge.'^ 
The  creditors  are  entitled  to  a  ten  days'  notice  by  mail  of 
such  hearing.'*  At  this  hearing  evidence  may  be  introduced 
before  the  judge,  as  he  may  direct,  either  orally  or  by  dep- 
ositions or  affidavits.*  and  counsel  may  be  heard  in  support  of 
and  against   the  specification   of  the  grounds   of  opposition. 

■*"  As  to  what  is  too  great  a  mar-  where    the    hanknipt    liad    been    re- 
gin,  see   "  because  it  is  not   for  the  fused  a  discharge, 
interest  of  creditors  "  above,  in  this  ^'^  B.  A.  1898,  Sec.  29,  clause  3. 
section.  '"'2  As  to  wlien  a  composition  may 

'"*  /»  re  Russell,  10  Chan.  .'\p.  255,  be  set  aside,  see  Sec.  252,  post. 

263;  In  re  Hannahs,  No.  6033,  Fed.  ^^  B.  A.   1898,  Sec.   12c,  and  Sec. 

Cas.,  s.  c.  8  Ben.  533,  the  court  re-  38,  clause  4.     Gen.  Ord.  12,  par.  3. 

fused  to  confirm   a  composition   of  '^*  B.  A.   1898,  Sec.   580. 
fifty  cents  for  every  hundred  dollars 


(192  i.AW   .\M>  1'K()(.i-:i-:dings  in   bankruptcy. 

The  judge  may  refer  the  matter  \i>  a  referee  with  directions  to 
rejxirt  the  facts  but  tlie  jud<>e  uiust  uiake  the  order. 

The  object  of  this  heariug  is  to  satisfy  the  judge  that  the 
composition  is  for  the  best  interests  of  the  creditors ;  that 
the  bankrupt  lias  not  been  guiUy  of  any  of  the  acts  or  failed 
to  perform  any  of  the  duties  which  wotikl  l)e  a  bar  to  his  dis- 
charge and  that  the  offer  and  its  acceptance  are  in  good 
faith,  and  have  not  been  made  or  procured  except  as  provided 
by  the  statute,  or  by  any  means,  promises,  or  acts  therein 
forbidden.^'^  If  satisfied  of  these  things  it  is  his  duty  to  con- 
firm the  composition.^**  Otherwise  he  should  refuse  to  con- 
firm it. 

§  249.     The  order  of  confirmation. 

The  statute  provides  that  the  judge  shall  confirm  a  com- 
position if  satisfied  that  ( i)  it  is  for  the  best  interests  of  the 
creditors;  (2)  the  bankrui)t  has  not  been  guilty  of  any  of  the 
acts  or  failed  to  perform  any  of  the  duties  which  would  be  a 
bar  to  his  discharge;  and  {3)  the  ofifer  and  its  acceptance  are 
in  good  faith,  and  have  not  been  made  or  procured  except  as 
provided  1n^  the  statute,  or  by  any  means,  promises,  or  acts 
therein  forbidden. 

Where  the  proceedings  have  been  regular,  and  the  bankrupt 
has  complied  with  all  the  conditions  specified  in  the  statute, 
and  no  opposition  is  made  by  the  creditors,  a  prima  facie 
case  is  made  w-hich  ordinarily  satisfies  the  court  that  the 
bankrupt  is  entitled  to  have  a  composition  confirmed.  The 
court  will  thereupon  regularly  pass  an  order  confirming  the 
composition.^'^  This  order  usually  recites  the  several  condi- 
tions which  have  been  complied  with  by  the  bankrupt.  The 
order  concludes  "  it  is  therefore  hereby  ordered  that  the  said 
composition  be  and  the  same  is  hereby  confirmed."  '*" 

In  case  there  is  opposition  to  the  confirmation,  and  it  ap- 
pears from  the  evidence  that  the  acceptance  of  the  offer  of 
terms  was  duly  made  by  the  requisite  number  of  creditors, 
and  the  court  is  satisfied  that  the  creditors  were  fully  and 
honestly  advised  of  the  true  condition  of  the  bankrupt's  af- 

''•'■  P..   A.   1898,   Sec.    ]2d.  No.  11.^,  past:  In  re  Frear,   10  Am. 

^'''  Official  Form  No.  62;  see  Form      P..  R.  199,  120  Fed.  Rep.  978. 


COMPOSITIONS    AND    ARBITRATIONS.  693 

fairs,  so  that  they  acted  intelligently  and  understandingly  in 
full  view  of  the  facts,  it  will  ordinarily  confirm  the  composi- 
tion.^" On  the  other  hand,  if  the  court  is  satisfied  from  the 
evidence  that  the  composition  has  not  been  honestly  made  as 
between  the  debtor  and  the  creditors,  or  that  it  is  not  for  the 
best  interest  of  them  all,  or  that  it  appears  that  the  bankrupt 
has  committed  or  omitted  to  do  some  act  which  would  bar 
his  discharge,  or  if  the  proceedings  have  been  irregular,'^^  the 
court  should  refuse  to  pass  an  order  of  confirmation.  When- 
ever a  composition  is  not  confirmed,  the  estate  is  adminis- 
tered in  bankruptcy  as  otherwise  provided  by  the  statute.^^ 
Whether  the  order  shall  be  granted  or  refused,  rests  in  the 
sound  judicial  discretion  of  the  judge.  The  judge  may  pro- 
vide for  a  disputed  or  an  unliquidated  claim  in  composition 
cases.  ^" 

A  certified  copy  of  an  order  confirming  or  setting  aside  a 
composition,  or  granting  or  setting  aside  a  discharge,  not  re- 
voked, is  evidence  of  the  jurisdiction  of  the  court,  the  reg- 
ularity of  the  proceedings,  and  of  the  fact  that  the  order  was 
made.''^ 

It  has  been  held  that  an  appeal  lies  in  favor  of  a  bankrupt 
from  an  cjrder  refusing  a  confirmation  of  a  composition.®^ 

§  250.     The  effect  of  a  confirmation  of  a  composition. 
The  confirmation  of  a  composition  has  the  effect : 
First,  to  revest  in  the  bankrupt  the  title  to  his  estate  and 
property  and  discharge  the  trustee  ;"^  second,  to  discharge  the 
bankrupt  from  his  debts,  other  than  those  agreed  to  be  paid 

■'''In   re  Reiman,   No.   11675,   Fed.  '•'■' B.   A.    1898,   Sec.    I2e. 

Cas.,    s.    c.    12    Blatch.    562;    In    re  «o£;r   parte    Trafton,    No.    14133. 

Grecnebaum,    No.    5769,    Fed.    Cas.,  Fed.  Cas.,  s.  c.  2  Low.  505. 

s.  c.  I  Chi.  L.  J.  599;  In  re  Walshe,  "i  B.  A.  1898,  Sec.  2if.     See  also 

No.  171 18,  Fed.  Cas.,  s.  c.  2  Woods  as  to  the  conclusiveness  of  an  or- 

225 ;  In  re  Weber  Furniture  Co.,  No.  der  of  confirmation,   Smith  v.   En- 

173.V,  Fed.  Cas.,  s.  c.  13  N.  B.  R.  gle,   14  N.  B.  R.  481. 

599;  In  re  Spades,  No.   13196,  Fed.  ^^  U.    S.    v.   Hammond,    104   Fed. 

Cas.,  s.  c.  6  Biss.  448.  Rep.  862,  4  .'Vm.  B.  R.  736.     But  see 

'''*  In  re  Asten,  No.  594,  Fed.  Cas.,  Ross    v.    Saunders,    105    Fed.    Rep. 

s.    c.    8    Ben.    350;    see   aLso    in    re  915,  5  Am.  B.  R.  350. 

Henry.  No.  6370.  Fed.  Cas.,  s.  c.  9  "•''  B.   A.   1898,   Sec.   70/';  Ligon  v. 

Ben.  449;  In  re  Rodger,  No.   1 1992,  Allen,  56   Miss.  632. 
Fed.  Cas.,  s.  c.  18  N.  B.  R.  381. 


604       ^'•'^^^'  -"^-'^'^^  PROCEEDINGS  IN  BANKRUPTCY. 

by  the  terms  of  the  composition  and  those  not  affected  by  a 
discharge."*  No  other  discharge  than  an  order  of  confirma- 
tion is  needed.*"^ 

The  confirmation  of  a  composition  releases  the  bankrupt 
from  such  debts  only  as  a  discharge.""  A  discharge  in  bank- 
ruptcy releases  a  bankrupt  from  all  of  his  prova1)le  debts,  ex- 
cept such  as  are  due  as  a  tax  levied  by  the  United  States,  the 
state,  county,  district,  or  municii)ality  in  which  he  resides; 
are  judgments  in  actions  for  frauds,  or  obtaining  property  by 
false  pretenses  or  false  representations,  or  for  willful  and  ma- 
licious injuries  to  the  i^erson  or  property  of  another;  have 
not  been  duly  scheduled  in  time  for  proof  and  allowance, 
with  the  name  of  the  creditor  if  known  to  the  bankrupt,  un- 
less such  creditor  had  notice  or  actual  knowledge  of  the  pro- 
ceedings in  bankruptcy;  or  were  created  by  his  fraud,  em- 
bezzlement, misappropriation,  or  defalcation  while  acting  as 
an  officer  or  in  any  fiduciary  capacity.'"'^ 

The  confirmation  of  a  comiX)sition  therefore  will  not  dis- 
charge a  debt  created  by  fraud, "^  nor  a  debt  or  liability  in- 
curred in  and  by  a  bankrupt  acting  in  a  fiduciary  capacity,"'' 
nor  a  stockholder's  contingent  liability  not  scheduled. ''*'  nor 
the  liability  of  a  person  who  is  a  co-defendant  with  or  guaran- 
tor, or  in  any  manner  a  surety  for  a  bankrupt,'^^  nor  the  debt 
of  a  creditor  whose  name  does  not  appear  in  the  statement 
of  the  debtor  or  otherwise  in  the  composition  proceedings 
and  whose  debt  is  not  mentioned,"  unless  such  person  had 
actual  knowledge  of  the  proceedings  in  bankruptcy. 

64  B.  A.  1898,  Sec.   14c.     Consult  ^opiower  v.  Greenebaum,  2  Fed. 

Liebke  v.  Thomas,  116  U.  S.  605.  Rep.  897- 

65 /n   re    Becket,    No.    1210,    Fed.  '^^  B.  A.   1898,  Sec.   16;   Moore  v. 

Cas.,  s.  c.   2  Woods,   173.  Stanwood,  98  111.  605;  In  re  Burch- 

66  Wilmot  V.    Mudge,    T03   U.    S.  ell,  4  Fed.  Rep.  406. 

217 ;  Bayly  v.  University,  106  U.  S.  '^s  Harrison   v.   Gamble,  69  Mich. 

i\;  In  re  Kahn,  9  Am.  B.  R.  107;  96;    Robinson    v.    Soule,    56    Miss. 

Glover  Grocery  Co.  v.  Dome  (Sup.  549.     See  also  In  re  Blackmore,  11 

Ct.  Ga.),  — Ga.  — ,  8  Am.  B.  R.  702.  Fed.  Rep.  412. 

07  B.  A.  1898,  Sec.  17.  That    it    binds    all    whose   names 

68  Wilmot   V.    Mudge,    103    U.    S.  appear    in    the    schedule,    see    Mc- 

217.  Gehee  v.  Hentz,  No.  8794.  Fed.  Cas., 

6»  Bayly  v.  University,  106  U.  S.  s.  c.  19  N.  B.  R.   136. 
II. 


COMPOSITIOXS    AND    ARBITRATIONS.  695 

Where  the  consideration  consists  of  negotiable  paper,  and 
the  bankrupt  does  not  fulfill  his  obligations  and  agreements 
in  connection  therewith,  the  creditor  may  recover  his  whole 
debt  from  the  bankrupt."  The  confirmation  of  a  composition 
does  not  release  the  bankrupt  from  debts  agreed  to  be  paid 
by  the  terms  of  the  composition.  If  the  bankrupt  fails  to 
make  good  his  part  the  consideration  fails  and  the  whole 
debt  revives. 

The  order  confirming  a  composition  is  not  a  bar  to  a  suit 
to  collect  the  whole  debt,  when  the  composition  was  procured 
by  fraud. ^*  The  reason  for  this  rule  is  that  fraud  vitiates  the 
whole  composition  and  leaves  the  debtor  and  the  bankrupt 
in  the  same  position  that  they  were  before  the  composition 
was  attempted. 

The  composition  proceedings  will  not  operate  to  deprive  a 
secured  creditor  of  the  right,  after  exhausting  his  own  secur- 
ity, to  assert  against  the  bankrupt  a  claim  for  a  deficiency.'^ 
Such  proceedings  will  not  affect  a  vested  right  or  security.^'' 
Secured  creditors  are  not  parties  to  the  composition. 

An  agreement  or  note  entered  into  secretly  for  the  purpose 
of  obtaining  a  composition  with  creditors  can  not  be  enforced 
against  the  bankrupt,  because  the  consideration  is  illegal.'^ 

A  composition  may  be  pleaded  in  bar  of  actions  upon  debts 
discharged.  In  order  to  be  available  as  defense  it  must  be 
pleaded.^® 

§  251.     Proceedings  after  a  confirmation  of  a  composition. 

Upon  the  confirmation  of  a  composition  the  consideration  is 
distributed  as  the  judge  shall  direct,  and  the  case  dismissed.''* 

■'•'«/«  re  Neglcy,  20  Fed.  Rep.  499;  '^"  Carey    v.    Hess,    112   Ind.   398; 

In  re  Hurst,   No.  6925,    Fed.   Cas.,  Tirrell  v.  Freeman,  139  Mass.  297; 

s.  c.   I   Flip.  462;   Ransom  v.  Gcer,  Blasdel    v.    Fowle,    120    Mass.   447; 

12  Fed.  Rep.  607.  Woodman     v.     Stowe,     11     Rradw. 

'♦Brownsville  Manufacturing  Co.  (111.  Ap.  Ct.)  613;  Tinker  v.  Hurst> 

V.    Lockwood,    II     Fed.    Rep.    705;  70  Mich.    159. 

Pukpe    V.    Churchill,    91     Mo.    81 ;  '« fn   re  Tookcr,  No.   14096,  Fed. 

Ex  parte  Halford,  19  L.  R.  Eq.  436.  Cas.,  s.  c.  8  Ben.  390.     See  Plcad- 

''^  Paret    v.    Ticknor,    No.    10711,  ing  a  discharge.  Sec.  301,  post. 

Fed.  Cas.,  s.  c.  4  Dill,  in,  per  Mr.  'o  B.  A.  1898,  Sec.  12c. 

Justice  Miller;  Cavanna  v.  Bassett,  .As  to  set-offs  in  composition,  see 

3  Fed.   Rep.  215.  in   re  Lissliarger,  2   Fed.   Rep.    153; 

'"/«  re  Stowell,  24  Fed.  Rep.  468.  In  re  Purcell,  No.  11470,  Fed.  Cas., 


696  LAW    AND    PROCEliDINGS    IN    BANKRUPTCY. 

The  form  of  order  for  distribution  on  composition  is  pre- 
scribed by  the  supreme  court."*"  It  provides  that  the  deposit 
shall  be  distributed  by  the  clerk  of  the  court  as  follows:  ist, 
to  pay  the  several  claims  which  have  priority;  2d,  to  pay 
the  costs  of  proceedings;^^  3d.  to  pay,  according  to  the  terms 
of  the  comjwsition,  the  several  claims  of  general  creditors 
which  have  been  allowed,  and  appear  upon  a  list  of  allowed 
claims,  on  the  files  in  the  case.  Only  those  creditors  who  prove 
their  claims  within  one  year  from  the  date  of  adjudication 
can  have  dividends  from  the  estate,  or  assert  a  right  to  share  in 
the  funds  paid  in  composition.  The  officers  of  the  court  cannot 
know  what  amount  should  be  paid  to  a  creditor,  or,  indeed, 
who  are  creditors,  except  upon  proof  of  their  claims  in  the 
time  and  manner  provided  by  law.  The  bankrupt  is  entitled 
to  the  money  remaining  in  court  unclaimed  after  the  expiration 
of  the  year  in  which  ])roof  of  claims  could  be  made,  and  the 
creditor  cannot  be  heard  to  say  that  it  was  not  in  fault  in 
respect  to  the  failure  to  present  its  claim.  The  language  of 
the  statute  permits  no  exceptions  to  its  terms.*"  A  claimant 
is  entitled  to  property  leased  to  bankrupt  and  which  is  not 
used  in  the  composition.*^  The  services  of  a  trustee  are  dis- 
pensed with.  When  the  property  has  thus  been  distributed, 
the  case  is  dismissed  by  the  judge  and  the  proceedings  are  at 
an  end. 

Upon  the  confirmation  of  a  composition  offered  by  a  bank- 
rupt the  title  to  his  property  thereupon  revests  in  him.** 
The  title  is  passed  by  operation  of  law,  and  no  deed  is  neces- 
sary to  convey.  A  certified  copy  of  an  order  confirming  a 
composition  constitutes  evidence  of  the  revesting  of  the  title 
of  his  property  in  the  bankrupt,  and  if  recorded  imparts  the 
same  notice  that  a  deed  from  the  trustee  to  the  bankrupt 
if  recorded  would  impart.*^ 

s.   c.    18   N.   B.   R.   447 ;   Ex  parte  «2  /,j  ^^  Brown,  123  Fed.  Rep.  336, 

Howard  Nat.  Bank,  No.  6764,  Fed.  10  Am.  B.  R.  588. 

Cas.,    s.    c.   2   Low.   487;    Ex    parte  ^^  In   re   Winship   Co.    (C.   C.   A. 

Harris,  No.  6109,  Fed.  Cas.,  s.  c.  2  7th  Cir.),  120  Fed.  Rep.  93,  9  Am. 

Low.  568.  B.  R.  638. 

**"  Official  Form  No.  63;  see  Form  »*  B.   A.    189,:,    Sec.   yof. 

No.  114,  post.  85  B.   A,   1898,  Sec.  2ig. 

81  In  re  Harris,  9  Am.   B.  R.  20, 
117  Fed.  Rep.  57s. 


COMPOSITIONS    AND    ARBITRATIONS.  697 

§  252.     Setting  aside  a  confirmation. 

The  courts  of  bankruptcy  are  expressly  given  power  to  set 
aside  a  composition  and  to  reinstate  the  case.^"  The  applica- 
tion to  set  aside  a  confirmation  should  be  made  to  the  judge, 
and  not  to  the  referee.*^ 

No  other  court  can  set  aside  a  composition  except  the 
court  of  bankruptcy  which  confirmed  the  composition.  An 
order  of  confirmation  of  a  composition  can  not  be  assailed 
collaterally  in  any  other  court.  The  statute  expressly  pro- 
vides that  "  a  certified  copy  of  an  order  confirming  or  setting 
aside  a  composition,  not  revoked,  shall  be  evidence  of  the 
jurisdiction  of  the  court,  the  regularity  of  the  proceedings, 
and  of  the  fact  that  the  order  was  made."  ^^ 

The  application  is  made  by  petition,  which  should  be  en- 
titled in  the  court  and  cause.  It  should  set  forth  the  grounds 
upon  which  the  composition  is  asked  to  be  set  aside.  The 
only  ground  upon  which  a  composition  can  be  set  aside  and 
the  case  reinstated  is  when  it  is  made  to  appear  upon  the  trial 
that  fraud  was  practiced  in  the  procuring  of  such  composition. 
and  that  the  knowledge  thereof  has  come  to  the  petitioners 
since  the  confirmation  of  such  composition.^'*  The  petition 
should  conclude  with  a  prayer  that  the  composition  be  set 
aside  and  be  signed  by  a  "  party  in  interest."  The  word 
"  creditors  "  was  used  in  the  former  act.""  The  words  "  parties 
in  interest  "  is  a  broader  term,  but  in  practice  the  application 
usually  is  made  by  a  creditor.  A  secured  creditor  can  not  make 
an  application  because  he  has  no  interest  in  the  composition."^ 

The  i)etiti()n  must  be  filed  in  the  clerk's  office  within  six 
months  after  the  composition  has  been  confirmed."^  A  trial 
is  had  uix)n  notice  to  all  creditors."''  Evidence  may  be  in- 
troduced and  counsel  heard  for  and  against  the  petition.  If 
the  allegations  in  the  j>etition  are  supported  by  sufficient 
evidence  the  court  will  order  the  composition  set  aside  and 

««R.    A.    1898,    Sec.    2,  clause  9;          »i /n    re    Scott.    No.    12519,    Fed. 

In   re    Riulnick,   93   Fed.  Rep.   787,      Cas.,  s.  c.  15  N.  R.  R.  73>- 

2   Am.    P..   R.    114.  "^B-  A.  1898,  Sec.  13. 

"P..   A.   1898,  Sec.  13.  "" /"    ''''   r)iRRlcs,   No.   3905.   Fed. 

""P..    A.    1898.    Sec.  2if.  Cas.,    s.    r     8    Ben.    36;    Ex    parte 

""  B.  A.   1898.  .Sec.   13.  Hamlin,    No.   5993,    Fed.   Cas.,   s.   c. 

••"  R.  S.  Sec.  5103.  2    Low.   571. 


098  LAW    AND    rKOCEEDINC.S    IN    liANKRUPTCY. 

the  case  reinstated.^'  and  if  not.  it  will  order  the  petition 
dismissed."^  A  composition  will  not  be  set  aside  on  the  ground 
that  a  creditor  had  failed  to  get  notice  of  the  proceedings  be- 
cause his  address  was  misstated  in  the  bankrupt's  schedule  by 
mistake."^ 

Whenever  a  composition  has  been  set  aside  the  creditors, 
at  their  tirst  meeting  thereafter,  must  appoint  one  or  three 
trustees  of  such  estate,"^  and  fix  the  amount  of  the  bonds  as 
in  the  first  instance.  The  trustee,  upon  his  appointment  and 
qualification,  is  vested  with  the  title  to  all  of  the  property  of 
the  bankrupt  as  of  the  date  of  the  final  decree  setting  aside 
the  composition.'^^ 

The  case  then  proceeds  as  if  no  composition  had  been  made. 
The  property  is  distributed  in  the  same  manner,  except  that 
in  the  event  of  the  confirmation  of  a  composition  being  set 
aside,  the  property  acquired  by  the  bankrupt,  in  addition  to 
his  estate  at  the  time  the  composition  was  confirmed  or  the 
adjudication  was  made,  is  applied  to  the  payment  in  full  of 
the  claims  of  creditors  for  property  sold  to  him  on  credit, 
in  good  faith,  while  such  composition  or  discharge  was  in 
force,  and  the  residue,  if  any,  is  applied  to  the  payment  of 
the  debts  which  were  owing  at  the  time  of  the  adjudication."^ 

§  253.     Arbitration  and  compromise. 

The  trustee  may,  pursuant  to  the  direction  of  the  court, 
submit  to  arbitration  any  controversy  arising  in  the  settle- 
ment of  the  estate,'""  or  he  may,  with  the  approval  of  the 
court,  compromise  any  controversy  arising  in  the  administra- 
tion of  the  estate  upon  such  terms  as  he  may  deem  for  the 
best  interests  of  the  estate.'*^^ 

94  B.  A.  1898,  Sec.  2,  clause  9;  '*/n  re  Rudnick,  93  Fed.  Rep. 
Fairbanks    v.    Amoskeag    Bank,    38      787.  2  Am.  B.  R.   114. 

Fed    Rep.  630;  Ex  parte  Williams,  "^  b.  A.  1898,  Sec.  44- 

10,  L.  R.  Eq.  57.  ''  B.  A.   1898,   Sec.  -jod. 

95  City   Bank  v.   Doolittel    (C.   C.  ^o  b.  A.    1898,   Sec.  64c. 

A.  5th  Cir.),   107  Fed.  Rep.  236,  5  '""  B.  A.  1898,  Sec.  26a.    Compare 

Am.  B.  R.  736;  In  re  Shaw,  9  Fed.  R.   S.   Sec.  5061. 

Rep.  495;    Pool  V.    McDonald,   No.  i"M'<.    A.    1898,    Sec.    27;    In    re 

1 1268,  Fed.  Cas.,  s.  c.  15  N.  B.  R  Heyman,  108  Fed.  Rep.  207,  5  Am. 

560.  B.   R.   808. 


COMPOSITIONS    AND    ARBITRATIONS.  699 

Whenever  a  trustee  makes  application  to  the  court  for 
authority  to  submit  a  controversy  arising  in  the  settlement  of 
a  demand  against  a  bankrupt's  estate,  or  for  a  debt  due  to  it, 
to  the  determination  of  arbitrators,  or  for  authority  to  com- 
jxjund  and  settle  such  contro\'ersy  by  agreement  with  the 
other  party,  the  application  must  clearly  and  distinctly  set 
forth  the  subject-matter  of  the  controversy,  and  the  reason 
why  the  trustee  thinks  it  proper  and  most  for  the  interest  of 
the  estate  that  the  controversy  should  be  settled  by  arbitra- 
tion or  otherwise/**' 

Whenever  it  may  be  deemed  for  the  benefit  of  the  estate 
of  a  bankrupt  to  compound  and  settle  any  debts  or  other 
claims  due  or  belonging  to  the  estate  of  the  bankrupt,  the 
trustee,  or  the  bankrupt,  or  any  creditor  who  has  proved  his 
debt,  may  file  his  petition  therefor;  and  thereupon  the  court 
appoints  a  suitable  time  and  place  for  the  hearing  there- 
of, notice  of  which  is  given  as  the  court  shall  direct,  so 
that  all  creditors  and  other  persons  interested  may  appear 
and  show  cause,  if  any  they  have,  why  an  order  should  not 
be  passed  by  the  court  upon  the  petition  authorizing  such 
act  on  the  part  of  the  trustee.^**^ 

Under  the  act  of  1867  it  was  held  that  such  applications 
must  be  made  to  the  judge."*  Under  the  present  act  the 
referee  is  authorized,  subject  always  to  a  review  by  the 
judge,  within  the  limits  of  his  district  as  established  from 
time  to  time,  to  perform  such  part  of  the  duties,  except  as  to 
questions  arising  out  of  the  applications  of  bankrupts  for 
compositions  or  discharges  as  are  by  the  l)ankru|)t  statute 
conferred  on  courts  of  bankruptcy,  and  as  shall  be  prescribed 
by  rules  or  orders  of  the  courts  of  bankruptcy  of  their  re- 
spective districts,  except  as  otherwise  provided  by  statute."'* 
It  seems,  therefore,  that  an  application  to  compromise  or  to 
submit  to  arbitration  any  controversy  arising  in  the  admin- 
istration of  the  estate  may  be  made  to  the  referee  or  to  the 
judge. 

In  cither  case  a  ten  days*  notice  should  be  given  bv  mail 

"»2  Gen.  Orel.  33.  '"* /«    re   Grnvcs.   Nn.    5700,   Fed. 

^"3  Gen.  Orel.  28.  Cas.,   s.  c.  2   Ren.    100. 

^"5  B.  A.  1898,  Sec.  38,  clause  4. 


-OO  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

to  the  creditors,  of  the  time  and  place  of  the  hearing  on  the 
petition. ^'^''  The  notice  is  usually  in  the  form  of  a  rule  to 
show  cause.  At  the  hearing  the  court  may  hear  testimony 
and  argimients  of  counsel  in  support  of  and  against  the  peti- 
tion, and  pass  an  order  granting  or  refusing  to  grant  the 
prayer  of  the  petition.  It  may  he  doubted  if  the  court  can 
by  a  general  order  authorize  the  trustee  to  compound  all 
doubtful  claims,  with  the  consent  of  a  committee  of  the 
creditors.'"'  Tlie  proceedings  should  be  in  accordance  with  the 
provisions  of  the  statute  and  general  orders. 

When  leave  is  granted  to  submit  a  controversy  to  arbitra- 
tion, three  arbitrators  are  chosen  by  mutual  consent,  or  one 
by  the  trustee,  one  by  the  other  party  to  the  controversy, 
and  the  third  by  the  two  so  chosen,  or  if  they  fail  to  agree 
in  five  days  after  their  appointment  the  court  appoints  the 
third  arbitrator."^  The  arbitrators,  upon  inquiry,  consider 
the  controversy,  and  should  report  their  finding  in  writing. 
The  written  finding  of  the  arbitrators,  or  a  majority  of  them, 
as  to  the  issues  presented,  may  be  filed  in  court,  and  have 
like  force  and  efifect  as  the  verdict  of  a  jury."*^  It  is  subject 
to  be  set  aside  or  adjudged  upon  by  the  court  as  a  verdict 
would  be."° 

106  B.    A.    1898,    Sec.    58a;   In   re  McLam,  97  Fed.   Rep.  922,  3  Am. 

Hoole,  3  Fed.  Rep.  496.  B.  R.  245. 

lo^See  In   re  Dibblee,    No.   3885,  "»  B.  A.  1898,  Sec.  26c. 

Fed.   Cas.,  s.  c.  3  Ben.  354.  i^" /«    re   McLam,   97    Fed.    Rep. 

108  B.    A.    1898,    Sec.   2Sb;   In   re  922,  3  Am.  B.  R.  245. 


HOW    TO    REDUCE    THE    ESTATE    TO    MONEY.  70I 


CHAPTER   XXIV. 

HOW  TO  REDUCE  THE  ESTATE  TO  MONEY. 

5^  254.     The  general  power  of  trustee  to  sell. 

The  estate  of  the  bankrupt  which  passes  to  the  trustee,  if 
there  are  any  assets,  consists  of  real  estate  or  personal  prop- 
erty or  both.  The  personal  property  may  include  a  stock  of 
croods,  choses  in  action,  horses  and  carriages,  farming  stock, 
implements,  machinery,  fixtures  and  tools  used  in  business, 
patents,  copyrights  and  trademarks,  stocks,  bonds,  and  per- 
sonal property  of  every  description.  It  is  obvious  that  such 
property  can  not  be  distributed  pro  rata  among  the  creditors 
of  the  bankrupt.  It  is  therefore  necessary  to  reduce  the 
estate  to  money  in  order  to  make  a  fair  and  proper  distribu- 
tion of  it. 

The  estate  may  come  to  the  trustee  loaded  with  burdens. 
There  may  be  valid  mortgages  or  other  liens  on  it,  and  there 
may  be  liens  and  mortgages  whose  validity  is  doubtful. 
Whatever  interest  the  bankrupt  has  in  such  property  must 
be  determined  and  reduced  to  money. 

The  courts  of  bankruptcy  are  given  power  to  cause  the 
estates  of  bankrupts  to  be  collected,  reduced  to  money  and 
distributed,  and  to  determine  controversies  in  relation  there- 
to, except  as  otherwise  provided  by  the  statute.^  The  trus- 
tees are  required  to  collect  and  reduce  to  money  the  property 
of  the  estates  for  which  they  are  trustees,  under  the  direction 
of  the  court,  and  to  close  up  the  estates  as  expeditiously  as  is 
compatible  with  the  best  interests  of  the  parties  in  interest.* 
The  authority  conferred  by  these  two  provisions  is  very  gen- 
eral in  its  nature.  It  would  seem  that,  under  the  direction 
of  the  court,  the  trustee  may  sell  any  property  interest  of  the 
banknij)!.      When   it   is  necessary   for  the  best  interest  of  the 

IB.    A.    1898,    Sec.    2,    clause    7;  -P..    A.    1898.    Sec.    ^,7.    cliiise    2, 

Compare  R.  S.  Sees.  5062-5066;  Act       an.l   Sees.   70/'  and  c". 
of  June  22,  1874,  18  Stat,  at  L.   17^- 


702  LAW    AXn    rUOCEEDINGS    IN    BANKRUPTCY. 

estate  the  court  may  also  t)rtler  a  receixcr,  who  is  taking- 
charge  of  the  bankrupt's  property  until  a  trustee  is  appointed, 
to  sell/' 

It  would  seem  that,  where  a  great  advantage  will  result  to 
the  estate  and  within  a  reasonable  time,  the  trustee  may  be 
permitted  to  expend  money  for  the  purpose  of  putting  the 
estate  or  any  part  of  it  in  a  merchantable  form,*  as  by  cut- 
ting timber,  harvesting  crops,  and  the  like ;  and  so  of  finish- 
ing unfinished  goods.  The  court  may  authorize  the  trustee 
to  conduct  the  business  of  the  bankrupt  for  limited  periods, 
if  necessary  for  the  best  interests  of  the  estate.^ 

Whenever  it  is  necessary  or  advisable  in  the  opinion  of 
the  trustee  to  make  a  sale,  it  would  seem  from  the  language 
of  the  statute  that  it  must  be  done  "  under  the  direction  of 
the  court."  He  should  apply  to  the  judge  or  referee,  usually 
the  referee,"  for  permission  to  sell  property,  specifying  particu- 
larly what  property  is  to  be  sold.  But  where  the  trustee  made 
a  sale  without  authority  and  the  sale  was  confirmed  the  con- 
firmation was  held  equivalent  to  a  prior  order.^  The  supreme 
court  has  prescribed  forms  of  petitions  and  orders  for  the 
sale  by  auction  of  real  estate,*  for  the  redemption  of  prop- 
erty from  lien,'-'  for  the  sale  of  property  subject  to  lien,^**  for  a 
private  sale  of  property,^^  and  for  a  sale  of  perishable  prop- 
erty.^- These  forms  of  petitions  and  orders  are  prepared  to 
be  addressed  to  and  made  by  the  referee. 


-In  re  Becker,  98  Fed.  Rep.  407,  B.    R.   643,   645;   In  re   Gerry,    112 

3  Am.  B.  R.  412.  Fed.  Rep.  958,  7  Am.  B.  R.  459. 

4  Foster  v.   Ames,   No.  4965,  Fed.  '  /;;    re    Harvey,    122    Fed.    Rep. 
Cas.,  s.  c.  I  Low.  313-  745,  10  Am.  B.  R.  565. 

5  B.  A.  1898,  Sec.  2,  clause  S ;  and  ^  Official  Form  No.  42 ;  see  Form 
amendment  of   1903,   32    Stat,  at   L.  No.    72,   post. 

797.  »  Official  Form  No.  43 ;  see  Form 

6 /«  re  Rosenberg,  116  Fed.  Rep.  No.    72,,   post 
402,  8  Am.  B.  R.  624 ;  Chauncey  v.  i"  Official  Form  No.  44 ;  see  Form 

Dyke  Bros.  (C.  C.  A.  8th  Cir.),  119  No.    77,   post. 

Fed.  Rep.  i,  9  Am.  B.  R.  444 ;  Car-  "  Official  Form  No.  45 ;  see  Form 

roll    Co.    V.    Young    (C.    C.    A.    3d  No.    83,  post. 

Cir.),  119  Fed.  Rep.  576,  578,  9  Am.  inofficial  Form  No.  46;  see  Form 

No.   84,   post. 


HOW    TO    REDUCE    THE    ESTATE    TO    MONEY.  703 

§   255.     Unencumbered  property. 

Under  the  general  power  conferred  upon  the  court  and 
trustee,  such  parts  of  the  estate,  real  or  personal,  as  come 
into  the  possession  of  the  trustee  unencumbered  by  mortgage 
or  lien,  may  be  sold  by  the  trustee  under  the  direction  of  the 
court."  The  trustee  may  be  authorized  to  compromise  or  sell 
and  assign,  in  such  manner  as  the  judge  or  referee  may  order, 
any  outstanding  claims  or  other  property  in  his  hands  due  or 
belonging  to  the  estate,  which  can  not  be  collected  or  received 
by  him  without  unreasonable  or  inconvenient  delay  or  expense.^* 

The  trustee  may  apply  to  the  referee  for  permission  to  sell 
such  property  by  auction  or  at  private  sale.^^  In  the  case  of 
real  estate,  it  may  be  sold  in  lots  or  parcels  or  as  a  whole,  as 
the  referee  may  direct. 

The  application  for  leave  to  sell  property  is  made  by  peti- 
tion." The  petition  should  be  entitled  in  the  court  and  cause 
and  allege  that  it  would  be  for  the  benefit  of  the  estate  that 
certain  property,  describing  it  and  its  estimated  value,  should 
be  sold  by  auction  or  at  private  sale,  as  may  be  desired.  In 
case  it  is  desired  to  have  it  sold  at  private  sale,  the  reasons 
or  advantages  to  be  o1)tained  by  selling  at  private  sale  should 
be  set  forth  in  the  petition.  The  property  to  be  sold,  either 
at  auction  or  at  private  sale,  should  be  specifically  described. 
The  petition  should  conclude  with  a  prayer  that  the  trustee 
may  be  authorized  to  make  the  sale  by  auction  or  at  private 
sale,  as  may  be.  The  petition  is  dated  and  signed  by  the 
trustee  without  verification. 

The  referee,  as  soon  as  the  petition  is  filed,  should  give  ten 
days'  notice  by  mail  to  the  creditors  of  the  bankrupt  of  the 
hearing  on  such  petition. ^^  At  the  time  and  place  mentioned 
in  tlie  notice  a  hearing  is  had.  at  wliicli  evidence  may  he  in- 
troduced and  counsel  heard  in  favor  of  the  petition  and  in 
opposition  thereto;  on  consideration  whereof  the  referee  may 

" /h  re  Goldsmith,  9  Am.  B.  R.  i^  .\s   to   private   sales,  see  In  re 

419,     118    Fed.     Rep.    763;    In    re  Kirtland.  No.  7851,  Fed.  Cas.,  s.  c. 

Mathews,  109  Fed.  Rep.  603,  6  Am.  10  Blatch.  515;   hi   re  Stevenson,  6 

B.  R.  96.  Fed.  Rep.  710. 

i*B.  A.  1898.  Sec.  27;  Gen.  Ord.  ^  Official  Forms  Nos.  42  and  45; 

28.     Compare  R.  S.  Sees.  5061  and  see  Forms  Nos.  72  and  83.  post. 

5064.  17  B.  A.    1898,   Sec.   58a. 


704  LAW   AND  rKoci:i:i)ii\r.s  IiN    haiNkkiptcy. 

pass  an  order  that  the  trustee  be  authorized  to  sell  the  prop- 
erty as  prayed  iu  the  petition,  or  may  refuse  to  grant  such  leave 
as  in  his  judgment  is  most  advantageous  to  the  estate.  If 
leave  for  sale  is  given,  the  referee  should  require  the  trustee 
to  keep  an  accurate  account  of  each  article  or  lot  sold,  and  the 
price  therefor  and  to  whom  sold,  and  that  an  account  thereof 
shall  be  filed  at  once  with  the  referee. 

§  256.     Encumbered  property. 

Wiiere  the  property  of  the  bankrupt  is  burdened  with  liens 
and  encumbrances,  several  courses  are  open. 

First:  Where  these  burdens  are  so  great  that  the  property 
is  without  value  to  the  estate  the  trustee  may  elect  not  to  take 
such  property,^*  and  for  the  court  to  authorize  the  sale  of  such 
property  by  the  trustee  is  an  abuse  of  its  discretion.^* 

Second:  WHienever  it  may  be  deemed  for  the  benefit  of  the 
estate  of  a  bankrupt  to  redeem  and  discharge  any  mortgage 
or  other  pledge,  or  deposit  or  lien,  upon  any  property,  real  or 
personal,  or  to  relieve  said  property  from  any  conditional 
contract,  and  to  tender  performance  of  the  conditions  thereof, 
or  to  compound  and  settle  any  debts  or  other  claims  due  or 
belonging  to  the  estate  of  the  bankrupt,  the  trustee,  or  the 
bankrupt,  or  any  creditor  who  has  proved  his  debt,  may  file 
his  petition  therefor ;  and  thereupon  the  court  appoints  a  suit- 
able time  and  place  for  the  hearing  thereof,  notice  of  which 
must  be  given  as  the  court  shall  direct,  so  that  all  creditors 
and  other  persons  interested  may  appear  and  show  cause,  if 
any  they  have,  why  an  order  should  not  be  passed  by  the 
court  upon  the  petition,  authorizing  such  act  on  the  part  of  the 
trustee.*^ 

^8  See  Trustee  not  bound  to  take  B.    R.   424.      In   doubtful    cases   the 

encumbered  interest,  Sec.   151,  ante,  court    may    in    its    discretion    order 

and  cases  cited  in  the  notes.  the    property    turned    over    to    the 

19 /n  re  Goldsmith,  118  Fed.  Rep.  mortgagee  or  order  it  sold.     Equit- 

763,  9  Am.  B.  R.  419;  In  re  Schaef-  able  Loan   &   Security  Co.  v.   Moss 

fer,    105   Fed.   Rep.   352,   5   Am.    B.  &    Co.,    125    Fed.    Rep.   609:    In   re 

R.  248;  In  re  Cogley,  107  Fed.  Rep.  Union    Trust    Co.     (C.    C.    A.     ist 

73,  5  Am.  B.  R.  731;  In  re  Gibbs,  Cir.),  122  Fed.  Rep.  937,  9  Am.  B. 

109  Fed.  Rep.  627,  6  Am.  B.  R.  485 ;  R-  767- 
In  re  Styer,  98  Fed.  Rep.  290,  3  Am.  -«  Gen.  Ord.  28. 


HOW    TO    REDUCE    THE    ESTATE    TO    MONEY.  7O5 

The  value  of  securities  held  by  secured  creditors  is  deter- 
mined by  converting  the  same  into  money  according  to  the 
terms  of  the  agreement  pursuant  to  which  such  securities 
were  delivered  to  such  creditors,  or  by  such  creditors  and  the 
trustee,  by  agreement,  arbitration,  compromise,  or  litigation, 
as  the  court  may  direct."^ 

The  application  for  redemption  of  property  from  a  lien  is 
made  by  petition,  which  should  be  in  the  form  prescribed." 
The  petition  should  be  entitled  in  the  court  and  cause.  It 
should  represent  that  certain  portions  of  the  bankrupt's  estate, 
describing  the  property  and  its  estimated  value,  is  subject  to  a 
mortgage  or  other  lien,  setting  forth  or  describing  the  mort- 
gage or  lien ;  and  contain  an  allegation  that  it  is  for  the 
benefit  of  the  estate  that  such  property  should  be  redeemed 
and  discharged  of  the  lien.  The  petition  concludes  with  a 
prayer  that  the  trustee  may  be  empowered  to  pay  out  of  the 
assets  of  the  estate  in  his  hands  the  amount  of  the  lien  in  order 
to  redeem  the  property.  The  petition  is  dated  and  signed  by 
the  trustee,  bankrupt,  or  creditor,''"'  without  verification. 

The  petition  is  regularly  presented  to  the  referee,  who  is 
required  to  give  ten  days'  notice  of  the  date  of  the  hearing  to 
the  creditors  of  the  bankrupt."''  At  the  hearing,  evidence  may 
be  introduced  and  counsel  heard  in  favor  of  the  petition  and 
in  opposition  thereto.  In  consideration  whereof,  the  referee 
may  authorize  the  trustee  to  make  such  payment  and  redeem 
the  property.  If  it  appears  to  the  referee  that  it  is  not  for  the 
advantage  of  the  estate  to  redeem  such  property  he  may  de- 
cline to  grant  the  request  to  redeem  the  property. 

Third:  The  trustee  may  sell  the  property,  under  the  order 
and  direction  of  the  judge  or  the  referee."  He  may  5?ell  the 
property  subject  to  a  lien.^"  In  this  respect  the  trustee  acts 
only  in  the  interests  of  the  general  creditors.      It  is  no  part  of 

"B.  A.    1898,  Sec.  57^.  Dykt-    Bros.    (C    C.    A.    8th    Cir.), 

"Official  Form  No.  43;  see  Form  119  Fed.  Rep.   i,  9  Am.  B.  R.  444; 

No.   7.1.  post:  Gin.  Ord.  28.  Carroll  Co.  v.  Young  (C.  C.  A.  3d 

2'' Gen.   Ord.   28.  Cir.),  119  Fed.  Rep.  576;  9  Am.  B. 

2*R.     A.     1898,    Sec.    58<i,-    In    re  R.  64.^;   In   re  Gerry.   II2   Fed.  Rep. 

Mathews,   109  Fed.  Rep.  ^>o,^,  6  Am.  058.  7  .\m.   R.  R.  459. 

B.    R.  96.  20 /„  ff,  Gerry,  112  Fed.  Rep.  958, 

•''In  re  Rosenherg.   1 16  Fed.  Rep.  7  Am.  B.  R.  459. 
402,  8  Am.  B.  R.  624 ;  Chauncey  v. 


706  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

his  duty  to  make  such  au  apphcation  uuloss  lie  believes  the 
sale  will  create  a  larger  fund  for  distribution  among  the  unse- 
cured creditors.  Me  should  not  make  an  application  for  the 
sale  of  property  which  has  no  market  value,  or  one  that  is 
clearly  less  than  the  debt  secured  by  the  lien."^ 

An  application  for  the  sale  of  such  i)roperty,  subject  to  a 
lien,  is  made  by  petition. "'*  which  should  be  in  the  prescribed 
forni."^  The  petition  should  be  entitled  in  the  court  and 
cause.  It  should  describe  the  estate,  or  property  to  be  sold, 
and  its  estimated  value.  It  should  set  forth  or  describe  the 
mortgage  or  other  lien  upon  the  ])roperty.  It  should  contain 
an  allegation  that  tlie  sale  would  be  for  the  benefit  of  the  es- 
tate and  that  the  property  should  be  sold.  It  should  conclude 
with  a  prayer  that  he  may  be  authorized  to  make  the  sale  of 
such  pn^i)erty  subject  to  the  encumbrances  thereon.  The  peti- 
tion should  l)e  signed  by  the  trustee,  but  need  not  be  verified. 
The  petition  is  presented  to  the  referee.^^ 

The  referee  should  give  ten  days'  notice  of  the  date  of  the 
hearing  of  the  petition  for  such  sale  by  mail  to  the  creditors 
of  the  bankrupt.-"  A  hearing  is  had  at  the  time  and  place 
named  in  the  notice,  at  which  arguments  may  be  heard  in 
favor  and  in  opposition  to  the  petition  and  evidence  intro- 
duced. Upon  consideration  of  which  the  referee  may  order 
the  property  sold  at  auction  or  at  private  sale,  and  require  the 
trustee  to  keep  an  accurate  account  of  the  property  sold,  the 
price  given  therefor,  to  whom  sold,  and  file  the  account  thereof 
at  once  with  the  referee.  If  it  appears  to  the  referee  that 
nothing  is  to  be  gained  by  the  sale  he  may  refuse  to  grant  the 
prayer  of  the  petition."'^ 

The  trustee  may  also  apply  for  leave  to  sell  encumbered 
property  free  from  all  encumbrances. ^°     The  application  for 

-~  In  re  Cogley,  107  Fed.  Rep.  73,  29  g  a  1898,  Sec.  58a. 
5  Am.  B.  R.  731;  In  re  Goldsmith,  ^o  Houston  v.  City  Bank,  6  How. 
118  Fed.  Rep.  763,  9  Am.  B.  R.  419;  486;  Ray  v.  Norseworthy,  23  Wall. 
In  re  Schaeffer,  105  Fed.  Rep.  352,  128;  In  re  ATathews,  109  Fed.  Rep. 
5  Am.  B.  R.  248;  In  re  Gibbs,  109  603,  6  Am.  B.  R.  96;  In  re  Gold- 
Fed.  Rep.  627,  6  Am.  B.  R.  485;  smith,  118  Fed.  Rep.  763,  9  Am.  B. 
In  re  Styer,  98  Fed.  Rep.  290,  3  R.  419;  In  re  Rosenberg,  116  Fed. 
Am.  B.  R.  424.  Rep.  402,  8  Am.  B.  R.  624;  Chan- 

28  Official     Form     No.     44,     see  cey   v.   Dyke   Bros.    (C.    C.   A.   8th 

Form  No.  77,  post.  Cir.),  119  Fed.  Rep.  i,  9  Am.  B.  R. 


HOW    TO    REDUCE    THE    ESTATE    TO    MONEY. 


707 


such  a  sale  is  made  by  a  petition  substantially  like  that  pre- 
scribed in  form  No.  44  for  a  sale  subject  to  encumbrances, 
except  that  the  prayer  should  be  that  he  may  be  authorized 
to  sell  such  property  free  from  all  encumbrances.  The  appli- 
cation is  regularly  made  to  the  referee  for  leave  to  sell  free  of 
licns.^^  A  ten  days'  notice  should  be  given  the  general  cred- 
itors.^" The  rights  of  the  secured  creditors  being  affected  by 
the  sale,  they  must  likewise  have  notice  to  appear  and  protect 
their  interests.^''  The  trustee  may  be  directed  to  sell  such 
property  at  public  auction  or  at  private  sale.  When  the  sale 
is  made,  the  lien  is  transferred  to  the  fund  in  court.^''  The 
bankruptcy  court  having  sold  the  property  free  from  liens  and 
the  liens  having  attached  to  the  funds  in  the  court's  custody  the 
bankruptcy  court  will  decide  the  rights  of  the  different  lien 
claimants.^^  and  may  call  the  claimants  in  by  either  notice  or 
rule  to  show  cause.'"'''  After  deducting  the  expenses  of  the 
sale  •"*'  the  mortgages  and  other  liens  must  be  paid  out  of  the 


444;  Carroll  Co.  v.  Young  (C.  C.  A. 
3rd  Cir.),  119  Fed.  Rep.  576,  9  Am. 
B.  R.  643 ;  In  re  Sanborn,  96  Fed. 
Rep.  551,  3  Am.  B.  R.  54;  /"  re 
Waterloo  Organ  Co.,  n8  Fed.  Rep. 
904 ;  9  .^m.  B.  R.  427 ;  In  re  Keet, 
II  .\m.  B.  R.  117. 

•■'^  In  re  Mathews,  109  Fed.  Rep. 
603.  6  Am.  B.  R.  96;  In  re  Gold- 
smith, 118  Fed.  Rep.  763,  9  .A.m.  B. 
R.  419;  In  re  Rosenberg,  116  Fed. 
Rep.  402,  8  Km.  B.  R.  624. 

32  B.  A.  1898,  Sec.  58a. 

33  In  re  Sanborn,  96  Fed.  Rep. 
551,  3  .\m.  B.  R.  54;  In  re  Gold- 
smith, 118  Fed.  Rep.  763,  9  \m.  B. 
R.  419;  Ray  v.  Norseworthy,  23 
Wall.  128;  Houston  v.  City  Bank.  6 
How.  486;  Fowler  v.  Hart,  13  How. 

•■'*  In  re  Worland,  92  F"ed.  Rep. 
893,  I  \m.  B.  R.  450:  In  re  Pittlc- 
kow,  92  Fed.  Rep.  901.  i  Am.  B.  R. 
472;  Trust  Co.  V.  Bcnbow,  96  Fed. 
Rep.  514,  3  Am.  B.  R.  9.  ^ 

•"•'■• /«  re  Rosenberg,  116  Fed.  Rep. 
402,  8  .\m.  B.  R.  624 ;  In  re  Water- 
loo Organ  Co.,  118  Fed.  Rep.  904,  9 


Am.  B.  R.  427 ;  Chauncey  v.  Dyke 
Bros.  (C  C.  A.  8th  Cir.),  119  Fed. 
Rep.  I,  9  Am.  B.  R.  444;  In  re 
Byrne,  97  Fed.  Rep.  762,  3  Am.  B. 
R.  268;  In  re  Rochford  (C.  C.  A. 
8th  Cir.),  124  Fed.  Rep.  182,  10  \m. 
B.  R.  608,  the  court  said:  "The 
only  question  here  presented  is 
whether  or  not  the  referee  and  the 
court  had  jurisdiction  to  determine 
the  validity  of  the  claim  of  the 
mortgagee  to  the  property  or  its 
proceeds.  The  sale  was  valid.  The 
court  lawfully  acquired  and  right- 
fully held  the  custmly  of  the  prop- 
erty. The  conversion  of  it  into 
money  by  the  sale  was  a  rightful 
pfdccfding  ill  baiikruiitcy.  The  is- 
sue of  the  notice  to  the  mortgagee 
to  present  his  claim  to  the  court  and 
the  adjudication  of  it  were  far 
within  the  jurisdiction  of  the  referee 
and  of  the  court  below." 

3" /m  re  Rochford  (C.  C.  A.  8th 
Cir.),  124  Fed.  Rep.  182.  10  Am.  P.. 
R.  608. 

"  McNair  v.  McTntyre  (C.  C.  A. 
4th  Cir.),  113  Fed.  Rep.  113,  7  Am. 


708  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

fund  obtained  fn^m  tlie  sale  bet\)re  it  is  applied  to  the  pay- 
ment of  other  debts,  even  the  debts  which  are  given  priority 
by  the  statute."'* 

It  is  not  necessary  for  the  lien  claimant  to  prove  his  claims 
before  he  can  subject  the  property  or  its  proceeds  to  his  debt,^° 
nor  is  it  necessary  for  him  in  any  way  to  object  to  the  sale.*" 
^\'here  the  entire  property  is  sold  without  any  objection  from 
a  creditor  who  has  a  lien  on  a  portion  of  it,  he  can  not  enforce 
his  lien  against  the  proceeds;  he  should  make  his  claim  before 
tiie  sale  and  have  the  ^-oods  on  which  he  has  a  lien  sold  sepa- 
rately.*^ The  purchaser  should  be  protected  from  being  forced 
to  pay  taxes  which  though  not  yet  levied  have  become  a  lien 
at  the  time  of  the  sale.*"  Where  the  lien  claimant  is  the  pur- 
chaser, if  the  amount  and  validity  of  his  lien  is  unquestioned, 
he  should  be  allowed  to  deduct  it  from  the  purchase  price;  if 
the  lien  is  doubtful  he  should  pay  the  difference  between  the 
amount  of  the  lien  as  claimed  and  the  purchase  and  give  the 
trustee  an  undertaking  to  pay  the  balance  if  it  is  decided 
against  him.*^ 

§  257.     When  a  secured  creditor  may  apply  to  have  property, 
on  which  he  has  a  lien,  sold. 

The  trustee  may  not  see  fit  to  institute  proceedings  for  the 
sale  of  encumbered  property.  Whenever  he  does  not,  the 
secured  creditor  must  do  so.  if  it  is  to  be  sold  in  the  court  of 
bankruptcy. 

Since  all  the  property  of  the  bankrupt  passes  to  the  trustee, 
as  has  been  pointed  out  elsewhere.**  subject  to  equities,  property 

B.  R.  638;  affirming  In  re  Sander-  *"  Carroll  Co.  v.  Young  (C.  C.  A. 

Hn,  109  Fed.  Rep.  857,  6  Am.  R.  R.  3rd  Cir.),  119  Fed.  Rep.  576,  9  Am. 

384.  R-  R-  643- 

:'«/n  re  Frick,  i   Am.  B.  R.  719;  *^ /«  re  Klapholz,    113  Fed.  Rep. 

In    re    McConnell,    No.    8712    Fed.  1002,  7  Am.  B.  R.  703 ;  In  re  Gerry, 

Cas.,  s.  c.  9  N.  B.  R.  387;  but  see  112  Fed.  Rep.  958,  7  Am.  B.  R.  459- 

In  re   Tebo,    loi    Fed.    Rep.   419,  4  *'- In  re  Keller,  109  Fed.  Rep.  131, 

Am.   B.   R.  235;   see  also  post  sec.  6  Am.  B.  R.  351. 

267,  last  paragraph.  '••''/«  re  Waterloo  Organ  Co.,  118 

39  In  re  Goldsmith,  1 18  Fed.  Rep.  Fed.  Rep.  904,  9  Am.  B.  R.  427. 
763,  9  Am.  B.  R.  419 ;  In  re  Oconee  **  See  Title  to  bankrupt's  proper- 
Milling  Co.  (C.  C.  A.  5th  Cir.),  109.  ty.  Sec.  149,  ante. 
Fed.  Rep.  866,  6  Am.  B.  R.  473- 


HOW    TO    REDUCE    THE    ESTATE    TO    MONEY, 


709 


on  which  there  is  a  mortgage  or  other  lien  passes  to  the 
trustee,  and  is  therefore  in  the  custody  of  the  court  of  bank- 
ruptcy." This  rule  is  subject  to  an  exception  in  case  the 
trustee  elects  not  to  take  encumbered  property.  Whenever  the 
secured  creditor  desires  to  enforce  his  mortgage  or  other  lien, 
or  to  prove  his  claim  against  the  estate,  he  must  regularly 
apply  to  the  court  of  bankruptcy  for  such  leave.  If  it  be  de- 
cided there  is  no  interest  for  the  general  creditors,  then  the 
bankruptcy  court  should  not  undertake  to  administer  the  prop- 
erty for  an  absent  lienor.  To  undertake  its  administration  is 
an  abuse  of  discretion  justly  condemned  by  the  authorities.*^ 

In  case  the  trustee  elects  not  to  take  the  encumbered  prop- 
erty, it  releases  the  jurisdiction  of  the  bankruptcy  court  over 
such  property,  and  the  secured  creditor  may  proceed  to  en- 
force his  lien  in  a  state  court. 

An  attempt  to  enforce  a  lien  in  any  other  court  is  liable 
to  be  enjoined.*^  A  sale  so  made  may  be  set  aside.*^  The 
court  of  bankruptcy  may  permit  or  authorize  a  secured  cred- 
itor to  enforce  his  security  in  a  state  court.*®  In  such  case 
the  trustee  must  be  a  party  to  the  proceeding.^"     Such  a  pro- 


«/h  re  Kellogg  (C.  C.  A.  2nd 
Cir.),  121  Fed.  Rep.  j,ii,  10  Am.  B. 
R.  7;  In  re  Rochford  (C.  C.  A. 
8th  Cir.),  124  Fed.  Rep.  182; 
Chauncej'  v.  Dyke  Bros.  (C.  C.  A. 
8th  Cir.),  119  Fed.  Rep.  i,  9  .\m.  B. 
R.  444;  In  re  Kellogg,  6  Am.  B.  R. 
389;  Carter  v.  Hobbs,  92  Fed.  Rep. 
594,  I  Am.  B.  R.  215  ;  In  re  Worland, 
92  Fed.  Rep.  893,  i  Am.  B.  R.  450; 
In  re  Sabine,  —  Fed.  Rep.  — ,  i  Am. 
B.  R.  315;  In  re  Pittlekow,  92  Fed. 
Rep.  901,  I  Am.  B.  R.  472;  In  re 
Booth,  96  Fed.  Rep.  943,  2  Am.  B. 
R.  770. 

*"/«  re  Schaeffer,  5  Am.  B.  R. 
248,  105  Fed.  Rep.  352;  In  re  Cog- 
ley,  5  Am.  B.  R.  731.  107  Fed.  Rep. 
7?,;  In  re  Gibbs  (D.  C.),6  Am.  B. 
R.  485.  109  Fed.  Rep.  627;  In  re 
GolHsmith,  9  Am.  B.  R.  419,  118 
Fed.  Rep.  765. 

*-'  In  re  UU  (C.  C.  \.  7th  Cir.), 
105  Fed.  Rep.  754.  45  C.  C.  A.  32,  5 


Am.  B.  R.  383 ;  In  re  Matthews,  109 
Fed.  Rep.  603,  6  Am.  B.  R.  96;  In 
re  Pittlekow,  92  Fed.  Rep.  901,  i 
Am.  B.  R.  472;  In  re  Globe  Cycle 
Works,  2  Am.  B.  R  447;  Markson 
V.  Heaney,  No.  9098,  Fed.  Cas.,  s.  c. 
I  Dill.  497;  McLean  v.  Lafayette 
Bank,  No.  8885,  Fed.  Cas.,  s.  c.  3 
McLean,  185 ;  In  re  Kerosene  Oil 
Co.  No.  7725,  Fed.  Cas.,  s.  c.  3  Ben. 
35;  In  re  Wynne.  No.  18117,  Fed. 
Cas.,  s.  c.  Chase,  227. 

See  Clifton  v.  Foster,  103  Mass. 
233- 

■»«/n  re  Davis,  No.  3618,  Fed. 
Cas.,  s.  c.  2  N.  B.  R.  391 ;  Davis  v. 
Anderson,  No.  3623,  Fed.  Ca.s.,  s.  c. 
6  N.  B.  R.  145. 

♦» /«  re  Porter,  109  Fed.  Rep.  iii, 
6  Am.  B.  R.  259;  In  re  Cook.  No. 
315 1.  Fed.  Cas.,  s.  c.  3  Bis.s.  116;  In 
re  McGilton,  No.  8798,  Fed.  Cas.,  s. 
c,  3  Bliss.   144. 

f^-'Cole    V.    Dnncan,    58    111.    176; 


/lO  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

ceeding  in  a  state  court,  without  authority,  is  not  absolutely 
void.'"^'  The  court  o\  l).inkrui)tcy  will  not  interfere  with  such 
proceedings  unless  an  atlvantage  may  result  to  the  bankrupt 
estate."^  It  may  ratify  the  state  proceedings  upon  applica- 
tion where  the  secured  creditor  shows  that  the  estate  and  the 
other  creditors  will  not  be  injured  thereby.'"^"'  The  secured 
creditor  may  surrender  his  security  or  rely  upon  his  security 
without  proving  his  claim,'"*  or  if  the  entire  debt  is  not  se- 
cured, he  may  rely  ujion  his  security  and  prove  for  the  bal- 
ance.''""* 

Where  the  secured  creditor  seeks  to  have  a  sale  made  in  a 
court  of  bankruptcy  he  must  first  prove  his  claim  in  the  man- 
ner prescribed.^"  Either  his  security  or  his  debt  may  be  dis- 
puted. The  contest  is  made  upon  the  proof  of  the  debt  in  the 
same  manner  as  contests  upon  the  proof  of  unsecured  debts.^^ 
If  Ids  claim  is  allowed,  the  property  will  regularly  be  sold 
upon  application.  The  object  of  selling  such  property  is  to 
ascertain  the  value  of  the  security. 

It  is  not  always  necessary  to  resort  to  a  sale  for  this  pur- 
pose. The  value  of  a  security  held  by  a  secured  creditor 
may-  be  determined  by  converting  the  same  into  money  ac- 
cording to  the  terms  of  the  agreement  pursuant  to  which 
such  security  was  delivered  to  such  creditor,  by  such  cred- 
itor and  the  trustee,  by  agreement,  arbitration  or  compro- 
mise,  as   well  as  by  litigation.^®     Whichever   method   is   re- 

Truitt  V.  Tniitt,  38  Ind.  16;  Wins-  enor  v.  Allen,  13  Grat.   (Va.)   15. 

low  V.  Clark,  47  N.  Y.  261;  Barron  ^^  phdpg    y.     Sellick,    No.    11079 

V.   Newberry,   No.    1056,   Fed.    Ca.s.,  Fed.  Cas.,  s.  c.  8  N.  B.  R.  390. 

s.  c.  I  Biss.  149.  ^*  In  re  Goldsmith,  118  Fed.  Rep. 

^1  Whitridge  v.  Taylor,  66  N.  C.  763,  9  Am.  B.  R.  419. 
273;  Triiitt  V.  Truitt,  38  Ind.  16;  ^^  See  Rights  of  secured  credit- 
Pierce  V.  Wilcox,  40  Ind.  70;  Cole  ors,  Sec.  202,  ante;  B.  A.  1898,  Sec. 
V.  Duncan,  58  111.  176;  Mays  v.  56^  and  Sec.  57/1;  Wicks  v.  Perk- 
Fritton,  20  Wall.  414;  Scott  v.  ins.  No.  17615,  Fed.  Cas.,  s.  c.  i 
Kelly,  22  Wall.  57;  Boese  v.  King,  Woods,  383;  Brown  v.  Gibbons,  2>7 
108  U.  S.  379.  la.  654 ;  McKay  v.  Funk,  2,7  la.  661 ; 

^-  In  re  Holloway,  93   Fed.   Rep.  Bentley  v.  Wells,  61  111.  59. 

638,  I  Am.  B.  R.  659;  In  re  Brink-  =«  Official  Forms  No.  32  and  No. 

man.  No.  1883,  Fed.  Cas.,  s.  c.  6  N.  36;  see  Forms  Nos.  55  and  59  post. 

B.  R.  541 ;  In  re  Bowie,  No.   1728,  ^''  See   Re-examination  of  claims, 

Fed.  Cas.,  s.  c.  i  N.  B.  R.  628;  In  Sec.  140,  ante. 

re    Iron    Mountain    Co.,    No.    7065,  ss  g   a.  1898,  Sec.  57/?. 
Fed.  Cas.,  s.  c.  9  Blatch.  320;  Tich- 


HOW    TO    REDUCE    THE    ESTATE    TO    MONEY.  /I  I 

sorted  to  for  this  purpose  is  subject  to  the  direction  of  the 
court.^*  The  selhng  of  such  property  is  a  matter  of  judicial 
discretion.  The  court  will  take  a  course  which,  in  its  judg- 
ment, having  due  reference  to  the  rights  of  the  secured  cred- 
itors, will  be  most  beneficial  to  all  the  parties  interested.  A 
secured  creditor  can  not  demand,  as  a  matter  of  right,  that 
the  trustee  shall,  upon  his  offer,  convey  the  property,  upon 
which  he  has  a  lien,  to  him  on  condition  of  his  agreeing  not 
to  present  a  claim  for  any  part  of  the  debt  against  the  estate.^^ 

§  258.     Disputed  property. 

It  would  seem  that,  under  the  general  power  conferred  upon 
the  court  of  bankruptcy  with  reference  to  collecting,  reducing 
to  money  and  distributing  the  estates  of  bankrupts,  and  deter- 
mining controversies  in  relation  thereto,"'*'  that  the  court  may 
order  property,  which  is  in  dispute,  sold.     The  title  to  a  part 
of  the  real  or  personal  property  which  comes  into  possession 
of  the  trustee  or  which  is  claimed  by  him  may  be  in  dispute. 
It  may  be  for  the  advantage  of  all  concerned  that  such  prop- 
erty l)e  sold,  and  the  fund  deposited  in  court  until  the  court 
of   bankru])tcy   shall    determine   to   whom    it   belongs.     This 
seems  fairly  a  controversy  in  relation  to  the  bankrupt's  estate. 
In  such  case  the  trustee  should  petition  the  judge  or  referee 
for  leave  to  make  such  sale.     Ten  days'  notice  should  be  given 
to  the  creditors.^'     Notice  should  also  be  given  to  the  claim- 
ant to  appear  and  assert  his  right  in  the  property.     In  practice, 
sales  of  this  character  can  usually  be  arranged  by  agreement. 
The  necessity  of  such  a  sale  arises  more  particularly  in  respect 
to  personal  property  in  the  hands  of  a  mere  bailee  or  carrier 
for  safe-keeping  or  transportation,  without  claim  of  title  or 
interest  in  the  goods,  and  to  the  personal  property  subsequently 
discovered  in  the  possession  of  the  bankrupt  which  did  not 
come  into  the  possession  of  the  trustee,  and  other  cases  of  like 
character. 

§  259.     Sale  of  perishable  property. 

rpon  petition  by  a  bankrui)t,  creditor,  receiver  or  trustee, 
setting  forth  that  a  part  or  the  whole  of  tlie  bankrupt's  estate 

Bn/n  re  FJlerhorst,  No.  4.380,  Fed.  "»  B.  A.  1898,  Sec.  2,  clause  7. 

Cas.,  s.  c.  2  Saw.  219.  "^  B.  A.  1898,  Sec.  580. 


712  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

is  perishable,  the  nature  and  IcKation  of  such  perishable  estate, 
and  that  there  will  be  loss  if  the  same  is  not  sold  immediately, 
the  court,  if  satisfied  of  the  facts  stated,  and  that  the  sale  is 
required  in  the  interest  of  the  estate,  may  order  the  same  to  be 
sold,  w  ith  or  without  notice  to  the  creditors,  and  the  proceeds 
to  be  deiHxsitcd  in  court.*''  The  petition  and  order  should  be 
in  the  prescribed  form.'"^ 

§  260.     The  sale. 

All  sales  must  be  by  public  auction  unless  otherwise  ordered 
by  the  court."*  Upon  application  to  the  court,  and  for  good 
cause  shown,  the  trustee  may  be  authorized  to  sell  any  specified 
portion  of  the  bankrupt's  estate  at  private  sale,  in  which  case 
he  must  keep  an  accurate  account  of  each  article  sold,  and  the 
price  received  therefor,  and  to  whom  sold,  which  account  he 
must  file  at  once  with  the  referee."'^ 

There  is  no  provision  of  the  statute  or  general  orders  re- 
quiring a  sale  to  be  advertised  in  a  newspaper.  The  court, 
in  granting  an  order,  might  make  such  a  requirement  if  it 
thought  it  advisable.  A  reasonable  i)ublic  notice  must  be  given 
to  the  public  in  some  manner.  A  mistake  in  judgment  by  the 
trustee  as  to  proper  place  and  notice  of  a  sale  will  not  invalidate 
it.  in  the  absence  of  fraud  or  collusion.**® 

Before  the  date  of  sale  of  real  or  personal  property  belong- 
ing to  the  bankrupt's  estate  it  must  be  appraised  by  three 
disinterested  appraisers.**^  The  appraisers  are  appointed  by 
and  report  to  the  judge  or  referee,"*  usually  the  referee. 
Where  the  trustee  is  acting  under  an  order  of  sale,  he  should 
proceed  in  accordance  with  the  provisions  of  the  order.  Any- 
thing which  he  may  do  in  conflict  with  or  in  violation  of  such 
order  is  null  and  void.  Under  an  order  to  sell  for  the  highest 
price  he  can  obtain,  he  must  accept  the  highest  bid,  although 
he  has  previously  agreed  to  sell  to  another  person  for  a  certain 

«2Gen.  Ord.   18,  par.  3.     See  also  Form    No.    45,    see    Form    No.    83, 

In   re    Becker,  98  Fed.  Rep.  407,   3  post;  In  re  Hawkins,  125  Fed.  Rep. 

Am.  B.  R.  412.  6.33.  n  Am.  B.  R.  49. 

«3  Official     Form     No.     46;     see  «•■■  Hills  v.  Alden,  No.  6507,  Fed. 

Form  No.  84,  post.  Cas.,  s.  c.  2  Hask.  299. 

«*  Gen.  Ord.  18.  «^  B.  A.  1898,  Sec.  70b. 

•^Gen.   Ord.    18,   par.   2;   Official  «^  B.  A.  T89S.  Sec.  rob. 


HOW    TO    REDUCE    THE    ESTATE    TO    MONEY.  713 

price,  and  to  wait  for  an  answer  for  a  certain  time,  which 
period  has  not  expired  at  the  time  of  receiving  the  better  bid.*'* 

As  a  general  rule,  any  person  may  bid  and  purchase  at  a 
public  or  private  sale  by  a  trustee.  Tlie  bankrupt  may  pur- 
chase at  such  a  sale."**  The  trustee,^^  or  an  attorney  or  agent 
of  the  trustee,^^  or  a  referee,^^  can  not  purchase  at  such  a  sale; 
but  if  the  trustee,  having  purchased,  makes  improvements  he 
is  entitled  to  be  reimbursed  their  value.^*  The  trustee  need  not 
adjourn  a  sale  for  the  purpose  of  giving  a  bidder  time  to  search 
the  title.^^  Where  a  sale  is  fairly  made,  and  the  bids  are  un- 
derstood by  the  bystanders  and  the  auctioneer,  it  will  be  a 
valid  sale,  although  the  trustee  is  present,  but,  in  consequence 
of  his  negligence  and  inattention,  fails  to  understand  the  terms 
thereof.  Such  a  purchaser  can  compel  a  transfer  of  property 
to  him  by  the  trustee.^" 

It  is  not  absolutely  necessary  that  a  sale  be  confirmed  by 
the  court,  but  all  real  and  personal  property  must,  when  prac- 
ticable, be  sold  subject  to  the  approval  of  the  court."  It  can 
not  be  sold  otherwise  than  subject  to  the  approval  of  the  court 
for  less  than  seventy-five  per  centum  of  its  appraised  value.^^ 

Where  the  sale  has  been  confirmed  by  the  court  the  title  to 
the  property  is  conveyed  to  the  purchaser  by  the  trustee.'^* 
Only  the  title  to  the  bankru])t's  interest  is  transferred,  the 
title  of  third  persons  claiming  adversely  is  in  no  way  affected.^" 
The  conveyance  of  real  estate  is  made  by  deed,  which  should 
recite  the  bankruptcy  proceedings,  the  appointment  and  quali- 
fication of  the  trustee  and  the  proceedings  relating  to  the  sale 
and  the  confirmation  by  the  court  and  is  executed  by  the  trustee 
as  other  deeds  in  the  state  wliere  the  property  is  situated."' 

^°  In    re    Ryan,    No.    12182,  Fed.          '"'Ives  v.  Tregent,  29  Mich.  390; 

Cas.,  s.  c.  6  N.  B.  R.  235.  Riissdl    v.    Phelps,    42    Mich.    388; 

''^  Arnold    v.    Leonard,    20  Miss.      Voorheis   v.   Frisbic,  25    Mich.  476, 

258.  and   note    i    (annotated   ed.). 

^' /«    re   Hawley,    117    Fed.  Rep.          ^tR.  A.  1898,  Sec.  70/). 

364.  9  Am.  B.  R.  61.  Tsp.  A.  1898.  Sec.  70/^ 

■^2  Citizens     Bank     v.     Oher,  No.           to  r     \    ,j^g    s^.p.  70c. 

2731,   Fed.   Cas.,  s.  c.   i   Woods,  80.  «o /„    ^^    Mnhlhaiisor    (C.    C.    A., 

"  B.  A.  1898,  Sec.  2,9b.  6th  Cir.).  121  Fed.  Rep.  669.  10  Am. 

''*  In    re    Hawley,    117    Fed.  Rep.        I',.  R.  j/i. 

.364.  9  Am.  B.  R.  61.  «i  I'(,r  form  of  deed  to  real  estate, 

'^'^  Hills   V.   Alden,   No.  6507,  Fed.       see  No.  — ,  post. 
Cas.,  s.  c.  2  Hask.  299. 


yi4  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

^  261.     Setting  aside  a  sale. 

The  contest,  with  reference  to  the  validity  of  a  sale,  is  usu- 
ally made  at  the  time  of  the  application  to  the  court  to  confirm 
the  sale.  The  court  will  not  refuse  to  coniirm  a  sale  or  set  it 
aside  after  it  has  been  confirmed  merely  because  a  higher  bid 
is  offered. '''  or  because  the  price  is  inadequate ;  *^  there  must  be 
circumstances  impeaching  the  validity  of  the  sale  or  such  gross 
inadequacy  as  to  shock  the  conscience."* 

The  court  of  bankruptcy  has  power,  in  its  discretion,  to  set 
aside  a  sale  even  where  such  sale  has  been  consummated  by 
the  delivery  of  a  deed."''  In  case  money  has  been  deposited 
or  paid,  it  should  be  ordered  to  be  refunded  by  the  trustee. 
Thus  a  sale  may  be  set  aside  on  the  ground  of  fraud  or  col- 
lusion,"" or  because  the  sale  is  illegal,  as  in  not  selling  to  the 
highest  bidder,"^  or  selling  property  unlawfully  in  the  posses- 
sion of  the  trustee,""  or  made  under  an  illegal  or  irregular 
order,"**  or  any  misconduct  on  the  part  of  the  trustee,""  and  this 
mav  be  done  although  the  purchaser  is  entirely  innocent  and 
although  the  sale  was  not  made  subject  to  the  order  of  the 
court.^^  In  deciding  whether  or  not  a  sale  shall  be  set  aside  the 
court  will  give  much  weight  to  objection  on  the  part  of  the 
creditors.''^ 

Under  the  present  statute  if  a  sale  is  made  for  less  than 
seventv-five  per  ccntiiui  of  the  appraised  value  it  would  seem 

«2 /)!  re  Ethier,  118  Fed.  Rep.  107,  How.  315;  In  re  Stevenson,  6  Fed. 

9  Am.  B.  R.  160;  In  re  Eelden,   120  Rep.  710. 

Fed.  Rep.  524,  9  Am.  B.  R.  679.  Rut  .see  Hills  v.  Alden,  No.  6507, 

'■•''  In   re  Thompson,  2  Am.  B.  R.  Fed.   Cas.,  s.   c.  2  Hask.  299,  as  to 

216.  what  is  not  evidence  of  fraud. 

"-*  In  re  Ethier,  118  Fed.  Rep.  107,  ^7 /„    ,-^    Ryan,    No.    12182,    Fed. 

9  Am.  B.  R.  160;  Magann  v.  Segal  Cas.,  s.  c.  6  N.   B.  R.  235. 

(C.   C.   A.,  6th   Cir.)    92  Fed.  Rep.  **^  Davis  v.   R.  R.   Co.,   No.  3648, 

252.  Fed.  Cas.,  s.  c.  i  Woods,  661. 

«5  In  re  Mott,  No.  9878,  Fed.  Cas. ;  «»  Ex  parte  Bryan,  No.  2061,  Fed. 

In   re  Stevenson,  6  Fed.  Rep.  710;  Cas.,    s.    c.    2    Hughes,   273;    In   re 

In  re   Hyde,  6  Fed.   Rep.   587;  Ex  Mott,   No.  8978,  Fed.  Cas. 

parte    Bryan,    No.    2061,    Fed.    Cas.,  ^'^  In  re  Shea,   122  Fed.  Rep.  742, 

s.  c.  2  Hughes,  273.  10  Am.  B.  R.  481 ;  In  re  Belden,  120 

8«/h  re  Ethier,  118  Fed.  Rep.  107,  Fed.  Rep.  524,  9  Am.  B.  R.  679. 

9  Am.  B.  R.  160;  In  re  Conant,  No.  "^ /n  re  Shea,  122  Fed.  Rep.  742, 

3085,    Fed.    Cas.,    s.    c.    cited    in    re  10  Am.  B.  R.  481. 

King.  3  Fed.  Rep.  842;  In  re  Hyde,  ^-In  re  Belden,  120  Fed.  Rep.  524, 

6  Fed.  Rep.  592;  Clark  v.  Clark,  17  9  Am.  B.  R.  679. 


HOW    TO    REDUCE    THE    ESTATE    TO    MONEY.  715 

to  be  sufficient  ground  for  setting  aside  tlie  sale,  irrespective 
of  whether  any  fraud  or  collusion  was  shown,  provided,  it 
was  made  otherwise  than  subject  to  the  approval  of  the  court. ^^ 
The  mere  nondelivery  of  a  deed  by  the  trustee  is  not  sufficient 
cause  for  setting  aside  a  sale,  otherwise  regular,  and  ordering 
a  resale.'''* 

§  262.     Costs  of  sale. 

The  expenses  of  a  sale  are  ordinarily  legitimate  costs  of  ad- 
ministration, and  should  be  paid  first,  out  of  the  proceeds  of 
the  property  sold.''^  Such  costs  are  left  by  statute  in  the- dis- 
cretion of  the  court,^*^  and  questions  arising  in  relation  to  them 
must  be  disposed  of  upon  equitable  principles. 

Where  a  mortgage  is  apparently  fraudulent,  and  creditors 
have  endeavored  to  have  it  declared  void,  such  creditors  are 
entitled  to  be  reimbursed  the  amount  of  their  reasonable  co^ts, 
expenses  and  disbursements  in  the  proceedings  in  bankruptcy, 
including  the  sale  of  the  mortgaged  property,  from  the  pro- 
ceeds of  such  sale.""  Where  a  secured  creditor  seeks  and  en- 
joys the  aid  of  the  bankruptcy  court  in  enforcing  and  releasing 
his  lien,  he  should  pay  the  costs  incurred  in  ol)taining  this 
aid."*  But  with  regard  to  the  costs  of  general  administration, 
in  which  he  has  no  concern,  and  in  which  he  can  have  no  in- 
terest until  his  lien  is  either  satisfied  or  released,  it  would 
be  inequitable  to  require  him  to  bear  the  burden  of  them."® 
Creditors  who  have  failed  to  obtain  a  review  of  an  order 
directing  a  private  sale  of  the  1)ankrupt's  property  may  be  re- 
quired to  pay  the  incidental  expenses  attending  the  sale."" 

§  263.     Of  preferences  and  debts. 

The  trustee  may  receive,  as  a  part  of  the  l)ankrupt's  estate, 
property  which  has  been  transferred  by  the  bankrupt  prior  to 

03  B.  A.   1898,   Sec.   70b.  o«B.   A.    1898,    Sec.   2,   clause    t& 

»<  In   re   King,   3    Fed.    Rep.   839.  "  In  re  Dumont,  4127,  Fed.  Cas., 

See  al.so  Owens  v.  Bruce  (C.  C.  A.,  s.  c.  4  N.  B.  R.  17. 

4tli  Cir.)    109  Fed.  Rep.  •72,  6  Am.  "s /»    re    Hambright,    No.    5973. 

B.  R.  322.  Fed.  Cas.,  s.  c.  2  N.  B.  R.  498;  In 

^^  In  re  Saiiflcrliii,   109  l<"ed.  Rep.  re  Davenport,  No.   3587,  Fed.  Cas., 

837.  6  .\m.   B.    k.   384,   affirmed   in  s.  c.  3  N.  B.  R.  77;  In  re  York,  No. 

McNair  v.  McTntyrc  (C.  C.  A..  4th  18138,  Fed.  Cas..  s.  c.  3  N.  B.  R.  661. 

C\T^.   113  Fed.   Rep.   113,  7  Am.   B.  "" /«  re  Johnston,  No.  7424,  Fed. 

R.  638.  Cas.,  s.  c.  25  PiUs.  Leg.  J.  141. 


-l6  l^AW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

the  filing  of  tlie  petition  in  fraud  of  the  act.  The  transferee 
may  decline  to  reconvey  it.  lie  may  also  receive  as  a  part 
of  the  estate  debts  and  accounts  due  the  bankrupt  which  the 
debtors  refuse  to  pay. 

The  trustee  may,  with  the  approval  of  the  court,  compro- 
mise any  controversy  arising  in  the  administration  of  the  estate 
upon  such  terms  as  he  may  deem  for  the  best  interests  of  the 
estate.^""  or  he  may  submit  the  claim  to  arbitration.*"^  When- 
ever it  mav  be  deemed  for  the  benefit  of  the  estate  of  a  bankrupt 
to  compound  and  settle  any  debts  or  other  claims  due  or  be- 
longing to  the  estate  of  the  bankrupt,  the  trustee,  or  the  bank- 
rupt, or  any  creditor  who  has  proved  his  debt,  may  file  his 
petition  therefor;  and  thereupon  the  court  appoints  a  suitable 
time  and  place  for  the  hearing  thereof,  notice  of  which  shall  be 
given  as  the  court  shall  direct  so  that  all  creditors  and  other 
persons  interested  may  appear  and  show  cause,  if  any  they 
have,  why  an  order  should  not  be  passed  by  the  court  upon  the 
petition  authorizing  such  act  on  the  part  of  the  trustee.*""  The 
creditors  are  entitled  to  ten  days'  notice  by  mail  of  the  pro- 
posed compromise  of  any  controversy.*"'' 

It  may,  however,  be  necessary  for  the  trustee  to  resort  to  a 
suit  to  recover  the  preferred  property  or  to  compel  the  payment 
of  such  debts.  The  authority  of  the  trustee  to  bring  and 
prosecute  such  suits  can  not  be  questioned.*"* 

The  trustee  was  compelled  at  first  to  prosecute  such  suits 
in  a  state  court,  except  upon  consent  of  the  defendant.*"''  Since 
the  amendment  of  February  5,  1903,  he  may  prosectrte  such 
suits  either  in  the  courts  of  bankruptcy  or  a  state  court.*"® 

io«B.  A.  1898,  Sec.  27.     Compare  ^"'^  Gen.   Ords.  28  and   33;   In  re 

R.    S.    Sec.    5061.      Consult    lu    re  Hoole,   3    Fed.   Rep.   496. 

Dibblee,  No.  3885,  Fed.  Cas.,  s.  c.  3  lo^  B.  A.  1898,  Sec.  58a. 

Ben.  354;  In  re  Graves,  No.  5709,  *"*  B.  A.   1898,  Sec.  joe  and  Sec. 

Fed.   Cas.,  s.   c.  2  Ben.   100;  In  re  47,  clause  2. 

?Ioole,  3  Fed.  Rep.  496;   Estate  of  lo^*  For  a  discussion  of  this  sub- 

the    Franklin    Sav.   Fund   Soc,  No.  ject,  see  Sec.  20. 

5058,   Fed.   Cas.,  s.   c.   31   Leg.   Int.  '"«  B.  A.  1898.  Sees.  23,  60,  67  and 

,7^  70.  as  amended  Feb.  5,  1903,  32  Stat. 

101  B.  A.  1898,  Sec.  26;  Gen.  Ord.  at  L.  797;  Pond  v.  N.  Y.  Exchange 

33  Bank,  10  Am.  B.  R.  343. 


THE    DISTRIBUTION    OF    THE    ESTATE.  JlJ 


CHAPTER  XXV. 

THE    DISTRIBUTION    OF    THE    ESTATE. 

§  264.     The  general  plan  of  distribution. 

The  trustee  collects  and  reduces  to  money  the  property  of 
the  estate,  for  which  he  is  trustee,  under  the  direction  of  the 
court,  and  is  required  to  account  for  and  pay  over  to  such 
estate  all  interest  received  by  him  upon  the  property  of  the 
estate.'  The  money  so  collected  is  deposited  in  one  of  the 
designated  depositories.  This  constitutes  the  fund  to  be  dis- 
tributed. It  should  be  deposited  in  the  name  of  the  court  or 
judge  ^  or  to  the  credit  of  the  trustee,  naming  the  estate,"'  and 
should  not  be  withdrawn  on  check  signed  l)y  the  referee  only, 
but  only  when  such  check  is  countersigned  by  the  judge  or 
some  one  designated  by  him.* 

The  trustee  is  required  to  report  to  the  court,  the  judge  or 
referee,  in  writing,  the  condition  of  the  estate  and  the  amounts 
of  money  on  liand.  and  such  otlier  details  as  may  be  recpiired 
bv  the  court,  witliin  the  first  month  after  his  ap])ointment  and 
every  two  months  thereafter,  unless  otherwise  ordered  by  the 
court.^  All  accounts  of  the  trustee  are  referred,  as  of  course, 
to  the  referee  for  orders,  unless  otherwise  specially  ordered  by 
the  court." 

The  referee  keeps  a  record  of  the  claims  which  have  been 
proved  and  allowed,  and  declares  all  dividends  and  ])rei)ares 
and  delivers  to  the  trustee  dividend  sheets  showing  the  divi- 
dends declared  and  to  whom  payable.'      The  dividends  are  of 

1  R.  A.  1898,  Sec.  47,  clauses  i  also  in  re  Rude,  101  lud.  Rep.  805, 
and  2.  4  Am.  B.   R.  310. 

2 /«  re  Cobb,   112  Fed.  Rep.  655,  •'•  R.    A.    T8f)8.   Sec.   47,   clause    10. 

7  Am.   B.   R.  202.  •■■r.cn.  Ord.   t;. 

^  In    re   Carr,    117   Fed.  Rep.   572,  '  W.    A     iSf)8.    Sec.    30.    clause    i; 

<)  .^m.   ]'>.   R.  58.  Official  Form  No.  40;  see  Form  No. 

*  In   re  Cobb,   112  Fed.  Rep.   655,      98,  f>ost. 
7  .^m.  H   R.  202;  Gen.  Ord.  29.     See 


7l8  LAW    AM)    I'KOCEEDINGS    IN    BANKKUPTCY. 

an  equal  prr  cciitiiiii.  and  arc  declared  and  paid  on  all  allowed 
claims  except  such  as  have  priority  or  are  secured.^  The  first 
dividend  should  be  declared  within  thirty  days  after  the  ad- 
judication, if  the  money  of  the  estate  in  excess  of  the  amount 
necessary  to  pay  the  debts  which  have  priority,  and  such 
claims  as  have  not  been  but  probably  will  be  allowed,  equals 
five  f^cr  centum-  or  more  of  such  allowed  claims." 

The  trustee  receives  the  list  of  claims  and  dividends  pre- 
pared by  the  referee,  and  forthwith  serves  a  notice  "  upon  the 
creditors  wdiose  names  are  included  in  this  list,  of  the  time 
and  place  where  payment  of  the  dividends  will  be  made.  The 
creditors  are  entitled  to  have  at  least  ten  days'  notice,  by  mail 
to  their  respective  addresses,  unless  they  waive  notice  in  writ- 
ing, of  the  declaration  and  time  of  payment  of  the  dividends.^ ^ 
The  creditors  may,  either  personally  or  by  some  person  author- 
ized in  writing,^-  obtain  such  dividends  from  the  trustee  at  tne 
time  and  place  mentioned  in  the  notice.  Where  payments  are 
made  to  attorneys  it  should  clearly  appear  on  whose  account 
the  payment  is  made.^^ 

Subsequent  dividends  are  declared  and  paid  upon  like  terms 
and  in  the  same  manner  as  the  first  dividend.'*  When  the 
estate  is  ready  to  be  closed,  a  final  meeting  of  the  creditors  is 
called  by  the  referee,"  of  which  at  least  a  ten  days'  notice  must 
be  given  to  each  creditor.'^  At  this  meeting  the  trustee  is 
required  to  lay  before  the  creditors  detailed  statements  of  the 
administration  of  the  estate."  He  is  also  required  to  make 
a  final  report  and  file  final  accounts  with  the  referee  or  the 
judge  at  least  fifteen  days  before  the  day  fixed  for  the  final 
meeting.  This  report  and  account  must  be  rendered  under 
oath,'^  and  must  be  clear  and  show  the  disposition  made  of 
all  money.'^  The  referee  audits  the  account,  and,  if  regular 
and  proper,  passes  an  order  allowing  the  account  and  discharg- 

8B.  A.  1898,  Sec.  650.  "/«  re  Carr,   116  Fed.  Rep.  556, 

9  B.  A.  1898,  Sec.  6s&.  8  Am.  B.  R.  635. 

i«  Official  Form  No.  41 ;  see  Form  "  B.  A.  1898,  Sec.  6sb. 

No.  99,  post.  ^^  B.  A.  1898,  Sec.  s8a. 

"B.   A.   1898,  Sec.  58a.  '8B.  A.  1898,  Sec.  47,  clause  7. 

12  Sec  Creditor's  letter  to  trustee  '^  See  Official  Forms  Nos.  49  and 

in  Off.cial  Form  No.  41;  see  Form  50;  see  Forms  Nos.  93  and  94,  post. 
No.  99,  post. 


THE    DISTRIBUTION    OF    THE    ESTATE.  719 

ing  the  trustee/*  This  is  the  general  plan  of  distributing 
the  bankrupt's  estate,  provided  by  the  bankrupt  law.  It  is 
necessary  to  consider  several  of  these  steps  more  in  detail, 
which  will  be  done  in  the  several  sections  of  this  chapter. 

It  may  be  observed  that  there  is  considerable  difference  be- 
tween the  method  of  distribution  under  this  act  and  that  pur- 
sued under  the  act  of  1867.  The  principal  point  of  difference 
is  that  the  referee  declares  the  dividends  under  the  present 
statute  instead  of  the  creditors,  as  was  done  under  the  former 
act.'* 

§  265.     Who  are  entitled  to  share  in  the  estate. 

All  creditors  whose  debts  are  duly  proved  and  allowed  are 
entitled  to  share  in  the  bankrupt's  property  and  estate.  This 
includes  creditors  who  have  a  priority  or  are  secured  as  well  as 
general  creditors.  Secured  creditors  are  entitled  to  be  paid  to 
the  extent  of  their  security.  Creditors  having  a  priority  are 
entitled  to  be  paid  in  full.  The  general  creditors  share  pro 
rata.  There  is  no  provision  in  the  statute  for  paying  dividends 
to  creditors  who  have  not  proved  their  claims,"*'  but  a  creditor 
who  received  an  innocent  preference  and  refused  to  surrender 
it  has  been  held  entitled  to  the  surplus  of  the  bankrupt's  estate, 
not  exceeding  the  balance  due  on  his  debt,  after  the  other  cred- 
itors have  been  paid  in  full.^^ 

The  persons  entitled  to  share  in  a  particular  dividend  are 
such  only  as  have  proved  their  debts  prior  to  its  being  de- 
clared by  the  referee.  A  creditor  is  not  entitled  to  have  his 
debt  brought  in  for  a  dividend  if  not  proved  until  after  the 
order  declaring  the  dividend  is  made.'^  This  construction  of 
the  act  is  the  only  one  that  can  give  bearing  and  consistency 
to  the  proceedings.  If  additional  debts  may  be  bnmght  into 
the  computation  after  the  referee  has  prepared  his  list  of  claims 
and  diviflends  it  would  be  subject  to  incessant  fluctuations  and 
renewals ;  and  what  would  render  it  still  more  inconvenient  and 

1*  Official  Form  No.  51 ;  sec  Form  -' /h    re    Morton,    118    Fed.    Rep. 

No.  95,  post.  908,  9  Am.  B.  R.  508. 

10  R.  S.  Sees.  5092  and  5093.  ^-Vt.    A.    1898,    Sec.    65r;    In    re 

20  See  JM  re  Hoyt.  No.  6806,  Fed.       Stein,  94  Fed.  Rep.  124,  i  Am.  B.  R. 

Cas.,  s.  c.  3  N.  B.  R.  55.  662;    In   re   Miller,   No.   9556,    Fed. 

Cas.,  s.  c.  I  N.  Y.  Leg.  Obs.  180. 


720  LAW    AND    PROCKKDINC.S    IN    BANKRUPTCY. 

unequal  in  practice  would  he  that  even  after  the  trustee  had 
jKiid  (Hvitlends  iitider  tlie  rate  to  a  part  of  the  creditors,  others 
iiiiqlit  come  in  and  arrest  payments  in  progress  to  the  residue. 
and.  l)y  presenting;-  fnim  day  to  (hiy  a  new  basis  of  distribu- 
tior..  dwindle  down  the  per  coitiim  first  established,  and  place 
tlu>se  creditors  to  whom  it  was  ileclared  on  a  scale  constantly 
descending  in  proportions.  This  would  be  in  direct  conflict 
with  the  evident  intent  of  the  statute.""^ 

Where  there  are  several  funds,  as  in  the  case  of  a  partner- 
ship, the  firm  creditors  are  entitled  to  be  paid  out  of  the  firm 
property  and  the  individual  creditors  out  of  the  individual 
estates  of  the  partners."*  Should  any  surplus  remain  of  the 
property  of  any  partner  after  paying  his  individual  debts,  such 
surplus  is  added  to  the  partnersiiip  assets  and  is  applied  to 
the  payment  of  the  partnership  debts.'"*  Should  any  surplus 
of  the  partnership  property  remain  after  paying  the  partnership 
debts,  such  surplus  is  added  to  the  assets  of  the  individual 
partners  in  the  proportion  of  their  respective  interests  in  the 
partnership.^''  The  distribution  of  a  partnership  estate  and 
the  individual  estates  of  the  partners  is  more  fully  discussed 
in  another  place,  to  which  the  reader  is  referred."" 

The  claims  of  persons  contingently  liable  for  the  bankrupt 
may  be  proved  in  the  name  of  the  creditor,  when  known,  by  the 
party  contingently  liable.  When  the  name  of  the  creditor  is 
unknown  such  claim  may  be  proved  in  the  name  of  the  party 
contingently  liable;  but  no  dividend  is  paid  upon  such  claim, 
except  upon  satisfactory  proof  that  it  will  diminish  pro  tanto 
the  original  debt.'"^ 

§  266.     How  and  when  dividends  are  declared. 

Creditors  are  entitled  to  have  at  least  ten  days'  notice  by 
mail  to  their  respective  addresses  as  they  appear  in  the  list 
of  creditors  of  the  bankrupt,  or  as  afterwards  filed  with  the 

23  B.    A.    1898,    Sees.   65a   and    c ;  ^n  5^^  Administration  of  partner- 

In  re  Stein,  94  Fed.  Rep.  124,  i  Am.  ship  estates,  Sec.  99,  ante. 

B.  R.  662.  -^  Gen.    Ord.    21,    par.    4-      B.    A. 

2*B.  A.  1898,  Sec.  Sf-  1898,    Sec.   65^;    In    re    Dillon,    100 

25  B.    A.    1898,    Sec.   sf-  Fed.  Rep.  627,  4  Am.  B.  R.  6^. 


THE    DISTRIBUTION    OF    THE    ESTATE.  72I 

papers  in  the  case  by  the  creditors,  unless  they  waive  notice  in 
writing  of  the  declaration  and  time  of  payment  of  dividends."* 

The  referee  declares  dividends  and  prepares  and  delivers  to 
the  trustee  dividend  sheets,  showing  the  dividends  declared 
and  to  whom  payable.-^  From  this  provision  it  appears  that 
the  referee  fixes  and  determines  the  rate  of  the  dividend  as 
well  as  makes  the  computation  and  calculations  as  to  the 
amounts.  The  data  for  such  calculations  is  in  his  possession, 
namely,  the  names  of  the  creditors  and  the  amount  of  each 
debt  proved  and  allowed.  The  trustee  is  required  to  report 
to  him.  in  writing,  the  condition  of  the  estate  and  the  amount 
of  money  on  hand,  and  such  other  details  as  may  be  required 
by  the  court.'^"  The  first  report  must  be  made  within  a  month 
after  his  appointment.''*  Other  reports  are  required  from  him 
every  two  months  thereafter,  unless  otherwise  ordered  by  the 
judge  or  referee.^"  With  this  data  the  referee  is  prepared  to 
declare  the  rate  and  compute  the  amount  of  each  creditor's 
dividend. 

Having  determined  upon  the  rate  per  centum  the  referee 
prepares  a  list  of  debts,  proved  and  allowed,  stating  the  rate 
of  dividend  and  the  name  of  each  creditor,  alphabetically  ar- 
ranged, together  with  the  sum  proved  and  allowed  and  the 
amount  of  the  dividend  to  be  paid  thereon.^^  Where  only 
one  creditor  has  proved  his  claim  he  is  entitled  to  be  paid  in 
full  if  there  be  enough  for  that  i)urpose;  if  there  be  not 
enough  he  takes  the  whole.^-  This  list  of  claims  and  divi- 
dends should  be  included  by  the  referee  in  his  record,  and  a 
copy  delivered  by  him  to  the  trustee.  This  is  the  authority 
for  the  trustee  to  make  payments  of  dividends  as  set  forth  in 
such  list. 

Where  a  claim  has  been  honestly  and  fairly  disputed  and 
the  claimant  finally  prevails,  interest  upon  the  dividends  should 
not  be  allowed  from  the  time  that  like  dividends  were  declared 

2«  B.  A.  1898,  Sec.  580.  31  Official  Form  No.  40;  see  Form 

20  B.   A.   1898,   Sec.  39,  clause  i ;      No.  98,  post. 
Form   No.  40.  •''2 /„   re   Haynes,    No.  6269,   Fed. 

•-•"B.  A.   1898,  Sec.  47.  clause  lO;      Cas.,   s.   c.   2   N.   B.   R.  227;   In  re 
Gen.  Ord.  17.  James.  No.  7175.  Fed.  Cas.,  s.  c.  2 

N.  B.  R.  227. 


'J22  LAW    AND    TROCEEDINGS    IN    BANKRUPTCY. 

upon  uiulisiiutod  claims.''''  Interest  may  be  allowed  on  all 
claims  from  the  date  of  tiling  the  petition  if  the  bankrupt's 
estate  is  sut^cient  to  pay  the  same  to  all."'* 

The  rights  of  creditors,  who  have  received  dividends,  or  in 
whose  favor  tinal  dividends  have  been  declared,  are  not  affected 
by  the  proof  and  allowance  of  claims  subsecpient  to  the  date  of 
such  payment  or  declarations  of  dividends;  but  the  creditors 
proving  and  securing  the  allowance  of  such  claims  are  paid 
dividends  equal  in  amount  to  those  already  received  by  the 
other  creditors  if  the  estate  equals  so  much  before  such  other 
creditors  are  paid  any  further  dividends.''^  It  is  not  necessary 
before  declaring  a  final  dividend  to  wait  a  year, —  the  time 
within  which  Sec.  57«  of  the  bankrupt  act  recpiires  all  claims 
to  be  proved.^*'  Where  an  order  is  entered,  by  the  consent 
of  all  known  creditors,  for  a  distribution  different  from  that 
provided  by  the  bankrupt  act  it  is  subject  to  the  rights  of  any 
unknown  creditors  who  appear  within  the  time  allowed  by  the 
act." 

Where  a  person  has  recovered  a  judgment,  which  is  pending 
review  in  an  appellate  court,  the  court  of  bankruptcy  will  see 

•■'•''  In  Hersey,  ct  al.,  v.  Fosdick,  20  aside  to  meet  a  large  claim  of  this 

Fed.  Rep.  44,  Judge  Lowell,  in  con-  kind,  and  have  earned  interest,  the 

sidering    this    question,    said :      "  I  court   has   not   power   to   order   the 

can   see  no   reason   why,  because   a  precise  amount  of  interest  so  earned 

creditor   finally   prevails   in   a   claim  on   a   sum   which   proves   to   be   the 

honestly  and  fairly  disputed  by  the  creditor's  money,  to  be  paid  to  him." 

assignees,  he  should  have  more  than  But  see  in  re  Kitzinger,  No  7862, 

his  dividend.    Not,  surely,  as  dam-  Fed.  Cas.,  s.  c.  19  N.  B.  R.  238,  and 

ages  for  withholding  something  due  No.  7863,  Fed.  Cas.,  s.  c.  19  N.  B. 

him,   for  there  is  nothing  due  him  R.  307. 

in  bankruptcy   until   his   debt,  both  ^*  In    re   Hagan,    No.    5898,    Fed. 

as  to  its  legality  and  its  amount,  has  Cas.,  s.  c.  6  Ben.  407;  In  re  Town, 

been  ascertained.     Not  as  a  matter  No.   141 12,  Fed.  Cas.,  s.  c.  8  N.  B. 

of   contract,    for   there    is   no    con-  R.  40. 

tractural  relation  between  the  par-  '-'-^  B.  A.  1898,  Sec.  6sc ;  In  re 
ties.  I  am  confident  that  the  prac-  Hovey,  S  Fed.  Rep.  356,  affirmed, 
tice  has  always  been  against  it,  and  8  Fed.  Rep.  314.  As  to  when  do- 
that  it  is  both  just  and  expedient  mestic  creditors  are  preferred  in 
that  the  general  creditors  should  be  paying  dividends  to  foreign  cred- 
at  liberty  to  investigate  doubtful  itors  see  B.  A.  1898,  Sec.  6sd. 
claims,  without  the  liability  to  such  "«  In  re  Stein,  94  Fed.  Rep.  124, 
a  penalty  as  would  be  imposed  upon  I  .A^m.  B.  R.  662. 
them  by  granting  the  petition.  I  do  "  /"  re  Lockwood,  104  Fed.  Rep. 
not  say  that  if  funds  have  been  set  794,  4  Am.  B.  R.  731. 


THE    DISTRIBUTION    OF    THE    ESTATE.  723 

to  it  that  no  dividends  are  paid  until  the  case  is  disposed  of 
by  the  appellate  court.  It  will  then  be  ordered  to  be  paid  or 
expunged,  or  ordered  suspended,  as  shall  be  indicated  by  the 
judgment  of  the  appellate  court.^^  The  proceedings  in  bank- 
ruptcy may  go  on  in  the  usual  way  to  their  final  orderly  ter- 
mination. If  the  judgment  creditor  shall  not,  in  the  mean- 
time, have  succeeded  in  getting  his  debt  in  a  condition  to  re- 
ceive dividends  upon  it,  he  will  not  be  able  to  participate  in  the 
distribution  of  the  estate  as  a  judgment  creditor. 

The  first  dividend  is  required  to  be  declared  within  thirty 
days  after  the  adjudication,  if  the  money  of  the  estate  in  ex- 
cess of  the  amount  necessary  to  pay  the  debts  which  have  pri- 
ority and  such  claims  as  have  not  been,  but  probably  will  be, 
allowed  equals  five  per  centum  or  more  of  such  allowed 
claims.^^  Dividends  subsequent  to  the  first  are  declared  upon 
like  terms  as  the  first  and  as  often  as  the  amount  equals  ten 
per  centum  or  more  and  upon  closing  the  estate.  Dividends  may 
be  declared  oftener  and  in  smaller  proportions  if  the  judge 
shall  so  order.^^ 

§  267.     Debts  which  have  priority. 

In  the  distribution  of  an  estate  a  secured  creditor,  as  a  mort- 
gagee or  lien-holder,  is  entitled  to  be  paid  in  full  from  a  fund 
derived  from  the  sale  of  property,  which  is  subject  to  his 
specific  lien  or  security. -"^  The  court  must  also  order  the  trus- 
tee to  pay  all  taxes  legally  due  and  owing  by  the  bankrupt  to 
the  United  States,  state,  county,  district,  or  municipality  in 
advance  of  the  payment  of  dividends  to  creditors,"  and  upon 
filing  the  receipts  of  the  proper  public  officers  for  such  pay- 
ment he  shall  be  credited  with  the  amount  thereof,  and  in 
case  any  question  arises  as  to  the  amount  or  legality  of  any 
such  tax  the  same  shall  be  heard  and  determined  by  the 
court.*^ 

•■'Vn  re  Sheehan,  No.  12737,  Fed.  *^  In    re    llarvcy,    122    Fed.    Rep. 

Cas.,  s.  c.  8  N.  B.  R.  345-  745.     10    Am.    B.    R.    567;    In    re 

3"  B.  A.  i8q8,  Sec.  656.  Conhaim,  100  Fed.  Rep;  268,  4  Am. 

*"  In  re  Frick,  i   Am.  B.  R.  719;  F..   R.   58;    /»(   re   Stalker,    123   Fed. 

In    re    McConnell.    No.    8712,    Fed.  Rep.  961. 

Cas.  .s.  c.  8  N.  B.  R.  387;  contra  in  *'^K  A.   t8q8.  Sec.  640;  U.  S.  v. 

re  Tebo,  loi   Fed.  Rep.  419,  4  Am.  Herron,  20  Wall.  251 ;  In  re  Tilden, 

B.  R.  235.  91   Fed.   Rep.  500. 


J 24  LAW    AM)    l'K(.)CEi:i)INGS    IN     BANKRUPTCY. 

Although  the  property  on  which  the  taxes  are  owing  is  ex- 
empt the  trustee  must  pay  them/''  Where  the  taxes  are  by  the 
state  law  made  a  lien  on  the  proi)erty  on  which  they  are  owing, 
prior  to  a  mortgage  lien,  they  should  be  paid  out  of  the  pro- 
ceeds of  such  property  and  not  out  of  the  general  fund  in  the 
hands  of  the  trustee  although  the  proceeds  of  the  property  are 
not  sufficient  to  satisfy  both  the  taxes  and  the  mortgage  lien.*' 
Where  a  state  statute  makes  a  partner  liable  for  partnership 
taxes,  such  taxes  have  priority  when  a  partner  is  adjudged  a 
bankrupt  and  there  are  no  partnership  assets.*** 

The  bankruptcy  court  will  follow  the  decision  of  the  state 
courts  in  determining  whether  or  not  a  debt  due  the  state  is  a 
tax;  thus  where  the  state  court  holds  that  a  license  is  not  a 
tax  it  will  not  be  given  priority.*^  and  where  the  state  court 
holds  an  assessment  a  tax  it  will  be  given  priority.**  A  debt 
due  the  state  on  a  judgment  is  not  entitled  to  priority,*'^  nor  is 
a  claim  for  taxes  w^hich  the  bankrupt  agreed  to  pay  on  prop- 
erty which  he  leased,  as  his  liability  is  entirely  contractual.** 

Funds  of  the  bankrupt  which  have  come  into  the  hands  of 
the  trustee  are  subject  to  taxation  in  the  district  where  they 
would  be  taxable  if  bankruptcy  had  not  intervened.*^ 

W^here  the  bankrupt,  as  lessee,  covenants  to  pay  the  water 
rates  and  charges  accruing  and  assessed  upon  the  leased  prem- 
ises, a  claim  for  unpaid  rates  if  classed  as  a  tax,  is  against  the 
property  upon  which  the  water  was  used  in  the  name  of  the 
owner,  and  is  not  a  tax  against  the  bankrupt  within  the  mean- 
ing of  Sec.  64a,  and  failure  to  comply  with  the  covenant  to 
pay.  neither  gives  to  the  municipality  nor  to  the  lessor  a  claim 
to  priority  of  payment  from  the  bankrupt  estate.^" 

Certain  other  debts  have  a  priority  by  virtue  of  express 
provisions  of  the  statute,  and  should  be  paid  in  full  before  pay- 

♦3  In  re  Tilden,  91  Fed.  Rep.  500,  ^^  In   re   Alderson,   98   Fed.   Rep. 

I  Am.  B.  R.  300.  588,  3  Am.  B.  R.  544. 

**  In  re  Veitch,  loi  Fed.  Rep.  251,  *^  In    re    Broom,    123    Fed.    Rep. 

4  .^m.   B.   R.    112.  639. 

***  In  re  Green,  116  Fed.  Rep.  118,  *» /n  re  Sims,  118  Fed.  Rep.  356, 

8  Am.  B.  R.  553.  9  Am.  B.  R.   162 ;  United  States  v. 

*'->  In  re  Ott,  95  Fed.   Rep.  274,  2  Herron,  20  Wall.   251,  264. 

Am.  B.  R.  637.  ^^  In  re  Broom,  10  Am.  B.  R.  427. 

♦6/m    re    Stalker,    123    Fed.    Rep. 
961. 


THE    DISTRIBUTION    OF    THE    ESTATE.  725 

ing  any  debts  of  general  creditors.     Such  debts  are,  and  the 
order  of  payment  is,  as  follows : 

First.  There  should  be  paid  the  actual  and  necessary  cost 
of  preserving  the  estate  subsequent  to  filing  the  petition." 

Second.  There  should  be  paid  the  filing  fees  paid  by  cred- 
itors in  involuntary  cases,"  and,  since  the  amendment  of  1903, 
where  property  of  the  bankrupt,  transferred  or  concealed  by 
him,  either  before  or  after  the  filing  of  the  petition,  shall  have 
been  recovered  for  the  benefit  of  the  estate  of  the  bankrupt  by 
the  efforts  and  at  the  expense  of  one  or  more  creditors,  the 
reasonable  expenses  of  such  recovery."  Such  expenses  were 
allowed  by  the  court  under  its  general  equity  powers  before 
the  amendment.^*  The  premium  paid  by  a  trustee  to  a  bond- 
ing company  to  act  as  surety  on  his  official  bond  may  be  al- 
lowed as  an  expense  of  administration. 

Third.  There  should  be  paid  the  cost  of  administration, 
including  the  fees  and  mileage  payable  to  witnesses  as  now 
or  hereafter  provided  by  the  laws  of  the  United  States,  and 
one  reasonable  attorney's  fee,  for  the  professional  services 
actually  rendered,  irrespective  of  the  number  of  attorneys  em- 
ployed, to  the  petitioning  creditors  in  involuntary  cases,  to  the 
bankrupt  in  involuntary  cases  while  performing  the  duties  by 
the  statute  prescribed,  and  to  the  bankrupt  in  voluntary  cases, 
as  the  court  may  allow."  For  the  treatment  of  the  subject  of 
attorney's  fees,  see  ante.  Sec.  41a.  The  actual  and  necessary 
expenses  incurred  by  officers  in  the  administration  of  estates 
must,  except  where  other  provisions  are  made  for  their  pay- 
ment, be  reported  in  detail,  under  oath,  and  examined  and 
approved  or  disapproved  by  the  court.  If  approved,  they 
shall  be  paid  or  allowed  out  of  the  estates  in  which  they  were 
incurred."" 

53  32  Stat,  at  L.  797.  "  /«  rr  Lesser,  100  Fed.  Rep.  43.3, 

52  B.  A.   1898,  Sec.  64ft,  clause  2.  3  Am.  R.  R.  815.  affirmed  l)y  C.  C. 

In  re  Allen,  96  Fed.  Rep.  512.  3  Am.  A.  2d  Cir.  in  5  Am.  B.  R.  320;  In 

B.  R.  38;  In  re  Tebo,  loi  Fed.  Rep.  re  Allen,  96  Fed.  Rep.  512,  3  Am. 

419,  4  Am.  B.  R.  235;  In  re  Beaver  B.   R.  38. 

Coal  Co.,  107  Fed.  Rep.  98.  5  Am.  '■••'•  B.  .\.   i8q8.  Sec.  64/j.  clause  3 

B.  R.  787;  In  re  Lewis,  99  Fed.  Rep.  ^'^  H.  A.   1898.  Sec.  62;  Gen.  Ord. 

935,  4  Am.  B.   R.  51;  In   re   Peter  10  and    19:   In   re  Barnes,    18  Fed. 

Paul  Book  Co.,   104  Fed,  Rep.  786,  Rep.   158. 

5  Am.   B.   R.   105. 

61  B.   A.    1898,  Sec.  64/..  clause    i  ; 


'J2(d  LAW    AND    PROCEEDINGS   IN    BANKRUPTCY. 

roiirth.  Tliere  should  be  paid  wages  due  to  workmen,  clerks 
or  servants  which  have  been  earned  within  three  months  be- 
fore the  date  of  the  commencement  of  proceedings,  not  to  ex- 
ceed three  hundred  dollars  to  each  claimant.^^  The  claim  of  a 
salesman  employed  in  a  shop  is  entitled  to  priority/'®  The 
claim  of  an  apprentice  for  labor  done  after  his  apprenticeship 
under  an  agreement  for  a  si:)ccific  compensation  is  entitled  to 
priority  as  the  claim  of  a  workman/"  The  fact  that  a  laborer 
is  paid  by  the  piece  does  not  do  away  with  his  right  to  prior- 
ity/'' A  claim  of  one  temporarily  employed  in  adjusting  the 
books  and  accounts  of  the  bankrupt  is  entitled  to  priority  as  a 
clerk/^  So  long  as  a  bona  fide  contract  for  hiring  exists 
and  the  servant  does  all  that  the  master  requires  of  him, 
the  wages  are  earned  so  vacation  pay  is  "  wages  earned  "  and 
"  due  "  although  payment  is  deferred/'^  A  father  is  entitled 
to  priority  for  the  services  rendered  by  his  minor  son  as  a 
workman/^  But  where  the  claim  arises  under  an  entire  con- 
tract for  labor,  including  the  services  of  a  team,  it  can  not  be 
apportioned,  and  is  not  entitled  to  priority."*  An  assignee  of 
labor  claims  has  priority  if  the  assignment  was  made  after  the 
filing  of  the  petition ;  ^^  but  not  if  the  assignment  was  made 
before  the  filing  of  the  petition.**®  The  claims  of  a  traveling 
salesman,®^  an  agent  selling  on  commission/'®  the  president  ^^ 
or  general  manager  ^'^  of  a  corporation  are  not  entitled  to  pri- 
ority. An  employee  is  not  entitled  to  priority  in  payment  of 
wages  for  an  unexpired  term  of  employment,  where  he  was 

5"  B.  A.  1898,  Sec.  64/),  clause  4.  "^  In  re  Campbell,  102  Fed.   Rep. 

58  In  re  Flick,  105  Fed.  Rep.  503.  686,  4  Am.  B.  R.  535- 
S  Am.  B.  R.  465.  ^^  In  re  Westlund,  99  Fed.   Rep. 

s'-*  In   re  Steiner,  No.   I33S4,  Fed.  399,  3  Am.  B.  R.  646. 
Cas.,  s.  c.  I  Pa.  L.  J.  368.  ^"^  In  re  Greenewald,  99  Fed.  Rep. 

60 /n   re  Gurewitz    (C.   C.   A.  2d  705,  3  Am.  B.  R.  696;  In  re  Scanlan, 

Cir.),  121  Fed.  Rep.  982.  97  Fed.  Rep.  26,  3  Am.  B.  R.  202. 

«i£.r   parte   Rockett,    No.    Ii977,  *'®  ^»  re  Mayer,  loi  Fed.  Rep.  227, 

Fed.  Cas.,  s.  c.  2  Low.  522.  4  Am.  B.  R.  119. 

''-  In   re   Gladding   Co.,    120  Fed.  •"'  In  re  Carolina  Cooperage  Co., 

Rep.  709,  9  Am.  B.  R.  700.  96  Fed.  Rep.  950,  3  Am.  B.  R.  154. 

«^  In  re  Harthorn,  No.  6162,  Fed.  '"^  In     re     Grubbs-Wiley    Grocery 

Cas.,  s.  c.  4  N.  B.  R.  103.  Co.,  96  Fed.  Rep.  183,  2  Am.  B.  R. 

«</«    re    Blackman,   6    Chi.    Leg.  442. 
News,  18. 


THE    DISTRIBUTION    OF    THE    ESTATE.  '/2'J 

wrongfully  discharged.'^  The  priority  for  wages  extends  to 
wages  earned  within  three  months  immediately  preceding  the 
filing  of  the  petition,  and  not  the  three  months  last  employed.'^ 
A  person  having  a  labor  claim  entitled  to  priority  does  not  lose 
his  priority  by  having  obtained  a  judgment  on  it  within  four 
months  prior  to  the  filing  of  the  petition.^^ 

Where  a  state  statute  gives  priority  to  wages  earned  more 
than  three  months  prior  to  insolvency  proceedings  such  claims 
are  not  entitled  to  priority  under  Sec.  646,  clause  5,  of  the 
bankrupt  act.  as  Sec.  64??,  clause  4.  is  held  to  exclude  claims 
for  wages  from  Sec.  64^,  clause  5.'*  Where,  however,  the 
state  law  gives  not  a  priority,  but  a  lien  on  the  bankrupt's 
property  and  this  lien  becomes  fixed  before  the  petition  in 
bankruptcy  is  filed,  it  will  be  respected." 

Fifth.  There  should  be  paid  debts  owing  to  any  person 
who  by  the  laws  of  the  states  or  the  United  States  is  entitled 
to  priority.^"  This  clause  does  not  adopt  the  state  laws  with 
reference  to  the  priority  of  labor  claims.'^ 

Where  a  claimant  has  a  lien  he  is  preferred  not  because  Sec. 
646,  clause  5.  of  the  bankrupt  act,  gives  him  priority,  but  be- 
cause the  bankrupt  act  recognizes  all  valid  liens,'^  which  it 
does  not  specifically  dissolve.  Thus  whfere  a  state  law'  gives  a 
lien  for  one  years'  rent,  on  the  goods  on  the  premises,  the 
landlord  is  entitled  to  the  proceeds  of  the  sale  of  such  goods  up 

^1 /n  re   Pevear,   No.    11053,   Fed.  ""  B.  A.   1898,  Sec.  64/;,  clause  5. 

Cas.,  s.  c.   17  N.  B.  R.  461.  '•''In  re  Rouse,  Hazard  &  Co.   (C. 

'-In  re  Rouse,  Hazard  &  Co.,  91  C.    .\.    jtli    Cir.),   91    Fed.    Rep.   96, 

Fed.  Rep.  96.  i   Am.  B.  R.  234;  In  re  Shaw,  109 

^^  In  re  Anson,  loi  Fed.  Rep.  698,  Fed.  Rep.  782,  6  Am.  B.  R.  501 ;  In 

4  Am.  B.  R.  231.  re  Slomka   (C.  C.  A.  2d  Cir.),  122 

'*  In  re  Rouse,  Hazard  &  Co.  (C.  Fed.    Rep.   630,   9   Am.    B.    R.   635. 

C.  A.  7th  Cir.),  91   Fed.  Rep.  96,  i  Where,  however,  the  labor  claimant 

Am.  B.  R.  234;  In  re  Shaw,  109  Fed.  has  acquired  a  lien  it  may  be  valid 

Rep.   782,  6  Am.   B.   R.  501;   In   re  against    the   trustee    in   bankruptcy, 

Slomka    (C.    C.    A.    2d    Cir.),    122  In  re  Lawler,  no  Fed.  Rep.   135,  6 

Fed.  Rep.  630,  9  Am.  B.  R.  635.  Am.  B.  R.  184;  In  re  Laird   (C.  C. 

'"^ /n  re  Lawler,  no  Fed.  Rep.  135,  .\.  6th   Cir.),   109  Fed.  Rep.  550,  6 

6  Am.  B.  R.   184;  In  re  Laird   (C.  ,\m.   B.   R.    i  ;   see   also  in  re   City 

C.  A.  6th  Cir.),  109  Fed.  Rep.  550,  Trust  Co.   (C.  C.  A.  6th  Cir.),  121 

6  Am.  B.  R.  I ;  see  also  in  re  City  Fcrl.  Rep.  706. 

Trust  Co.   (C  C.  A.  6th  Cir.),   121  '"  B.  A.  1898,  Sec.  Gyd. 
Fed.  Rep.  706,  10  Am.  B.  R.  231. 


728  LAW    AND    TROCEEDINGS    IN    BANKRUPTCY. 

to  that  amount/"  A  mere  judgment  is  not  entitled  to  priority 
tliough  due  to  the  state  ;*''  and  when  a  judgment  becomes  a 
Hen  depends  upon  the  laws  of  the  state  in  which  it  is  asserted.**^ 
This  clause  of  the  bankrupt  act  does  not  make  all  liens  under 
state  laws  equal  but  leaves  them  the  priorities  which  the  state 
law  gives  them.''"  So  where  the  state  statutes  give  a  lien  to 
both  a  landlord  and  a  wage-earner  their  priority  will  be  deter- 
mined by  the  state  law.^^  Where  there  is  a  debt  due  for  taxes 
on  certain  real  estate  and  a  mortgage  of  more  than  its  value 
on  the  same  real  estate  and  the  state  law  gives  precedence  to  the 
taxes,  they  should  be  collected  from  the  real  estate  and  not  from 
the  general  assets  in  the  hands  of  the  trustee.**  Where  a  land- 
lord distrains  for  rent  after  adjudication  he  will  not  be  en- 
titled to  the  amount  distrained  for  as  the  pro])erty  is  in  citstodia 
Icgis,  but  will  be  given  the  priority  which  the  state  law  gives  to 
a  landlord  in  case  of  execution. *"''  Where,  as  in  Pennsylvania, 
the  vendor  has  no  lien  on  real  estate  for  the  purchase  price, 
but  a  bare  legal  title,  if  the  trustee  of  the  vendee  severs  part  of 
the  structures  and  sells  them,  the  proceeds  go  to  the  general 
creditors.*^ 

The  insolvency  laws  of  the  states  are  considered  as  remain- 
ing in  force  since  the  passage  of  the  bankruptcy  act,  so  where 
these  laws  give  priority  to  certain  debts  when  the  estate  is  ad- 
ministered in  insolvency,  the  same  priorities  will  ordinarily  be 
allowed  when  the  estate  is  administered  in  bankruptcy.*^  If 
the  state  statute  gives  not  a  priority,  but  a  lien,  and  the  lien 
is  dissolved  by  the  bankruptcy  proceedings,  the  lienor  is  en- 


''^  III    re   Mitchell,   116  Fed.   Rep.  g  Am.   B.   R.   252.     See  also  in  re 

87,  8  Am.  B.  R.  324.  Hamilton,  102  Fed.  Rep.  683,  4  Am. 

»o  In  re  Falls  City  Shirt  Mfg.  Co.,  B.  R.  543. 

98  Fed.  Rep.  592,  3  Am.  B.  R.  437.  s^ /„  yg  Worcester  Co.   (C.  C.  A. 

«i  Pence  v.   Cochran,  6  Fed.  Rep.  ist  Cir.),  102  Fed.  Rep.  808,  4  Am. 

269 ;  In  re  Lowe,  19  Fed.  Rep.  589.  B.  R.  496 ;  In  re  Crow,  1 16  Fed.  Rep. 

82  Falls   City   Shirt    Mfg.    Co.,  98  no,  7  Am.  B.  R.  545;  In  re  Daniels, 

Fed.  Rep.  592,  3  Am.  B.  R.  437.  no    Fed.    Rep.    745,    6   Am.    B.    R. 

83 /n  re  Byrne,  97  Fed.  Rep.  762,  699;  In  re  Lewis,  99  Fed.  Rep.  935. 

3  Am.  B.  R.  268.  4  Am.  B.  R.  51  ;  /«  re  Beaver  Coal 
«</«  re  Veitch,  loi  Fed.  Rep.  251,  Co.,  107  Fed.  Rep.  98,  5  Am.  B.  R. 

4  Am.  B.  R.  112.  787,  seems  contra.  Where  the  prior- 
»5/h  re  Duble,  \\y  Fed.  Rep.  794.  ity  is  given  in  the  settlement  of  a 
86  In  re  Clark,  n8  Fed.  Rep.  358,  partnership  no  priority  will  be  given 


THE    DISTRIBUTION    OF    THE    ESTATE.  729 

titled  to  no  priority.**  Where  the  priority  given  by  the  state 
law  was  to  claims  for  compensation  and  for  expenses  incurred 
by  an  assignee  in  insolvency,  a  doubtful  question  arose  when 
the  assignment  was  set  aside  by  the  bringing  of  bankruptcy 
proceedings  within  four  months.  It  was  held  that  such  a 
general  assignment  was  in  fraud  of  the  bankrupt  act  and  there- 
fore such  debts  were  not  only  not  entitled  to  priority  but  were 
not  even  provable  claims.*"  This  doctrine  was  repudiated  by 
the  supreme  court  in  Randolph  v.  Scruggs,""  and  it  is  now  set- 
tled that  an  assignee  or  his  attorney  are  entitled  to  compensa- 
tion for  services  rendered  either  before  or  after  the  filing  of  the 
petition,  if  the  services  rendered  were  beneficial  to  the  estate, 
and  that  this  claim  is  entitled  to  priority."^ 

The  United  States  are  entitled  to  priority,  although  they  do 
not  prove  their  debt,  irrespective  of  the  form  of  indebtedness."^ 
Where  a  person  purchases  an  article  duty  free,  and  is  com- 
pelled to  pay  the  duty  in  order  to  get  possession  of  the  prop- 
erty, he  is  entitled  to  be  subrogated  to  the  right  of  the  United 
States  to  priority,  although  he  proves  his  debt  as  unsecured."^ 
Where  a  revenue  officer  had  paid  a  dishonored  check,  received 
by  him  from  a  government  debtor,  he  is  entitled  to  be  sub- 
rogated to  the  rights  of  the  United  States  against  such  debtor."* 
Where  the  United  States  have  obtained  a  judgment  against 
persons  comi)Osing  a  bankru])t  firm,  though  for  a  de1)t  on 
which  one  of  the  partners  was  liable  as  principal  and  the  other 
as  surety,   they  are  entitled  to  priority  over  all   partnership 

in   administration    of   the   estate   of  533.   10  Am.  B.  R.   i ;  In  re  Chase 

one  of  the  partners  in  bankruptcy,  (C.  C.  A.  ist  Cir.),  124  Fed.  Rep. 

In  re  Daniels,  no  Fed.  Rep.  745,  6  753;  Summers  v.  Abbott  (C.  C  A. 

Am.  B.  R.  699.  8th   Cir.),    122   Fed.   Rep.   36. 

««/n  re  Allen,  96  Fed.  Rep.  512,         02  r      5.     Sec.     3466;     Lewis     v. 

3  Am.  B.  R.   38;  In   re  Young,  96  United  States,  92  U.  S.  6t8;  U.  S. 

Fed.  Rep.  606,  2  Am.  B.  R.  673.  v.  Hcrron,  20  Wall.  251;  In  re  Vet- 

•*»  Sterns  v.   Flick,   103   Fed.   Rep.  terlcin,  20  Fed.  Rep.  109;  Harri.son 

919,  4  Am.  B.  R.  723;  In  re  Peter  v.  Sterry,  5  Cranch,  289. 
Paul  Book  Co.,  104  Fed.  Rep.  786,  See  also  U.  S.  v.  Murphy.  15  Fed. 

S  Am.  B.  R.  105 ;  Wilbur  v.  Watson,  Rep.  589.  and  collation  of  cases  in 

III  Fed.  Rep.  493,  7  Am.  B.  R.  54;  note  at  the  end  of  the  opinion. 
In  re  Tatum,    112  Fed.   Rep.   50,   7         ^^  In  re  Kirkland,  No.  7844,  Fed. 

Am.  B.  R.  52;  contra  In  re  Scholtz,  Cas.,  s.  c.   14  N.  B.  R.   157. 
106  I'Vd.  Rep.  834,  5  Am.  B.  R.  782.  »*  In  re  McBride,  No.  8662,  Fed. 

""  KX)  I'.  S.  533.  10  Am.  B.  R.  I.  Cas.,  s.  c.  19  N.  B.  R.  452. 

"'  Randolph  v.  Scruggs,  190  U.  S. 


730  LAW    AND    TROCEEDINGS    IN    BANKRUPTCY. 

creditors.^'*  A  judgrnent  for  an  internal  revenue  penalty  re- 
covered aft-er  the  adjudication  in  bankruptcy  is  entitled  to 
priority  of  payment.'*"  Debts  owin.^-  to  the  United  States,  a 
state,  a  county,  a  district,  or  a  niunicip.ality  as  a  penalty  or  for- 
feiture are  allowed  only  Un-  the  anioinit  of  the  pecuniary  loss 
sustained  by  the  act.  transaction,  or  proceeding  out  of  which 
the  penalty  or  forfeiture  arose,  with  reasonal)le  and  actual  costs 
occasioned  thereby  and  such  interest  as  may  have  accrued 
thereon  according  to  law."'  Hence  the  priority  of  the  United 
States  is  limited  in  respect  to  what  may  be  allowed. 

In  the  event  of  the  confirmation  of  a  composition  being  set 
aside,  or  a  discharge  revoked,  the  property  acquired  by  the 
bankrupt  in  addition  to  his  estate  at  the  time  the  composition 
was  confirmed  or  the  adjudication  was  made,  is  applied  to 
the  payment  in  full  of  the  claims  of  creditors  for  property  sold 
to  him  on  credit,  in  good  faith,  while  such  composition  or 
discharge  was  in  force,  and  the  residue,  if  any,  is  applied  to 
the  payment  of  the  debts  which  were  owing  at  the  time  of  the 
adjudication.®^ 

When  the  referee  has  determined  what  debts  are  entitled 
to  priority  he  should  pass  an  order  setting  forth  the  names  of 
the  creditors  and  the  amount  of  debts  entitled  to  priority  due 
each,  and  direct  the  trustee  to  pay  such  debts  in  full. 

Where  a  secured  creditor  and  a  creditor  having  a  priority 
are  entitled  to  payment  out  of  the  same  fund,  and  the  fund  is 
insufficient  to  pay  both  in  full,  the  question  will  arise  as  to 
which  class  of  creditors  has  preference  over  the  other,  the  se- 
cured or  those  having  priority?  The  statute  creates  prefer- 
ences in  the  distribution  of  the  bankrupt's  assets,  as  has  been 
stated,  and  prescribes  the  order  of  payment.  This  provision 
does  not  refer  to  any  part  of  the  estate  derived  from  the  sale 
of  property  on  which  creditors  may  have  a  specific  lien.""  It 
will  be  observed  that  this  priority  is  only  allowed  out  of  the 

^^  In  re  Strassburger,  No.   13526,  hi    re    McConnell,    No.    8712,    Fed. 

Fed.  Cas.,  s.  c.  4  Woods,  557.  Cas.,  s.  c.  9  N.  B.  R.  387;  see  also 

88 /n   re   Rosey,   No.    12066,   Fed.  in  re  Sanderlin,  109  Fed.  Rep.  857, 

Cas.,  s.  c.  6  Ben.  507.  859,  6  Am.  B.  R.  384,  387;  but  see 

s'^  B.  A.  1898,  Sec.  57;.  in  re  Tebo,  loi  Fed.  Rep.  419,  4  Am. 

»«  B.  A.  1898.  Sec.  64c.  B.  R.  235. 

88 /h  re  Frick,   i   Am.  B.  R.  719; 


THE    DISTRIBUTION    OF    THE    ESTATE.  73 1 

estate  of  the  bankrupt.  The  fund  derived  from  the  sale  of 
property,  which  is  subject  to  specific  liens  becomes  a  part  of 
the  bankrupt's  estate  to  such  extent  only  as  the  fund  exceeds 
the  amount  of  the  debt  secured  by  the  lien  or  mortgage.'"" 
The  priority  referred  to  in  Sec.  64  evidently  relates  to  claims 
otherwise  unsecured  and  gives  them  priority  over  other  unse- 
cured claims  but  does  not  affect  a  debt  or  claim  secured  by 
mortgage  or  other  lien  which  the  act  expressly  provides  shall 
not  be  affected  by  bankruptcy  proceedings  in  Sec.  67.'-"'  The 
claim  of  the  lien  creditor  must  therefore  be  paid  in  full  before 
creditors  are  entitled  to  a  priority  under  Sec.  64. 

§  268.     Dividend-s  are  not  subject  to  attachment. 

A  dividend  in  the  hands  of  the  trustee  can  not  be  reached 
by  attachment  or  on  any  process  from  a  state  court."'  The 
same  rule  holds  in  cases  of  money  payable  under  a  composi- 
tion with  creditors.'*^-  The  reason  for  this  rule  is  that  while 
the  funds  are  in  the  hands  of  the  trustee  they  are  a  part  of 
the  estate  of  the  bankrupt  in  the  custody  of  the  court.  Such 
money  is  not  the  property  of  the  debtor,  but  is  property  only 
which  becomes  his.  when  he  actually  gets  it.  He  can  not 
maintain  any  suit  against  the  trustee  for  it,  nor  obtain  it  by 
any  legal  process  other  than  an  application  to  the  court  of 
bankruptcy  having  control  of  the  funds,  as  a  party  to  the  pro- 
ceedings in  that  court.  The  situation  is  very  similar  to  that  of 
money  in  the  hands  of  a  public  officer  due  to  a  private  person. 

^<">  That  the  trustee  takes  the  title  No.  10743,  Fed.  Cas.,  s.  c.  2  Story, 

of  the  bankrupt  subject  to  all  equi-  334;    Fletcher  v.    Morey,   No.   4864, 

ties,    liens    and   encumbrances,   con-  Fed.  Cas.,  s.  c.  2  Story,  555;  Kelly 

suit  Ycatman  v.  Savings  Institution,  v.   Scott,  49  N.   Y.  595;   Talcott  v. 

95  U.  S.  766;  Jerome  v.  McCarter,  Dudley,  5  111.  4^7- 

94  U.  S.  734;  Donaldson  v.  Farwell,  ^"'^  In    re   Chisholm,  4   Fed.    Rep. 

93    U.    S.   631;    Cook   V.   Tullis,    18  526;  Gilbert  v.  Quinby,  i  Fed.  Rep. 

Wall.    332;    Gibson    v.    Warden,    14  m;   /"   re   Cunningham,   No.   3478, 

Wall.   244;   Brown  v.   Heathcote,    i  Fed.   Cas..   s.   c.    19  N.    B.    R.   276; 

Atk.    160;   Crane  v.    Penny,  2   Fed.  In  re  Kohlsaat,  No.  7918,  Fed.  Cas., 

Rep.  455;  Mitchell  v.  Winslow,  No.  s.  c.  18  N.  B.  R.  570 ;  In  re  Bridg- 

9673,  Fed.  Cas..  s.  c.  2  Story,  630;  man,  No.  1867,  Fed.  Cas.,  s.  c.  2  N. 

Goddard  v.  Weaver,  No.  5495,  Fed.  B.  R.  252 ;  Colby  v.  Coatcs,  6  Cush. 

Cas..    s.    c.    r    Woods.    257;    /"    re  (Mass.)    558. 

Pusey.    No.    11477.    Fed.    Cas..   s.   c.  »»2 /„  re  Kohlsaat,  No.  7918,  Fed. 

6  X.  B  R.  40;  Parker  v.  Muggridge,  Cas.,  s.  c.  18  N.  B.  R.  570. 


73-  • -^^v    ^N'>  rRt)ci-:iii)iNc-.s  in   bankruptcy. 

aiul  the  familiar  cases  relatinj;  to  tlie  exemption  of  such  funds 
from  attachment,  to  prevent  them  from  passing  to  the  person 
who  claims  them,  may  he  protitahly  consulted/"^ 

^   269.     The  manner  of  paying  dividends. 

A  dividend  sheet,  showing  the  dividends  declared  and  pay- 
able, is  delivered  hy  the  referee  to  the  trustee.'"*  The  trustee 
should  f(,)rthwith  give  notice  to  the  creditors  when  and  where 
a  check  or  warrant  for  tiie  dividends  may  be  obtained.'"''  The 
trustee  is  required  to  pay  dividends  within  ten  days  after  they 
are  declared  by  the  referee.'""  If  the  creditor  can  not  person- 
ally attend,  the  warrant  may  be  delivered  to  a  person  author- 
ized in  writing  to  receive  it.'"^  At  the  time  and  place  named 
in  the  notice  the  creditor  should  present  himself,  or  a  duly 
authorized  agent,  to  receive  and  receipt  for  the  dividend  war- 
rant. 

Each  dividend  is  paid  by  a  check  or  warrant  drawn  upon 
the  designated  depository  in  which  the  fund  is  deposited.'"* 
The  warrant  or  check  must  be  signed  by  the  clerk  of  the 
court  or  by  the  trustee,  and  countersigned  by  the  judge  of 
the  court,  or  by  a  referee  designated  for  that  purpose,  or  by 
the  clerk  or  his  assistant  under  an  order  made  by  the  judge, 
stating  the  date,  the  time,  and  the  account  for  which  it  is 
drawn.'""  The  warrant  is  usually  drawn  by  the  trustee  and 
countersigned  by  the  referee.  Where  the  checks  are  given  to 
attorneys  they  should  distinctly  show  in  payment  of  which 
claim  they  are  given.""  An  entry  of  the  substance  of  such 
check  or  warrant,  with  the  date  thereof,  the  sum  drawn  for, 

103  Buchanan     v.     Alexander,     4  ^^^  Official     Form     No.     41 ,     see 

How.  20;  McLaughlin  v.  Swann,  18  Form   No.  99,  post. 

How.   217;    Providence   &   Stoning-  i^"  B.   A.   1898,  Sec.  47,  clause  9. 

ton   Steamship    Co.   v.   Ins.   Co.,   11  ^o^  official     Form     No.     41,     see 

Fed.  Rep.  284;  Clarke  v.  Shaw,  28  Form  No.  99,  post. 

Fed.    Rep.    356;    Van    Brocklin    v.  '"s  B.   A.    1898,  Sec.  47,  clause  4- 

Tennessee,  117  U.  S.   151;  Foley  v.  i'»»  Gen.  Ord.  29;  In  re  Cobb,  112 

Shriver,    81     Va.    568;     Roeller    v.  Fed.  Rep.  655,  7  Am.  B.  R.  202;  see 

Ames,    33    Minn.     132;    Gassett    v.  also  in  re  Rude,  lOi   Fed.  Rep.  805, 

Grout,  4  Met.    (Mass.)   486.  4  Am.  B.   R.  319;  In  re  Clark,  No. 

10*  B.  A.   1898,  Sec.  39,  clause  i ;  2810,  Fed.  Cas.,  s.  c.  9  N.  B.  R.  67. 

Form  No.  40.  ""^«  re  Carr,  116  Fed.  Rep.  556, 

8  Am.   B.  R.  635. 


THE    DISTRIBUTION    OF    THE    ESTATE.  ^^^ 

and  the  account  for  which  it  is  drawn,  must  be  forthwith 
made  in  a  book  kept  for  that  purpose  by  the  trustee  or  his 
clerk;  and  all  checks  and  drafts  should  be  entered  in  the 
order  of  time  in  which  they  are  drawn,  and  numbered  in  the 
case  of  each  estate.^'^'*  The  creditor  receiving  the  check  is  re- 
quired by  the  trustee  to  sign  a  voucher  to  be  used  in  making 
up  his  accounts. 

§  270.     Unclaimed  dividends. 

There  was  a  conflict  of  opinion  under  the  former  act  as  to 
what  disposition  should  be  made  of  the  balance  that  remained 
after  the  payment  of  all  the  creditors,  who  had  proved  their 
debts  in  case  there  w-ere  names  of  creditors  on  the  schedule 
W'ho  had  not  proved  their  debts.  Some  judges  held  that  it 
should  be  distributed  among  the  creditors  holding  unproved 
claims,"^  Other  judges  held  that  it  should  be  paid  to  the 
bankrupt.^^" 

This  question  can  not  be  mooted  under  the  present  act, 
which  expressly  provides  that  dividends  which  remain  un- 
claimed for  six  months  after  the  final  dividend  has  been 
declared  shall  be  paid  by  the  trustee  into  court.  Dividends 
remaining  unclaimed  for  one  year  shall,  under  the  direction 
of  the  court,  be  distributed  to  the  creditors  whose  claims  have 
been  allowed  but  not  paid  in  full,  and  after  such  claims  have 
been  paid  in  full  the  balance  shall  be  paid  to  the  bankrupt. 
Provided,  that  in  case  unclaimed  dividends  belong  to  minors, 
such  minors  may  have  one  year  after  arriving  at  majority  to 
claim  such  dividends.^" 

§  271.     The  settlement  of  the  estate. 

When  the  trustee  has  realized  all  the  property  of  the  bank- 
rupt, or  so  much  thereof  as  can  be  realized,  or  where  no  tan- 
gible assets  have  come  into  his  hands  and  he  has  no  informa- 

*i*  In  re  Haynes,  No.  6269,  Fed.  Fed.  Cas.,  s.  c.   i   Pa.  Law  J.  225, 

Cas.,   s.   c  2   N.   B.   R.  227 ;   In  re  it    was    held    that    unclaimed    divi- 

Jatnes,  No.  7175,  Fed.  Cas.,  s.  c.  2  dends  would   not   he  awarded  to  a 

N.   B.   R.   227.  hanknipt's    administrator    when   op- 

^^2  Jn    re    Hoyt,    No.    6806,    Fed.  posed    hy    creditors    whose    claims 

Cas.,  s.  c.  3  N.  B.  R.  55 ;   Stcevens  were  not  paid  in  fnll. 
V.  Earles,  25  Mich.  40.  "■•  B.  A.    1898,  Sec.  66. 

In   re   Blight's    Estate,   No.    1540, 


734  LAW    AND    rKOCKEDINGS    IN    BANKRITPTCY, 

tioii  of  any  property  belonging  to  the  bankrupt,  and  the  estate 
has  been  distributed  or  is  in  shape  for  a  iinal  dividend,  the 
estate  is  ripe  for  settlement.  The  final  dividend  may  be  de- 
clared before  the  time  limited  for  proving  claims  has  expired."* 
The  trustee  thereupon  makes  a  final  report  and  tiles  his  iinal 
accounts  under  oath  with  the  referee."''  This  should  be  done 
at  least  fifteen  days  before  the  day  fixed  for  the  final  meeting 
of  the  creditors."*^ 

The  referee  slnnild  thereupon  give  at  least  ten  days'  notice 
by  mail  to  the  creditors,  at  their  respective  addresses  as  they 
appear  in  the  list  of  creditors  of  the  bankrupt,  or  as  after- 
wards filed  with  the  papers  in  the  case,  unless  they  waive 
notice  in  writing,  of  the  filing  of  the  final  accounts  of  the 
trustee  and  the  time  when  and  the  place  where  they  will  be 
examined  and  passed  upon.^"  Whenever  the  affairs  of  the 
estate  are  ready  to  be  closed  a  final  meeting  of  creditors  must 
be  ordered. ^^*  But  if  no  trustee  is  appointed,  the  court  may 
order  that  no  meeting  of  the  creditors  other  than  the  first 
meeting  shall  be  called."" 

Upon  the  day  fixed  for  the  final  meeting  the  creditors  as- 
semble pursuant  to  notice.  The  trustee  is  required  to  lay 
before  this  meeting  of  the  creditors  detailed  statements  of  the 
administration  of  the  estate.  These  statements  and  accounts 
are  examined  at  this  time,  and  such  other  business  as  may  be 
necessary  to  the  final  settlement  of  the  affairs  of  the  bankrupt 
may  be  transacted.  The  creditors  may.  by  vote  at  the  final 
meeting,  dispense  with  the  reading  and  exhibition  of  the  trus- 
tee's accounts  and  vouchers,  where  they  have  been  on  file  for  a 
reasonable  time.^"^ 

If  the  final  accounts  are  satisfactory  and  proper  the  referee 
passes  an  order  allowing  the  same  and  discharging  the  trustee 
from  his  trust. ^"^     If  objections  are  made  to  the  accounts  the 

"*/n  re  Stein,  94  Fed.  Rep.  124,         "^  b.    A.    1898,    Sec.   58a;   In   re 

I  Am.  B.  R.  662.  Savage,  12  Fed.  Rep.  719. 

"■■^  Official  Forms  Nos.  49  and  50,  ^^^  B.  A.  1898,   Sec.  SSf- 

see    Forms    Nos.    93    and   94,    post.         ^i^  Gen.  Ord.  15. 
If  there  are  no   assets   the  trustee  120  /,j  ^g  Merchants  Ins.  Co.,  No. 

makes  his   return   in   Official   Form  9442,  Fed.  Cas.,  s.  c.  6  Biss.  252. 
No.  48;  see  Form  No.  92,  post.  121  Qf^^ial     Form     No.     51,     see 

ii«  B.  A.  1898,  Sec.  47,  clause  8.  Form   No.  95,  post. 


THE    DISTRIBUTION    OF    THE    ESTATE.  735 

referee  should  hear  them  and  determine  the  merits  as  soon  as 
he  conveniently  can  do  so.  The  meeting  may  be  adjourned 
with  leave  to  the  trustee  to  correct  his  errors  or  omissions.'" 

The  court  may  set  aside  a  discharge  of  a  trustee  which  has 
inadvertently  found  its  way  into  the  files  and  order  him  to 
proceed.'-^  The  statute  expressly  authorizes  the  court  to  re- 
open estates  whenever  it  appears  they  were  closed  before  being 
fully  administered.'"'^ 

§  272.     The  record  of  the  referee  to  be  transmitted  to  the  court. 

When  the  debts  have  been  proved  and  allowed,  the  assets 
collected  and  distributed,  the  trustee's  accounts  audited  and 
the  trustee  discharged,  the  case  is  concluded  before  the  referee. 
He  should  then  certify  to  a  record  of  the  proceedings  before 
him,  together  with  such  papers  as  are  on  file  before  him,  and 
transmit  them  to  the  clerk  of  the  court.'-^  They  are  preserved 
by  the  clerk  as  a  part  of  the  records  of  the  court. 

Certified  copies  of  such  proceedings  or  of  such  papers,  when 
issued  by  the  clerk  or  referee,  are  to  be  admitted  as  evidence 
with  like  force  and  effect  as  certified  copies  of  the  records  of 
district  courts  of  the  United  States  are  now  or  may  hereafter 
be  admitted  as  evidence.'""  The  referee  can  furnish  certified 
copies  only  when  the  papers  are  in  his  possession,  and  not 
after  his  record  has  been  filed  with  the  clerk. 

"2/n  re  Savage,  12  Fed.  Rep.  719.  124  b.  A.  1898,  Sec.  2,  clause  8. 

"3  Maybin  v.  Raymond,  No.  9338,  125  3.  A.  1898,  Sec.  42c. 

Fed.  Cas.,  s.  c.  15  N.  B.  R.  353.  i^c  b.  A.  1898,  Sec.  2id. 


-36  l-AW     AM)    I'KOCllKDlNr.S    IN     I?.\  N  KKTrTCY. 


e 


CHAPTER  XXVI. 

DISCHARGE. 

^  273.     Application  for  a  discharge. 

Any  person  who  has  been  adjudged  a  bankrupt  may  file  an 
application  for  a  discharge  in  the  court  of  bankruptcy  in 
which  the  proceedings  are  pending.'  This  includes  involun- 
tary as  well  as  voluntary  bankrupts. 

The  application  for  a  discharge  should  be  by  a  petition  in 
the  prescribed  form.^  It  should  be  entitled  in  the  court  and 
cause  and  addressed  to  the  judge.  It  must  state  concisely,  in 
accordance  with  the  provisions  of  the  bankrupt  act  and  th 
orders  of  the  court,  the  proceedings  in  the  case  and  the  acts 
of  the  bankrupt. «  Thus  it  should  state  the  name  of  the  bank- 
rupt, his  residence  and  the  date  on  which  he  was  adjudged  a 
bankrupt;  that  he  has  duly  surrendered  all  his  property  and 
rights  of  property  and  has  fully  complied  with  all  the  require- 
ments of  said  acts  and  of  the  orders  of  the  court  touching  his 
said  bankruptcy.  It  should  conclude  with  a  prayer  that  he 
may  be  decreed  by  the  court  to  have  a  full  discharge  from  all 
debts  provable  against  his  estate  under  said  bankrupt  acts, 
except  such  debts  as  are  excepted  by  law  from  such  discharge. 
A  person  need  not  pray  for  a  discharge  from  his  firm  debts 
in  precise  words,  if  he  asks  for  a  discharge  from  his  provable 
debts ;  that  virtually  prays  for  a  discharge  from  his  partnership 
debts.*  The  petition  should  be  dated  and  signed  by  the  bank- 
rupt.     No  verification  is  required. 

As  soon  as  the  petition  is  properly  filed  the  court  passes  an 
order  of  notice.'^  This  order  should  fix  the  date  that  a  hear- 
ing may  be  had  upon  the  petition,  and  provide  that  notice  be 
published  in  a  certain  designated  newspaper"  to  all  known 
creditors  and  all  other  persons  in   interest  to  appear  at  the 

IB.   A.    1898,    Sec.    14.      Compare  *  In   re    Pierson,   No.    Iii53,   Fed. 

R.  S.  Sec.  5108  to  Sec.  5120.  Cas.,  s.  c.  10  N.  B.  R.  107. 

-Official  Form  No.  57;  see  Form  ''Official  Form  No.  57;  see  Form 

No.  153,  post.  No.  153,  past. 

3  Gen.  Orel.  31.  «  B.   A.    1898,   Sec.  28. 


DISCHARGE.  737 

said  time  and  place  to  show  cause,  if  any  they  have,  why  the 
prayer  of  the  petitioner  should  not  be  granted.  The  order 
should  also  provide  that  the  clerk  send  by  mail  to  all  known 
creditors  copies  of  the  petition  and  the  order.  All  creditors. 
whether  they  have  proved  their  claims  or  not,  are  entitled 
to  have  at  least  ten  days"  notice  by  mail  to  their  respective 
addresses  as  they  appear  in  the  list  of  the  creditors,  or  as 
afterwards  filed  w'ith  the  papers  in  the  case  by  the  creditors, 
unless  they  w^aive  notice  in  writing  of  the  hearing  upon  the 
application  for  discharge  of  the  bankrupt."  If  the  creditors 
were  not  notified  by  mail  it  must  appear  that  their  addresses 
could  not  be  obtained  after  due  search,  or  the  discharge  will 
not  be  granted.**  This  order  should  be  tested  by  the  clerk  and 
issued  by  him  under  the  seal  of  the  court.  The  clerk  there- 
upon mails  to  each  creditor  and  other  party  in  interest  a  copy 
of  the  petition  and  the  order  and  certifies  that  he  has  done  so. 
This  certificate  of  the  clerk  is  sufficient  evidence  that  the  notices 
were  duly  mailed." 

A  copy  of  the  petition  and  order  are  also  published  in  the 
newspaper,  as  directed  by  the  order,  and  an  affidavit  to  that 
efifect,  stating  the  days  upon  which  they  are  so  published,  must 
be  made  and  filed  in  the  court.  A  copy  of  the  printed  adver- 
tisement is  usually  attached  to  the  affidavit.  The  affidavit 
is  regularly  made  by  the  publisher  or  some  person  officially 
connected  with  the  new^spaper.  Any  person  cognizant  of  the 
fact  may  make  it. 

§  274.     When  and  where  the  petition  is  filed. 

Any  person  may,  after  the  expiration  of  one  month  and 
within  the  next  twelve  months  subsequent  to  being  adjudged 
a  bankrupt,  file  an  application  for  a  discliargc  in  the  court 
of  bankrujjtcy  in  which  the  proceedings  are  pending;  if  it 
shall  be  made  to  a|)pear  to  the  judge  that  the  bankrupt  was 
unavoidably  prevented  from  filing  it  within  such  time,  it  may 
be   filed    witliin   l)iit   not  after  the  ex])ir.-ition   of  the  next   six 

7  B.  A.  1898,  Sec.  58a.  "  hi  re  Townscnd.  No.  141 16.  Fed. 

*  In  re  Dvorak,  107  Fed.  Rep.  76,      Cas.,  s.  c.  2  Ben.  62. 
6  Am.  B.  R.  66. 


y^S>  LAW    AND    PROCEEDINGS   IN    BANKRUPTCY. 

months.'"  A  petition  filed  more  than  twelve  months  and  less 
than  eighteen  months  after  tlie  adjndication  will  not  be  heard 
nnless  leave  to  tile  it  has  been  granted  by  the  court  after  hear- 
ing the  reasons  for  delay,  and  this  leave  will  not  be  granted  by 
a  nioic  pro  tunc  entry  more  than  eighteen  months  after  the 
adjudication.'^  The  petition  should  be  filed  in  the  clerk's  of- 
tice  and  not  with  the  referee.'" 

ll  will  be  observed  that  the  time  within  which  an  applica- 
tion may  be  made  is  not  dependent  at  all  upon  the  progress 
made  in  the  administration  of  the  estate.  Assets  may  or  may 
not  have  come  into  the  hands  of  the  trustee.  The  estate  may 
have  been  fully  or  ])artly  distributed.  It  is  immaterial  whether 
any  dividend  has  been  declared  or  not. 

In  computing  the  time  within  which  a  petition  in  bank- 
ruptcy must  be  filed  the  number  of  days  are  computed  by 
excluding  the  first  and  including  the  last,  unless  the  last  fall 
on  a  Sunday  or  holiday,  in  which  event  the  day  last  included 
shall  be  the  next  day  thereafter  which  is  not  a  Sunday  or  a 
legal  holiday.'"  The  word  "  holiday  "  includes  Christmas,  the 
fourth  of  July,  the  twenty-second  of  February,  and  any  day 
appointed  by  the  president  of  the  United  States  or  the  con- 
gress of  the  United  States  as  a  holiday  or  as  a  day  of  public 
fasting  or  thanksgiving.'* 

A  bankrupt  is  not  entitled  to  file  a  second  application  for  a 
discharge  when  his  first  petition  is  denied  after  an  investiga- 
tion of  its  merits ;  '^  but  the  fact  that  a  bankrupt  has  been  re- 
fused a  discharge  does  not  prevent  his  obtaining  one  on  again 
going  through  bankruptcy.^*^ 

§   275.     Who  may  oppose  a  discharge. 

An  ap]:)lication  for  a  discharge  may  be  opposed  by  any  of 
the  "  parties  in  interest."  ''^     To  entitle  a  party  to  oppose  a 

^^  B.    A.    1898,    Sec.    14a;    In    re  ^^  In  re  Brockway,   23   Fe(^.   Rep. 

Fahy,  116  Fed.  Rep.  239,  8  Am.  B.  583,  reviewing  12  Fed.  Rep.  69;  In 

R.  354.  re  Feigenbaum    (C.  C.  A.  2d  Cir.), 

11 /m  re  Wolff,  100  Fed.  Rep.  430,  121  Fed.  Rep.  69,  9  Am.  B.  R.  595; 

4  Am.  B.  R.  74.  In  re  Royal,   113  Fed.  Rep.    140,  7 

12  Watson    V.    McDuff,    loi    Fed.  Am.  B.  R.  636. 

Rep.  241,  4  Am.  B.  R.  no.  i" /n  re  Claff,  iii  Fed.  Rep.  506, 

I'B.  A.   1898,  Sec.  31.  7  Am.  B.  R.  128. 

"B.  A.  1898,  Sec.  I,  clause  14.  ^^  B.  A.  1898,  Sec.  14&. 


DISCHARGE.  739 

discharge  he  must  have  a  pecuniary  interest  in  the  matter, 
and  that  interest  must  be  satisfactorily  shown. ^*  A  person 
has  been  held  to  have  an  interest  sufficient  to  entitle  him  to 
oppose  a  discharge,  where  his  claim  was  contingent  and  un- 
liquidated so  as  not  to  be  capable  of  being  proved  as  a  debt,^'"' 
or  where  he  held  an  equitable  claim  only  against  the  estate,"" 
or  where  his  claim  was  being  contested,"^  although  his  claim 
has  not  been  proved  "  or  is  no  longer  provable. '"^  But  where 
a  debt  is  barred  by  a  lapse  of  time  the  creditor  has  no  interest, 
and  therefore  can  not  oppose  the  discharge."* 

A  creditor  may  be  barred  from  objecting  to  a  discharge  by 
laches,"''  or  he  may  be  estopped  by  his  own  consent  to  an  act 
from  alleging  it  against  his  debtor  on  the  question  of  his  dis- 
charge. This  question  of  estoppel  arose  more  frequently  under 
the  act  of  1867.  where  fraudulent  preferences  barred  a  dis- 
charge, than  it  can  under  the  present  act.  The  question  was 
frequently  considered  by  the  court  under  the  former  act."*^ 

§  276.     How  to  oppose  a  discharge. 

Although  a  petition  for  a  discharge  is  filed  and  the  opposition 
to  it  is  made  in  the  l)ankruptcy  proceedings,  the  specification  of 
grounds  in  opposition  to  the  discharge  is  in  the  nature  of  a 
new  suit.  It  calls  for  pleas,  proofs  and  a  hearing  or  trial."' 
If,  however,  the  bankrupt  does  not  plead  to  the  specifications 

18 /«  re  Shepard,  No.  12753,  Fed.  23 /„   ^re   Bimberg,    121    Fed.   Rep. 

Cas.,  s.  c.    I    N.   B.   R.   439;   /"  »'^  942,  9  Am.  B.  R.  601. 

Smith,   No.    12977,   Fed.   Cas.,    s.   c.  24 /„  ,.^  Biirk,  No.  2156,  Fed.  Cas., 

8  Blatch.  461 ;  In  re  Boutelle,  No.  s.  c.  Deady.  425. 

1705,   Fed.    Cas.,   s.   c.    2   N.    B.   R.  ^r,  Kentucky     National     Bank     v. 

129;  In  re  Murdock,  No.  9939,  Fed.  Carley  (C.  C.  A.  3d  Cir.),  121  Fed. 

Cas.,  s.  c.  I  Low.  362;  Book's  Case,  Rep.  822. 

No.  1637,  Fed.  Cas.,  s.  c.  3  McLean,  26 /„  yc  Sawyer,  No.   12394.   l'<-'J- 

317.  Cas.,    s.    c.    2    Hask.    Z2,T,    In    re 

i»£.r  parte  Traphagen,  No.  14140,  Schuyler,  No.  12494,  Fed.  Cas.,  s.  c. 

Fed.  Cas.,  s.  c.   i    N.  Y.  Leg.  Obs.  3  Ben.  200 ;  In  re  Kraft,  3  Fed.  Rep. 

98.  892;   Johnson   v.   Rogers,   No.  74o8, 

20/h  re  Tebbetts,  No.  13817,  Fed.  Fed.  Cas.,  s.  c.  15  N.  B.  R.  i;  Jud- 

Cas.,  s.  c.  5  Law  Rep.  259.  son  v.  The  Courier  Co.,  8  Fed.  Rep. 

21  In    re    Belden,    No.    1238,    Fed.  422. 

Cas.,  s.  c.  4  Ben.  225.  -7  p,.  a.   180S,  Sec.  14. 

'--In  re  Fricc,  96  Fed.  Rep.  611, 
2  Am.  B.  R.  674. 


740  I'AW    AM)    l'KC)CEi:i)lNC.S    IN    BANKRUPTCY. 

the  l)anknipt  will  not  be  denied  :i  discharge  without  proof  by 
the  opposing  creiUtor."'* 

A  crechtor  or  other  party  in  interest,  who  desires  to  oppose 
a  (hscharge.  is  re([uire(l  to  enter  his  appearance  in  opposition 
thereto  on  the  day  when  the  crecUtors  are  recpiired  to  show 
cause,  and  to  tile  a  sijccitication  in  writing  of  the  grounds 
of  his  opposition  within  ten  days  thereafter,  unless  the  time 
shall  be  enlarged  by  special  order  of  the  judge.^" 

An  appearance  is  not  regularly  entered  until  after  a  peti- 
tion for  discharge  is  filed, ^"  but  it  has  been  held  that  an  ap- 
pearance may  be  entered  to  oppose  a  discharge  at  any  time 
before  the  expiration  of  the  time  limited  by  general  order  32.^^ 
The  former  is  the  better  practice.  Manifestly  a  person  should 
not  put  in  a  defense  until  it  is  called  for,  and  it  is  not  called 
for  until  a  ])etition  is  filed.  Before  that  time  it  is  not  known 
whether  the  bankrupt  will  apply  for  a  discharge  or  not. 

A  creditor  intending  to  oppose  an  application  for  discharge 
mav  enter  his  appearance  in  person  in  his  own  behalf  or  by 
attorney,  who  must  be  an  attorney  or  counselor  authorized 
to  practice  in  the  circuit  or  district  court. "'*"  The  name  of  the 
attorney  or  counselor,  with  his  place  of  business,  must  be 
entered  upon  the  docket,  with  the  date  of  the  entry.''-  An 
appearance  not  duly  authorized  will  be  disregarded.^^  Unless 
an  appearance  is  duly  entered,  the  creditor  has  no  standing 
in  court  as  to  the  petition  for  discharge,  and  therefore  can  not 
be  heard  in  opposition  to  it.''*  It  has  been  held  that  creditors 
may  enter  their  appearance  upon  an  adjourned  day  of  the 
hearing  on  the  order  to  show  cause ;  ^°  and  also  that  the  court 

'^^  In  re  Crist,  116  Fed.  Rep.  1007,         ^^  In   re    Eidom,    No.    4314,    Fed. 

9  Am.  B.   R.   i;  In  re  Logan,   102  Cas.,  s.  c.  3  N.  B.  R.  106;  Creditors 

Fed.  Rep.  876,  4  Am.  J?.  R.  525-  v.  Williams,  8379,  Fed.  Cas.,  s.  c.  4 

29  Gen.  Ord.  32.  N.  B.  R.  579.  v 

30 /n  re   McVey,    No.   8932,   Fed.  ^*  In   re   McVey,    No.   8932,    Fed. 

Cas.,  s.  c.  2   N.   B.   R.  257;   In  re  Cas.,  s.   c.   2   N.   B.    R.  257;   In  re 

Seabury,    No.    12573,    Fed.    Cas.,    s.  Sutherland,    No.    13640,    Fed.    Cas.,- 

c.    10  N.   B.   R.  90.  s.  c.  Deady,  573;  In  re  Smith,  No. 

"1 /m    re    Baum,    No.    11 16,    Fed.  12985,   Fed.  Cas.,  s.  c.  5   N.    B.   R. 

Cas.,  s.  c.  I  Ben.  274.  20;  Creditors  v.  Williams,  No.  3379, 

32  Gen.  Ord.  4;  Creditors  V.  Will-  Fed.    Cas.,    s.    c.   4    N.    B.    R.    579; 

iams.  No.  3379,  Fed.  Cas.,  s.  c.  4  N.  In  re  Biixbaum,  No.  2259,  Fed.  Cas., 

B.  R.  579;  In  re  McVey,  No.  8932,  s.  c.  2  Hughes,  339- 
Fed.  Cas.,  s.  c  2  N.  B.  R.  257.  ^s  /„  re  Seabury,  No.  12573,  Fed. 


DISCHARGE.  74 1 

may,  in  its  discretion,  enlarge  the  time  for  entering  appear- 
ance and  filing  specifications  in  opposition  to  a  discharge  as 
well  after  as  before  the  expiration  of  the  time  allowed  by  the 
rule.^°  Speaking  of  this  question.  Judge  Lowell  said :  "  I 
have  decided  in  one  case  that  the  discretion  of  the  court  to  en- 
large the  time  extends  to  the  time  for  appearance,  as  well  as  to 
that  for  filing  the  specification,  and  may  be  exercised  after  the 
time  has  expired,  as  well  as  before ;  but  I  do  not  think  it  can 
be  laid  down  as  a  matter  of  law  that  the  day  when  creditors 
are  required  to  show  cause  means  any  day  to  which  the  pro- 
ceedings may  have  been  adjourned  for  other  purposes.     But 

1  do  think  that  the  rule  intends  that  the  court  shall  have 
power  to  enlarge  the  time  whenever  there  is  good  cause  shown 
for  it.  The  distinction  is  between-  an  absolute  right  imposing 
a  corresponding  duty  upon  the  court,  and  a  discretionary 
power  to  be  exercised  only  upon  cause  shown." 

Upon  the  entry  of  appearance  of  a  creditor  or  a  party  in 
interest  to  oppose  a  discharge  all  proceedings  upon  the  peti- 
tion are  suspended  until  the  specification  of  grounds  in  oppo- 
sition to  the  discharge  is  filed. ^*  Where  no  entry  of  appear- 
ance is  made  within  the  time  specified,  or  where  it  is  not  duly 
authorized,  it  should  be  disregarded  and  the  cause  should  pro- 
ceed as  if  no  opposition  had  been  made. 

Where  there  is  no  entry  of  appearance  by  an  opposing  party 
the  petition  of  a  bankrupt  to  be  discharged  may  be  continued 
from  time  to  time  to  suit  the  convenience  of  the  bankrupt.""* 
When  an  appearance  has  been  entered  by  any  creditor  against 
the  discharge  the  proceedings  u])on  the  petition  are  no  longer 
under  the  exclusive  control  of  the  bankrupt  but  the  opp<^s- 
ing  creditor  can  not  move  to  dismiss  the  petition  or  that  its 

Cas.,   s.  c.    10  N.   B.   R.  go;    In  re  But    see    Creditors    v.    Williams, 

Tallmann,   No.   13740,   Fed.  Cas.,  s.  No.  3379,  Fed.  Cas.,  s.  c.  4  N.  B.  R. 

c.  2  Ben.  404.  579;  In  re  Houghton,  No.  6730,  Fed. 

But    see    in    re    Houghton,    No.  Cas.,  s.  c.  2  Low.  328. 

6730,  Fed.  Cas.,  s.  c.  2  Low.  328.  •"''  In  re  Houghton,  No.  6730,  Fed. 

'"  In    re    Levin,    No.    8291,    Fed.  Cas.,  s.  c.  2  Low.  328. 

Cas.,  s.  c.  7  Biss.  231;  In  re  Filley,  2" /m  re   Frizellc,   No.   5132,    Fed. 

2  Cent.  L.  J.  419.     In  this  last  case  Cas.,  s.  c.  5  N.  B.  R.  119. 

it  appeared  that  the  creditor  had  not  '"♦  In    re    Sutherland,    No.    13640, 

received    notice    of    the    application      Fed.  Cas.,  s.  c.  Deady,  573. 
for  discharge. 


74-  I'AW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

pravcr  l)o  denied  l)ee;uise  the  l);uikni])t  is,  or  sujiposed  to  be, 
dilatory  in  bringing-  the  matter  on  t\)r  hearing.  The  proper 
course  for  the  creditor  is  to  move  the  court  to  set  down  the 
matter  for  hearing  upon  the  petition  and  his  objections  there- 
to, if  anv  be  filed. ^'"^  A  hearing  on  a  i)etition  for  discharge  may 
be  continued  for  the  purpose  of  examining  the  bankrupt.**' 

§   277.     The  specification  of  grounds  in  opposition  to  a  dis- 
charge. 

Where  an  opposing  creditor  or  other  party  in  interest  has 
entered  his  appearance  in  opposition  to  a  discharge  upon  the 
day  when  creditors  are  required  to  show  cause,  he  must  file 
a  specification  in  writing  of  the  grounds  of  his  opposition 
within  ten  days  thereafter,  unless  the  time  shall  be  enlarged 
by  special  order  of  the  judge."  If  the  specification  is  not 
filed  within  the  prescribed  time  it  can  not  be  considered.''^ 
Where  a  creditor  has  duly  entered  his  appearance,  and 
through  inadvertence  fails  to  file  a  specification  within  the 
prescribed  time,  he  may,  on  showing  proper  cause,  be  allowed 
to  file  it  unite  pro  tiinc.*'^  Where  the  specification  is  not 
filed  within  the  time,  and  the  time  for  filing  it  is  not  extended, 
the  cause  progresses  as  though  there  were  no  opposition.** 

The  specification  must  be  in  writing.*^  It  must  state  the 
name  of  the  opposing  creditor.*®  The  specification  should 
then  state  the  grounds  of  his  opposition  specifically,  except 
those  which  appear  on  tlie  face  of  the  proceedings.  The 
object  of  the  specification  of  grounds  in  opposition  to  a  peti- 
tion for  discharge  is  to  give  the  bankrupt  reasonable  notice 
of  what  is  expected  to  be  proved  against  him.     The  allega- 

40  In    re    Seckendorf,    No.    12600,  4*./,j   ^^   McVey,   No.    8932,    Fed. 
Fed.   Cas.,  s.  c.  2  Ben.  462 ;   In   re  Cas.,  s.  c.  2  N.  B.  R.  257 ;  Credit- 
Thompson,    No.    1.3935,    Fed.    Cas.,  ors  v.  Williams,  No.  3379,  Fed.  Cas., 
s.  c.  2  Ben.   166;  In  re  Jacobs,  No.  s.  c.  4  N.  B.  R.  579. 
7160,  Fed.  Cas.,  s.  c.  S  Saw.  458.  ^^  Qgn.  Ord.  32. 

*i  Gen.  Ord.  32.  •*«  Official  Form  No.  58 ;  see  Form 

*~In   re   McVey,    No.   8932,    Fed.  No.    157,    post:    In    re    Shoemaker, 

Cas.,  s.   c.  2   N.   B.   R.  257;  In   re  No.   12799,  Fed.    Cas.,  s.   c.  4  Biss. 

Albrecht,  104  Fed.  Rep.  974,  5  Am.  245,   it   was   held   that   "A.   and   B., 

B.  R.  223 ;  In  re  Clothier,  108  Fed.  attorneys    for    opposing    creditors," 

Rep.  199,  6  Am.  B.  R.  203.  was  not  sufficient.     In  re  Glass,  119 

*^-  In  re  Grefe,  No.  5794,  Fed.  Cas.,  Fed.  Rep.  509,  9  Am.  B.  R.  391. 
s.  c.  2  N.  B.  R.  329. 


DISCHARGE. 


743 


tions  must  be  allegations  of  fact,  stated  distinctly,  precisely 
and  specifically  :*'  it  is  not  sufficient  to  simply  state  the  words 
of  the  statute  *^  and  when  nothing  further  was  stated  leave  to 
amend  has  been  refused.*''  Where  the  ground  of  objection 
was  the  concealment  of  realty  it  w^as  held  that  the  specifica- 
tion must  describe  the  realty,  name  the  persons  holding 'the 
title,  state  the  time  of  transfer  and  other  facts  necessary  to 
identify  the  transaction.^**  Where  the  allegations  are  so  gen- 
eral as  really  not  to  advise  the  bankrupt  what  facts  he  must  be 
prepared  to  meet  and  resist,  the  specification  is  bad,  and  may 
be  disregarded  ^^  or  stricken  out."  All  objections  to  specifi- 
cations for  formal  defects  must  be  raised  before  the  issue  is 
tried  or  the  defect  is  waived.""^  If  the  specifications  are  de- 
fective either  in  form  or  in  substance  they  may  be  amended 
by  leave  of  the  court. '^  Whether  or  not  this  leave  shall  be 
granted  is  within  the  discretion  of  the  court  and  the  question 
of  whether  or  not  this  discretion  was  abused  is  one  on  which 
the  circuit  court  of  appeals  can  exercise  its  power  of  revision 
under   section  24^.^^      Before   the   hearing  the  court   should 


*''  In  re  Steed,  107  Fed.  Rep.  682, 
6  Am.  B.  R.  73 ;  In  re  Goodale,  log 
Fed.  Rep.  783;  In  re  Peck,  120  Fed. 
Rep.  972,  9  Am.  B.  R.  747 ;  In  re 
Parish,  122  Fed.  Rep.  553 ;  In  re 
Rathbone,  No.  11580,  Fed.  Cas.,  s.  c. 
2  Ben.  138;  In  re  Hill,  No.  6482, 
Fed.  Cas.,  s.  c.  2  Ben.  136;  In  re 
Mawson,  No.  9318,  Fed.  Cos.,  s.  c. 
2  Ben.  332 ;  In  re  Beardsley,  No. 
1 183,  Fed.  Cas.,  s.  c.  i  N.  B.  R.  304; 
In  re  Butterfield,  No.  2247,  Fed. 
Cas.,  s.  c.  5  Biss.  120;  In  re  Burk, 
No.  2156,  Fed.  Cas.,  s.  c.  Dcady, 
425;  In  re  Graves,  24  Fed.  Rep.  550; 
In  re  Eidom,  No.  4314;  Fed.  Cas., 
s.  c.  3  N.  B.  R.  106. 

<8  In  re  Goodale,  109  Fed.  Rep. 
783;  In  re  Peck,  120  Fed.  Rep.  972, 
9  Am.  B.  R.  747. 

*^  In  re  Peck,  120  Fed.  Rep.  972, 
9  Am.  B.  R.  747;  but  see  In  re 
Glass,  119  Fed.  Pep.  509,  9  Am. 
B.  R.  391. 


^0  In  re  Parish,  122  Fed.  Rep. 
553- 

^^  In  re  Rathbone,  No.  1 1580, 
Fed.  Cas.,  s.  c.  2  Ben.  138;  In  re 
Hansen,  No.  6039,  Fed.  Cas.,  s.  c. 
2  N.  B.  R.  211;  In  re  Dreyer,  No. 
4082,  Fed.  Cas.,  s.  c.  2  N.  R.  R.  212; 
In  re  Son,  No.  13174,  Fed.  Cas.,  s. 
c.  2  Ben.  153;  In  re  Tyrrel,  No. 
143 14,  Fed.  Cas.,  s.  c.  2  N.  B.  R. 
200. 

^'- In  re  Waggoner,  No.  17037, 
Fed.  Cas.,  s.  c.  i  Ben.  532. 

'^^  In  re  Baldwin,  119  Fed.  Rep. 
796,  9  Am.  B.  R.  591  ;  hi  re  Baern- 
copf,  117  Fed.  Rep.  975,  9  Am.  B.  R. 
133 ;  lit  re  Robinson,  123  Fed.  Rep, 
844.  Tn  the  northern  district  of 
New  York  this  should  be  done  by 
motion.     /;/   ;■(■   Baldwin. 

^*  In  re  Pock,  120  Fed.  Rep.  972, 
9  Am.  ]'..  R.  747;  In  re  Parish,  122 
Fed.  Rep.  553. 

^'^In  re  Carley  (C.  C.  A.  3d  Cir.), 


744 


LAW    AND    VROCKKniNGS    IN    RANKRl'PTCY, 


1)0  vciv  lilicral  in  s^ranting  leave  to  amoiul  specifications/'"  but 
after  issue  joined  and  the  case  is  argued  amendment  will  not 
he  allowed  f  in  one  case  amendment  was  allowed  after  the 
evidence  was  in  where  it  would  not  present  any  new  issue.^* 

As  the  proceedings  in  bankruptcy  are  strictly  statutory,  a 
disciiarge  can  be  refused  only  upon  a  ground  specifically  set 
forth  in  the  statute,  except  the  want  of  jurisdiction  of  the 
court  to  entertain  the  proceedings.  The  statutory  grounds 
which  may  be  set  up  in  the  specification  m  opposition  to  a 
petition  for  discharge  are  considered  in  the  next  few  sections. 

The  specification  must  be  signed  by  the  parties  in  interest 
who  are  opposing  the  discharge.""  As  to  whether  or  not  a 
specification  must  be  verified  has  been  a  matter  of  much  dis- 
cussion, but  it  now  seems  to  be  pretty  well  settled  in  the 
affirmative,"^  though  the  last  decision  was  that  it  need  not 
be."^  There  is  also  a  conflict  as  to  what  verification  is  suffi- 
cient."' 

§  278.     Grounds  for  opposing  a  bankrupt's  discharge. 

Tn  order  to  prevent  a  bankrupt's  discharge  his  case  must 
fall  within  one  of  the  exceptions  named  in  the  statute."*  Un- 
der the  act  of  1867  the  cases  in  which  no  discharge  could 

117  Fed.  Rep.  130,  8  Am.  B.  R.  720.  go  Official  Form  No.  58;  see  Form 

B«/n  re  Glass,  119  Fed.  Rep.  509,  No.     157    post;    In    re    Glass     iig 

9  Am.  B.  R.  391;  In  re  Carley  (C.  Fed.   Rep.    509,   520,   9    Am.    B.    R. 

C.   A.  3d  Cir.),  117  Fed.  Rep.  130,  39i,  405- 

8  Am.    B.   R.   720;   In   re    Morgan,  «i /m  re  Glass,  119  Fed.  Rep.  509, 

loi  Fed.  Rep.  982,  4  Am.  B.  R.  402;  9  Am.  B.  R.  391    (treating  the  sub- 

In   re  Kaiser,   99   Fed.   Rep.   689,   3  ject  exhaustively)  ;  In  re  Baerncopf, 

Am.  B.  R.  767;  In  re  Frice,  96  Fed.  117  Fed.  Rep.  975,  9  Am.  B.  R.  133; 

Rep.  6ri,  2  Am.   B.  R.  674;  In  re  In  re  Brown    (C.   C.  A.  5th  Cir.), 

Hirsch,   96    Fed.    Rep.    468,    47i»    2  112  Fed.  Rep.  49,  7  Am.  B.  R.  252. 

Am.  B.   R.   715,   718;   In   re  Hixoti,  ^-In  re  Jamieson,   120  Fed.   Rep. 

93  Fed.  Rep.  440,  i  Am.  B.  R.  610;  697,  9  Am.  B.  R.  681. 

In  re  Holman,  92  Fed.  Rep.  512,  I  63/„  yg  Glass,  119  Fed.  Rep.  509, 

Am.    B.    R.   600.     Amendment   was  9  Am.  B.  R.  391 ;  In  re  Peck,  120 

not    allowed    in    In    re    Mndd,    105  Fed.  Rep.  972,  9  Am.  B.  R.  747. 

Fed.   Rep.   348,   5    Am.    B.   R.   242;  «*  B.    A.    1898,    Sec.    \\h;    In    re 

In   re   Peck,    120   Fed.   Rep.   972,   9  I'.lalock,   118  Fed.   Rep.  679,  9  Am. 

Am.  B.  R.  747.  B.  R.  266;  In  re  McCarty,  in  Fed. 

^^/n  re  Smith,  16  Fed.  Rep.  465,  Rep.    151,   7  Am.    B.   R.  40;    In   re 

467;  In  re  Graves,  24  Fed.  Rep.  550.  Howden,  in  Fed.  Rep.  723,  7  Am. 

^^  In  re  Pierce,   103  Fed.  Rep.  64,  B.    R!    191 ;    In    re    ATarshall    Paper 

4  Am.  B.  R.  554.  Co.    (C.   C.   A.    ist    Cir.),    102   Fed. 


DISCHARGE. 


745 


be  granted  were  collated  in  ten  separate  paragraphs.''^  The 
bill,  which  afterwards  became  the  present  bankrupt  act,  con- 
tained nine  distinct  classes  of  cases  in  which  no  discharge 
could  be  granted.'""  These  grounds  remained  in  the  bill  until 
its  final  revision  by  the  conference  committee.  The  bill  was 
materially  changed  by  the  conference  committee  in  this  re- 
spect."^    Many  of  the  grounds  were  stricken  out. 

Before  the  anrendment  of  February  5,  1903,  there  were 
two  general  grotands  only  for  contesting  the  discharge  of  a 
bankrupt  in  the  present  statute.     They  were  that  the  bank- 


Rep.  872,  4  Am.  B.  R.  468;  In  re 
Peacock,  loi  Fed.  Rep.  560,  4  Am. 
B.  R.  136. 

In  re  Schenck,  116  Fed.  Rep.  554, 
8  Am.  B.  R.  727;  In  re  Walther,  95 
Fed.  Rep.  941,  2  Am.  B.  R.  702; 
and  In  re  Fleishman,  120  Fed.  Rep. 
960,  9  Am.  B.  R.  557.  seem  to  deny 
a  discharge  where  the  statute  does 
not   authorize    it. 

®^  R.  S.   Sec.  51 10. 

^*  The  bill  provided  that  the  bank- 
rupt should  be  discharged  "  unless 
he  has  (i)  been  convicted  of  having 
committed  an  offense  punishable  by 
imprisonment  as  herein  provided ; 
(2)  given  a  preference  as  herein  de- 
fined, and  within  six  months  prior 
to  the  filing  of  the  petition  against 
him,  which  has  not  been  surren- 
dered to  the  trustee;  (3)  obtained 
property  upon  credit  which  has  not 
been  paid  for  or  stored  at  the  time 
the  petition  is  filed  against  him  up- 
on a  materially  false  statement  in 
writing  made  by  him  to  any  person 
for  the  purpose  of  obtaining  credit 
or  of  being  communicated  to  the 
trade  or  to  the  person  from  wlmm 
he  obtained  such  property  on  cred- 
it ;  (4)  made  a  transfer  of  any  of 
his  property  which  any  crcditDr 
who  has  proved  his  claim  in  tiic 
proceedings  might,  at  the  time  of 
the  filing  of  the  petition,  have  im- 
peached as  fraudulent  if  he  had  then 
been    a    judgment    creditor,    unless 


such  property  shall  have  been  sur- 
rendered to  the  trustee;  or  (5)  with 
fraudulent  intent  and  in  contempla- 
tion of  bankruptcy,  destroyed  or 
neglected  to  keep  books  of  account 
or  records  from  which  his  true 
condition  might  be  ascertained ;  or 
(6)  made  a  substantially  false  valu- 
ation, as  a  bankrupt,  of  any  of  the 
property  of  his  estate  in  his  sched- 
ule of  property,  or  intentionally 
omitted  therefrom  any  of  the  prop- 
erty of  his  estate,  or  from  the  list 
of  his  creditors  any  person  to  whom 
he  is  indebted  in  a  substantial 
amount,  or  included  therein  any 
person  to  whom  he  is  not  indebted, 
or  included  therein  a  creditor  for 
an  amount  substantially  more  than 
the  true  indebtedness,  or  (7)  se- 
creted or  conveyed  any  of  his  prop- 
erty to  avoid  its  being  administered 
in  bankruptcy,  or  any  document  re- 
lating to  his  property  in  contempla- 
tion of  bankruptcy;  or  (8)  trans- 
ferred any  property  otherwise  than 
in  the  ordinary  course  of  his  busi- 
ness, in  contemplation  of  bankrupt- 
cy :  or  (9)  in  case  of  any  person 
having,  to  his  knowledge,  after  he 
has  become  a  bankrupt,  proved  a 
false  claim  against  his  estate,  failed 
to  disclose  that  fact,  within  one 
month  after  coming  to  a  knowledge 
thereof,  to  his  trustee." 
""31   Cong.  Rcc.  7205. 


^•46  I  AW    AND    PRCICEKDINGS    IN    BANKRUPTCY. 

niiU  lias  ( 1 )  conunillcd  an  offense  pnnishable  by  imprison- 
ment as  herein  i)rovided ;  or  (2)  with  frandnlent  intent  to 
coneeal  his  trne  financial  condition,  and  in  contemplation  of 
bankruptcy,  destroyed,  concealed  or  failed  to  keep  books  of 
account  or  records  from  which  his  true  condition  might  be 
ascertained/'^ 

The  statute  as  it  existed  i)rior  to  Feb.  5,  1903,  applies  to 
all  cases  in  which  the  proceedings  were  begun  before  that 
time.  By  that  amendment  the  second  ground  was  changed  to 
read  "  with  intent  to  cenceal  his  financial  condition,  destroyed, 
concealed,  or  failed  to  keep  books  of  account  or  records 
from  which  such  condition  might  be  ascertained."  and  the 
following  grounds  were  added ; — ^"  obtained  property  on  credit 
from  any  person  upon  a  materially  false  statement  in  writing 
made  to  such  person  for  the  purpose  of  obtaining  such  prop- 
erty on  credit ;  or.'^^  at  any  time  subsequent  to  the  first  day  of 
the  four  months  immediately  preceding  the  filing  of  the 
petition  transferred,  removed,  destroyed,  or  concealed,  or  per- 
mitted to  be  removed,  destroyed,  or  concealed  any  of  his  prop- 
erty with  intent  to  hinder,  delay,  or  defraud  his  creditors ; 
or,^^  in  voluntary  proceedings  been  granted  a  discharge  in 
bankruptcy  w- ithin  six  years ;  or  "''  in  the  course  of  the  proceed- 
ings in  bankruptcy  refused  to  obey  any  lawful  order  of  or 
to  answ^er  any  material  question  approved  by  the  court.®" 

Another  ground  for  contesting  a  discharge,  recognized  by 
the  courts,  is  that  the  court  has  never  acquired  jurisdiction 
of  the  proceedings,  although  it  may  have  made  many  orders 
therein.  Thus  a  court  will  not  acquire  jurisdiction  where 
at  the  time  of  filing  the  petition  the  bankrupt  had  not  resided 
or  had  a  domicile  or  a  place  of  business  within  the  district 
for  the  length  of  time  prescribed  by  the  statute,  or  where 

68  B.  A,  1898,  Sec.  14b.    See  Sees.  ^2  b.  A.   1898,  Sec.  14&. 

27g  and  2£o,  post.  ''^  In   re   Gaylord    (C.   C.    A.    2d 

60  32  Stat,  at  L.  797.  Cir.),  112  Fed.  Rep.  668,  7  Am.  B. 

''^  In  re  Ives,  No.  71 15,  Fed.  Cas.,  R.  i;  In  re  Dow's  Estate,  105  Fed. 

s.  c.  5  Dill.  146;  In  re  Goodale,  109  Rep.  889,  5  Am.   B.   R.  400;  In  re 

Fed.   Rep.   783,  6   Am.   B.   R.   493;  Goodale,  109  Fed.  Rep.  783,  6  Am. 

In  re  Clisdell,  loi  Fed.  Rep.  246,  4  B.   R.   493;   In   re  Leslie,    119  Fed. 

Am.  B.  R.  95 ;  In  re  Mason,  99  Fed.  Rep.  406,  9  Am.  B.  R.  561 ;  contra, 

Rep.  256,  3  Am.  B.  R.  599.  In  re   Marx,    102  Fed.   Rep.  676,  4 

n  See  Chap.  XXI.  Am.  B.  R.  521. 


DISCHARGE.  747 

any  jurisdictional  requirement  is  wanting.  This  objection 
cannot  be  raised  upon  an  application  for  a  discharge  when 
the  record  on  its  face  shows  jurisdiction.'"  The  truth  of  juris- 
dictional averments  in  the  petition  must  be  contested  at  the 
time  of  the  adjudication  or  jurisdiction  will  be  conclusively 
presumed  and  a  discharge  granted.^" 

§  279.     First  ground  for  opposing  a  discharge,  that  the  bank- 
rupt is  guilty  of  an  offense.'^ 

The  court  will  refuse  the  application  for  a  discharge  when 
the  bankrupt  has  committed  an  offense  under  the  statute 
punishable  by  imprisonment.'^  It  is  not  necessary  that  he 
shall  have  been  convicted  of  the  offense  as  a  foundation  for 
refusing  the  discharge.  If  he  has  been  guilty  of  an  offense 
he  can  not  be  discharged,  although  from  difficulties  in  proof. 
placed  in  the  way  by  statute,  he  can  not  be  convicted  of  the 
offense  in  a  criminal  prosecution."' 

Offenses  under  the  act  are:  When  a  person  has  know- 
ingly and  fraudulently,  first,  concealed,  while  a  bankrupt, 
from  his  trustee  any  of  the  property  belonging  to  his  estate 
in  bankruptcy;  or.  second,  made  a  false  oath  or  account  in. 
or  in  relation  to,  any  proceeding  in  bankruptcy;  or,  third, 
presented  under  oath  any  false  claim  for  proof  against  the 
estate  of  a  bankrupt,  or  used  any  such  claim  in  composition, 
personally  or  by  agent,  proxy,  or  attorney,  or  as  agent,  proxy, 
or  attorney;  or,  fourth,  received  any  material  amount  of  prop- 
erty from  a  bankrupt  after  the  filing  of  the  petition,  with 
intent  to  defeat  the  act;  or,  fifth,  extorted  or  attempted  to 
extort  any  money  or  property  from  any  person  as  a  consid- 
eration for  acting  or  forbearing  to  act  in  bankruptcy  proceed- 
ings.'^* Another  offense  punishable  by  imprisonment  is  a 
contem])t  committed  before  a  referee  ''  or  a  court  of  bank- 
ruptcy.'" It  would  ihcrcfore  seem  tliat  the  person  who  has 
been  guilty  of  a  contempt  is  not  entitled  to  a  discharge, 

^*B.  A.  t8o8.  Sec.  20b.     See  also  t'' B.  A.  1S08.  Sec.  41.  and  Sec.  2, 

Offenses,   Chap.   XXI,   ante.  clauses   1.3  and   16. 

^oB.  A.  1898,  Sec.  2,  clause  13. 


74^  1  AW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

^   280.     Second  ground  of  opposing  discharge,  that  books  of 
account  are  fraudulently  withheld  or  are  not  kept. 

The  bankrupt  can  not  be  discharged  wlien  he  has,  with 
frauchilent  intent  to  conceal  his  true  financial  condition,  and 
in  contemplation  of  bankruptcy,  destroyed,  concealed,  or 
failed  to  keep  books  of  account  or  records  from  which  his 
true  condition  might  be  ascertained."  In  order  to  prevent  a 
discharge  under  this  provision,  three  things  must  concur. 
J'irst.  the  bankrupt  must  have  destroyed,  concealed,  or  failed 
to  have  kept  books  of  account  or  records  from  which  his  true 
condition  might  be  ascertained.  Second,  he  must  have  done 
this  with  fraudulent  intent  to  conceal  his  true  financial  con- 
dition. Third,  he  must  have  done  this  in  contemplation  of 
bankruptcy. 

First,  w^iat  constitutes  destroying,'*  concealing,^"  or  fail- 
ing *"  to  have  kept  books  of  account  or  records  is  a  question  of 
fact  to  be  determined  from  the  circumstances  of  each  par- 
ticular case. 

The  object  of  this  provision  is  to  furnish  and  preserve 
evidence  of  the  real  condition  of  the  bankrupt's  affairs,  so 
that  all  of  the  bankrupt's  proper  assets  and  liabilities  may  be 
ascertained  and  his  property  distributed  among  his  bona  fide 
creditors.  If  a  competent  person,  upon  an  examination  of 
the  books  and  records  kept  by  the  bankrupt,  is  able  to  reacll 
a  substantially  correct  conclusion  as  to  the  state  of  his  affairs, 
it  is  enough,  or  if  the  business  of  the  bankrupt  was  such  that 

"B.     A.     1898,     Sec.     14b.     See  «» Consult  In  re  Feldstein   (C.  C. 

amendment  of  Feb.  5,  1903,  32  Stat.  A.  2d   Cir.),    115   Fed.   Rep.  259,  8 

at  L.  797.  Am.  B.  R.  160;  In  re  Brockway,  12 

^* /«  re  McBachron,  116  Fed.  Rep.  Fed.  Rep.  69;  In  re  Vernia,  5  Fed. 

783,  8  Am.   B.   R.  732.     See  In  re  Rep.  723 ;  In  re  Williams  &  Leidig, 

Pierson,  No.  11153,  Fed.  Cas.,  s.  c.  13  Fed.  Rep.  30;  In  re  Hammond, 

10  N.   B.    R.    107.  No.   5999,    Fed.    Cas.,   s.   c.    i    Low. 

'9  Consult    In    re   Jewett,   3    Fed.  381 ;  In  re  White,  No.    17532,  Fed. 

Rep.    503;    In   re   Carrier,   47    Fed.  Cas.,   s.   c.  2   N.   B.   R.   590;    In  re 

Rep.   438.  Bellis,   No.   1275,  Fed.  Cas.,  s.  c.  4 

To    conceal    includes    to    secrete,  Ben.  53 ;  In  re  Gay.  No.  5279,  Fed. 

falsify    and    mutilate.      B.    A.    1898,  Cas.,  s.   c.   2  N.   B.   R.   358;   In   re 

Sec.    I,    clause   22.     See  also  in  re  Frey,  9  Fed.  Rep.  376:  In  re  Cham- 

Pierson,  No.   11 153,  Fed.  Cas.,  s.  c.  berlain,  125  Fed.  Rep.  629,  11   Am. 

10  N.  B.  R.  107.  B.  R.  95- 


DISCHARGE.  749 

ordinarily  bcx)ks  would  not  be  kept,  he  need  not  have  kept 
them." 

The  destruction  of  partnership  books  is  ground  for  the 
refusal  of  a  discharge  to  a  bankrupt  individually.*'-  The  of- 
fense can  not  be  imputed,  so  a  failure  to  keep  books  by  a 
husband  who  manages  the  business  for  his  wife  will  not  pre- 
vent a  discharge  being  granted  the  wife  if  she  is  innocent,®^ 
and  a  failure  to  keep  books  by  a  partner,  if  it  prevents  the 
discharge  of  an  innocent  partner  at  all,  does  so  only  when 
the  transactions  not  recorded  had  reference  to  partnership 
transactions  so  as  to  fall  within  the  scope  of  the  partner's 
authority.®* 

Two  principal  objections  are  liable  to  be  raised  in  respect 
to  books  of  account  and  records. 

First,  that  proper  books  were  not  kept  by  the  bankrupt, 
or.  if  kept,  have  been  destroyed  or  concealed  so  that  it  is  im- 
possible to  determine  his  financial  condition.  Thus  it  was 
held  under  the  former  statute  in  some  cases  that  it  was  nec- 
essary to  keep  a  cash  book,®^  and  a  stock  or  invoice  book,®*' 
and  a  shipping  book,®^  and  other  accounts  than  mere  sales 
made  on  credit.®® 

Second,  that  the  books  have  been  so  negligently  kept  that 
it  is  impossible  to  determine  the  bankrupt's  true  financial 
condition  from  them.  Congress  has  not  attempted  to  pre- 
scribe any  particular  system  or  principle  of  bookkeeping.  The 
system  may  be  dcjuble  entry  or  single  entry.  I^he  form  and 
manner  in  which  the  books  are  kept  is  unimportant  so  long 
as  the  financial  condition  of  the  bankrupt  may  be  ascertained 
from   them.      The  degree  of  accuracy   and   particularity   re- 

81  In  re  Com,  106  Fed.  Rep.  143,  s.  c.  4  Ben.  53 ;  In  re  Gay,  No.  5279 

5  Am.   P>.  R.  478.  Fed.  Cas.,  s.  c.  2  N.  R.  R.  358. 

*2  Itt  re  Conley,  120  Fed.  Rep.  42,  See    also    in    re    Smith,    16    Fed. 

9  Am.   W.   R.  496.  Rep.  468. 

'■■■'  In    re    Meyers,    105    Fed.    Rep.  ^^  In   re  White,    No.    17532,   Fed- 

353.    5    Am.    B.    R.   4;    In   re    Hy-  Cas.,   s.   c.  2   N.   R.   R.  590;   In  re 

man,  97  Fed.  Rep.  195,  3  Am.  B.  R.  Brockway,  12  Fed.  Rep.  69. 

169.  "'^ /«  ;■('  Tlammnnd,  No.  5999,  Fed. 

"* /»    re    Schiiltz,    109    Fid.    Rep.  Cas.,   s.    c.    i    T,(>w.   381. 

264.  (\  km.   P..   R.  91.  "" /»   re  Wniia,  5   I-'ed.   Rep.  723. 

"^ /n  re  Bellis,  No.  1275,  Fed.  Cas., 


^:;0  1  AW    AM)    I'ROCKKDIXr.S    IN    BANKRUPTCY. 

i[uireil  depeiuls  in  a  i^roat  (lci;roc  111)011  the  circumstances  of 
eacli  case. 

Second.  In  order  to  defeat  a  discharge,  in  proceedings  be- 
g-iin  before  Feb.  3.  1903.  the  destroying,  concealing,  or  failing 
to  keep  books  of  account  or  records  must  be  with  fraudulent 
intent  to  conceal  his  true  linancial  condition."**  Where  the 
bankrupt  acts  honestly,  without  intent  to  deceive  or  defraud, 
he  is  entitled  to  a  discharge,  although  he  may  have  destroyed 
or  neglected  to  keep  books  through  inadvertence,  ignorance 
or  mistake.  In  this  respect  the  present  statute  differs  from 
the  law  of  1867.  Under  the  provision  of  that  statute  no  in- 
tent to  deceive  or  defraud  was  essential  to  bar  a  discharge.  A 
simple  failure  to  keep  books  of  account  was  all  that  w^as 
necessary  to  defeat  a  discharge  under  the  act  of  1867.°^  Since 
the  amendment  of  the  present  act,""  the  intent  need  no  longer 
lie  fraudulent,  there  must  merely  be  an  intent  to  conceal  his 
financial  condition.  The  amendment  also  leaves  out  the 
word  "  true  "  as  qualifying  the  bankrupt's  financial  condition. 

A  fraudulent  intent  on  the  part  of  the  bankrupt  is  not 
ordinarily  capable  of  direct  proof.  It  must  usually  be  de- 
termined from  the  acts  of  the  bankrupt  and  the  circum- 
stances on  each  particular  case. 

Third.  In  order  to  defeat  a  discharge,  in  proceedings  be- 
gun before  Feb.  5,  1903,  the  destroying,  concealing,  or  fail- 
ing to  keep  books  of  account  or  records  must  be  in  contempla- 
tion of  bankruptcy."^  What  is  meant  by  the  words  "  in  con- 
templation of  bankruptcy  "  has  been  the  subject  of  a  good  deal 

89 /m  re  Feldstein,   115  Fed.  Rep.  00  B.    A.    1898,    Sec.    14b;    In    re 

259,  8  Am.  B.  R.  160;  In  re  Green-  Idzall,  96  Fed.  Rep.  314,  2  Am.  B. 

burg,  114  Fed.  Rep.  773,  8  Am.  B.  R.   741;  In  re  Carmichael,  96  Fed. 

R.  94;  In  re  Kenyon,  112  Fed.  Rep.  Rep.  594,  2  Am.  B.   R.  815;   In  re 

658,  7  Am.  B.  R.  527;  In  re  Bemis,  Blalock,  118  Fed.  Rep.  679,  9  Am.  B. 

104  Fed.  Rep.  672,  5  Am.  B.  R.  36;  R.  266;  In  re  Spear,  103  Fed.  Rep. 

In  re  Cashman,  103  Fed.  Rep.  67,  4  779,  4  Am.  B.  R.  617;  In  re  Brice, 

Am.  B.  R.  326;  In  re  ^Mendelsohn,  102  Fed.  Rep.  114,  4  Am.  B.  R.  355. 

102  Fed.  Rep.  119,  4  .A.m.  B.  R.  103;  "i /)i  re  Hiiut,  26  Fed.  Rep.  739; 

In  re  Morgan,  loi  Fed.  Rep.  982,  4  In  re  Jorcy,  No.  7530,  Fed.  Cas.,  s. 

Am.  B.  R.  402;  In  re  Ablowich,  99  c.  2   Bond,  336;   In  re  White,   No. 

Fed.  Rep.  81,  3  Am.  B.  R.  586;  In  17532,  Fed.  Cas.,  s.  c.  2  N.  B.  R.  590. 

re  Grossman,   1 1 1  Fed.  Rep.  507,  6  ^-  32  Stat,  at  L.  797. 

Am.  B.  R.  510;  In  re  Studebaker,  »"  B.  A.  1898,  Sec.  14b. 
124  Fed.  Rep.  945. 


DISCHARGE. 


751 


of  discussion  and  difference  of  judicial  opinion  in  this  coun- 
try and  in  England."*  In  some  cases  it  has  been  held  to  mean 
in  contemplation  of  insolvency,  or  a  simple  inability  to  pay  as 
debts  should  become  payable.  In  other  cases  it  has  been  held 
that  the  debtor  must  contemplate  an  act  of  bankruptcy  or  a 
voluntary  application  for  the  benefit  of  the  bankrupt  law.  The 
most  authoritative  definition  of  these  words  in  this  country  is 
contained  in  the  opinion  in  Buckingham  v.  McLean. ''^  In  that 
case  the  supreme  court  decided  that  the  words  "  in  contem- 
plation of  bankruptcy."  did  not  mean  "  in  contemplation  of 
insolvency  " — ■  or  a  simple  inability  to  pay  as  debts  should 
become  due  and  payable  —  but  meant  that  the  debtor  must 
contemplate  the  commission  of  what  was  declared  by  the 
act  to  be  an  act  of  bankruptcy,  or  must  have  contemplated 
an  application  by  himself  to  be  declared  a  bankrupt.  This 
has  been  followed  under  the  present  act.''® 

It  may  be  conceived  that  if  any  of  the  acts  mentioned 
above  were  done  or  omitted  to  be  done  after  an  act  of  bank- 
ruptcy had  been  committed,  or  after  a  petition  in  bankruptcy 


"*  As  used  in  the  act  of  1841,  see 
Buckingham  v.  McLean,  13  How. 
151 ;  Arnold  v.  Maynard,  No.  561, 
Fed.  Cas.,  s.  c.  2  Story,  349;  Hutch- 
ins  V.  Taylor,  No.  6953,  Fed.  Cas., 
s.  c.  5  Law  Rep.  289;  Wakeman  v. 
Hoyt,  No.  17051,  Fed.  Cas.,  s.  c.  5 
Law  Rep.  309;  Ashby  v.  Steere,  No. 
576,  Fed.  Cas.,  s.  c.  2  W.  &  M.  347; 
Everett  v.  Stone,  No.  4577,  Fed. 
Cas.,  s.  c.  3  Story,  446;  Collins  v. 
Hood,  No.  3015,  Fed.  Cas.,  s.  c.  4 
McLean,  186;  Atkinson  v.  Farmers' 
Rank,  No.  609,  Fed.  Cas.,  s.  c. 
Crabbe,  529;  Jones  v.  Sleeper,  No. 
7496,  Fed.  Cas.,  s.  c.  2  N.  Y.  Leg. 
Obs.  131  ;  Dennett  v.  Mitchell,  No. 
3789,  Fed.  Cas.,  s.  c.  6  Law.  Rep. 
16;  Morse  v.  Godfrey,  No.  9856, 
Fed.  Cas.,  s.  c.  3  Slory,  346;  Carr 
V.  Hilton,  No.  2436,  Fed.  Cas.,  s.  c. 
1  Curtis,  230. 

Under  the  act  of  1867,  see  fn  re 
Goldschmidt.  No.  5520,  Fed.  Cas.,  s. 
c.  3  Ben.  379;  In  re  Freeman,  No. 


5082,  Fed.  Cas.,  s.  c.  4  Ben.  245 ; 
In  re  Black,  No.  1457,  Fed.  Cas.,  s. 
c.  2  Ben.  196;  In  re  Craft,  No.  3316, 
Fed.  Cas.,  s.  c.  2  Ben.  214,  affirmed. 
No.  3317,  Fed.  Cas.,  s.  c.  6  Blatch. 
177;  Rison  V.  Knapp,  No.  11861, 
Fed.  Cas.,  s.  c.  i  Dill.  186;  In  re 
Wolfskin,  No.  17930,  Fed.  Cas.,  s.  c. 
S  Saw.  38s;  In  re  Wright,  No. 
18071,  Fed.  Cas.,  s.  c.  2  N.  B.  R. 
490. 

Under  the  English  acts,  see  Mor- 
gan V.  Brundrett,  5  B.  &  Ad.  296; 
Atkinson  v.  Brindall,  2  Bing.  N.  C. 
225 ;  Abbott  V.  Burbage,  2  Scott, 
656;  Strachan  v.  Barton,  11  Exch. 
647;  Gibson  v.  Boutts,  3  Scott,  229, 
cited  at  4  M.  &  G.  169;  Poland  v. 
Glyn,  4  Bing.  22,  n.,  s.  c.  12  J.  B. 
Monre,  109,  n. ;  Ex  parte  Simpson, 
De  Gcx,  9. 

"•'•  13  How.   168. 

""  In  re  Marx,  102  Fed.  Rep.  676 ; 
In  re  Kenyon,  112  Fed.  Rep.  658,  7 
Am.  B.  R.  527. 


752  LAW    AND    I'KOCKliDlNt'.S    IN    BANKRUPTCY. 

had  been-  filed,  the  bankrupt  wnnild  come  within  the  meaning 
of  the  wortls  "  in  conteniplation  of  bankruptcy."  This  ques- 
tion has  never  been  directly  presented  for  decision  under  the 
former  bankrupt  acts. 

This  third  requirement  is  done  away  with  by  the  amend- 
ment." 

§  281.     Pleading  to  a  specification. 

As  has  been  stated,  the  tiling  of  a  specification  of  grounds 
of  opposition  to  a  bankrupt's  discharge  in  the  bankruptcy 
proceedings  is  in  the  nature  of  a  new  suit.  It  calls  for  plead- 
ing by  the  bankru])t.'""^ 

Where  the  allegations  of  the  specification  are  vague  and 
general  he  may  move  to  have  them  stricken  out,""  or  he  may 
rely  upon  this  defense  at  the  time  of  the  hearing,  for  the 
court  will  disregard  vague  and  general  allegations.^"'^  If  the 
allegations  are  insufificient  in  law  he  may  file  exceptions  to 
them  analogous  to  those  allowed  in  equity,"^  or  he  may 
demur.^"-  Where  the  bankrupt  desires  to  make  a  general  de- 
fense, as  by  confession  and  avoidance,  or  otherwise,  he  may  do 
so  by  answer. 

When  a  bankrupt  has  been  allowed  to  file  his  petition  for 
discharge  more  than  a  year  after  adjudication  insufficient 
grounds  for  the  delay  should  be  seasonably  set  up  by  motion 
to  vacate."^ 

§  282.     The  hearing  of  objections  to  a  discharge. 

The  statute  provides  that  "  the  judge  shall  hear  the  appli- 
cation for  a  discharge  and  such  proofs  and  pleas  as  may  be 
made  in  opposition  thereto  by  parties  in  interest,  at  such  time 
as  will  give  parties  in  interest  a  reasonable  opportunity  to  be 

»^  32  Stat,  at  L.  797.  Fed.  Cas.,  s.  c.  2  N.  B.  R.  116;  In  re 

»^  See  ante,  sec.  276.  Baerncopf,  117  Fed.  Rep.  975,  9  Am. 

"*>  In    re    Waggoner,    No.    17037,  E.  R.  133 ;  In  re  Robinson,  123  Fed. 

Fed.  Cas.,  s.  c.  i  Ben.  532.  Rep.   844. 

100/n  re  Peck,  120  Fed.  Rep.  972,  102  /„    ^g    Burk,    No.    2156,    Fed. 

9  Am.  B.  R.  747 ;  In  re  Goodale,  109  Cas.  s.  c.  Deady,  425 ;  In  re  McVey, 

Fed.   Rep.    783,  6  Am.    B.   R.   493 ;  No.  8932,  Fed.  Cas.,  s.  c.  2  N.  B.  R. 

In   re   Steed,   107   Fed.   Rep.  682,  6  257. 

Am.    B.    R.   73;    In   re   Parish,    122  i''^ /jj  r^  Haynes  &  Sons,  122  Fed. 

Fed.  Rep.  553.  Rep.  560. 

^•^1 /n    re    Rosenfield,    No.    12057, 


DISCHARGE.  753 

heard,  and  investigate  the  merits  of  the  application."^"*  It 
would  seem  from  this  provision  that  congress  intended  the 
application  to  be  heard  and  determined  by  the  judge, *°^  al- 
though he  can  refer  it  to  a  referee  to  report  the  facts.^**^  The 
act  of  1867  provided  that  "  the  court  may  in  its  discretion 
order  any  question  of  fact  so  presented  to  be  tried  at  a  stated 
session  of  the  district  court."^***'  This  was  construed  to  mean 
a  trial  by  jury.^"^ 

It  is  regularly  the  duty  of  the  bankrupt  to  move  the  court 
to  set  the  case  down  for  hearing.  If  the  bankrupt  is  dilatory 
in  bringing  the  matter  on  for  hearing,  the  creditor  may  move 
the  court  to  set  down  the  matter  for  hearing  upon  the  petition 
and   his  objections."^ 

Upon  the  hearing,  proofs  are  introduced  in  support  of  and 
against  the  specification  of  grounds  of  opposition  to  the  dis- 
charge. The  burden  of  proof  is  upon  the  persons  objecting 
to  the  discharge.^""  The  proofs  in  support  of  the  specification 
should  be  confined  to  proving  the  allegations  contained  in  it. 
The  opposing  j)arty  is  bound  by  them  and  can  not  go  beyond 
them  and  produce  evidence  outside  of  them.^"  A  creditor  may 
be  estopped  by  his  own  consent  to  an  act  from  proving  it 
against  his  debtor  on  the  question  of  his  discharge,^^^  or  may 
be  barred  from  objecting  to  his  discharge  by  laches.^^'  The 
court  may  allow  an  amendment  of  the  specification   at   the 

1"*?).  A.  1898,  Sec.  14b.     See  also  Rep.   503;   In  re  Okell,  No.    1047S. 

Sec.    19,   B.   A.   1898.  Fed.    Cas.,    s.    c.    2   N.    B.    R.    105; 

iof5  Watson    v.    McDuff,    loi    Fed.  In  re  George,   No.  5325,  Fed.  Cas., 

Rep.  241,  4  Am.  B.   R.   no.  s.  c.   i   Low.  409;  In  re  Chamber- 

'""  R.  S.  Sec.  Sin.     See  also  Sec.  lain,    125    Fed.    Rep.    629,    11    Am. 

\gc,  B.  A.  1898.  B.  R.  95. 

'0^  Morgan  V.  Thornhill,  11  Wail.  i'" /m    re    Roscnfield,    No.    12057, 

65,   yy;   In  re  Hoist,   11    Fed.   Rep.  Fed.  Cas.,  s.  c.  2  N.  B.  R.  i\6. 

856;  In  re  Lawson,  No.  8151,  Fed.  ^^^ /n  re  Sawyer,  No.  12394,  Fed. 

Cas.,  s.  c.  2  N.  B.  R.  396.  Cas.,  s.  c.  2  Hask.  337;  In  re  Schny- 

^'>''  In   re    Sutherland,    No.    13640,  ler,  No.  12494,  Fed.  Cas.,  s.  c.  3  Ben. 

Fed.  Cas.,  s.  c.  Deady,  573.  200;  In  re  Kraft,  3  Fed.  Rep.  892: 

1""  In  re   Boasberg,    i    Nat.   Bank  Johnson  v.   Rogers,  No.   7408,   Fed. 

News,    133,    s.    c.   — Fed.    Rep.    — ;  Cas.,  s.  c.  15  N.  B.  R.  i;  Judson  v. 

In  re  ITerdic,   i   Fed.  Rep.  242;   In  Tlu-  Courier  Co.,  8  Fed.  Rep.  422. 

re  Nooman,  No.  10291,  Fed.  Cas.,  s.  ^i- Kentucky     National     Bank     v. 

c.   3    N.    B.    R.   267;   In   re   Frey,   9  Carlcy  (C.  C  .\.  3d  Cir),  121  Fed. 

Fed.  Rep.  376;  In  re  Jewett.  3  Fed.  Rep.  822. 


754 


LAW    AND    rROCEEDINGS    IN    BANKRUPTCY. 


time  of  the  hcarino-  if  justice  requires  it.'^''  Where  the  credit- 
ors, tiling-  the  specification,  with(h-aw  their  opposition  to  the 
discharge,  under  the  former  act  in  some  districts,  other  cred- 
itors were  permitted  to  take  up  the  opposition  and  prosecute 
the  matter  as  if  they  had  originally  filed  the  specification."* 
This  is  true  under  the  present  act  at  least  where  the  with- 
drawal was  without  notice  to  the  other  creditors."'* 

Counsel  may  be  heard  in  support  of  and  in  opposition  to 
the  specification.  The  court  thereupon  considers  the  merits 
of  the  application  for  a  discharge  in  view  of  the  grounds  upon 
which  it  is  opposed,  and  passes  an  order  in  accordance  with 
justice,  either  granting  or  refusing  to  grant  the  bankrupt  a 
discharge. 

§  283.     The  order  granting  a  discharge. 

It  is  the  duty  of  the  court  to  discharge  the  applicant  unless 
he  has  committed  one  of  the  acts  specifically  set  out  as  a 
reason   for  refusing  the   discharge."® 

These  are  the  only  grounds  on  which  the  court  can  refuse 
a  discharge,  except  that  the  judge  may  refuse  it  when  the 
court  is  without  jurisdiction  of  the  proceedings."^  An  honest 
bankrupt  is  regularly  entitled  to  a  discharge,  which  releases 
him  from  all  his  provable  debts,  except  such  as  are  expressly 
excepted  by  the  statute."^  The  court  will  not  seek  for  grounds 
for  refusing  a  discharge  unless  they  are  properly  presented 
by  the  parties.""  If  the  parties  do  not  raise  objections,  the 
court  will  consider  them  to  consent  to  the  discharge,  or 
that  no  reason  exists  for  not  granting  it.  The  confirmation 
of  the  composition  with  creditors  operates  as  a  discharge 
of  the  bankrupt. ^-° 

"3  Jtt  re  Pierce,  103  Fed.  Rep.  64,  ^^'^  See  ante,   Sec.   278. 

4  Am.  B.  R.  554;  In  re  Bellis,  No.  "«  B.  A.  i8g8,  Sec.  17,  and  Sec.  I, 

1275,  Fed.  Cas.,  s.  c.  4  Ben.  53.  clause   12. 

"*  See  In  re  Houghton,  No.  6730,  "f*  In  re  Schuyler,  No.  12494,  Fed. 
Fed.  Cas.,  s.  c.  10  N.  B.  R.  ZZT-  Cas.,  s.  c.  3  Ben.  200;  In  re  Rosen- 
Compare  B.  A.   1898,   Sec.  59/-  field,   No.    12057,  Fed.   Cas.,  s.  c.  2 

"5/,i  re  Dietz,  97  Fed.  Rep.  563,  N.   B.  R.   116;   In  re  Frey,  9  Fed. 

3  Am.  B.   R.  316.  Rep.  376. 

"6B.     A.     1898,     Sec.     14&,    and  J-'og,  a.  1898,  Sec.  14c;  Sec.  250, 

amendment  of  Feb.  5,  1903,  32  Stat.  ante. 
at  L.  797;  Official  Form  No.  59;  see 
Form  No.  164  post. 


DISCHARGE.  755 

An  order  denying  a  discharge  to  a  bankrupt  is  a  bar  to  a 
second  application  in  the  same  bankruptcy  proceedings/"^ 

§  284.     The  general  nature  and  effect  of  a  discharge. 

A  discharge  in  bankruptcy  is  in  the  nature  of  a  personal 
privilege  granted  to  a  debtor  in  consideration  of  his  yielding 
up  all  of  his  property  for  distribution  among  his  creditors. 
It  does  not  extinguish  the  bankrupt's  liability.  It  is  a  release 
from  the  unpaid  balance  of  debts  existing  at  the  time  the 
petition  was  filed,  which  may  be  pleaded  in  bar  of  any  action 
upon  a  debt  so  released.'"  Where  no  discharge  is  granted 
there  is  no  release,  and  the  unpaid  balance  of  a  debt  may  be 
recovered.'-^  Bankruptcy  proceedings  alone  do  not  operate  to 
bar  suits. 

§  285.     The  effect  of  a  discharge  upon  liens. 

The  effect  of  a  discharge  is  to  release  the  personal  liability 
only.  It  does  not  effect  liens  upon  his  property.  If  they  are 
valid,  under  the  laws  of  the  state  and  the  bankrupt  act,  they 
may  be  enforced  after  a  discharge  is  granted. 

Thus  a  judgment  which  has  become  a  Hen  on  property 
will  continue  to  be  so,''*  but  if  the  judgment  is  merely  a  per- 
sonal liability  it  is  released  by  a  discharge.  In  an  action  to 
enforce  a  mechanic's  lien  or  mortgage  the  discharge  will  not 
bar  the  proceedings  except  as  to  a  personal  judgment  for  a 
deficiency.'^^    A  vendor's  lien  for  the  purchase  price  of  prop- 

1^  In  re  Fiegenbaum    (C.   C   A.  McCance  v.  Taylor,  10  Grat.  (Va.) 

2(J  Cir.),   121   Fed.  Rep.  69,  9  Am.  580;  Bates  v.  Tappan,  99  INIass.  376; 

B.   R.   595;   In   re  Royal,    113   Fed.  Bowman  v.   Harding,  56    IMe.   559; 

Rep.  140,  7  Am.  B.  R.  636.  Leighton  v.  Kelsey,  57  ^le.  85 ;  Ing- 

122  See  Pleading  a  discharge,  Sec.  raham  v.  Phillips,  i  Day  (Conn.) 
298,   post.  IT/;  Jones  v.  Lellyett.  39  Ga.  64. 

123  Dingce  v.  Becker,  No.  3919,  '-■'•Second  Nal'l  Bank  v.  State 
Fed.  Cas.,  s.  c.  9  N.  B.  R.  508;  Nat'l  Bank,  10  Bush.  (Ky.)  Z^T, 
Grcenwald  v.  Appell,  17  Fed.  Rep.  Reed  v.  Bullington,  49  Miss.  223; 
140;  Whitney  V.  Crafts,  ID  Mass.  23.  Scott  v.  Fllcry,  142  U.  S.  381: 
See  also  In  re  Sweet,  36  Fed.  Rep.  Pierce  v.  Wilcox,  40  Ind.  70;  Rol)- 
761.  crts  V.  Wood,  38  Wis.  60;  Stewart 

>-' I'.lum   V.    I'.lli'^.   ■}},   N.   C.  293;  V.  Anderson,  10  Ala.  504;  Truitt  v. 

Peck  V.  Jenness,  7  ilnw.  612;  Cros-  Truitt,    38    Ind.    16;    City    Bank    v. 

by  V.  Wentworth.  48  Mass.  10;  Mc-  Walton,  5   Rob.    (La.)    158. 
Cullough  V.   Caldwell,  5  Ark.   237; 


75^>  LAW    AND    PKOCKEDINGS    IN    BANKRUPTCY. 

crty  si^kl  may  be  cnforccil  after  a  discliarjj^c.  provided  such 
lien  is  recognized  by  the  state  hiws.'*"  Nor  can  a  (hscharge 
be  pleaded  when  the  (juestion  in  issue  is  one  of  title  to  prop- 
erty.^^^' 

Where  property  of  the  bankrupt  has  been  attached  by  legal 
proceedings  prior  to  the  period  of  four  months  next  pre- 
ceding the  commencement  of  proceedings  in  bankruptcy,  a 
judgment  may  be  entered  in  the  court  in  which  such  judg- 
ment is  pending,  to  be  enforced  against  the  property  attached, 
even  though  the  discharge  is  pleaded  in  bar  of  the  further 
maintenance  of  the  judgment  suit/"^  In  such  cases  the  judg- 
ment can  not  be  enforced  against  the  |:)erson  of  the  bankrupt. 
It  was  held  under  the  former  act  that  where  a  suit  has  been 
begiin  before  a  petition  in  bankruptcy  had  been  filed,  a  person 
might  prosecute  a  suit  to  enforce  a  lien  upon  property  fraudu- 
lently conveyed  by  the  bankrupt,  even  though  a  discharge  is 
pleaded  in  bar  of  the  suit.^^" 

The  liability  of  a  person  who  is  a  codebtor  with,  or  guar- 
antor, or  in  any  manner  a  surety  for  a  bankrupt  is  not  altered 
by  the  discharge  of  the  bankrupt.^^* 

§  286.     The  effect  of  a  discharge  on  foreign  creditors. 

A  discharge  under  the  national  bankruptcy  act  of  the 
United  States  operates  to  release  a  bankrupt  from  all  his 
provable  debts,  except  certain  debts  enumerated  in  the  stat- 
ute."^ A  discharge  operates  as  a  release  from  any  such  debt 
or  liability,  wherever  it  has  been  contracted  or  arisen,^"* 
throughout  the  several  states  and  territories  of  the  United 

126  Lewis   V.    Hawkins,   23    Wall.  129  Petter   v.    Cirode,   4    B.    Mon. 
119.  (Ky.)  482;  Payne  v.  Able,  7  Bush. 

127  Berry  V.  Jackson  (Ga.),  8  Am.  (Ky.)   344;  Lowry  v.  Morrison,  11 
B.  R.  485-  Paige    (N.    Y.)    327. 

12ft  Doe  V.  Childress,  21  Wall.  642;  "o  r    ^    jg^g^  Sec.   16.     See  sec. 

Bates  V.  Tappan,  99  Mass.  376;  In-  296.  f>ost. 

graham  v.  Phillips,  i   Day  (Conn.)  i^i  g  ^   j8gS,  Sec.  17,  and  amend- 

117;    Bowman   v.   Harding,   56  Me.  ment  of    1903,   32   Stat,   at  L.   798; 

559;  Leighton  v.  Kelsey,  57  Me.  85.  Sec.   292,  post. 

See  also  In  re  Paper  Co.,  102  Fed.  i^i*  Zarega's  Case,  No.  18204,  Fed. 

Rep.  872,  4  Am.  B.  R.  468;   In  re  Ca,s.,    s.    c.    4   L.    R.    480;    Ruiz    v. 

Remington     Motor    Co.,     119    Fed.  Eickerman,  5  Fed.  Rep.  790;   Patti- 

Rep.  441,  9  Am.  B.  R.  533.  son  v.  Wilbur,  10  R.  I.  448. 


DISCHARGE.  757 

States.^^^  It  may  be  set  up  as  a  defense  in  bar  of  any  action, 
upon  a  debt  thereby  released,  in  any  court,  either  state  or 
federal,  within  the  United  States/^^  The  reason  for  this  is 
that  the  territorial  effect  of  a  discharge  is  coextensive  with 
power  of  the  legislature  enacting  the  law.  It  may  be  possi- 
ble that  a  foreigner  can  not  enforce  a  claim  in  the  courts  of 
this  country,  although  he  may  be  able  to  enforce  it  in  a  for- 
eign court. 

The  rule  of  comity  of  nations  is  that  a  discharge  from  any 
debt  or  liability  under  the  bankrupt  law  of  the  country 
where  the  debt  or  liability  has  been  contracted  or  has  arisen, 
or  possibly  where  it  is  to  be  paid  or  satisfied,  will  be  recog- 
nized as  a  discharge  or  satisfaction  everywhere.^^*  "  The 
rule  was  laid  down  by  Lord  Mansfield  in  Ballantine  vs. 
Golding.  that  what  is  a  discharge  of  a  debt  in  the  country 
where  it  was  contracted  is  a  discharge  of  it  everywhere."^'*'^ 
Hence  a  discharge  obtained  in  a  court  of  bankruptcy  in  the 
United  States,  releasing  a  debt  or  obligation  contracted  or 
incurred  in  the  United  States,  will  be  recognized  as  a  dis- 
charge of  that  debt  or  liability  in  any  country.  Thus  where 
a  debtor  and  creditor  both  resided  in  the  United  States  where 
the  debt  was  created  and  where  the  discharge  was  granted, 
and  afterwards  both  parties  became  residents  of  England, 
and  a  suit  was  there  commenced  against  the  debtor  on  the 
original   indebtedness,   the  discharge  was   held  a  bar  to  re- 

But  see  Lizardi  v.  Cohen,  3  (Till.  there    is   no    doubt    that    a    debt    or 
(Md.)   430;  McMenomy  v.  Murray,  liability  arising  in  any  country  may 
3  Johns.  Chan.   (N.  Y.)  435.  be   discharged   by  the   laws   of   that 
182  Hargadine-McKittrick        Dry  country,  and  that  such  a  discharge, 
Goods  Co.  V.  Hudson  (C.  C.  A.  8th  if  it  extinguishes  the  debt  or  liabil- 
Cir).  122  Fed.  Rep.  232,  10  Am.  B.  ity,   and   does  not   merely   interfere 
R.    225.  with  the  remedies  or  course  of  pro- 
133  See  Pleading  a  discharge,  Sec.  ccdure  to  enforce  it,  will  be  an  ef- 
298,  f>ost.  fectual  answer  to  the  claim,  not  only 
"*  Story    on     Conflict    of    Laws,  in    the   courts   of   that   country,   but 
Sec.     340;     Dicey     on     Conflict     of  in    every    other    country.      This    is 
Laws,  449.  t'l^'  l<i^\'  "^  England,  and  is  ;i  prin- 
ce Lord    Ellenborough    in    Potter  ripic    nf    priv.ilc    inUTiiati.mal    law 
V.  Brown    (1804),  5  East,   130.  adopted   in  otlur  countries.     It   was 
In   Kllis  V.   McHenry.  6  L.  R.   C.  laid    down    by   Lord    King,   in    Bur- 
P.   234.   Bovill,  C.  J.   (1871).  apply-  rows    v.    Jemino,    2    Slra.    7^:^;    by 
ing    this    principle    to    the    British  Lord     Mansfuld,     in     Ballantine     v. 
Colonies,  said:     "In  the  first   place  C.f.lding,   Cook's   Bk.   Law,  419;   by 


758       I^AW  AM)  rUOCEEDINGS  IN  BANKRUPTCY. 

covcrv.'''"'  The  same  rule  with  rcfcroiico  to  a  discharge  in 
the  states  has  been  apphod  in  Canaela.'''  The  authorities 
seem  to  recognize  no  distinction  with  reference  to  the  resi- 
dence of  the  parties  to  the  contract,  whether  between  citizens 
or  between  citizens  and  a  foreigner,  or  between  foreigners."* 

A  chscharge  from  any  debt  or  HabiHty  under  the  national 
bankrupt  act  of  this  country  will  not  be  recognized  as  a  re- 
lease of  a  debt  or  liability  which  has  not  been  contracted  or 
arisen,  and  is  not  to  be  paid  or  satisfied  in  this  country.^''"  It 
has  been  held  in  England  that  a  contract  made  in  England  is  not 
discharged  under  an  insolvent  act  of  one  of  the  United  States 
so  as  to  bar  a  suit  upon  contract  in  the  English  courts.^ ^^ 

Where  a  foreigner  comes  into  a  court  of  bankruptcy  for 
the  purpose  of  proving  a  debt,  he  thereby  submits  himself  to 
the  jurisdiction  of  the  court.  A  discharge  in  such  case  will 
probably  bar  the  foreigner's  claim  asserted  in  either  a  do- 
mestic or  foreign  court. ^"  But  where  a  foreigner  does  not 
prove  his  debt  in  a  court  of  bankruptcy,  and  has  not  knowl- 
edge of  the  proceedings,  his  debt  is  not  barred  in  any  court 
by  the  discharge."'"^ 

Where  a  discharge  does  not  release  a  debt  or  claim  under 
the  national  bankruptcy  act,  such  debt  or  claim  is  not  re- 
leased in  any  other  country. 

§  287.     The  effect  of  a  foreign  discharge  on  American  debts. 

The  same  principles  which  have  been  stated  in  the  last 
section  as  governing  the  effect  of  an  American  discharge  in  a 

Lord    Ellenborough,    in    Potter    v.  430;     IMcMenomy     v.     Murray,     3 

Brown,  5   East,   124;   by  the  Privy  Johns.  Chan.   (N.  Y.)  435;  Ellis  v. 

Council,  in  Odwin  v.  Forbes,  Buck.  McHenry,  L.  R.  6  C.  P.  228. 

57;  in  Quelin  v.  Moisson,  i  Knapp,  See  also  Bartley  v.  Hodges,  I.  B. 

265,  6,  n. ;  by  the  court  of  Queen's  &  S.  375 ;  Story  on  Conflict  of  Laws, 

Bench,  in  Gardner  v.  Houghton,  2  Sec.  342 ;  Dicey  on  Conflict  of  Laws, 

B.  &   S.  743;  and  by  the  Court  of  451. 

Exchequer  Giamber,  in   Phillips  v.  i^o  Smith  v.   P.uchanan,  i  East,  6, 

Eyre,  L.  R.  6  Q.  B.  1.  1 1.     See  also  Lewis  v.  Owen,  4  B. 

i-c  Potter  V.  Brown,  5  East,  124.  &  Aid.  654;  Phillips  v.  Allan,  8  B. 

137  Ohlemacher  v.  Broek,  44  Up-  &  Aid.  477. 

per  Canada  Rep.  366.  1*^  Consult    Peck    v.    Hibbard,   26 

i-'*'»  Story  on  Conflict  of  Laws,  Sec.  Vt.  6q8  ;  Phelps  v.  Borland,  103  N. 

340.  Y.   406. 

"'J  Lizardi  V.  Cohen,  3  Gill.  (Md.)  ^*-B.  A.   1898,  Sec.   17,  clause  3; 


DISCHARGE.  759 

foreign  country  are  true  with  reference  to  the  effect  of  a  for- 
eign discharge  in  the  United  States.  Thus  it  has  been  held 
that  a  discharge  under  a  foreign  law  was  no  bar  to  an  action 
on  a  contract  made  in  this  country."^  Where  a  person  volun- 
tarily submits  himself  to  the  jurisdiction  of  the  court  grant- 
ing the  discharge,  to  prove  his  claim  and  participates  in  the 
proceedings,  he  is  bound  thereby,  and  the  courts  of  this  coun- 
try will  recognize  the  discharge  as  a  bar  to  an  action  upon  a 
debt  released  thereby."*  The  courts  of  this  country  will  also 
recognize  the  binding  force  of  a  discharge  under  a  foreign 
law,  releasing  a  debt  or  liability  which  had  been  contracted  or 
had  arisen  in  that  country. 

There  are  many  cases  decided  in  the  federal  and  state  courts 
which  apply  to  discharges  granted  by  the  courts  of  one  state 
when  sought  to  be  asserted  against  the  citizens  of  another."^ 
These  cases  can  not  be  considered  authority  in  determining 
the  effect  of  a  discharge  between  sovereign  states  unrestricted 
by  constitutional  limitations.  All  of  these  cases  turned  upon 
the  peculiar  structure  of  the  constitution  of  the  United  States 
prohibiting  the  states  from  passing  laws  impairing  the  obli- 
gation of  contracts.  This  limitation  upon  state  legislatures 
has  been  discussed  in  another  place."® 

§  288.     In  what  court  the  effect  of  a  discharge  is  determined. 

A  discharge  in  bankruptcy  discharges  the  bankrupt  from 

all   debts  and  claims,   which   are  made  provable  against   his 

estate,  and  which  existed  on  the  day  the  petition  was  filed, 

Lizard!    v.    Cohen,    3    Gill.     (Md.)  Wheeler.  25  Conn.  603;  Whitney  v. 

430;     McMenomy     v.     Murray,     3  Whiting,  35  N.  H.  457;  Murphy  v. 

Johns.  Chan.  (N.  Y.)  435.  Manning,   134  Mass.  488;   Hicks  v. 

"3  McMillan  v.  McNeill,  4  Wheat.  Hotchkiss,  7  John.  Chan.    (N.   Y.) 

209;  Green  v.  Sarmiento,  No.  5760,  297;    Van    Hook    v.    Whitlock,    26 

Fed.  Cas.,  s.  c.  3  Wash.  C.  C.  17.  Wend.     (N.     Y.)     43;     Savoye    v. 

144  Peck  V.  Hibbard,  26  Vt.  698;  Marsh,  10  Met.   (Mass.)   594;   Pro- 

Phelps  V.  Borland,  103  N.  Y.  406.  dncers    Bank    v.    Farnum,    5    Allen 

'*''•  Gilman  v.  Lockwood,  4  Wall.  (Mass.)    10;   Dunlap  v.   Rogers,  47 

409;  Baldwin  v.  Hale,  i  Wall.  223;  N.   H.  281;   Pierce  v.  O'Brien,    129 

Baldwin  v.  Bank,  i  Wall.  234;  Og-  Mass.    314;    Towne    v.    .Smith,    No. 

den  V.  .Sainiders,  12  Wheat.  358-3r)9 ;  14115,  Fed.  Cas.,  s.  c.  I  Wood.  &  M. 

Boyle  V.  Zacharie,  6  Pet.  348;  Felch  115. 

V.   Bugbee,  48  Me.  9;  Anderson  v.  i'*"  Sec.  11,  ante. 


760  LAW    AND    PUOlEKDIN'CS    IX    HANKRUPTCY. 

excepting  such  debts  as  are  l>y  law  excepted  from  the  opera- 
tion of  a  discharge  in  bankruptcy. '^^ 

The  court  of  bankruptcy  decides  whether  or  not  a  discharge 
shall  be  granted,  and  if  granted,  it  has  the  sole  power  to 
entertain  a  proceeding  to  vacate  the  same.  It  does  not  con- 
strue the  extent  of  tlie  discharge  with  reference  to  particular 
debts  of  the  bankrupt/^"  That  inquiry  is  properly  to  be  made 
only  by  the  court  in  which  a  direct  suit  on  the  debt  is  pend- 
ing, and  when  the  discharge  is  properly  pleaded  in  bar  of 
the  particular  debt."''  The  court  in  which  such  a  direct  suit 
is  pending  and  the  discharge  pleaded  does  not  modify  the 
order  of  the  court  of  bankruptcy.  Its  inquiry  should  be,  is 
the  debt  sued  on  a  debt  which  is  released  by  the  discharge 
pleaded?  If  it  is  released  under  the  bankrupt  act,  the  plea 
should  be  sustained  and  the  action  dismissed.  If  such  court 
determines  that  it  is  a  debt  not  released  by  the  discharge,  the 
plea  is  bad  and  should  be  overruled. 

§  289.     What  debts  are  released  by  a  discharge. 

A  discharge  in  bankruptcy  releases  a  bankrupt  from  all  of 
his  provable  debts,^°°  whether  allowable  or  not,^^^  except  such 
as  ( I )  are  due  as  a  tax  levied  by  the  United  States,  the  state, 
county,  district,  or  municipality  in  which  he  resides;  (2)  are 
judgments  in  actions  for  frauds,  or  obtaining  property  by 
false  pretenses  or  false  representations,  or  for  willful  and 
malicious  injuries  to  the  person  or  property  of  another;  (3)  , 
have  not  been  duly  scheduled  in  time  for  proof  and  allowance, 
with  the  name  of  the  creditor  if  known  to  the  bankrupt, 
unless  such  creditor  had  notice  or  actual  knowledge  of  the 
proceedings  in  bankruptcy;  or  (4)  were  created  by  his  fraud, 
embezzlement,  misappropriation  or  defalcation  while  acting  as 

'*^  Official     Form     No.     59;     see  the  proof  of  debt  in  this  case  which 

Form  No.  164,  post.  can    in    any    manner    conclude    or 

148 /„  ff,  Mussey,  99  Fed.  Rep.  71,  prejudice  any  party  in  any  tribunal 

3  Am.  B.  R.  592.  so  far  as  regards  the  issue  of  fraud 

149  /„    ^c    Rosenberg,    No.    12054,  in  contracting  the  debt." 

Fed.  Cas.,  s.  c.  3  Ben.  14.  i^o  b.   A.    1898,   Sec.   17. 

In    re    Wright,    No.    18065,    Fed.  ''^  Hargadine-McKittrick       Dry 

Cas..  s.  c.  2  Ben.  509,  Judge  Blatch-  r,oods    Co.    v.    Hudson    (C.    C.    A. 

ford    said:      "There    is    nothing   in  8th  Cir.),  122  Fed.  Rep.  232,  10  Am. 


DISCHARGE.  76 1 

an  officer  or  in  any  fiduciary  capacity.  By  the  amendment  of 
Feb.  5,  1903,  the  second  exception  was  changed  to  read,  "  are 
liabilities  for  obtaining  property  by  false  pretenses  or  false 
representations,  or  for  wilful  and  malicious  injuries  to  the 
person  or  property  of  another,  or  for  alimony  due  or  to  be- 
come due.  or  for  maintenance  or  support  of  wife  or  child, 
or  for  seduction  of  an  unmarried  female,  or  for  criminal  con- 
versation." ^^"  This  exception  does  not  apply  when  the  pro- 
ceedings were  commenced  before  the  above  date. 

Debts  only  which  are  provable  are  in  any  case  released  by 
a  discharge. ^^^  In  order,  therefore,  to  be  discharged  it  must 
come  within  one  of  the  classes  enumerated  in  the  statute  as 
being  provable  against  the  estate  of  the  bankrupt. ^^*  Such 
are  debts  which  are  (  i )  a  fixed  liability,  as  evidenced  by  a 
judgment  or  an  instrument  in  writing,  absolutely  owing  at 
the  time  of  the  filing  of  the  petition  against  him,  whether 
then  payable  or  not,  with  any  interest  thereon  which  would 
have  been  recoverable  at  that  date,  or  with  a  rebate  of  in- 
terest upon  such  as  were  not  then  payable  and  did  not  bear 
interest;  (2)  due  as  costs  taxable  against  an  involuntary  bank- 
rupt who  was  at  the  time  of  the  filing  of  the  petition  against 
him  plaintiff  in  a  cause  of  action  which  would  pass  to  the 
trustee  and  which  the  trustee  declines  to  prosecute  after  notice; 
(3)  founded  upon  a  claim  for  taxable  costs  incurred  in  good 
faith  by  a  creditor  before  the  filing  of  the  petition  in  an  action 
to  recover  a  provable  debt;  (4)  founded  upon  an  open  ac- 
count, or  upon  a  contract  express  or  implied;  and  (5)  founded 
upon  provable  debts  reduced  to  judgments  after  the  filing  of  the 
petition  and  before  the  consideration  of  the  bankrupt's  ap- 
plication for  a  discharge,  less  costs  incurred  and  interest  ac- 
crued after  the  filing  of  the  petition  and  up  to  the  time  of  the 
entry  of  such  judgments.  Unliquidated  claims  against  the 
bankrupt  may.  pursuant  to  application  to  the  court,  be  liqui- 

B.  R.  225.     See  also  In  re  Horstein,  v.   Cooper,   18   How.  82;   RiRpin  v. 

122  Fed.  Rep.  266.  MaRwire,    15   Wall.   551 ;    Porter  v. 

"■'232  Stat,  at  L.  798.  Lascar,  109  U.  S.  84. 

"'■''  Consult  Miirray  v.  De  Rotten-  i''.4  p    \    ,f^f^    S(.(.    ^^ 

ham,   6   John.    Clian.    (N.    Y.)    52;  Sec    also    Provable    debts,    Chap. 

Monroe    v.    ITptnn,    50    N.    Y.    50.3;  XIII. 
Glenn  v.  Howard,  65  .\Id.  40;  Bnsh 


762  LAW    AND    PROCEEDINGS   IN    BANKRUPTCY. 

dated  in  such  manner  as  it  shall  direct,  and  may  thereafter  be 
proved  and  allowed  against  his  estate. 

The  inquiry  of  the  court,  to  which  is  presented  the  question 
of  whether  a  debt  is  barred  or  not,  should  be,  first,  is  the  debt 
one  which  was  provable  in  bankruptcy?  and  second,  is  such 
debt  included  in  the  exceptions  specihed  in  section  17?  If  the 
debt  is  a  provable  one  and  is  not  one  included  in  these  excep- 
tions it  is  in  all  cases  released  by  a  discharge.  This  applies 
even  to  debts  the  discharge  from  which  was  denied  under  for- 
mer bankru])tcy  or  insolvency  proceedings.^^'^  What  are 
provable  debts  is  the  subject  of  a  separate  chapter.^""  An  un- 
liquidated claim  which  might  have  been  liquidated  and  proved 
imder  Sec.  63^  is  discharged.'"  The  liability  of  a  sheriff  for 
an  escape  of  the  bankrupt  is  not  a  debt  owed  by  the  bankrupt 
and  therefore  is  not  released  by  the  bankrupt's  discharge. '"^^ 
^^'hat  is  included  in  the  exceptions  is  considered  in  the  next 
few  sections  following. 

§  290.     The  effect  of  a  discharge  on  debts  due  the  United 
States. 

The  act  expressly  excepts  from  the  effect  of  a  discharge 
debts  due  as  taxes  levied  by  the  United  States,  the  state, 
county,  district  or  municipality  in  which  the  bankrupt  re- 
sides.'^" 

Whether  a  debt  due  the  United  States,  or  one  of  the  states, 
other  than  taxes,  is  released  by  a  discharge  under  the  present 
act.  is  not  free  from  difficulty.  It  was  held  that  a  debt  due 
the  United  States  was  not  barred  by  a  bankrupt's  certificate 
of  discharge  under  the  act  of  1800,^"°  or  under  the  act  of 
1867,^°^  where  it  was  extended  to  a  surety  on  the  bond  of  a 

^'^^  hi    re    Bybee,    124    Fed.    Rep.  act  the.  debt  can  be  otherwise  than 

loii;   Dean   v.   Justices,    173   Mass.  discharged. 

453.     There   is  a   dictum   contra  in  ^^•'^  Chap.  XIII. 

In   re   Gaff,    iii    Fed.    Rep.   506,   7  '^■'"  In    re   HiUon,    104    Fed.    Rep. 

Am.  P..  R.  128,  and  it  seems  to  have  981.   4   Am.    B.    R.   774. 

been  held  the  other  way  under  the  ^^^  Baer    v.    Grell,    6   Am.    B.    R. 

Act  of  1867  (In  re  Drisco,  Fed.  Cas.  (N.  Y.)   428. 

No.   4090,   2   Low.   430),   but    it    is  i^o  b   a_  iggg.  Sec.  17,  clause  i. 

hard    to   see    how,    under   the   plain  i""  U.  S.  v.  King,  No.  15536,  Fed. 

wording  of  Sec.   17  of  the  present  Cas..  s.  c.  Wall.  Sen.  13. 

i«i  U.  S.  V.  Herron,  20  Wall.  251 ; 


DISCHARGE.  7^3 

public  officer."-  The  ground  of  this  rule  was  that  a  discharge 
will  not  release  the  debtor  from  a  debt  due  the  sovereign,  un- 
less the  sovereign  is  expressly  named  in  the  clauses  relating 
to  discharge  of  debts.     This  rule  is  recognized  in  England.'"' 

The  leading  case  in  this  country  upon  this  subject  is  U.  S. 
V.  Herron.'''*  The  reasoning  of  the  court  in  that  case  would 
appear  to  apply  with  equal  force  to  the  act  of  1898.  There 
are,  however,  two  points  of  distinction  to  be  noted  between 
the  act  of  1867  and  the  act  of  1898  with  reference  to  this 
opinion.  In  the  act  of  1867  there  was  no  provision  in  the 
clause  relating  to  discharges  with  reference  to  the  United 
States,  but  the  fifth  class  of  claims  entitled  to  priority  '"'  pro- 
vided that  "  nothing  contained  in  this  title  shall  interfere 
wih  the  assessment  and  collection  of  taxes  by  the  authority 
of  the  United  States  or  any  state."  It  is  clear  that  that  pro- 
vision is  the  same  in  import  as  clause  i  of  section  17  of  the 
present  act.  The  only  difference  noticeable  is  the  position  the 
clauses  occupy  in  the  two  acts.  In  the  act  of  1898  it  is  in  the 
section  relating  to  discharges.  Does  this  rule  cxprcssio  itnius, 
exclusio  alteriiis  apply  to  exclude  all  debts  due  the  United 
States  except  for  taxes? 

In  section  57;  the  act  provides  that  debts  owing  to  the 
United  States,  a  state,  a  county,  a  district,  or  a  municipality 
as  a  penalty  or  forfeiture  shall  not  be  allowed,  excei:)t  for 
the  amount  of  the  pecuniary  loss  sustained  by  the  act,  trans- 
action, or  proceeding  out  of  which  the  penalty  or  forfeiture 
arose,  with  reasonable  and  actual  costs  occasioned  thereby  and 
such  interest  as  may  have  accrued  thereon  according  to  law. 
This  provision  is  a  limitation  upon  the  rights  of  the  sovereign. 

U.  S.  V.  Rob  Roy,  No.   161 79,  Fed.  tomey  General,  7  Price,  s;   i  Dea- 
Cas.,  s.   c.   I   Woods,   42;    Smith   v.  con's    Bankrnptcy,   784. 
Hodson,  SO  Wis.  279;  Hamilton  v.  Sec.  150  of  the  English  bankrupt- 
Reynold's,  88  Ind.   191.  ^y  'it't  of  1883,  46  and  47  Vic,  Chap. 

i«2U.  S.  V.  Herron,  20  Wall.  251,  52,    provides   tliat    "save   as   herein 

overruling  U.   S.  v.  Throckmorton,  provided  the  provisions  of  this  act 

No.  16516,  Fed.  Cas.,  s.  c.  8  N.  B.  relating  to   ...    a  discharge  shall 

R.  .309;  U.  S.  V.  Davis,  No.  14929.  lj<"fl  <'ie  Crovirn." 

Fed.  Cas.,  s.  c.  3  McLean.  483-  ""''  20  Wall.  251. 

ifis  .\non.,  I  Atk.  262;  Rex  V.  Fix-  ^'"■' R.    S.    Sec.    5101.    which    em- 

ky,  Bunbiiry,  202;  Craufurd  v.  At-  braces  a  part  of  Sec.  j8  of  the  orig- 
inal act. 


764  LAW  AND  PROCi:i:niN(;s  IX    bankrittcy. 

Were  it  not  for  this  provision  the  clel)tor  would  be  liable  for 
the  whole  anionnt  of  the  penahy.  It  ean  not  be  contended 
but  wiiat  the  United  States  may  or  may  not  prove  its  debts  in 
the  bankruptcy  proceedings.^"" 

It  wtniUl  sconi  therefore  that  these  two  points  of  difference 
can  hardly  be  urged  as  sufficient  to  take  the  present  act  out 
of  the  S2^eneral  rule  announced  and  followed  in  U.  S,  v.  Her- 
ron.  It  would  seem  that  if  congress  had  intended  a  depar- 
ture from  the  general  rule  relating  to  the  sovereign  not  being 
bound  by  the  provisions  of  a  bankrupt  statute,  which  has 
long  been  recognized  in  England  and  in  this  country,  it  would 
have  expressed  its  intention  more  clearly  in  this  respect. 

By  a  similar  course  of  reasoning  many  of  the  state  courts 
reached  the  same  conclusion  with  reference  to  debts  due  a 
state.  Such  debts  were  held  not  barred  by  a  discharge  in 
bankruptcy  either  under  the  act  of  1841  or  the  act  of  1867.^®^ 

§  291.  The  effect  of  a  discharge  upon  judgments  against  the 
bankrupt. 
A  discharge  releases  all  judgments,  provable  in  bankruptcy, 
except  such  as  are  judgments  in  actions  for  frauds,  or  obtain- 
ing property  by  false  pretenses  or  false  representations,  or  for 
willful  aiifl  malicious  injuries  to  the  person  or  property  of  an- 
other.^'^^  Subject  to  these  exceptions,  judgments  entered  prior 
to  the  filing  of  the  petition,  granted  in  actions  founded  in 
contract,  are  discharged.^"^  Since  the  amendment  of  1903  it 
is  immaterial  whether  or  not  the  claim  is  in  the  form  of  a 
judgment,  as  the  word  "  judgments  "  has  been  omitted  and 
"liabilities"  substituted.  If  it  is  a  liability  for  obtaining 
property  by  false  pretenses  or  false  representations,  or  for 

106  Lewis  V.  The  United  States,  92  las  B.  A.   1898,  Sec.   17,  clause  2. 

U.  S.  618;  Bayne  v.  United  States,  As  to  what  judgments  are  provable, 

93   U.    S.  642;   Harrison  v.    Sterry,  see  Sec.   115,  ante. 

5  Cranch,  289.  lao  B.  A.  1898,   Sec.  63,  clause  i; 

1"^  Commonwealth  v.  Hutchinson,  Sec.  115,  ante;  Blake  v.  Bigelow,  5 

10   Pa.    St.    466;    Saunders   v.   The  Ga.  437;  Comstock  v.  Grout,  17  Vt. 

Commonwealth,  10  Grat.  (Va.)  494;  512;   In  re  Comstock,  22  Vt.  642; 

Connecticut    v.    Shelton,    47    Conn.  In  re   Sidle,    No.    12844,   Fed.   Cas., 

400;    Johnson    v.    The    Auditor,    78  s.  c.  2  N.  B.  R.  220;  Duncan  v.  Har- 

Ky.    282.      But    see    Jones    v.    The  grove,  22  Ala.  150. 
State,  28  Ark.  119. 


DISCHARGE. 


765 


willful  and  malicious  injuries  to  the  person  or  property  of 
another,  or  for  alimony  due  or  to  become  due,  or  for  main- 
tenance or  support  of  a  wife  or  child,  or  for  seduction  of 
an  unmarried  female  or  for  criminal  conversation,  it  is  not 
discharged/'"  The  discharge  of  debts  created  by  fraud  is  now 
covered  only  by  clause  4. 

Judgments  and  decrees  are  not  released,  where  they  are 
in  the  nature  of  penalties  or  fines,  imposed  for  wrongful  or 
criminal  acts,  or  to  enforce  a  moral  or  natural  duty.  Such 
are  judgments  imposing  a  fine  for  contempt,"^  or  directing 
the  payment  of  certain  sums  periodically,  for  the  support  of 
a  bastard  or  other  child, ^'"  or  in  actions  for  seduction, ^'^  or 
directing  the  payment  of  alimony.^'*  These  judgments  are 
not  deemed  debts  within  the  meaning  of  that  word  as  used  in 
bankruptcy.  ^"^  The  amendment  to  1903  expressly  excludes 
such  liabilities  from  those  to  which  a  discharge  will  be  a  re- 
lease. A  verdict  is  not  a  judgment,''"  and  the  report  of  a 
referee  or  master  is  equivalent  to  the  verdict  of  a  jury.'^^ 


1T032  Stat,  at  L.  798. 

1"!  People  V.  Spalding,  10  Paige 
(N.  Y.)  284,  s.  c.  4  How.  21 ;  Ma- 
cey  V.  Jordan,  2  Dem.  (N.  Y.)  570. 
See  also  In  re  Moore,  iii  Fed.  Rep. 
145,  6  Am.  B.  R.  590;  but  see  In  re 
Alderson,  98  Fed.  Rep.  588,  3  Am. 
B.  R.  544- 

1^2  Dunbar  v.  Dimbar,  190  U.  S. 
340;  In  re  Hubbard,  98  Fed.  Rep. 
710,  3  Am.  B.  R.  528;  In  re  Baker, 
96  Fed.  Rep.  954,  3  Am.  B.  R.  loi ; 
In  re  Cotton,  No.  3269,  Fed.  Cas., 
s.  c.  2  N.  Y.  Leg.  Obs.  370;  Comm. 
V.  Erisman,  21  Pitts.  L.  Jour.  69. 

iTT/rt  re  Cotton,  No.  3269,  Fed. 
Cas.,  s.  c.  2  N.  Y.  Leg.  Obs.  370; 
Nassau  v.  Parker,  2  Penn.  L.  Jour. 
298.  Such  cases  are  put  on  the 
ground  of  not  being  judgments  for 
willful  and  malicious  injury.  In  re 
Frcche,  109  Fed.  Rep.  620,  6  Am. 
B.  R.  479;  In  re  Maples,  105  Fed. 
Rep.  919,  5  Am.  B.  R.  426;  Distler 
V.  McCnuley,  35  Misc.  (N.  Y.)  411, 
6  Am.  P..  R.  4QI ;  so  also  of  a  judg- 
ment for  criminal  conversation.  Col- 


well    V.    Tinker,   35    Misc.    (N.   Y.) 
330,  6  Am.  B.  R.  434. 

1T4  Audubon  v.  Shufeldt,  181  U. 
S.  575,  5  Am.  B.  R.  829;  Barkley  v. 
Barkley,  184  111.  375  ;  Turner  v. 
Turner,  108  Fed.  Rep.  785.  6  Am.  B. 
R.  289 ,  In  re  Shephard,  97  Fed. 
Rep.  187;  In  re  Houston,  94  Fed. 
Rep.  119,  2  Am.  B.  R.  107,  is  contra 
in  regard  to  alimony  due  but  no 
longer  represents  the  law ;  In  re 
Garrett,  No.  5252,  Fed.  Cas.,  s.  c.  2 
Hughes,  235. 

As  to  a  judgment  for  breach  of 
promise,  see  In  re  Sidle,  No.  12844, 
Fed.  Cas.,  s.  c.  2  N.  B.  R.  220;  Ail- 
ing V.  Egan,    II   Rob.    (La.)    244. 

^''^  See  .Sec.  no,  ante. 

I''"  Kellogg  V.  Schuyler,  2  Denio 
(N.  Y.)  7?,\  Nassau  v.  Parker,  2 
Penn.  L.  Jour.  298;  Audubon  v. 
Shufeldt,  181  U.  S.  575.  5  Am.  B. 
R.  829;  Barkley  v.  Barkley,  184  111. 

375- 

i77Crooch  V.  Gridley,  6  Mill   (N. 

Y.)  250. 


766  LAW    AND    PROCEEDINGS    IN    RANKRUi^TCY. 

Judgments  founded  upon  provable  debts,  which  have  been 
entered  after  the  tiHng-  of  the  petition  and  before  the  con- 
sideration of  the  bankrupt's  application  for  a  discharge,  are 
released  to  the  same  extent  as  judgments  entered  prior  to  the 
ctMumencement  of  the  baiikruiilcy  i)roceedings.     Such  judg- 
ments are  made  provable  debts  under  the  present  act/'^  and 
therefore  discharged  under  section  17.     Under  the  act  of  1867 
there  was  a  conflict  of  opinion  among  the  judges  as  to  whether 
a  judgment  entered   after  the  commencement  of  bankruptcy 
proceedings  and  before  the  discharge  was  granted  was  a  prov- 
able debt  or  not.      Some  judges  held  that  the  original  debt 
was   merged   in  the   judgnnent   and   the  original   debt  extin- 
guished ;  and  some  judges  held  to  the  contrary.     The  supreme 
court  finally  held  that,  notwithstanding  the  change  in  its  form 
from  that  of  a  simple  contract  debt  or  unliquidated  claim,  or 
whatever  its  character  may  have  been,  by  merger,  into  a  judg- 
ment of  a  court  of  record,  it  still   remained  the  same  debt 
on  which  the  action  was  brought  and  the  existence  of  which 
was  provable  in  bankruptcy  and  therefore  discharged. ^^'^    This 
is  the  rule  in  cases  arising  under  the  ])resent  act. 

W'here  a  judgment  is  entered  upon  a  debt,  whether  prov- 
able or  not.  after  a  discharge  has  been  granted,  it  is  not  released 
by  the  discharge.  The  reason  for  this  is  that  the  discharge 
does  not  extinguish  the  debt  and  can  only  be  used  as  a  de- 
fense to  the  action.  Where  it  is  not  set  up  as  a  defense  it  is 
waived.^^"  If  the  discharge  is  pleaded  and  the  judgment  ren- 
dered against  the  bankrupt  the  adjudication  is  in  effect  that 
the  discharge  is  not  a  sufficient  defense. 

Judgments  Expressly  Excepted  by  the  Statute. — 
The  statute  expressly  excepts  from  the  effect  of  a  discharge 
judgments  in  three  classes  of  cases,^^^  namely :  Judgments  in 
actions  for  frauds,  or  obtaining  property  by  false  pretenses  or 
false  representations,  or  for  willful  and  malicious  injuries  to 
the  person  or  property  of  another. 

"^B.  A.  1898,  Sec.  63,  clause  5.  Tex.  536;  Mechanics  Bank  v.  Haz- 

i^oBoynton  v.  Ball,  121  U.  S.  457,  ard,  9  Johns.  (N.  Y.)  392;  Desobry 

466.  V.  Morange,  18  Johns.  (N.  Y.)  336. 

^^  Dimock  v.  Revere  Copper  Co.,  See    also    Pleading    a    discharge, 

i!7  U.  S.  559;  McDonald  v.  Davis,  Set.  298,  post. 

105   X.   Y.   508;    Park   v.   Casey,   35  i"  B.  A.  1898,  Sec.  17,  clause  2. 


DISCHARGE.  7^7 

These  judgments  may  be  proved  in  bankruptcy  and  a  divi- 
dend paid  out  of  the  bankrupt's  estate  on  such  claims.  The 
effect  of  this  provision  is  merely  to  deprive  the  bankrupt  of 
the  privilege  of  pleading  his  discharge  in  an  action  for  any 
balance  of  such  judgments  remaining  unpaid.  Such  balance 
may  be  collected  out  of  his  after-acquired  property. 

First,  a  discharge  does  not  release  judgments  in  actions  for 
frauds.  The  act  of  1867  did  not  contain  a  similar  exemp- 
tion in  terms.  It  was,  however,  held  under  that  act  that  a 
judgment  upon  a  debt  fraudulently  created  did  not  merge  the 
debt  in  the  judgment  so  as  to  take  it  out  of  the  provision  in 
that  act  that  "  no  debt  created  by  fraud  or  embezzlement  of 
the  bankrupt  shall  be  discharged."  ^^~  It  was  held  under  that 
act  that,  where  a  judgment  for  a  fraudulent  debt  created  by 
two  persons,  one  of  whom  afterwards  received  a  discharge, 
and  the  other  purchased  the  judgment,  that  he  might  enforce 
the  judgment  against  the  discharged  bankrupt,  as  there  could 
be  no  contribution  between  wrong-doers.^^^  A  debt  created 
by  fraud  which  has  not  gone  to  judgment  is  not  released  be- 
cause of  clause  4  of  section  17.^^* 

Whether  a  discharge  is  obtained  in  an  action  for  fraud  or 
not  is  a  question  for  the  court  to  determine,  upon  the  inspec- 
tion of  the  record,  including  the  pleadings,  and  not  one  to  be 
submitted  to  a  jury.^^'^  Fraud  must  be  the  ground  of  the  re- 
covery of  the  judgment."" 

The  clause  in  regard  to  judgments  for  frauds  was  omitted 
from  the  amendment  of  1903.'**** 

Second,  a  discharge  in  bankruptcy  does  not  release  a  judg- 
ment in  an  action  for  obtaining  property  under  false  pre- 
tenses or  false  representations."^  The  rules  governing  this 
class  of  judgments  are  the  same  generally  as  those  relating  to 
judgments  in  actions  for  frauds.     The  action  must  be  founded 

i*'^  R.    S.   Sec.    51 17;  In  re   Pitts,  516.  9  Am.  B.  R.  685  and  cases  cited. 

No.   1 1 190,  Fed.  Cas.,  s.  c.  19  N.  B.  i^^  pianagan  v.   Pearson,  42  Tex. 

R.   63;    Warner   v.    Cronkhite,    No.  I. 

17180,  Fed.   Cas.,  s.  c.  6  Biss.  453.  ^S"  In  re  Blumberg,  94  Fed.  Rep. 

But  sec   Palmer  v.   Preston,  45  Vt.  476,  i  Am.  B.  R.  633- 

154.  '**'■  B.  A.   1898,  Sec.   17,  clause  2; 

>'*•'' Ball ictt  V.  Sccley,  .34  I'Y'd.  Rep.  In    re   Pitts,   No.    11190,    Fed.   Cas., 

300,  reversing  27  Fed.  Rep.  507.  s.  c.  19  N.  B.  R.  6^. 

»"♦  In  re  Wollock,  120  Fed.  Rep.  i«8  32  Stat,  at  L.  798. 


^68  LAW    AND    PROCEEDINGS    IN    BANKRLPTCY. 

iipiMi  the  false  pretenses  or  false  representations.  Incidental 
or  immaterial  false  representations  in  eonneetion  with  the 
transaction  are  not  sntticient.  They  must  have  been  essen- 
tial to  maintainini^  the  action  to  avail  to  take  the  judgment 
out  of  the  rule  that  judgments,  provable  in  bankruptcy,  are 
released  by  a  discharge. 

By  the  amendment  of  1903  the  word  "judgments"  was 
changed  to  read  "  liabilities."  ^^* 

Third,  a  discharge  in  bankruptcy  does  not  "release  judg- 
ments in  actions  for  willful  and  malicious  injuries  to  persons 
or  property  of  another,^^* 

The  effect  of  this  provision  is  not  to  except  all  judgments 
for  torts  from  the  efTect  of  the  discharge.  In  order  that  a 
judgment  shall  not  be  released,  the  injury  to  the  person  or 
property  must  have  been  willful  and  malicious.  Seduction  has 
been  held  to  be  a  willful  and  malicious  injury  both  to  the 
female.''*'*  and  to  the  father ;  "'  alienation  of  affections  may 
also  be  a  willful  and  malicious  injury.'"'  A  judginent  found- 
ed upon  negligence  without  malice  is  not  such  a  judgment. 
Such  judgments  undoubtedly  are  released  by  the  discharge. 
Whether  the  act  was  willful  and  malicious  inust  be  deter- 
mined by  the  record  of  the  court  in  which  the  judgment  was 
recovered.  It  is  a  question  of  law  for  the  court,  and  should 
not  be  submitted  to  a  jury.'**^ 

"  Judgment  "  is  here  also  changed  to  "  liability "  by  the 
amendment  of  1903."* 

§  292.     The  effect  of  a  discharge  upon  debts  not  scheduled. 

A  discharge  will  not  release  a  bankrupt  from  debts,  which 
have  not  been  duly  scheduled  in  time  for  proof  and  allow- 
ance, with  the  name  of  the  creditor  if  known  to  the  bankrupt, 
unless  such  creditor  had  notice  or  actual  knowledge  of  the 
proceedings  in  bankruptcy."*^     Where  the  court  has  jurisdic- 

'8»  B.  A.  1898,  Sec.  17,  clause  2.  i"-'  See    Flanagan   v.    Pearson,   42 

i''"/m    re    ^Taples,    105    Fed.    Rep.  Tex.   i. 

919,  5  Am.  B.  R.  426.  ""  .32  Stat,  at  L.  798. 

191 /«    re    Freche,    109   Fed.    Rep.  ^"^  B.  A.   1898,  Sec.  17,  clause  3; 

620,  6  Am.   B.  R.  479.  /"  re  Monroe,  114  Fed.  Rep.  398,  7 

192  Leicester   v.    Hoadley,   9   Am.  Am.  B.  R.  706,  Tyrrel  v.  Hammer- 

B.  R.   (Kas.)  318.  stein,  6  Am.  B.  R.  (N.  Y.)  430;  .see 

also  I  C.  C.  New    Series,  Ohio,  469. 


DISCHARGE.  769 

tion  and  the  claims  have  been  placed  upon  the  schedule,  or 
if  omitted  from  it  and  the  creditors  have  had  notice  or  actual 
knowledge  of  the  proceedings,  the  debt,  if  provable,  is  re- 
leased by  the  discharge. 

The  rule  established  by  the  present  act  is  quite  different  in 
many  respects  from  that  under  the  act  of  1867.  Under  that 
act.  if  the  notice  required  by  the  statute  had  been  duly  pub- 
lished, the  discharge  was  held  to  bar  the  debt,  although  the 
name  of  the  creditor  was  not  placed  on  the  schedule  nor  notice 
given  to  him.^^'' 
§   293.     Debts  created  by  fraud  or  embezzlement. 

A  discharge  in  bankruptcy  does  not  release  a  bankrupt 
from  debts  which  were  created  by  his  fraud  or  embezzlement.^"" 
This  is  substantially  a  reenactment  of  the  provision  of  the 
act  of  1867  in  this  regard."**  The  effect  to  be  given  to  this 
phrase  was  considered  and  fully  settled  by  the  supreme  court 
in  cases  arising  under  the  former  act.  The  word  "  fraud  " 
means  "positive  fraud,  or  fraud  in  fact  —  involving  moral 
turpitude  or  intentional  wrong,  as  does  embezzlement,  and 
not  implied  fraud  or  fraud  in  law."  "'^ 

This  phrase  was  held   not  to  apply  to  a  debt  created  by 

purchasing  in  good  faith  from  an  executor  bonds  belonging 

to  his  decedent's  estate,  at  a  discount,  although  such  an  act 

was  held   to  be  constructive   fraud. "'"'     Nor  does   it   include 

i»«Hill    V.   Rohbins,   i   Mich.    (N.  Singletarj'.    19   Ohio,   291;    Pattison 

P-)  305;  Thurmond  v.  Andrews,  10  &  Co.  v.  OHvcr,   10  R.  I.  448. 

Bush.  400;   Payne  v.   Able,  7  Bush.  i"^  B.  A.  1898,  Sec.  17,  clause  4. 

344;   Blum  V.   Ricks,  39  Tex.    112;  io«  R.  S.  Sec.  51 17. 

Symonds    v.    Barnes,    59    Me.    191;  loo /n  re  Blumberg,  94  Fed.  Rep. 

Hood    V.    Spencer,    No.    6665,    Fed.  476,    i    Am.    B.    R.    633 ;    Western 

Cas.,  s.  c.  4  McLean,  168;  Knabe  v.  Union   Cold    Storage    Co.    v.    Hurd, 

Hayes,   71    N.    C.    109;    Burnside   v.  116  Fed.  Rep.  442.  8  Am.  B.  R.  633; 

Brigham,     49     Mass.     75 ;     Fox     v.  Bracken    v.    Milncr,    104    Fed.    Rep. 

Paine,  10  Ala.  523;  Strong  v.  Claw-  522,   5   Am.    B.   R.   23;   Burnham   v. 

son,  ID  111.  346;  Stern  v.  Nussbaum,  Pidcock  (N.  Y.),  5  Am.  B.  A.  590; 

47  How.  Pr.  (N.  Y.)  489;  Campbell  In  re  Benedict    (N.  Y.),  8  Am.  B. 

V.   Perkins,  8  N.  Y.  430;  Morse  v.  R.    463;    Neal    v.    Clark,   95    U.    S. 

Presby,   25   N.   H.   299;    Magoon   v.  704;    Strang  v.   Bradner,   114  U.   S. 

VVarficld.  3  Greene  (la.)  293;  Hub-  555;    Palmer   v.   Husscy,   119  U.   S. 

bell  V.  Cramp.  11  Paige,  310;  Thom-  96;   Noble  v.   Hammond,   129  U.   S. 

as  V.  Jones.  39  Wis.  124;  Downer  v.  65;  Wolf  v.  Stix,  c;g  U.  S.  i ;  Ames 

Dana,  22  Vt.  2i7'<  Russell  v.  Cheat-  v.   .Moir,   138  U.   S.  311;   Upshur  v. 

ham,     16    Miss.     703;     Mitchell    v.  Briscoe.    1.3S  U.   S.  .365. 

200  Neal  V.  Clark.  05  U.  S.  704. 


7/0  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

such  fraud  as  the  law  impHcs  from  the  purchase  of  property 
from  a  debtor  with  intent  thereby  to  hinder  and  delay  the 
creditors  in  the  collection  of  their  debts.-"^  Nor  does  it  apply 
to  a  debt  created  by  a  person  asked  to  collect  money  for 
another  without  compensation,  and  to  keep  it  until  called  for, 
and  the  money  is  collected,  and.  without  actual  fraud,  is 
dejwsited  to  the  credit  of  the  collector  with  his  own  money, 
and  he  is  afterwards  forced  into  bankruptcy  and  effects  a 
composition  with  his  creditors.""'"  Nor  where  a  factor  or 
commission  merchant  converts  money  received,""^  nor  is  a 
debt  arising  by  an  overpayment  which  the  bankrupt  refused  to 
return  on  learning  of  the  overpayment  one  arising  in  fraud.^"* 
Where  the  claim  is  for  damages  on  account  of  actual  fraud 
or  deceit,  practiced  by  the  debtor,  the  claim  is  not  barred  by 
a  discharge. "*^°  Thus  a  private  banker  who  accepts  deposits 
with  full  knowledge  of  his  own  insolvency,  concealing  the 
fact  from  the  depositor,  is  guilty  of  fraud  and  the  debt  is  not 
released. -"''  A  debt  is  not  barred  by  a  discharge  where  goods 
are  purchased  with  the  intention  of  never  paying  for  them, 
or  by  fraudulent  representations  at  the  tinie.^"^  A  discharge 
was  held  not  to  bar  an  action  for  a  debt  created  by  fraud,  even 
where  the  creditor  has  proved  his  claim  in  the  bankruptcy 

201  Wolf  V.  Stix,  99  U.  S.  I.  Rep.  837;  In  re  Butts,  120  Fed.  Rep. 

2"2  Noble  V.  Hammond,  129  U.  S.  966;  Frey  v.  Torrey  (N.  Y.),  8  Am. 

65;  Zepcrink  v.  Card,  11  Fed.  Rep.  B.    R.    196,   75    N.    Y.   40;    Forsyth 

295.  V.  Vehmeyer,   177  U.  S.  177,  3  Am. 

203 /„  yg  Benedict  (N.  Y.),  8  Am.  B.  R.  807;  Strang  v.  Bradncr,  114 

B.  R.  463 ;  In  re  Basch,  97  Fed.  Rep.  U.  S.  555 ;  Ames  v.  Moir,  138  U.  S. 

761,  3  Am.  B.  R.  235;  Knott  v.  Put-  306;    Hughes    v.   Oliver,  8   Pa.    St. 

nam,  6  Am.  B.  R.  80,  107  Fed.  Rep.  426;  Morse  v.  Hutchins,  102  Mass. 

907;    Bracken   v.    Milner,    104  Rep.  439;  Stokes  v.  Mason,  10  R.  I.  261. 

522,  5  Am.  B.  R.  23.  That   the   intent   to   deceive   at  the 

20*  Western   Union   Cold    Storage  time  the  debt  was  contracted  is  es- 

Co.  V.  Hurd,  116  Fed.  Rep.  442,  8  sential,   see   Broadnax   v.   Bradford, 

Am.  B.  R.  633.  50  Ala.  270;   Brown  v.  Broach,  52 

205  The   court   in   Hargadine-Mc-  Miss.  536. 
Kittrick  Co.  v.  Hudson    (C.  C  A.         200  Prcy   v.    Torrey    (N.    Y.),    8 

8th  Cir.),  122  Fed.  Rep.  232,  seems  Am.  B.  R.  196,  75  N.  Y.  S.  40. 
to  say  that  unless  there  is  a  judg-         207  poj-gyth  v.  Vehmeyer,   177  U. 

ment  a  claim  for  fraud  is  released,  S.   177,  3  Am.  B.  R.  807;  Stewart 

but  see  contra   In  re  Wollock,   120  v.   Emerson,   52   N.   H.  301 ;  In  re 

Fed.  Rep.  516,  9  Am.  B.  R.  685,  and  Devoe,   No.   3843,   Fed.   Cas.,   s.   c. 

cases   cited ;   In  re   Cole,   106   Fed.  i  Low.  251. 


DISCHARGE.  771 

proceedings  and  received  a  dividend  on  it.-°^  The  act  of  1867 
pro\ided  that  "  the  debt  may  be  proved,  and  the  dividend 
thereon  shall  be  a  payment  on  account  of  such  debt."  ^"^  The 
rule  must  be  the  same  under  the  present  act  because  the  ex- 
emptions from  the  effect  of  a  discharge  relate  to  provable 
claims.  It  can  not  be  contended  that  by  proving  a  claim  the 
creditor  waives  a  right  expressly  given  him  by  the  statute. 

It  has  been  held  that  where  a  plaintiff  sues  on  a  contract  he 
may  reply  to  the  plea  of  discharge  that  the  debt  was  created 
by  fraud."^^  The  reason  for  this  rule  is  that  the  plaintiff  does 
not,  by  his  replication,  attempt  to  rescind,  or  invalidate,  or 
renounce  the  contract,  but  he  affirms  it,  and  claims  that  the 
debt  is  a  valid  subsisting  debt.  In  his  petition  he  asserts  a 
debt.  In  his  reply  he  asserts  the  same  debt.  He  avers  the 
fraud,  not  to  avoid  the  contract,  but  to  show  that  the  defend- 
ant can  not  avoid  it ;  not  to  show  that,  by  reason  of  the  fraud, 
the  debt  declared  upon  was  never  created,  but  to  show,  being 
created,  it  was  not  discharged  under  the  bankrupt  act  —  not 
to  show  that  there  was  any  such  debt  but  to  show  such  a  debt 
notwithstanding  the  discharge. 

§  294.     Fiduciary  debts. 

A  discharge  does  not  release  a  bankrupt  from  debts  which 
were  created  by  him  "  while  acting  in  any  fiduciary  capac- 
ity." -" 

This  phrase  is  substantially  a  reenactment  of  the  provision 
of  the  act  of  1867  in  this  regard."^  The  effect  to  be  given  to 
tlie  i)hrase  "  while  acting  in  any  fiduciary  capacity  "  has  been 
considered  and  fully  settled  by  the  supreme  court  in  cases 
arising  under  the  former  acts.  'I'his  phrase  relates  to  special 
trusts,  and  does  not  include  those  trusts  which  the  law  implies 
from  the  contract,  and  which  form  an  element  in  every  agency 
and  in  nearlv  all  the  commercial  transactions  in  the  country. 
It  is  confined  to  technical  trusts.""  and  the  fiduciary  character 
is  not  that  which  the  debt  gives  rise  to,  but  must  exist  inde- 

208  Prey    V.    Torrcy    (N.    Y.),    8      270;  Hamilton  v.  Reynolds,  88  Tnd. 
Am.   B.   R.    196,  75   N.   Y.    S.  40;      191. 
Stokes  V.  Mason,  10  R.  I.  261.  ^n  b.  A.   1898.  Sec.   17,  clanse  4. 

^ooR.  S.  Sec.  51T7.  212  R.  s.  Sec.  51 17- 

210  Stewart  v.  Emerson.  52  N.  H.  21.1 /„  re  Benedict  (N.  Y.),  8  Am. 

301;  Broadnax  v.  Bradford,  50  Ala.       B.  R.  46.3;   Bracken   v.  Milner,   104 


//- 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


pendently  of  it."^*  Thus  a  factor,  commission  merchant,  or 
agent,  who  has  sold  property  of  his  principal  and  has  failed 
to  pay  over  to  him  the  proceeds  is  held  not  to  owe  to  him  a 
debt  created  in  a  fiduciary  capacity.-^'* 

Under  the  act  of  1867  a  series  of  diverse  rules  by  different 
courts  arose  on  this  subject.  Some  judges  conceived  that  act 
to  be  broader  in  scope  than  the  act  of  1841,'"^°  and  hence  treated 
agents,  factors,  commission  merchants,  etc.,  as  acting  in  a 
fiduciary  capacity.^^^  Other  judges  took  the  view  that  the  act 
of  1867  used  the  phrase  "  acting  in  a  fiduciary  character  "  in 
the  sense  which  it  had  received  by  construction  in  Chapman 
V.  Forsyth  under  the  act  of  1841.-^^  The  effect  of  the  decisions 
of  the  supreme  court  established  the  latter  as  the  correct  con- 
struction.'^"  Thus,  where  a  person,  to  secure  a  debt  from  him- 
self, hy])othecates  securities  which  had  been  pledged  to  him 
to  secure  the  obligation  of  another,  and  failed  to  return  them 
when  such  obligation  was  discharged,  was  held  not  thereby 
to  create  a  debt  in  a  fiduciary  capacity. ^^^ 

bezzlement  of  the  bankrupt,  or  by 
his  defalcation  as  a  public  officer, 
or  while  acting  in  any  fiduciary 
character,  shall  be  discharged  by 
proceedings  in  bankruptcy ;  but  the 
debt  may  be  proved,  and  the  divi- 
dend thereon  shall  be  a  payment  on 
account  of  such  debt." 

217  In  re  Seymour,  No.  12684, 
Fed.  Cas.,  s.  c.  i  Ben.  348;  In  re 
Kimball,  No.  7769,  Fed.  Cas.,  s.  c.  6 
Blatch.  292;  Whitaker  v.  Chapman, 
3  Lans.  (N.  Y.)  155;  Lemcke  v. 
Booth,  47  Mo.  385 ;  Gay  v.  Farran, 
2  Cinn.  Sup.  Ct.  426;  Header  v. 
Sharpe,  54  Ga.  125;  Banning  v. 
Bleakley,  27  La.  Ann.  257. 

218  Woolsey  v.  Cade,  15  N.  B.  R. 
238;  Owsley  V.  Cobin,  No.  10636, 
Fed.  Cas.,  s.  c.  15  N.  B.  R.  489; 
Cronan  v.    Cotting,    104  Mass.   245. 

2i»Neal  v.  Clark,  95  U.  S.  704; 
Hennequin  v.  Clewes,  III  U.  S. 
676.  For  a  review  of  the  author- 
ities, see  Upshur  v.  Briscoe,  138 
U.  S.  365. 

2-0  Hennequin  v.   Clewes,  ill 


Fed.  Rep.  522,  5  Am.  B.  R.  23; 
Chapman  v.  Forsyth,  2  How.  202; 
Hennequin  v.  Clewes,  iii  U.  S.  676; 
Palmer  v.  Hussey.  119  U.  S.  96, 
ainrming  87  N.   Y.  303. 

21*  Bracken  v.  Milner,  104  Fed. 
Rep.  522,  5  Am.  B.  R.  23. 

215 /„  re  Benedict  (N.  Y.),  8  Am. 
B.  R.  463;  Knott  V.  Putnam,  107 
Fed.  Rep.  907,  6  Am.  B.  R.  80;  In 
re  Basch,  97  Fed.  Rep.  761,  3  Am. 
B.  R.  235;  Chapman  v.  Forsyth,  2 
How.  202. 

216  In  Sec.  I  of  the  act  of  1841  (5 
Stat,  at  L.  441),  debts  are  not  prov- 
able "  which  have  been  created  in 
consequence  of  defalcation  as  a  pub- 
lic officer,  or  as  executor,  adminis- 
trator, guardian  or  trustee,  or  while 
acting  in  any  fiduciary  cai)acity," 
and  hence  were  not  released  by  a 
discharge  because  only  provable 
debts  were  affected  by  the  dis- 
charge (see  Sec.  4  of  the  act  of 
1841). 

R.  S.  Sec.  5117  provides  that  "no 
debt  created   by  the  fraud   or   em- 


DISCHARGE.  'J'JT^ 

A  balance  due  on  the  subscription  to  capital  stock  of  a  cor- 
poration has  been  held  not  to  be  a  fiduciary  debt.""^  A  sum 
of  money  to  whicii  a  wife  was  entitled  on  the  sale  of  certain 
real  estate  in  partition  proceedings  was  decreed  to  be  paid  to 
her  husband  to  have  the  use  of  the  interest  and  give  bond  for 
the  payment  of  the  principal  at  his  death  or  when  ordered  to 
do  so  by  the  court.  In  an  action  to  recover  such  a  principal 
sum  it  was  held  that  the  liability  incurred  by  the  husband  was 
incurred  while  acting  in  a  fiduciary  capacity,  and  was  not  dis- 
charged by  proceedings  in  bankruptcy.^^^ 

Executors,  Trustees,  Guardians,  etc. —  A  discharge 
does  not  release  a  debt  due  by  a  testamentary  trustee,  execu- 
tor, administrator,  or  guardian,  as  such.  These  are  the  spe- 
cial or  technical  trusts,  which  have  been  uniformly  held  to 
create  obligations  not  released  by  a  discharge.  Thus  it  ha^ 
been  held  to  be  a  fiduciary  debt  where  a  sum  of  money  is  due 
from  an  executor,  as  such,  to  the  residuary  legatee, '^^  or  where 
a  guardian  fails  to  account  for  money  belonging  to  his  wards. 
In  such  cases  a  surety  of  the  bankrupt,  having  paid  his  liability 
on  a  bond,  may  recover  such  amount  from  the  bankrupt  out  of 
property  acquired  after  the  discharge.^"* 

It  should,  however,  be  observed  that  the  debt  must  be  due 
from  the  trustee,  executor,  administrator,  or  guardian  in  his 
official  capacity.  An  individual  indebtedness,  even  though 
connected  with  the  trust  estate,  is  not  a  fiduciary  debt.  Thus, 
where  a  guardian  gave  his  note  under  seal  to  the  ward's  hus- 
band in  settlement  of  his  account  and  received  a  release  from 
them  he  was  held  not  liable  in  a  fiduciary  capacity .^^'  Where 
a  note  is  given  as  new  evidence  of  an  old  debt,  without  a  re- 
lease, no  release  of  the  debt  is  effected  by  the  discharge."'" 
Where  an  executor  gave  his  personal  guarantee  of  a  claim  of 
a  creditor  against  the  testate's  estate  the  guarantee  was  held 

S.  676;   Palmer  v.  Hiissey,   119  U.  "4  Carlin  v.  Carlin,  8  Bush.  (Ky.) 

S.  g6,  aflRrmiriR  87  N.  Y.  303.  141;  Halliburton  v.  Carter,  55  Mo. 

-21  Morrison    v.    Savage,    56    MA  435. 

142.  --5  Coleman  v.  Davies,  45  Ga.  489. 

222  Mock    V.    llowcll,    loi    N.    C.  Sec  also    Elliot  v.   Higgins,   83   N. 

443.  C.  459 

*23CrisfieId  v.   State,  55   Md.   192.  2::o  ^lajison    v.    Dunkle,    114    Ind. 

3(  "^"- 


774  LAW    AND    PROCEEDINGS    IN    BANKRITPTCY. 

an  ordinary  debt  and  not  one  created  while  acting  in  a  fidu- 
ciary capacity."'^ 

Attorneys. —  An  attorney,  who  collects  debts  for  a  client, 
has  been  held  to  act  in  a  Ikhiciary  capacity,  and  will  nut  be 
released  by  a  discharge  from  his  obligation  to  ])ay  the  money 
to  his  client."'"*  Where  an  attorney  acts  as  a  gratuitous  bailee, 
and  his  liability  is  merely  for  negligence  in  failing  to  return 
a  note,  he  is  released  by  a  discharge."** 

Officers. —  A  discharge  in  bankruptcy  does  not  release  a 
bankrupt  from  a  debt  which  was  created  by  his  defalcation 
while  acting  as  an  officer."^"  Precisely  who  are  included  in  the 
term  "  officer  "  can  not  be  stated.  It  manifestly  includes  all 
public  officers.  A  collector  of  city  taxes  is  such  an  officer, 
and  a  debt  due  from  him  to  the  municipal  corporation  for 
taxes  received  and  not  accounted  for  is  not  discharged. "^^  So 
where  a  retiring  township  trustee  gave  his  note  to  his  succes- 
sor in  satisfaction  of  a  debt  due  the  township  for  funds  wrong- 
fully appropriated  to  his  own  use,  it  was  held  that  the  debt 
was  not  so  changed  thereby  as  to  be  released  by  a  discharge. ^^^ 
The  mere  negligence  of  a  public  officer  in  collecting  moneys, 
which  it  is  his  duty  to  collect,  has  been  held  not  to  be  a 
defalcation.-''^ 

Sureties  on  bonds  of  public  officers  are  not  within  the  ex- 
emption. It  has  been  held  that  a  discharge  granted  to  a 
surety  will  release  him  from  any  liability  actually  incurred 
upon  his  bond,  even  though  his  principal  is  guilty  of  a  defal- 
cation."^* 

The  phrase  "  while  acting  as  an  officer  or  in  any  fiduciary 
capacity,"  has  been  held  to  apply  only  to  "  defalcation,"  so 

227  Amoskeag  Manufacturing  Co.  Richmond  v.  Brown,  66  Me.  57Z- 
V.  Barnes,  49  N.  H.  312.  232  \ia(jisQ,-,    ^    Dunkle,   114   Ind. 

228  Heffren  v.  Leroy,  39  Ind.  471 ;      262. 

Heffren    v.    Jayne,    39    Ind.    463;  238  Courtney  v.  Beale,  84  Va.  692. 

Flanagan    v.    Pearson,   42   Tex.    i ;  234  :McMinw    v.    Allen,    67    N.    C. 

White    V.    Piatt,    5    Den.    (N.    Y.)  131;   Steele  v.  Graves,  68  Ala.  21; 

274.    But  see  Wolcott  v.  Hod!?e,  81  Fowler    v.    Kendall,    44    Me.    448; 

Mass.  547;   Williamson  v.  Dickens,  Reitz   v.    The    People,    72   111.   435; 

5  Ired.  Law  (N.'  C.)  259.  Jones  v.  Knox,  46  Ala.  53;   Saun- 

220  McAdoo  V.  Lummis,  43   Tex.  ders    v.    Commonwealth,     10    Grat. 

227.  (Va.)  494.    But  see  U.  S.  v.  Herron, 

^'-''B.  A.   1898,   Sec.   17,  clause  4.  20  Wall.  251. 

231  Morse  v.  Lowell,  48  Mass.  152 ; 


DISCHARGE,  775 

debts  created  by  "  fraud,  embezzlement  or  misappropriation  " 
are  not  released,  although  the  bankrupt  was  not  acting  as  an 
officer  or  in  any  fiduciary  capacity.""" 

§  295.     Debts  created  by  misappropriation. 

It  will  be  observed  that  clause  4  of  section  17  is  substan- 
tially a  reenactment  of  the  provision  of  the  act  of  1867,-^*'  with 
the  addition  of  the  word  "  misappropriation."  It  is  a  new 
word  in  bankrupt  laws.  It  is  not  contained  in  the  English 
statutes  nor  in  the  former  United  States  statutes  on  the  sub- 
ject of  bankruptcy. 

It  was  manifestly  inserted  for  some  purpose.  In  view  of 
the  judicial  construction  of  R.  S.  section  51 17,  it  may  be  for 
the  purpose  of  excluding  from  the  effect  of  a  discharge  debts 
created  by  implied  fraud.  It  was  settled  by  the  supreme 
court  that  ''  debts  created  by  fraud  "  meant  actual  fraud.'"  It 
was  also  settled  that  fiduciary  debts  were  thus  created  only 
in  the  discharge  of  a  technical  trust.-^^  It  follows  from  these 
two  propositions,  and  the  facts  in  the  cases  cited  to  support 
them,  as  well  as  in  many  other  cases  decided  by  the  inferior 
courts,  that  a  factor,  agent,  commission  merchant,  collecting 
agent,  bailee  or  auctioneer  was  not  acting  in  a  fiduciary  capac- 
ity with  reference  to  their  principals,  and  that  the  mere  con- 
version of  property  in  their  hands  without  actual  fraud  was 
not  a  debt  included  within  the  statutory  exemption  from  the 
effect  of  a  discharge.  Such  debts  were  held  to  be  discharged. 
It  would  therefore  seem  reasonable  to  conclude  that  the  inser- 
tion of  the  word  "  misappropriation  "  was  intended  to  bring 
debts  of  this  character  within  the  exemption  from  the  effect 
of  a  discharge  to  the  same  extent  as  debts  created  by  actual 
fraud  or  by  a  person  acting  in  a  fiduciary  capacity.  This 
view  was  taken  by  Laughlin,  J.,  in  Frey  v.  Torrey,"'"'  where 
he  said :     "  We  regard  the  addition  of  the  word  *  misappro- 

23t>/n  re  Butts,  120  Fed.  Rep.  966;  v.  Moir,  138  U.  S.  zw,  Upshur  v. 

Frey  v.  Torrey   (N.  Y.),  8  Am.  B.  Bri.scoe,   138  U.   S.  365- 
R.  196,  75  N.   Y.  S.  40.  238  Chapman   v.  Forsyth,   2  How. 

23"  R.  S.  Sec.  5117.  202;    Hennequin    v.    Clews,    iii    U. 

2"Neal   V.   Clark,  95  U.   S.   704;  S.  676:    Palmer  v.  Hussey,    119  U. 

Wolf  V.   ,Stix.  99  U.  S.   r ;  Strang  S.  96. 

V.   Rradner,    114  U.    S.  555:    Noble  ^m.  r  Am.    15.    R.    i,j,6,    199,  75   N. 

V.  Hammond,   129  U.  S.  65 ;   Ames  Y.  S.  40,  +2- 


77^  i-AW    AND    I'ROCKEDINGS    IN    UAN  KKl  TTCY, 

priatii'U  '  inserted  in  subdivision  4  of  section  17  of  the  act  of 
1898,  w  hich  was  not  in  the  former  act,  as  quite  signihcant  and 
as  desii^ned  to  except  from  the  thschar^e  the  classes  of  debts 
last  referred  to  which  were  discharged  under  the  former  bank- 
ruptcy law."  The  opposite  view,  however,  was  taken  by 
Brown.  J.,  in  ///  re  Basch."***  Other  cases,  without  noticing  in 
particular  the  word  "  misapproj)riation,"  also  hold  that  debts 
of  this  class  arc  not  discharged."" 

§  296.     Codebtors  not  discharged. 

The  liability  of  a  person  wlio  is  a  codebtor  with,  or  guaran- 
tor, or  in  any  manner  a  surety  for  a  bankrupt,  is  not  altered 
by  the  discharge  of  such  bankrupt."'*" 

This  section  applies  to  the  discharge  in  bankruptcy,  and 
does  not  refer  to  nor  have  in  view  any  act  of  the  parties 
effecting  a  release  of  liability  in  law  or  in  equity."*'*  The  fact 
that  one  of  the  codebtors  has  received  a  discharge  will  not 
prevent  the  creditor  from  suing  anyone  else  liable  on  the 
same  debt;  and  proceedings  pending  against  gthers,  and  un- 
satisfied judgments  already  obtained  against  others  for  the 
same  debt,  are  not  affected  by  a  discharge  or  surrendered  by 
proving  the  debt."**  Thus  the  discharge  of  the  maker  in  no 
way  affects  the  endorser."*^  There  is  no  obligation  resting  on 
the  creditor  to  prove  his  claim  in  bankruptcy.^*''  The  bank- 
rupt statute  protects  the  surety  in  such  cases. ^*^  The  provision 
quoted  above  undoubtedly  includes  partners  jointly  liable,  al- 
though they  are  not  expressly  mentioned  in  the  section.^** 
Where  two  general  partners  are  discharged,  a  special  partner 

2*097  Fed.  Rep.  761,  3  Am.  B.  R.  Waller,  i  A.  K.  Marsh.   (Ky.)  488; 

236.  Bowery    Savings    Bank    v.    Clinton, 

2*1  Knott  V.  Putnam,  107  Fed.  2  Sandf.  (N.  Y.)  113;  Scldner  v. 
Rep.  907,  6  Am.  B.  R.  80;  In  re  Smith,  40  Md.  602;  Phillips  v.  Solo- 
Benedict  (N.  Y.).  8  Am.  B.  R.  463;  mon,  42  Ga.  192. 
Bracken  v.  Milner,  104  Fed.  Rep.  245  King  v.  Central  Bank,  6  Ga. 
522,  5  Am.  B.  R.  23 ;  In  re  Butts,  257 ;  Clopton  v.  Spratt,  52  Miss. 
120  Fed.  Rep.  966.  251. 

2*2  B.  A.   1898,  Sec.   16.     Compare  2*0  Clopton  v.  Spratt,  52  Miss.  251. 

R.    S.    Sec.    SI18.  247  B    A.   1898.   Sec.  57/. 

2<8  In    re    McDonald,    No.    8753,  248  As  to  the  effect  of  a  discharge 

Fed.  Cas.,  s.  c.  24  Pitts.  L.  J.  42.  upon    partners,    see    Sec.    102,    ante. 

2**  In    re    Levy,    No.    8297,    Fed.  See  also  in  re  Dillon,  100  Fed.  Rep. 

Gas.,    s.    c.    2    Ben.    169;    Payne    v.  627,  4  Am.  B.  R.  63. 
Abel,  7  Bush.  (Ky.)  344;  Moore  v. 


DISCHARGE.  'J'jy 

can  not  avail  himself  of  their  discharge  to  bar  an  action 
against  him  on  a  firm  obligation."""* 

The  question  of  the  effect  of  a  discharge  on  the  liability  of 
sureties  on  bonds  given  by  the  bankrupt,  to  release  property 
of  his  which  had  been  attached,  where  the  suit  was  pending 
at  the  time  of  the  commencement  of  bankruptcy  proceedings, 
was  variously  answered  by  the  courts  under  the  act  of  1867. 
Some  held  when  a  discharge  had  been  granted  to  a  bankrupt, 
pending  a  suit  in  which  a  judgment  on  his  property  had 
previously  been  dissolved  by  the  giving  of  a  bond,  no  judg- 
ment could  be  subsequently  entered  against  him  or  his  sure- 
ties. Others  held  otherwise.  The  question  came  before  the 
supreme  court  ten  years  after  the  bankrupt  act  had  been  re- 
pealed, in  the  case  of  Hill  v.  Harding."^''  It  was  held  in  that 
case  that  where  the  attachment  of  property  in  an  action  in 
the  state  court  was  dissolved  by  the  defendant  entering  into 
a  bond  with  sureties  to  pay  any  final  judgment,  and  the  de- 
fendant after  a  verdict  against  him  obtained  his  discharge  in 
bankruptcy,  the  bankrupt  act  did  not  prevent  the  state  court 
from  rendering  judgment  against  him  on  the  verdict,  with  a 
perpetual  stay  of  execution,  so  as  to  leave  the  plaintiff  at 
liberty  to  proceed  against  the  sureties.  In  that  case  the  court 
said :  "  If  the  sureties  should  ultimately  pay  the  amount 
of  any  such  judgment,  and  thereby  acquire  a  claim  to  be  re- 
imbursed by  their  principal  the  amount  so  paid  ( which  is  a 
point  not  now  in  issue),  it  would  be  because  his  liability  to 
them  upon  such  a  claim  did  not  exist  at  the  time  of  the  com- 
mencement of  the  proceedings  in  bankruptcy,  and  therefore 
could  not  be  proved  in  bankruptcy  nor  barred  by  the  discharge, 
and  consequently  would  not  be  affected  by  any  provision  of 
the  bankrupt  act." 

The  statutory  liability  of  officers  and  stockholders  of  a  cor- 
poration, being  in  the  nature  of  surety,  is  not  released  by  the 
discharge  of  the  corporation.  The  amendment  of  February 
5,  1903,  expressly  provides  that  the  bankruptcy  of  a  corpora- 
tion shall  not  release  its  officers,  directors  or  stockholders,  as 
such,  from  any  such  liability.""     A  suit  to  enforce  such  statu- 

2*»  Abcnrlrntli  v.  Van  Dolsen,  131  2"'  R.  A.  1S08,  Sec.  4  as  amended, 

U.   S.   66.  32  Stat,  at  L.  974. 

250  130  U.  S.  699. 


778  l.AW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

toiy  liability  may  ho  maintained  against  such  officers  or  stock- 
holders notwithstanding  the  fact  that  the  corporation  has 
obtained  a  discharge.-'"'-  A  court  of  bankruptcy  may  refuse 
to  stay  a  suit  against  the  corporation  but  may  permit  a  judg- 
ment to  be  entered  with  stay  of  execution  for  the  purpose  of 
fixing  the  liability  of  the  stockholders  and  officers,  when  such 
judgment  is  required  as  a  condition  precedent  to  maintaining 
suit  to  enforce  the  statutory  liability  of  officers  and  stock- 
holders.-"''•'  A  judgment  against  a  corporation  obtained  after 
a  discharge  granted  and  pleaded  in  the  suit  is  not  such  a  judg- 
ment as  is  required  by  the  Massachusetts  statute  as  a  condition 
precedent  to  maintain  a  suit  to  enforce  the  statutory  liability  of 
its  officers  and  stockholders."'^*  It  is  error  for  a  state  court 
to  enter  such  a  judgment.-^*  But  where  the  judgment  is  en- 
tered before  the  discharge  is  granted  or  when  it  is  not  pleaded 
it  would  seem  to  be  a  sufficient  compliance  wdth  such  statute. 

A  discharge  does  not  have  the  effect  of  releasing  a  liability 
of  a  surety  on  an  appeal  bond  while  the  appeal  is  pending,^^^ 
or  upon  replevin  bonds  ;^^"  or  upon  an  administrator's  bond;-" 
or  upon  an  auctioneer's  bond  ;-^®  or  upon  jail  bonds, -^'*  except 
where  the  bankrupt  leaves  the  prison  limits  after  he  receives 
his  discharge.^*'*'  Where  one  of  several  cosureties  is  dis- 
charged, so  that  he  is  released  from  his  liability  as  such, 
he  is  also  released  from  the  duty  of  contribution  to  his  co- 
sureties.^^^ 

One  of  several  joint  debtors  discharged  in  bankruptcy  may 
be  made  a  party  to  a  suit  upon  a  debt  from  which  he  is  dis- 
charged.^^^  The  reason  for  this  is  that  the  discharge  is  a  per- 
sonal privilege  which  he  may  or  may  not  plead  as  a  defense. 
If  he  does  not  plead  his  discharge  a  judgment  may  be  en- 
tered against  him."*'^ 

252  Wood  V.  Vanderveer,  55  N.  Y.  Marsh.  (Ky.)  488;  Miller  v.  Gil- 
App.   Div.    549.  lespie,  59  Mo.  220. 

253  /„  fe  Marshall  Paper  Co.,  102  --'^  Jones  v.  Russell,  44  Ga.  460. 
Fed.    Rep.  872,   4  Am.    B.   R.   468 ;          259  Dyer  v.  Cleaveland,  18  Vt.  241 ; 
In  re  Motor  Co.,  119  Fed.  Rep.  441,  Claflin    v.    Cogan,    48    N.    H.    411; 
9  Am.  B.   R.  533.  Goodwin  v.  Stark,  15  N.  H.  218. 

25<  Train  v.  Marshall   Paper  Co.,  260  Kirby  v.  Garrison,  21  N.  J.  L. 

180  Mass.   513.  179- 

-"  Knapp  V.  Anderson,  71   N.  Y.  '-ei  Tobias  v.  Rogers,  13  N.  Y.  59. 

466,  affirming  7  Hun   (N.  Y.)  295;  But  see  Miller  v.  Gillespie,  59M0.  220. 

Hall  V.  Fowler,  6  Hill  (N.  Y.)  630.  262jenks    v.    Opp,    43    Ind.    108; 

250  Fiagg  V   Tyler,  6  Mass.  33.  Camp  v.  Gifford,  7  Hill  CN.  Y.)    169. 

26^  Moore    v.    Waller,    i    A.    K.  ^c.-?  See  Pleading  a  discharge.  Sec. 

298,  post. 


DISCHARGE.       •  779 

§  297.     The  effect  of  a  new  promise  upon  a  discharged  debt. 

As  has  been  pointed  out,  the  effect  of  a  discharge  is  to  re- 
lease a  bankrupt  from  his  liability  for  provable  debts.  ^  He 
is  not  bound  in  law  to  pay  any  debt  released  by  his  dis- 
charge. The  moral  obligation  of  the  bankrupt  to  pay  it 
remains.  It  is  due  in  conscience  although  discharged  in 
law,  and  this  moral  obligation,  together  with  a  subsequent 
promise  by  the  bankrupt  to  pay  the  debt,  gives  a  right  of 
action.' 

There  is  considerable  conflict  in  the  decisions  under  the 
former  bankrupt  acts,  as  to  whether  the  action  should  be 
founded  on  the  original  debt  or  on  the  new  promise.  Some 
judges  were  of  the  opinion  that  the  discharge  extinguished 
the  debt,  and  the  only  cause  of  action  w^as,  therefore,  on  the 
new  promise.^  The  better  authority,  however,  is  to  the  effect 
that  the  new  promise  revives  a  debt  barred  by  the  discharge, 
and  that  the  creditor  should  declare  on  the  original  debt  and 
not  on  the  new  promise.*  If  the  debt  were  wholly  extin- 
guished by  the  discharge  it  is  hard  to  see  what  consideration 
would  support  a  new  promise.  Upon  principle,  therefore,  it 
would  seem  that  the  new  promise  should  be  considered  a 
waiver  of  the  discharge  as  a  defense. 

Where  there  is  no  state  law  requiring  the  promise  to  pay  a 
debt  discharged  in  bankruptcy  to  be  made  in  writing,  the 
promise  may  be  proved  by  parole,  and  when  proved  is  bind- 
ing.^    An  oral  promise  made  before  a  statute  requiring  it  to 

1  See  General  nature  and  effect  INIurphy  v.  Crawford,  114  Pa.  St. 

of  a  discharge,  Sec.  284,  «///^.  496;  Fleming  v.  Lullnian,  1 1   IMo. 

2Dusenbury  v.  Hoyt,  53  N.  Y.  App.  104;   Ross  v.  Jordan,  62   Ga. 

521;    Maxim    v.    Morse,  8   Mass.  298;  Horner  v.  Speed,  2   Patt.  & 

127;  Fletcher  v.  Neally,  20  N.  H.  H.  (Va.)  616. 

464;  Herdon    v.  Givens,    16   Ala.  "•  Dusenbury  v.   Iloyt.  53  N.  Y. 

261;    Blanc    V.    Ranks,    ro    Rob.  521;    Maxim    v.    Morse,  8  Mass. 

(La.)    ri.s;    Williams  v.    Robbins,  127  ;  Marshall  v.  Tray,  74  111.  379; 

32  Me.   181  ;  Sjiooner  v.    Rus.sell,  Badger  v.  Gilmore,  33  N.  H.  361  ; 

30  Me.  454.  Apperson  v.  vStewart,  27  Ark.  619; 

"Kckler  v.  Galbraith,    12    JUtsli.  Riggs  v.   Roberts,  85  X.  C.    151; 

(Ky.)  71 ;  Carson  v.  Osborn,  10  B  Fraley  v.  Kelly,  67  N.  C.  78. 

Mon.   (Ky.)    155;    Egbert   v.    Mc-  ''Hill  v.  Robins,  22  Mich.  474; 

Michael,  9  B.  Mon.  (Ky.)  44 ;  Ho-  Barron    v.    Benedict,  44    Vt.   518; 

bough  V.  Murphy,  114  Pa.  St.  358;  Apperson  v.  wStewart,  27  Ark.  619, 


-8o  T.AW    AND    rR(H'KKl)lN(".S    IN     HANKKirTtV. 

be  in  writing  is  binding,  and  will  defeat  a  defense  of  bank- 
ruptcy in  actions  subsequently  brought.' 

It  is  immaterial  at  what  date  a  new  promise  is  made.  It  is 
a  sufficient  consideration  if  the  new  promise  is  made  before 
the  discharge  as  well  as  after  it.'^  It  may,  however,  be 
doubted  if  a  new  promise  would  entitle  a  judgment  cred- 
itor to  sue  execution  on  a  judgment  released  by  a  discharge." 
An  original  debt  is  revived  only  as  of  the  date  of  the  new 
promise.* 

All  the  authorities  agree  that  the  promise  by  which  a  dis- 
charged debt  is  revived  must  be  clear,  distinct  and  unequiv- 
ocal. It  may  be  an  absolute  or  a  conditional  promise,  but 
in  either  case  it  must  be  unequivocal,  and  the  occurrence  of 
the  condition  must  be  averred,  in  case  the  promise  be  condi- 
tional. The  rule  is  different  in  regard  to  the  defense  of  the 
statute  of  limitations  against  a  debt  barred  by  the  lapse  of 
time.  In  any  case  acts  or  declarations  recognizing  the  pres- 
ent existence  of  the  debt  have  often  been  held  to  take  the 
case  out  of  the  statute,  but  not  so  in  the  class  of  cases  relating 
to  new  promises  reviving  debts  discharged  in  bankruptcy. 
In  order  to  revive  a  discharged  debt  the  jury  must  be  authoi- 
ized  by  it  to  say  that  there  is  the  expression  by  the  debtor  of 
a  clear  intention  to  bind  himself  to  the  payment  of  the  debt,  ^ 

Thus  it  has  been  held  to  be  a  sufficient  promise  to  suppoit 
an  action  where  a  debtor  promises  "to  settle"  a  liquidated 
demand  concerning  which  there  was  no  dispute  between  the 
parties,®  or  where  a  debtor  declared  that  he  was  "able  and 
willing  to  pay  the  debt, "'or  the  statement  "I  intend  to 
pay,"  upon  the  happening  of    a  particular    event, ^    or  any 

1  Williams  v.   Robbins,   32  Me.  *Willisv.Cushman,  r  15  Ind.  100. 

181;  Spooner  v.  Russell,  30  Me.  *  Allen    v.  Ferguson,  18  Wall,  i ; 

454.     But  see  Kingley  v.  Cousins,  Stewart  v.  Reckless,  24  N.  J.  L. 

47  Me.  91.  427  ;  Fraley  v.  Kelly,  67  N.  C.  78; 

'-i  Jersey  City  Ins.  Co.  V.  Archer,  Pratt   v.    Russell,  61    Mass.   462; 

122  N.  Y.  376;  Griel  v.  Solomon,  Church  v.  Winkley,  73  Mass.  460. 

82  Ala.  85;  Otis  V.  Gazlin,  31  Me.  « Stillwell  v.  Cope,    4  Denio  (N. 

567;  Wheeler  v.  Wheeler,  28  111.  Y.)  225. 

App.  385.  '  Evans  v.  Carey,  29  Ala.  99. 

»  Shuman  v.  Strauss,   52   N.  Y.  **  Bearing  v.  MoflStt,  6  Ala.  776. 
404.     This  case  was  dismissed  on 
another  ground. 


DISCHARGE. 


781 


agreement  to  pay  or  any  word  signifying  an  intention  to  pay 
or  giving  assurance  that  the  debtor  would  pay  (although  he 
did  not  use  the  word  promise),'  or  a  promise  "to  pay  the  old 
debts  as  well  as  the  new,"  '^  or  a  promise  to  pay  the  debt  he 
owed  "when  he  shall  be  able."^  It  is  not  necessary  that 
the  new  promise  be  made  by  the  bankrupt  to  the  creditor  or 
his  authorized  agent."  It  may  be  made  to  a  third  person. 
The  refusal  to  give  a  new  note  is  not  inconsistent  with  a 
promise  to  pay  an  existing  note.*  A  debt  revived  by  a  new 
promise  may  be  enforced  although  it  was  proved  in  the  bank- 
ruptcy proceedings.^ 

If  the  promise  is  not  clear,  distinct  and  unequivocal  it  docs 
not  revive  a  debt.  It  is  necessary  that  there  be  an  express 
promise  or  an  expression  by  the  debtor  of  a  clear  intention  to 
bind  himself  to  the  payment  of  the  debt."  It  has  been  held 
not  sufficient  to  constitute  a  new  promise  where  the  debtor 
merely  expressed  an  intention  to  pay  the  debt,**  or  declared 
that  he  "expects"  or  "hopes"  to  pay  as  fast  as  he  could,"  or 
mere  admissions  of  the  debt  or  acknowledgment  of  the  obliga- 
tion,'°  or  where  he  promised  to  give  his  note  and  did  not 
execute  it,"  or  where  he  has  made  partial  payments, •-  or  the 
mere  payment  of  interest. '^^  It  has  been  held  that  the  benefit 
of  the  new  promise  will  not  pass  to  the  endorsee  of  a  note  to 

'  Harris  v.  Peck,  i  R.  I.  262.  man  v.  Hobart,  26  Vt.  60;  Taylor 

"Hornthal  v.    McRae,  67  N.  C.      v.  Nixon,  4  Sneed  (Tenn.)  352. 

><  Allen  V.  Ferguson,    18  Wall,  i ; 


21. 


•Mason  v.  Hughart,    9  B.  Mon.  vStewart  v.  Reckless,  24  N.  J.  L. 

(Kv.)  480.  427;    Yoxtheimer   v.    Keyset,    11 

*  Bennett   v.    Everett,     3    R.    I.  Pa.  364;  Bearing  v.  Moffitt,  6  Ala. 

152;  Comfort  V.  Kisenbeis,  11  Pa.  776;  Church  v.  Winkley,  73  Mass. 

13;  Evans  v.   Carey,   29  Ala.  99;  460. 
Haines  v.  Stauffer,  13  Pa.  541.  »Bartlett  v.  Peck.     5   La.   Ann. 

■>  Pratt  V.  Rus.sell,  61  Ma.ss.  462;  669. 
rnderwood  v.  Eastman.  18  N.  H.  »<>  Prewett  v.  Caruthers,  20  Miss. 

5S2.     vSee  al.so  Horner  V.  Speed,  2  491;  Bennett  v.  Everett.   3  R. 

Patt.  &  H.  616,  152- 

••■Mason  v.  Hughart,    9  B.  Mon.  "  Porter  v.  Porter,  31  Me.  169. 

(Ky.)48o.  '•■^vStark    v.    Stin.son.  23     N.    H. 

■  Allen  v.  Kergu.son.    iSWall.  i;  259;  Viele    v.    Ogilvie,    2    Greene 

Fraley  v.  Kelly,  67  N.  C.  78;  vSam-  (la.)  326. 

uel  V.  Cravens.  10  Ark.  380;  vSher-  '•'•Cambridge  Inst.  v.  Littlefield, 

60  Mass.  210. 


yHj  LAW    AND    I'KOCEEDINGS    IX    BANlvRLTTCY. 

whom  it  is  susbequently  endorsed,  for  the  new  promise  is  not 

negotiable.' 

Where  the  debtor  has  promised  to  pay  the  debt  after  his 
discharge  the  creditor  may  bring  his  action  upon  the  original 
demand  and  reply  the  new  promise  in  avoidance  of  a  plea  of 
discharge.^  A  conditional  promise  and  an  nnconditional 
promise  may  be  joined  in  the  same  petition."  Where  the 
words  are  capable  of  being  construed  as  a  promise  it  is  for 
the  jury  to  determine  whether  the  bankrupt  intended  to 
promise  to  pay  the  debt/  or  whether  the  promise  was  abso- 
lute or  conditional  in  case  the  evidence  is  conflicting.^ 

§  298.     Pleading  a  discharge. 

A  discharge  in  bankruptcy  may  be  pleaded  in  bar  of  an 
action  founded  upon  a  debt  released  by  it.  A  state  court 
does  not  lose  jurisdiction  of  the  person  of  a  defendant  by  his 
being  adjudged  a  bankrupt.  A  judgment  may  be  rendered 
against  him  if  he  does  not  plead  his  discharge.  Unless  a 
defendant  pleads  his  discharge  he  is  deemed  to  have  waived 
it  as  a  defense.*'  No  proceeding  in  bankruptcy  can  be  pleaded 
in  bar  of  an  action  upon  ante-bankruptcy  debts  except  the 
discharge.' 

iWarwell  v.  Foster,  31  Me.  558;  ''- Dimock  v.   Revere,    117  U.    S. 

White  V.   Gushing,    30    Me.    267;  559,  affirming  90  N.  Y.  33  ;  Horner 

Walbridge  v.  Harroon,  18  Vt.  448.  v.  vSpelman,  78  111.  206;  Seymour 

But  see  Way  V.  Sperry,  60  Mass.  v.   Browning,  17  Ohio,  362;  Man- 

238;  Underwood  v.   Eastman,   18  warring  v.  Kouns,  35    Tex.   171  ; 

N.  H.  582.  Park  v.  Casey,  35  Tex.  536;  Jenks 

-  Dusenbury  v.  Hoyt,    53  N.  Y.  v.  Opp,  43  Ind.  108. 
^21  ;  ]Maxim  V.  Norse,  8  Mass.  127.  'Whitney    v.    Crafts,    10  Mass. 

In  those  states  which  held  that  23;  Atkinson    v.    Fortinberry,    15 

the  action  must  be  brought  ujjon  Miss.  302  ;  Hayes  v.  Flowers,   25 

the  new  promise  and  not  upon  the  Miss.  169;  Dick  v.  Powell,  2  Swan 

original  debt  a  different  rule  ex-  (Tenn.)  632;  Ingalls  v.  Savage,  4 

ists.     See  Egbert  v.  McMichael,  9  Pa.  224. 

B.  Mon.  (Ky.)  44;   Carson  v.  Os-  In    Nat.    Bank    v.    Taylor,    120 

born,  9  B.  Mon.  (Ky.)  155.  Mass.    124,  the  defendant  was  al- 

3  Horner  v.  Speed,  2  Patt.  &  H.  lowed  a  continuance  of  the  suit 

616.  upon  filing  a  copy  of  an  adjudica- 

*  Pratt  V.  Rus.sell,  61  Mass.  462;  tion  until  his  right  to  a  discharge 

Bennett  v.  P^verett,  3  R.  I.  152.  should  be  determined  by  the  court 

•'■' La  Tourrette  V.  Price,  28  Miss,  of  bankruptcy. 
702. 


DISCHARGE.  783 

A  discharge  may  be  pleaded  by  the  bankrupt/  or  by  a  per- 
son who  has  derived  title  from  the  bankrupt  subsequent  to 
his  bankruptcy,-  but  not  by  other  persons.^  A  discharge  of 
two  general  partners  can  not  be  set  up  in  favor  of  a  special 
partner  in  an  action  against  the  three  as  general  partners  on 
the  ground  that  the  special  partner  has  made  himself  liable 
as  a  general  partner.*  Where  a  bankrupt  joins  his  sureties 
in  pleading  his  discharge,  if  the  plea  is  insuSicient  for  them 
all,  it  is  bad  for  all,^ 

In  what  pleading,  answer  or  plea,  the  defense  of  a  discharge 
may  be  set  up  depends  upon  the  practice  relating  to  particular 
action  and  court  in  which  it  is  pleaded.  A  plea  of  discharge 
is  sufficient  if  it  sets  out  a  discharge  duly  authenticated.^  A 
certified  copy  of  an  order  confirming  a  composition  or  grant- 
ing a  discharge,  not  revoked,  is  evidence  of  the  jurisdiction  of 
the  court,  the  regularity  of  the  proceedings,  and  of  the  fact 
that  the  order  was  made.^ 

Where  a  discharge  has  been  granted  before  the  suit  on  the 
debt  is  commenced  the  plea  of  discharge  should  be  set  up  in 
the  first  instance.  The  court  will  not  permit  it  to  be  set  up 
by  amendment,  unless  a  good  excuse  for  omitting  it  is  shown. 
Where  a  discharge  is  granted  pending  the  suit  the  defense  of 
discharge  in  bankruptcy  is  regularly  permitted  to  be  set  up 
by  amendment  or  supplemental  answer  or  other  proper  plead- 

1  Boynton  v.  Ball,  121  U.  S.  457;  *  Abend  roth  v.  Van  Dolson,  131 
Banque     Franco  -  Egyptienne     v.      U.  S.  66. 

Brown,  24  Fed.  Rep.  106  ;  Ruiz  v.  "^  Dyer  v.  Cleaveland,  18  Vt.  241 ; 

Kickerman,  5  Fed.  Rep.  790.  Hall  v.  Fowler,  6  Hill  (N.  Y.)  630. 

2  Upshur  V.  Briscoe,  138  U.  S.  « McNeil  v.  Knott,  11  Ga.  142; 
365;  Fleitas  v.  Mellen,  39  Fed.  Rowan  v.  Holcombe,  16  Ohio,  463; 
Rep.  129;  Fleitas  V.  Richardson,  Downer  v.  Chamberlin.  21  Vt.  414; 
147  U.  vS.  550.  Morrison  v.  Woolson,  23  N.  H.  11; 

As  to  the  effect  of  a  discharge  Preston     v.    Simons,    i    Rich.    (S. 

granted  a.  feme  so/e  who  marries.  Car.)  262;  Lathroj)  v.  Stuart,  No. 

see  Chadwick  v.  Starrett,  27  I\Ie.  81 13,   Fed.   Cas.,  s.  c.  5  McLean, 

138.  167;  White    V.    How,    No.    17549, 

"  Moyer  V.  Dewey,  103  U.S.  301,  Fed.  Cas.,  s.   c.  3  McLean,  291. 
as  explained  in  Upshur  V.  Briscoe,  "  B.  A.    1898   Sec.  21/,-  Boas  v. 

138  U.  vS.  378:  Frazier  v.  Banks,  Hetzel,    3     Pa.     298;      Morse    v. 

iiLa.  Ann.  31.  Cloyes,     11     Barb.    (N.    Y.)    100; 

Pennell   v.  Percival,    13    Pa.    197. 


r>^4 


LAW     WD    rRDlF.l-.IIIXCS    I  \     UANKRITTCY. 


ing. '  It  will  not  be  allowed,  however,  where  application  to 
amend  is  not  seasonably  made.  *      Where  a  discharge  is  granted 

after  a  judgment  has  been  entered  it  is  usually  unavailing  as 
a  defense.'  But  judgments  by  default  have  frequently  been 
set  aside  to  allow  a  plea  of  discharge.^  .\n  execution  should 
not  issue  upon  a  judgment  after  the  debtor  has  obtained  a 
discharge.-'  If  an  execution  is  isued  it  may  be  perpetually 
stayed.^ 

Where  a  discharge  is  not  granted  until  the  case  is  in  an 
appellate  court  it  will  not  avail  the  defendant  ordinarily  as 
a  defense,"  because  there  is  no  way  in  which  it  can  be 
brought  before  the  court.  It  has  been  held,  however,  that 
the  appellate  court  might  enter  a  judgment  pro  forma  where 
a  discharge  was  suggested.'* 

J<  299.     Revoking  discharges. 

The  statute  provides  that  "the  judge  may,  upon  the  appli' 
cation  of  parties  in  interest  who  have  not  been  guilty  of  un- 
due laches,  filed  at  any  time  within  one  year  after  a  discharge 


1  Richards  v.  Nixon,  20  Pa.  19; 
Lyon  V.  Isett,  34  N.  Y.  vSupr.  41; 
Holyoke  v.  Adams,  59  N.  Y.  233; 
Fellows  V.  Hall,  No.  4722,  Fed. 
Cas.,  s.  c.  3  McLean,  281;  Kunz- 
ler  V.  Kohaus,  5  Hill  (N.  Y.)  317; 
Keene  v.  Mould,  16  Ohio,  12. 

In  Nat.  Bank  v.  Taylor,  120 
Mass.  124,  the  defendant  filed  an 
order  of  adjudication  in  the  state 
court  and  was  permitted  to  have 
a  continuance  to  await  the  deter- 
mination of  the  question  of  wheth- 
er he  received  a  discharge. 

2Medbury  v.  Swan,  46  N.  Y. 
200;  Barstow  v.  Hansen,  2  Hun 
(N.  Y.  Supr.)  333. 

3  Dimock  v.   Revere,  117    U.  S. 

559- 

<  vSavings  Bank  v.  Webster,  48 
N.  H.  21;  Lee  v.  Phillips,  6  Hill 
(N.  Y.)  246;  Carter  v.  Goodrich,  i 
How.  Prac.  (N.  Y.)  239;  vShurtleff 
V.   Thompson,  63   Me.   118;  Park 


V.  Casey,  35  Tex.  536;  Manwai" 
ring  V.  Kouns,  35  Tex.  171. 

•'Francis  v.  Ogden,  22  N.  J.  L- 
210;  Alcott  V.  Avery,  i  Bart/. 
Chan.  (N.  Y.)  347  ;  Hill  v.  Hard- 
ing, 130  U.  vS.  699;  Wolf  V.  Stix, 
99  U.  S.  I. 

«  Alcott  V.  Avery,  i  Barb.  Chan, 
(N.  Y.)  347;  Thomas  v.  Shaw,  2 
Cin.  Sup.Ct.  97 ;  Chambers  v.  Neal, 
13  B.  Mon.  (Ky.)  256;  McDougald 
v.  Reid,  5  Ala,  810;  Curtis  v.  Slos- 
son,  6  Pa.  265;  Graham  v.  Pier- 
son,  6  Hill  (N.  Y.)  247;  Stewart 
V.  Hargrove,  23  Ala.  429;  Bank  v. 
Franciscus,  10  Mo.  27. 

'  Wolf  V.  Stix,  99  U.  S.  I ;  Wolf 
V.  Stix  96  U.  S.  541;  Cornell  v. 
Dakin,  38  N.  Y.  253;  Riggs  v. 
Wliite,  4  Heisk.  (Tenn.)  503 ; 
Longley  v.  Swayne,  4  Heisk. 
(Tenn.)  506. 

"*  Bank  v.  Onion,  16  Vt.  470; 
Haggerty  v.  Morrison,  59  Mo.  324. 


DISCHARGE.  785 

shall  have  been  granted,  revoke  it  upon  a  trial  if  it  shall  be 
made  to  appear  that  it  was  obtained  through  the  fraud  of  the 
bankrupt,  and  that  the  knowledge  of  the  fraud  has  come  to 
the  petitioners  since  the  granting  of  the  discharge,  and  that 
the  actual  facts  did  not  warrant  the  discharge."  ^ 

This  provision  prescribes  the  forum,  the  time  within  which 
and  the  grounds  upon  which  direct  proceedings  to  impeach 
a  discharge  may  be  had.  The  remedy  thus  given  is  exclusive. 
The  application  must  be  made  to  the  court  which  granted  the 
discharge.  The  order  of  discharge  can  not  be  questioned 
or  attacked  collaterally  in  any  other  court,  either  state  or 
federal."  A  certified  copy  of  the  order  granting  a  discharge, 
not  revoked,  is  evidence  of  the  jurisdiction  of  the  court,  the 
regularity  of  the  proceeding,  and  of  the  fact  that  the  order 
was  made.^ 

The  application  must  be  made  by  a  party  in  interest.  A 
creditor,  whose  name  has  been  omitted  from  the  schedule,  and 
who  has  had  no  notice  or  knowledge  of  bankruptcy  proceed- 
ings, has  not  such  an  interest  as  will  enable  him  to  institute 
proceedings  to  vacate  a  discharge.  The  reason  for  this  is 
that  his  debts  are  not  affected  by  the  discharge.*  The  fact 
that  a  creditor  is  barred  from  proving  his  claim  by  Sec.  57W 
does  not  prevent  him  from  being  a  party  in  interest.^ 

The  application  must  be  filed  within  one  year  after  the  dis- 
charge has  been  granted,  and  by  one  who  has  not  been  guilty 

1  B.  A.  1898,  Sec.  15  and  Sec.  2,  Alston  v.  Robinett.  37  Tex.  56; 
clause  12.  Beardsley    v.    Hall,    36    Conn.    270; 

Compare    R.    S.    Sec.    5120.     The  Smith    v.    Ramsey,    27    O.    S.    339; 

act  of  1841  provided  that  a  discharge  Seymour  v.  Street,  5  Neb.  85 ;  Com- 

might  be  impeached  in  all  courts  of  mercial   Bank  v.  Buckner,  20  How. 

justice  for  certain  causes  and  in  the  108;  Black  v.  Blazo,  117  Mass.  17; 

manner  in  the  act  stated.     (Act  of  Parker  v.  Atwood,  52  N.  H.  181. 

T841.    Sec.    4,    5    Stat,    at    L.    440.)  But    see    Batchelder    v.    Low,    43 

Under    the    act    of    1800    discharge  Vt.    662;    Poillon    v.    Lawrence,    77 

might   be   impeached    when   pleaded  N.  Y.  208. 

as   a   defense.      (Act   of    1800,    Sec.  •"' B.   A.    1898.    Sec.   2if;   Allen   v. 

34,  2  Stat,  at  L.  19.)  Thompson,  10  Fed.  Rep.  116;  In  re 

2  Corey    v.    Ripley,    57    Me.    69 ;  Adams,  29  Fed.  Rep.  843. 

Gates  V.  Parish.  47  Ala.  157;  Ocean         *  B.  A.  1898.  Sec.  17,  clau.sc  3;  fn 

National   Bank  v.  Olcott,  46  N.  Y.  re  Monroe,  114  Fed.  Rep.  398,  7  Am. 

12;    Dusenbury   v.    Hoyt,   53    N.   Y.  B.  R.  706. 

521:    Reed    v.    BuUingtnn.   49    .Miss.  ° /n    re    Bimbcrg,    121    Fed.    Kc-p. 

223;  Way  V.  Howe,  108  Mass.  502;  942,  9  Am.  B.  R.  601. 


786  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

of  undue  laches.®  Where  the  petition  is  not  filed  within  one 
year  from  the  date  of  the  discharge  it  is  absolutely  barred  by 
the  statute.^  The  limitation  is  not  in  any  way  controlled 
by  the  discovery  of  the  fraud.®  A  person  will  not  be  per- 
mitted to  amend  his  application  after  the  expiration  of  one 
year  from  the  date  of  the  discharge  by  adding  new  grounds 
or  acts." 

What  causes  such  laches  on  the  part  of  the  applicant  as  to 
prevent  his  making  an  application  within  a  year  from  the 
granting  of  a  discharge  depends  upon  the  circumstances  of 
each  case.^"  Mere  averments  by  the  creditor  that  he  has  not 
been  guilty  of  laches  are  not  sufficient. ^^ 

The  application  is  made  by  petition,  addressed  to  the  judge 
and  filed  in  the  clerk's  office,  and  not  with  the  referee.  It 
should  state  the  names  and  residences  of  the  creditors  and 
their  interest  in  the  matter;  the  date  upon  which  the  order  of 
discharge  w^as  made;  the  particular  acts  complained  of  as 
fraudulent  on  the  part  of  the  bankrupt ;  that  the  knowledge  of 
the  fraud  has  come  to  the  petitioners  since  the  granting  of  the 
discharge;  that  the  actual  facts  did  not  warrant  a  discharge; 
and  pray  that  the  discharge  be  annulled  and  set  side.  The 
petition  should  be  signed  and  verified  ^^  by  the  creditors  or 
their  authorized  agent  or  attorney. 

6  B.  A.    1898,  Sec.  15.  upon  specification  of  objections,  and 

"  Mall    V.    Ullrich,   2>7   Fed.    Rep.  a  discharge  granted  in  the  absence 

653.  of    the    creditors,    upon   a    showing 

'^  Pickett  V.  McGavick,  No.  11 126,  that  their  counsel   was  unavoidably 

Fed.  Cas.,  s.  c.  14  N.  B.  R.  236;  In  prevented    from   being    present   and 

re  Brown,  No.  1983,  Fed.  Cas.,  s.  c.  from  informing  them  in  order  that 

19  N.  B.  R.  312.  they   might   obtain   a   postponement. 

»/«  re  Sims,  9  Fed.  Rep.  440.  In    re    Mclntire,    No.    8823,    Fed. 

^"/h  r^  Upson,  124  Fed.  Rep.  980;  Cas.,   s.  c.   2  Ben.  345,  a    specifica- 

/»  re  Murray,  No.  9953,  Fed.  Cas.,  tion    of   objections    to    a    discharge 

s.  c.  ^4  Blatch.  43,  five  months  was  had  been  filed,  which  was,  however, 

held    an    unreasonable    delay    under  too  vague  to  be  triable,  and  a  dis- 

the  circumstances  of  that  case.     See  charge  had  been  granted.     An  ap- 

also  in  re  Beck,  31  Fed.  Rep.  554;  plication    one    month    afterward    to 

In  re  Hunter,  No.  6902,  Fed.  Cas.,  have  the  case  reopened,  with  leave 

s.  c.  3  McLean,  297.  to  amend  the  specification,  was  de- 

In  in   re   Dupee,    No.  4183,   Fed.  nied  on  the  ground  of  laches. 

Cas.,  s.  c.  2  Low.  18,  Judge  Lowell  ^^ /m  re  Oleson,  no  Fed.  Rep.  796,. 

reopened     a     decree     of     discharge  7  Am.  B.  R.  22. 

where    the    date    had    been    set    for  1^  B.  A.    1898,   Sec.   i8c. 
hearing  an  application  for  discharge 


DISCHARGE,  787 

The  procedure  on  such  a  petition  is  not  prescribed  by  act 
or  the  general  orders.  The  bankrupt  should  have  reasonable 
notice  of  the  filing  of  such  petition  in  order  to  give  him  an 
opportunity  to  make  a  defense,  if  any  he  has.  This  he  may 
do  by  demurrer  if  the  petition  is  not  sufficient  in  law.  He 
should  set  up  his  defense  on  the  merits  in  an  answer  or  a 
plea.  The  time  within  which  such  pleading  should  be  filed 
may  be  fixed  by  the  judge.  When  an  issue  is  made,  the  case 
is  ripe  for  a  hearing  or  trial.  This  may  be  had  before  the 
judge  or  a  jury."  Evidence  may  be  introduced  by  the  peti- 
tioning creditors  and  by  the  bankrupt,  and  counsel  heard  for 
both  parties. 

The  fact  that  a  creditor  can  adduce  new  facts  happening 
since  the  discharge,  which  would  be  competent  evidence  for 
a  new  trial,  does  not  authorize  a  rehearing  or  a  new  trial  upon 
specifications  filed  in  opposition  to  the  discharge  of  a  bank- 
rupt, heard  and  determined  before  the  discharge.'* 

There  is  only  one  ground  specified  in  the  statute  upon 
which  a  discharge  can  be  revoked;  and  that  is,  that  the  dis- 
charge "  was  obtained  through  the  fraud  of  the  bankrupt."  ^^ 
The  creditor  has  the  right  to  have  the  discharge  set  aside 
when  such  fraud  was  used  in  obtaining  it  as  would  have  pre- 
vented the  granting  of  the  discharge  if  it  were  known  at  the 
time.'®  It  may  be  doubted  if  constructive  fraud  is  sufficient 
to  maintain  an  application  to  revoke  a  discharge.     It  should 

13  B.  A.   1898,  Sec.  19c.  In    re    Augenstein,    2    MacArthur 

i*/m  re  Corwin,  i  Fed.  Rep.  847;  (D.  C.)  322,  the  court  said:     "The 

In  re  Mclntire,  No.  8823,  Fed.  Cas.,  fraud    of   the   bankrupt   in    relation 

s.  c.  2  Ben.  345.  to    his    property    is    too    clear    for 

But   see  in  re  Dupee,   No.   4183,  doubt  or  discussion.     He  is  shown 

Fed.   Cas.,  s.   c.  2  Low.    18,    where  to  have  possessed  considerable  prop- 

a  case  was  reopened  after  discharge  erty,  of  which  he  gives  no  rational 

granted.  account,  no  assets  came  to  the  hands 

i"*  B.  A.  1898,  Sec.  15.  of  the  assignee,  and  his  wife,  when 

1* /»  re  Roosa,  119  Fed.  Rep.  542,  interrogated  as  to  how  she  came  to 

9  Am.  B.  R.  531 ;  Ex  parte  Briggs,  have  a  large  sum  of  money,  refused 

No.    1868,   Fed.    Cas.,   s.   c.   2  Low.  to  give  any  explanation.    The  traces 

389;    In    re    Rainstord,    No.    11537,  of    fraud     are    apparent    upon    the 

Fed.  Cas.,  s.  c.  5  N.  B.  R.  381 ;  In  slightest    examination    of    the    evi- 

re  Fowler,  No.  4999,  Fed.  Cas.,  s.  c.  dcnce,  and  liulc  or  nothing  need  be 

2  Low.  122;  In  re  Douglass,  11  Fed.  said   111)011   the  .subject." 

Rep.  403. 


ySS  LAW  AM)  i'Kc)ci:b:i)iNr.s  in   bankruptcy. 

be  actual  fraud  as  distinguishetl  from  fraud  in  law.  The 
courts  have  set  aside  decrees  of  discharge,  which  were  entered 
either  through  mistake  or  by  default.'" 

A  discharge  will  not  be  vacated  unless  the  court  is  satisfied 
that  the  creditor  or  his  representatixes  had  no  knowledge  of 
the  objections  at  the  time  the  discharge  was  granted.'**  Where 
an  attorney  has  knowledge  of  objections  it  will  be  presumed 
that  the  client  knows  the  same  facts. ^^ 

If  the  court  finds  that  the  fraudulent  acts  alleged  are  not 
proved,  or  that  they  were  known  to  the  creditors  before  the 
granting  of  the  discharge,  the  judgment  should  be  rendered 
in  favor  of  the  bankrupt.*"  In  such  case  the  validity  of  his 
discharge  is  not  affected  by  the  proceedings.  If  the  court 
finds  that  the  fraudulent  acts,  or  any  of  them,  alleged  by  the 
creditor  in  his  petition  are  proved,  and  that  the  creditor  had 
no  knowledge  of  the  same  until  after  the  granting  of  the  dis- 
charge, and  that  the  actual  facts  would  not  warrant  the  dis- 
charge, the  judgment  should  be  given  in  favor  of  the  creditor 
and  the  discharge  of  the  bankrupt  should  be  annulled. 

Costs  may  be  awarded  to  the  prevailing  party  in  such  a 
proceeding.^^ 

§  300.     The  effect  of  revoking  a  discharge. 

The  effect  of  annulling  an  order  granting  a  discharge  ren- 
ders the  discharge  invalid  as  a  defense  to  actions  upon  debts 
of  the  bankrupt.  Where  it  is  pleaded,  the  order  revoking  it  is 
a  good  answer  to  the  plea.  If  the  judgment  of  the  court  is  in 
favor  of  the  bankrupt  the  validity  of  his  discharge  is  not  af- 
fected by  the  proceedings  to  revoke  it. 

The  granting  of  a  discharge  is  in  no  way  dependent  upon 
the  settlement  of  the  bankrupt's  estate.^^     It  may  therefore 

1" /n    re    Amory    &    Leeds,    No.  i»/m  re  Douglass,    1 1   Fed.   Rep. 

336a,  Fed.  Cas.,  s.  c.  Betts  Scr.  Bk.  403. 

97;    In   re   Dupee,    No.   4183,    Fed.  20 /„   ^^   Hoover,    105   Fed.    Rep. 

Cas.,  s.  c.  2  Low.  18.  354,  5  Am.  B.  R,  247. 

18  B.    A.     1898,    Sec.    15;    In    re  ^^  In   re  Holgate,   No.   6601,  Fed. 

Bates,  27   Fed.    Rep.   604;    Marion-  Cas.,  s.  c.  8  Ben.  355. 

neaux's   Case,  No.  9088,  Fed.   Cas.,  '^'^  B.   A.    1898,   Sec.   14. 
s.  c.  I  Woods,  37;  In  re  Douglass, 
II  Fed.  Rep.  403. 


DISCHARGE.  789 

be  granted  and  revoked  before  the  estate  is  settled  and  the 
original  trustee  discharged.  Where  this  is  the  case  a  new 
trustee  is  not  necessary.  Otherwise  the  creditors  of  the  bank- 
rupt estate  may,  at  their  first  meeting  after  a  discharge  has 
been  revoked,  or  if  there  is  a  vacancy  in  the  office  of  trustee, 
appoint  one  trustee  or  three  trustees  of  such  estate.  If  the 
creditors  do  not  appoint  a  trustee  or  trustees  as  herein  provided, 
the  court  should  do  so.'^  Whenever  a  discharge  is  revoked, 
the  trustee,  upon  his  appointment  and  qualification,  is  vested 
with  the  title  to  all  of  the  property  of  the  bankrupt  as  of  the 
date  of  the  final  decree  revoking  the  discharge."* 

In  the  event  of  a  discharge  being  revoked,  the  property  ac- 
quired by  the  bankrupt,  in  addition  to  his  estate  at  the  time  the 
adjudication  was  made,  shall  be  applied  to  the  payment  in 
full  of  the  claims  of  creditors  for  property  sold  to  him  on 
credit,  in  good  faith,  while  such  discharge  was  in  force,  and 
the  residue,  if  any.  is  applied  to  the  payment  of  the  debts 
which  were  owing  at  the  time  of  the  adjudication." 

23  B.  A.   1898,  Sec.  44.  pine  v.  Toiirtelotte,  24  Fed.  Rep.  69. 

2*B.    A.    1898,    Sec.    70c/;    McAl-  "  B.  A.  1898,  Sec.  64c. 


790  LAW    AM)    rUOClCKDINGS    IN    BANKRUPTCY. 


CHAPTER  XW'II. 

APPELLATE    PROCEEDINGS. 

§  301.     The  appellate  courts. 

The  statute  confers  appellate  jurisdiction  in  bankruptcy 
upon  three  classes  of  existing  courts  as  follows  :^  "  The  supreme 
court  of  the  United  States,  the  circuit  courts  of  appeals  of  the 
United  States,  and  the  supreme  courts  of  the  territories,  in 
vacation  in  chambers  and  during-  their  respective  terms,  as 
now  or  as  they  may  be  hereafter  held,  are  hereby  invested 
with  appellate  jurisdiction  of  controversies  arising  in  bank- 
ruptcy proceedings  from  the  courts  of  bankruptcy  from  which 
they  have  appellate  jurisdiction  in  other  cases.  The  supreme 
court  of  the  United  States  shall  exercise  a  like  jurisdiction 
from  courts  of  bankruptcy  not  within  any  organized  circuit 
of  the  United  States  and  from  the  supreme  court  of  the  Dis- 
trict of  Columbia."  No  other  court,  federal  or  state,  has 
anv  appellate  jurisdiction  to  review  proceedings  in  a  court 
of  bankruptcy.  The  circuit  courts  have  no  £uch  power  under 
the  present  statute  as  they  had  under  the  act  of  1867.^ 

§  302.  Appellate  jurisdiction  at  law  and  in  equity  to  revise 
the  action  of  federal  courts. 

The  bankrupt  statute  does  not  affect  the  appellate  jurisdic- 
tion or  procedure  at  law  or  in  equity.  Decrees  in  equity  and 
judgments  at  law.  although  in  controversies  relating  to  bank- 
ruptcy, are  revised  by  the  appellate  courts  as  before  the  pas- 
sage of  the  act." 

The  statute  regulating  the  jurisdiction  in  cases  from  federal 
courts  provides :  * 

1  B.  A.  1898,  Sec.  24a  and  Sec.  i,  Jones   Lumber   Co.    (C.    C.    A.    7th 

clause  3.     Compare  R.  S.  Sees.  4980  Cir.),  8  Am.  B.  R.  521;  Booneville 

to  4989.  Nat.  Bank  v.  Blakey  (C.  C.  A.  7th 

-Compare    R.    S.    Sees.    4980   to  Cir.),  107  Fed.  Rep.  891,  6  Am.  B. 

4986.  R.  13;  Steele  v.  Buel  (C.  C.  A.  8th 

"  Bardes  v.  Hawarden  Bank,   175  Cir.),  104  Fed.  Rep.  968,  5  Am.  B. 

U.    S.    526;    s.    c.    178    U.    S.    524,  R.  165;  Burleigh  v.  Foreman  (C.  C 

4  .\m.   B.  R.    163;   Scott  V.  Wilson  A.  ist  Cir.),  11  Am.  B.  R.  74. 

(C.  C.  A.  7th  Cir.),  115  Fed.  Rep.  *  .^ct  of  March   3,  1891,  26  Stat. 

284,  8  .\m.   B.   R.  349;   Stelling  v.  at  L.  826. 


APPELLATE  PROCEEDINGS.  791 

"  Sec.  5.  That  appeals  or  writs  of  error  may  be  taken  from 
the  district  courts  or  from  the  existing  circuit  courts  direct  to 
the  supreme  court  in  the  following  cases : 

"  In  any  case  in  which  the  jurisdiction  of  the  court  is  in 
issue:  in  such  cases  the  question  of  jurisdiction  alone  shall 
be  certified  to  the  supreme  court  from  the  court  below  for 
decision.^ 

"  From  the  final  sentences  and  decrees  in  prize  causes. 
"  In  cases  of  conviction  of  a  capital    [or  otherwise  infa- 
mous] **  crime. 

"  In  any  case  that  involves  the  construction  or  application 
of  the  constitution  of  the  United  States. 

"  In  any  case  in  which  the  constitutionality  of  any  law  of  the 
United  States,  or  the  validity  or  construction  of  any  treaty 
made  under  its  authority,  is  drawn  in  question. 

"  In  any  case  in  which  the  constitution  or  law  of  a  state  i& 
claimed  to  be  in  contravention  of  the  constitution  of  the  United 
States, 

"  Nothing  in  this  act  shall  affect  the  jurisdiction  of  the 
supreme  court  in  cases  appealed  from  the  highest  court  of  a 
state,  nor  the  construction  of  the  statute  providing  for  review 
of  such  cases, 

"  Sec.  6.  That  the  circuit  courts  of  appeals  established  by 
this  act  shall  exercise  appellate  jurisdiction  to  review  by  appeal 
or  by  writ  of  error  final  decision  in  the  district  court  and  the 
existing  circuit  courts  in  all  cases  other  than  those  provided 
for  in  the  preceding  section  of  this  act,  unless  otherwise  pro- 
vided by  law.  and  the  judgments  or  decrees  of  the  circuit 
courts  of  appeals  shall  be  final  ^  in  all  cases  in  which  the 
jurisdiction  is  dependent  entirely  upon  the  opposite  parties  to 
the  suit  or  controversy,  being  aliens  and  citizens  of  the  United 

cin   such  cases  there  must  be  a  Mitchell  v.  McClurc,  178  U.  S.  539^ 

certificate    of    the    judge    that    only  4  .Am.  B.  R.  i77- 
the  question  of  jurisdiction  was  in  For  form  of  certificate  and  i>rac- 

issue    and    an    appeal    will    not    lie  tice  generally,  see  Loveland's  Forms 

where    other    questions    were    also  of  Fed.  Practice,  Nos.  1.3.34  to  1336. 
considered.    Denver  First  Nat.  Bank  « The    words    in     brackets     were 

V.   Klug,    186  U.   S.   20.3;   or  where  stricken  out  by  the  act  of  January 

no  final  judgment  has  been  entered.  20.  1897;  29  Stat,  at  L.  492. 
Bardes  v.  Bank,  175  U.  S.  526;  s.  c.  "^  Spencer  v.  Duplan,  191  U.  S.  526. 

178   U.   S.   524,  4  Am.   B.   R.   163;  Spreckles  V.  McClaim,  192  U.  S.  — . 


792  LAW    AND    PUOCKKUINGS    IN    IJANKRUrTCY. 

States  or  citizens  of  clitYeient  states ;  also  in  all  cases  arising 
under  the  patent  laws,  under  the  revenue  laws,  and  under  the 
criminal  laws  and  in  atlniiralty  cases,  excepting  that  in  every 
such  suh)cct  within  its  appellate  jurisdiction  the  circuit  court 
of  appeals  at  any  time  may  certify  to  the  supreme  court  of  the 
United  States  any  questions  or  propositions  of  law  concerning 
which  it  desires  the  instruction  of  that  court  for  its  proper 
decision.^  And  thereupon  the  suprenje  court  may  either  give 
its  instruction  on  the  questions  and  propositions  certified  to 
it.  which  shall  be  binding  upon  the  circuit  courts  of  appeals  in 
such  case,  or  it  may  require  that  the  whole  record  and  cause 
may  be  sent  up  to  it  for  its  consideration,  and  thereupon 
shall  decide  the  whole  matter  in  controversy  in  the  same 
manner  as  if  it  had  been  brought  there  for  review  by  writ  of 
error  or  appeal. 

"And  excepting  also  that  in  any  such  case  as  is  herein- 
before made  final  in  the  circuit  court  of  appeals  it  shall  be 
competent  for  the  supreme  court  to  require,  by  certiorari  or 
otherwise,  any  such  case  to  be  certified  to  the  supreme  court 
for  its  review  and  determination  with  the  same  power  and 
authority  in  the  case  as  if  it  had  been  carried  by  appeal  or 
writ  of  error  to  the  supreme  court. 

"In  all  cases  not  hereinbefore,  in  this  section,  made  final 
there  shall  be  of  right  an  appeal  or  writ  of  error  or  review  of 
the  case  by  the  supreme  court  of  the  United  States  where  the 
matter  in  controversy  shall  exceed  one  thousand  dollars  be- 
sides costs.  But  no  such  appeal  shall  be  taken  or  writ  of 
error  sued  out  unless  within  one  year  after  the  entry  of  the 
order,  judgment  or  decree  sought  to  be  reviewed." 

The  manner  of  proceeding  to  obtain  a  review  of  a  decree 
or  a  judgment  of  a  federal  court,  and  the  practice  in  respect 
thereto,  is  not  changed  or  affected  by  the  bankrupt  statute. 
In  proceedings  in  equity,  instituted  for  the  purpose  of  carry- 
ing into  effect  the  provisions'  of  the  act,  or  for  enforcing  the 
rights  and  remedies  given  by  it,  the  rules  of  equity  practice 
established   by  the  supreme  court  of  the  United  States  shall 

*  As  was  done  in  Hicks  v.  Knost,  U.   S.    igi  ;    Metcalf  v.    Barker,    187 

178   U.    S.   541;    White   V.    Schloeb,  U.   S.   165;  Elliott  v.  Toeppncr,   187 

178  U.    S.   542;    Wall    V.    Cox,    181  U.    S.    327;    Randolph   v.    Scruggs, 

U.    S.   244;   Wilson   V.   Nelson,    183  190  U.  S.  533. 


APPELLATE    PROCEEDINGS.  793 

be  followed  as  nearly  as  may  be."  In  proceedings  at  law, 
instituted  for  the  same  purpose,  the  practice  and  procedure 
in  cases  at  law  shall  be  followed  as  nearly  as  may  be.^ 

§  303.  Appellate  jurisdiction  at  law  and  in  equity  to  revise 
the  action  of  a  state  court. 
The  only  federal  court  which  can  review^  the  action  of  a 
state  court  in  a  suit  at  law  or  in  equity  is  the  supreme  court 
of  the  United  States.  The  cases  in  which  the  decision  of  a 
state  court  may  be  reviewed  by  the  supreme  court  are  pointed 
out  in  the  Revised  Statutes,  section  709.  It  is  immaterial 
whether  the  judgment  or  decree  was  rendered  in  a  case  aris- 
ing in  bankruptcy  or  not.  The  state  courts  have  jurisdiction 
only  of  suits  at  law  or  in  equity  which  may  concern  bank- 
ruptcy matters,  and  not  cases  in  bankruptcy  strictly.  The 
courts  of  bankruptcy  have  exclusive  jurisdiction  in  such 
cases. 

The  Revised  Statutes  provide  for  a  review  in  three  classes 
of  cases,  namely  :     Section  709  provides  that : 

"  A  final  judgment  or  decree  in  any  suit  in  the  highest 
court  of  a  state,  in  which  a  decision  in  the  suit  could  be  had, 
where  is  drawn  in  question  the  validity  of  a  treaty  or  statute 
of,  or  an  authority  exercised  under,  the  United  States,  and 
the  decision  is  against  their  validity;  or  where  is  drawn  in 
question  the  validity  of  a  statute  of,  or  an  authority  exercised 
under  any  state,  on  the  ground  of  their  being  repugnant  to 
the  constitution,  treaties,  or  laws  of  the  United  States,  and 
the  decision  is  in  favor  of  their  validity;  or  where  any  title, 
right.  i)rivilege,  or  immunity  is  claimed  under  the  constitu- 
tion, or  any  treaty  or  statute  of,  or  commission  held  or  au- 
thority exercised  under,  the  United  States,  and  the  decision 
is  against  the  title,  right,  ])rivilege,  or  immunity  specially 
set  up  or  claimed,  by  either  party,  under  such  constitution, 
treaty,  statute,  commission,  or  authority,  may  be  re-examined 

°Gcn  Ord.  36.  circuit  courts  of  appeals  ami  of  the 

As  to  the  practice  in  obtaininp  a  supreme  court ;   Desty's  Fed.   Prac. ; 

review  of  a  proceeding  at  law  and  Loveland's   Forms   P'ed.   Prac,   Nos. 

in  equity  in  the  appellate   courts  of  1308  to   1512.  and  notes  thereto, 

the  United  States,  sec  Beach's  Mod.  Cases  in  bankruptcy  strictly.    The 

Ec|.  Prac,  Sees.  954,  ct  seq;  Foster's  courts  of  bankruptcy  have  exclusive 

Fed.    Prac,   Chap.   33;   rules  of   the  jurisdiction  in   such  cases. 


794  LAW    AND    PROCEEDINGS   IN    BANKRUPTCY. 

ami  reversc(.l  or  atlirnied  in  the  supreme  eourt  upon  a  writ  of 
error.  I'he  writ  shall  have  the  same  effect  as  if  the  judg- 
ment or  decree  complained  of  had  been  rendered  or  passed  in 
a  court  of  the  L'nited  States;  (cnid  the  proceeding  upon  the 
reversal  shall  be  the  same,  e.veept  thai  the  supreme  court  may, 
at  their  discretion,  proceed  to  a  final  decision  of  the  case,  and 
azeard  execution,  or  remand  the  same  to  the  court  from  zvhich 
if  icas  so  ronoved).      [See  R.  S.  Sec.  1017.] 

"  The  supreme  court  m;iy  ( reaHirm ) ,  reverse,  modify,  or 
affirm  the  judgment  or  decree  of  such  state  court,  and  may, 
at  their  discretion,  award  execution,  or  remand  the  same  to 
the  court  from  which  it  was  removed  by  the  writ." 

Unless  a  particular  case  relating  to  matters  in  bankruptcy 
falls  within  one  of  these  classes  it  can  not  be  revised  in  the 
su])reme  court."  Where  a  federal  question  is  drawn  in  ques- 
tion and  the  decision  of  the  highest  court  of  a  state  to  which 
the  case  may  be  taken  is  adverse  to  the  federal  authority  or 
statute,  that  decision  may  be  reviewed  by  the  supreme  court 
of  the  United  States. 

The  supreme  court  has  entertained  cases  in  which  the  va- 
lidity and  effect  of  a  discharge  in  bankruptcy  was  called  in 
question,  and  the  decision  was  against  the  debtor  holding  the 
discharge;  "  where  the  judgment  of  a  state  court  was  against 
the  trustee  in  bankruptcy,  in  an  action  between  him  and  the 
bankrupt,  where  the  question  at  issue  was  whether  the  matter 
in  controversy  passed  to  the  trustee  or  not ;  ^^  where  a  sheriff 
was  sued  for  moneys  obtained  by  a  sale,  directed  by  the  court 
of  bankruptcy  to  be  made  in  the  state  court,  and  the  decision 
of  the  state  court  was  adverse  to  that  authority ;  ^^  where  the 
suit  was  for  the  foreclosure  of  a  mortgage  on  real  estate, 
when  the  only  controversy  in  the  case  was  as  to  the  effect  to 

lOMcKenna   v.    Simpson,    129   U.  555;   Neal  v.   Clark,  95  U.  S.   704; 

S.  506;  Boatman's  Savings  Bank  v.  Dimock  v.  Revere  Copper  Co.,   117 

State    Savings    Association,    114   U.  U.  S.  559;  Long  v.  Billiard,  117  U. 

S.  265;  Wolf  V.  Stix,  96  U.  S.  541;  S.  617;  Palmer  v.  Hussey,  119  U.  S. 

Scott  V.  Kelly,  22  Wall.  57;  Linton  96;   Jenkins  v.   International   Bank, 

V.  Stanton,  12  How.  423.  127   U.    S.  484. 

11  Dunbar  v.   Dunbar,   190  U.    S.  ^-Williams   v.   Heard,    140  U.    S. 

340;  Hennequin  v.  Clews,  in  U.  S.  529. 

^77 'i  Strang  v.  Bradner,   114  U.   S.  ^^  O'Brien  v.  Weld,  92  U.  S.  81. 


APPELLATE    PROCEEDINGS.  795 

be  given  to  a  sale  of  the  property  under  an  order  of  the  court 
of  bankruptcy  to  sell  the  bankrupt's  mortgaged  property  free 
from  encumbrances ; "  where  a  state  court  denied  an  applica- 
tion to  stay  a  suit  and  rendered  final  judgment  against  the 
bankrupt ;  ^^  and  where  an  immunity  was  claimed  by  the  ap- 
pellant (under  the  Revised  Statutes,  section  711)  from  the 
operation  of  the  decree  of  a  state  court  on  their  rights,  because 
that  statute  made  the  jurisdiction  of  the  courts  of  the  United 
States  exclusive  in  such  cases." 

The  writs  of  error  and  appeals  are  taken  from  the  decision 
of  a  state  court  in  the  same  manner  in  a  case,  in  which  the 
federal  question  is  one  relating  to  bankruptcy  matters,  as  in 
any  other  cases.  The  same  rules  govern  the  law  and  practice 
in  such  cases.^^ 

§  304.     Jurisdiction  of  the  U.  S.  supreme  court  of  appeals  in 
bankruptcy. 

The  supreme  court  of  the  United  States  has  no  original  ju- 
risdiction in  bankruptcy.  Nor  does  the  statute  provide  for 
taking  a  case  to  that  court  on  writ  of  error. 

Power  to  reverse  on  appeal  the  action  of  other  courts  of  the 
United  States  in  bankruptcy  is  conferred  upon  the  supreme 
court  in  the  following  cases : 

First  :  From  the  Supreme  Court  of  the  District  of 
Columbia. —  The  supreme  court  is  invested  with  appellate  ju- 
risdiction of  controversies  arising  in  bankruptcy  jiroceedings 
from  courts  of  bankruptcy  not  within  any  organized  circuit  of 
the  United  States  and  from  the  supreme  court  of  the  District 
of  Columbia.'* 

The  manner  of  taking  and  prosecuting  an  appeal  from  such 
courts  to  the  suj^reme  court  is  prescribed  by  the  general  or- 
ders "  as  follows : 

Appeals  to  the  supreme  court  from  the  supreme  court  of 
the  District  of  Columbia,  or  from  any  court  of  bankruptcy 

"Factors,  etc.,  Ins.  Co.  v.  Mur-  Prac,    Sec.   477.     See   Forms    Nos. 

phy,  III  U.  S.  738.  166  to  17s-  post. 

IS  Hill  V.  Harding,  107  U.  S.  631.  "  B.  A.  1898.  Sec.  24,  as  in  Aiidu- 

10  Winchester  v.  Heiskell,  119  U.  l)on  v.  Shnfeldt.  181  U.  S.   575- 

S.  450.  '"  Consult  Sec.  313,  pnst. 

i'^  For   practice,   see   Foster's  Fed. 


796  LAW    AM)    TRDCEEDINGS    IN    BANKRUPTCY. 

whatever,  must  be  taken  within  thirty  days  alter  the  judg- 
ment or  decree,  and  must  be  allowed  by  a  judge  of  the  court 
appealed  from,  or  by  a  justice  of  the  supreme  court;  "'*  and  in 
every  case,  in  which  either  party  is  entitled  by  the  act  to  take 
an  appeal  to  the  supronie  court  of  the  United  States,  the 
court  from  which  the  ai)peal  lies  shall,  at  or  before  the  time 
of  entering  its  judgment  or  decree,  make  and  tile  a  finding 
of  the  facts,  and  its  conclusions  of  law  thereon  stated  sepa- 
rately,"" and  the  record  transmitted  to  the  supreme  court  on 
such  an  ajipeal  consists  only  of  the  jileadings,  the  judgment  or 
decree,  the  finding  of  facts,  and  the  conclusions  of  law.'" 

When  the  case  is  in  the  supreme  court  it  is  governed  by  the 
general  rules  of  practice  of  that  court.^^ 

Second:  From  the  Circuit  Courts  of  Appeal. —  The 
statute  provides  "  that  "  from  any  final  decision  of  a  court 
of  appeals,  allowing  or  rejecting  a  claim  under  the  act,  an 
appeal  may  be  had  under  such  rules  and  within  such  time  as 
may  be  prescribed  by  the  supreme  court  of  the  United  States 
in  the  following  cases  and  no  other :  First,  where  the  amount 
in  controversy  exceeds  the  sum  of  two  thousand  dollars,  and 
the  question  involved  is  one  which  might  have  been  taken 
on  appeal  or  writ  of  error  from  the  highest  court  of  a  state  to 
the  supreme  court  of  the  United  States ;  ^^  or,  second,  where 
some  justice  of  the  supreme  court  of  the  United  States  shall 
certify  that  in  his  opinion  the  determination  of  the  questicMi 
or  questions  involved  in  the  allowance  or  rejection  of  such 
claim  is  essential  to  a  uniform  construction  of  this  act  through- 
out the  United  States." 

The  supreme  court  has  prescribed  by  rule  36  that  appeals 
under  the  act  to  the  supreme  court  from  a  circuit  court  of 
appeals,   or  from  the  supreme  court  of  a  territory,  or  from 

20  Gen.  Ord.  36.  See  also  Holden  v.  Stratton.    191 

21  Consult  rules  of  the  supreme  U.  S.  115;  Spencer  v.  Duplan  Silk 
court.  Co.,  191  U.  S.  526. 

22  B.  A.  1898,  Sec.  255.  This  pro-  2.3  As  was  done  in  Jaquith  v.  ,'\l- 
vision  is  considered  at  length  hy  the  den,  189  U.  S.  78,  9  Am.  B.  R.  773; 
Circuit  Court  of  Appeals  for  the  Hutchinson  v.  Otis,  190  U.  S.  552; 
First  Circuit  in  Hutchinson  v.  Otis,  Page  v.  Edmunds,  187  U.  S.  596; 
10  Am.  B.  R.  275,  123  Fed.  Rep.  Pirie  v.  Trust  Co.,  182  U.  S.  4.18. 
14;  s.  c.  on  appeal,   190  U.  S.  552, 

10  Am.  B.  R.   135. 


APPELLATE    PROCEEDINGS.  797 

any  court  of  bankruptcy  whatever,  shall  be  taken  within 
thirty  days  after  the  judgment  or  decree,  and  shall  be  allowed 
by  a  judge  of  the  court  appealed  from,  or  by  a  justice  of  the 
supreme  court  of  the  United  States. 

In  every  case  in  which  either  party  is  entitled  by  the  act 
to  take  an  appeal  to  the  supreme  court,  the  court  from  which 
the  appeal  lies  shall,  at  or  before  the  time  of  entering  its 
judgment  or  decree,  make  and  file  a  finding  of  the  facts,  and 
its  conclusions  of  law  thereon,  stated  separately;  and  the 
record  transmitted  to  the  supreme  court  of  the  United  States 
on  such  an  appeal  shall  consist  only  of  the  pleadings,  the 
judgment  or  decree,  the  finding  of  facts,  and  the  conclusions 
of  law. 

When  the  case  is  in  the  supreme  court  it  is  governed  by  the 
general  rules  of  practice  of  that  court.-* 

§  305.     Writs  of  certiorari  from  the  supreme  court. 

The  bankrupt  statute  authorizes  the  supreme  court  of  the 
United  States  "  to  issue  writs  of  certiorari  pursuant  to  the 
provisions  of  the  United  States  laws  now  in  force  or  such  as 
may  be  hereafter  enacted."  '^  This  provision  manifestly  applies 
to  controversies  in  bankruptcy  cases.  It  clearly  confers  upon 
the  supreme  court  the  same  power  with  reference  to  writs  of 
certiorari  in  bankrui)tcy  cases  as  that  court  has  in  other  cases. 

Under  the  laws  of  the  United  States  now  in  force  the  su- 
preme court  is  authorized  to  issue  writs  of  certiorari  for  two 
purposes,  namely :  First,  for  the  purpose  of  completing  a 
record  in  a  case  pending  in  the  supreme  court ;  and,  second, 
for  tlie  purpose  of  removing  a  case  from  a  circuit  court  of 
appeals  to  be  reviewed  by  the  supreme  court. 

§  306.     Certiorari  to  complete  records. 

The  Revised  Statutes  authorize  the  supreme  court  to  "  is- 
sue writs  not  specifically  jirovidod  by  statute,  which  may  be 
necessary  for  the  exercise  of  tiieir  respective  jurisdictions, 
and  agreeable  to  the  usages  and  principles  of  law,^" 

2*  Consult    tlic    rules    oi    the    su-  '-"'I'..    A.    1898.   .Sec.   2Sd. 

premc  court.  -"  R.  S.  Sec.  716. 


798  LAW    AND    PROCEEDINGS    IN     BANKRUPTCY. 

Under  this  provision  the  writ  of  certiorari  has  not  been 
useil  as  troclv  hv  the  supreme  eitnrt  as  l)y  the  eonrt  of  queen's 
beneh  in  luii;land.''  it  has  been  used  as  an  auxiliary  process 
onlv,  to  supply  imperfections  in  a  record  of  a  case  already 
before  it:  and.  not  like  a  writ  of  error,  to  review  the  judg- 
ment of  an  inferior  court."'  It  has  never  been  used  to  bring 
up  from  an  inferior  court  of  the  United  States  for  trial  a  case 
within  the  exclusive  jurisdiction  of  a  higher  court."" 

The  Evarts  acts  of  March  3.  1891/'"  did  not  affect  this 
power,  and  the  supreme  court  may  still  issue  writs  of  cer- 
tiorari in  proper  cases.^^ 

The  circuit  courts  of  appeals  are  vested,  by  the  act  creating 
them,"-  with  the  power  to  grant  writs  of  certiorari  for  the  pur- 
pose of  supplying  omissions  or  curing  defects  in  a  record  in  a 
case  pending  in  one  of  these  courts.  Under  this  provision 
the  circuit  courts  of  appeals  have  frequently  issued  writs  of 
certiorari  for  such  purposes,  although  the  cases  are  rarely,  if 
ever,  reported. 

The  application  for  a  writ  of  certiorari  to  supply  an  omis- 
sion or  cure  a  defect  in  a  record  should  be  made  to  the  court 
in  which  the  case  is  pending.  It  is  usually  made  by  petition, 
entitled  in  the  court  and  cause  and  addressed  to  the  court.  It 
should  state  the  defect  or  parts  claimed  to  be  omitted,  and 
pray  for  a  writ  of  certiorari  to  issue.  The  petition  should  be 
sio-ned  and  verified.  If  a  proper  showing  is  made,  the  court 
will  ordinarily  order  a  writ  to  issue,  directed  to  the  court  be- 

27  Ex  parte  Vallandigham,  i  Wall,  ville  Ry.  Co.,  148  U.  S.  380.     Sup. 

243,  249.  Ct.,  Rule  14. 

28Luxton  V.  North  River  Bridge,  In   re   Chetwood,    165   U.   S.  443. 

147  U.  S.  337;  U.  S.  V.  Young,  94  a    writ    of    certiorari    was    allowed 

U.    S.    258;    Ex    parte    Gordon,    i  to  bring  up  the  record  so  that  the 

Black,     503;     Barton    v.     Pettit,    7  order     adjudging     Chetwood     and 

Cranc'h,     288;     Beach's     Mod.     Eq.  his   counsel    in   contempt   for  being 

Prac.     Sec.   963.  concerned    in    suing    out    writs    of 

2«£x  parte  Hitz,  iii  U.  S.  766;  error  and  directing  them,  or  either 

Patterson  v.  U.   S.,  2  Wheat.  221 ;  of  them,  to  refrain  from  prosecut- 

Fowler    v.    Lindsey,    3    Dall.    411;  ing    t'le    same,    might    be    revised 

In  re  Tampa  Suburban  R.  R.  Co.,  and    annulled.     This     case    is     ex- 

168  U.  S.  583.  plained   in   Tampa   Southern   R.   R. 

30  26  Stat,   at  L.  826  Co;,   168  U.  S.  587- 

siAmer.    Const.    Co.    v.   Jackson-  ''2  Act  of  March  3,  1891,  26  Stat. 


APPELLATE    PROCEEDINGS.  799 

low.  commanding-  it  to  return  a  true  and  complete  record, 
including  the  omitted  or  defective  parts,  if  any  there  be. 
The  order  also  regularly  contains  a  direction  to  the  clerk  of 
the  appellate  court  to  also  return  the  transcript  for  the  pur- 
pose of  being  corrected.  The  court  will  not  usually  order 
the  alleged  omitted  portions  or  the  defective  portions  to  be 
corrected.  If  the  record  is  faulty  it  should  be  made  to  con- 
form to  the  record  below  by  certifying  the  corrections  to  be 
made.  The  appellate  court  will  not  undertake  to  make  a 
record  in  the  inferior  court. 

The  writ  of  certiorari  is  regularly  issued  under  the  hand 
and  seal  of  the  clerk  of  the  appellate  court,  and  is  transmitted 
to  the  clerk  of  the  court  below,  together  with  the  transcript 
and  a  copy  of  the  petition,  setting  forth  the  alleged  defects  or 
omissions  in  the  record.  The  clerk  of  the  inferior  court 
thereupon  compares  the  transcript  with  the  original  record, 
and  returns  the  writ  with  a  certified  correction,  or  a  certitied 
copy  of  the  omitted  papers,  or  with  a  certificate  to  the  effect 
that  the  record  is  true  and  complete,  or  such  other  facts  as 
may  be  necessary  for  a  full  understanding  of  the  matter. 
This  is  returned  under  the  seal  of  the  court.  It  is  not  neces- 
sarv  to  have  the  return  made  by  the  judge.^^  It  is  regularly 
made  by  the  clerk. 

§  307.     Certiorari  to  remove  a  case  for  review. 

The  provision  of  the  bankrupt  statute,  with  reference  to 
writs  of  ccrtiurari,'-'*  clearly  adopts  the  same  rule,  with  refer- 
ence to  removing  a  bankrupt  case  for  review  by  writs  of  cer- 
tiorari, that  applies  to  other  cases.  The  authority  for  the 
supreme  court  to  issue  such  writs  is  found  in  the  act  of 
March  3,  iSqi.''"'  This  being  the  case  the  rules  announced  in 
other  cases,  with  reference  to  when  such  writs  may  jiroperly 
issue,    will    be    useful    in    determining    under    what    circum- 

at  L.   826,   Sec.    12,  provides   "  that  Forms    Fed.    Prac,    Nos.    1477   and 

the    circuit    court    of    appeals    shall  1478. 

have    the    powers    specified    in    sec-  ^^  Stewart     v.     Ingle,     9    Wkoat. 

tion  seven  hundred  and   sixteen   of  526. 

the  Revised   Statutes  of  the  United  •'"  P..    A.    1808.   Sec.   25(/. 

States."     Rule     18,    C.     C.     A.,    90  ■'•'■'  26  Stat,  at  L.  8_'6.  Sec.  6.  which 

P'ed.  Rep.  clx.    See  also  Loveland's  is  quoted  in  full  at  page  791,    Den- 


8CX)  LAW    AND    PROCEEDINGS    IN    BANKKITTCY. 

Stances  the  writ  may  issue  in  l)ankru|)tcv,  for  the  purpose  of 
removing  a  case  from  a  circuit  court  of  appeals  to  the  supreme 
court  to  be  there  reviewed. 

There  is  no  autliority  for  issuing  a  writ  of  certiorari  to 
remove  a  case  to  the  sujireme  court,  except  such  as  is  found 
in  the  act  of  March  3,  1891."^"  The  language  of  that  act  is 
very  general.  All  that  is  essential  is  that  the  case  be  pend- 
ing in  the  circuit  court  of  appeals,  and  of  those  classes  of 
cases  in  which  the  decision  of  that  court  is  declared  a  finality. 
\\nien  these  two  elements  exist,  the  sui)reme  court  may  reach 
out  of  its  writ  of  certiorari  and  transfer  the  case  there  for 
review  and  determination."'^ 

The  question  at  what  stage  of  the  proceedings,  and  under 
what  circumstances  the  case  should  be  required  to  be  sent  up 
for  review,  is  left  to  the  discretion  of  the  supreme  court,  as 
the  exigencies  of  each  case  may  require."^  The  supreme 
court  has  declined  to  issue  writs  of  certiorari  in  cases  where, 
there  being  only  a  matter  of  private  interest,  there  has  been 
no  final  judgment  in  the  circuit  court  of  appeals,^"  and  where 
there  was  a  remedy  by  appeal  or  otherwise,*"  Although  a 
writ  of  certiorari  is  not  usually  issued  until  after  a  circuit 
court  of  appeals  has  pronounced  its  judgment,  the  supreme 
court  has  issued  a  writ  in  one  case,*^  appealed  to  a  circuit 
court  of  appeals,  before  any  action  has  been  taken  by  that 
court.  But  this  was  a  case  involving  questions  affecting  the 
relation  of  this  country  to  foreign  nations,  the  decision  of 
which,  by  the  highest  court  was  important,  not  merely  for  the 
guidance  of  the  executive  department  of  the  government, 
but  also  to  disclose  to  each  citizen  the  limits  beyond  which  he 

ver  National  Bank  v.  Klug,  186  U.  *" /n    re    Tampa    Suburban    Ry. 

S.  202.  Co.,    168   U.    S.    583,   an   application 

3626  Stat,  at  L.  826;  Amer.  Const.  was   made   for  a   writ   of   certiorari 

Co.  V.  Jacksonville  Ry.  Co.,  148  U.  to  a  circuit  court,  where  there  was 

S.  380.  a  right  of  appeal  to  a  circuit  court 

37  Forsyth    v.   Hammond,    166   U.  of  appeals. 
S.  513.  See  also  Pullman  Palace  Car  Co. 

3«  Amer.    Const.    Co.   v.   Jackson-  v.   Central    Transportation   Co.,    171 

ville  Ry.  Co.,  148  U.  S.  380.  U.  S.   138,  where  there  was  a  writ 

See    also    Harris    v.    Barber,    129  of  certiorari  and  also  an  appeal. 
U.  S.  368.  *'  The  Three  Friends,   166  U.   S. 

•'•»  Chicago    &    Northwestern    Ry.  i,  as  explained  in  Forsyth  v.  Ham- 
Co.  V.  Osborne,  146  U.  S.  354-  mond,  166  U.  S.  513. 


APPELLATE    PROCEEDINGS.  80I 

might  not  go  in  interfering  in  the  affairs  of  another  nation 
without  violating  the  laws  of  this.  The  writ  may  be  granted 
after  the  mandate  of  the  circuit  court  of  appeals  has  issued,*" 

§  308.  The  application  for  writ  of  certiorari  to  remove  a  case 
to  the  Supreme  court. 

The  application  for  a  writ  of  certiorari  to  remove  a  case 
from  the  circuit  court  of  appeals  to  the  supreme  court  must 
be  made  to  the  supreme  court.  The  time  within  which  the 
application  must  be  made  is  not  prescribed  by  the  statute. 
It  should,  however,  be  made  within  a  reasonable  time  after 
the  final  decision  of  the  circuit  court  of  appeals.  One  year  is 
probably  a  reasonable  time.*^ 

The  application  is  made  by  petition.**  The  style  of  the 
case  in  that  court  is  A.  B.,  petitioner,  vs.  C.  D.,  respondent. 
The  petition  is  filed  in  the  office  of  the  clerk  of  the  supreme 
court,  together  with  a  deposit  of  twenty-five  dollars  t)n  ac- 
count of  costs  and  an  entry  of  appearance  for  the  petitioning 
party,  signed  by  a  member  cjf  the  bar  of  the  supreme  court. 
The  case  is  then  docketed.  The  petitioner  must  also  file  a 
certified  copy  of  the  entire  record,  including  all  the  proceed- 
ings in  the  circuit  court  of  appeals.*^  A  sufficient  number  of 
the  printed  copies  of  this  record  ( not  less  than  ten )  must  also 
be  furnished  to  supply  the  court.  These  ])rinte(l  copies  may 
usually  be  obtained  from  the  clerk  of  the  circuit  court  of 
appeals.  In  case  they  can  not  be  so  obtained  the  record  must 
be  reprinted  under  the  supervision  of  the  clerk  of  the  supreme 
court.  In  such  cases  it  is  usually  desirable  to  print  at  least 
fifty  copies,  in  order  that  there  may  be  a  sufficient  number 
for  use  on  the  final  hearing,  should  the  petition  be  granted. 

**  The  Conqueror,  166  U.  S.   1 10.  from  tlic  court  of  appeals  to  review 

*•■' In    The   Conqueror,    166   U.    S.  the  judgment  of  the  district  or  cir- 

114,      the      supreme      court      said:  cuit  court;  and  it  would  seem  that 

"  While   we   think   such    application  he    is,   by   analogy,   entitled    to    the 

should    be    made    with     reasonable  year  within  which,  by  Sec.  6,  an  ap- 

promptness,  as  it  was  made  during  peal  shall  be  taken  or  writ  of  error 

the   term    and    within    a    year    after  sued  out  from   this  court  to  review 

the    original     decree,    we    think     it  judgments  or  decrees  of  the  court  of 

was    within    the    time.     We   do   not  appeals    in    cases    where    the    losing 

think      the     party     complaining     is  party  is  entitled  to  such  review." 
limited    to   the   six   months   allowed  **  .See   Form  No.   199,  /lost. 

by   Sec.    11   of  the  court  of  appeals  *•'■  .Supreme  Court  Rule  37. 

act    for   suing   out   a    writ    of   error 


802  LAW     AM)    PROCEEDINGS    IN    BANKRUPTCY. 

Some  Monthly  shuuUl  l)o  fixed  for  the  submission  of  the 
petition,  that  hcin<;  motion  (hiy.  Snfhcient  notice  must  be 
gi\en  counsel  for  the  respondent  of  the  (hiy  selected  to  enable 
them  to  hie  briefs  in  opposition,  if  they  desire  to  do  so.  Proof 
of  service  of  such  notice  must  be  filed  in  the  clerk's  office. 
The  petition  must  be  called  up  and  submitted  in  open  court 
by  counsel.  The  ai)plication  is  submitted  on  briefs.  Oral 
arguments  are  not  permitted. 

Although  in\ested  with  a  power  so  broad  and  comprehen- 
si\'e  it  has  been  sparingly  exercised.  The  supreme  court  has 
said  that  writs  of  certiorari  will  be  allowed  "  only  when  the 
circumstances  of  the  case  satisfy  us  that  the  importance  of 
the  question  involved,  the  necessity  of  avoiding  conflict  be- 
tween tw^o  or  more  courts  of  appeal,  or  between  courts  of  , 
appeal  and  courts  of  a  state,  or  some  matter  affecting  the 
interests  of  this  nation  in  its  internal  or  external  relations, 
demands  such  exercise."  ■*" 

These  rules  were  rigidly  adhered  to  by  the  supreme  court 
for  several  years.  In  the  words  of  Mr.  Justice  Brewer,  the 
supreme  court,  "  while  not  doubting  its  power,  has  been  chary 
of  action  in  respect  to  ccrtiurarics."  *^  Of  the  many  applica- 
tions which  have  been  more  recently  made  to  the  supreme 
court,  comparatively  few  have  been  granted,  yet  that  court 
appears  to  be  much  more  liberal  of  late  in  granting  such  writs 
than  formerly.**  A  writ  of  certiorari  will  be  granted  to  bring 
up  a  case  in  wdiich  one  member  of  the  circuit  court  of  appeals 
sat  on  the  trial  or  hearing  of  the  same  case  or  question  in 
the  district  court.'*'* 

*^  Mr.    Justice    Brewer,    in    For-  Northwestern    Ry.   Co.   v.   Osborne, 

syth   V.   Hammond,    i66  U.    S.  514.  146   U.    S.    354;    Hendry    v.    Ocean 

Consult   also    Amer.    Const.    Co.    v.  Steamship  Co.,  164  U.  S.  707. 
Jacksonville    Ry.     Co.,     148    U.     S.  ^^  Writs    of   certiorari   have    been 

383 ;  Lau  Ow  Bew  v.  U.  S.,  144  U.  granted  to  remove  bankruptcy  cases 

S.    58;    In    re    Woods,    143    U.    S.  from  the  circuit  court  of  appeals  in 

202;   Lau   Ow   Bew,   petitioner,    141  Mueller  v.   Nugent,   184  U.   S.   i,  7 

U.    S.    583 ;    The    Three    Friends,  Am.  B.  R.  224 :  Louisville  Trust  Co. 

166  U.   S.   I.  V.   Comingor,   184  U.   S.   18,  7  Am. 

*^  Forsyth    v.    Hammond,    166   U.  B.   R.  421  ;   Lockwood  v.   Exchange 
S.  513.     Consult  also  cases  reported  Bank,  190  U.  S.  294;  Clarke  v.  Lar- 
in  163  U.  S.,  pp.  675  to  712.     Lau  remore,  188  U.  S.  486. 
Ow    Beu,    141    U.    S.    583;    In    re         *"  Amer.    Const.    Co.    v.   Jackson- 
Woods,    143   U.   S.  202;   Chicago  &  ville   Ry.    Co.,    148   U.    S.    372,   386. 


APPELLATE    PROCEEDINGS.  803 

When  a  writ  of  certiorari  is  granted  it  is  issued  by  the 
clerk  of  the  supreme  court  and  sent  to  the  clerk  of  the  circuit 
court  of  appeals  from  which  the  case  is  to  be  removed.  A 
return  to  such  writ  is  ordinarily  made  pursuant  to  a  stipula- 
tion of  counsel  filed  in  the  office  of  the  clerk  of  the  circuit 
court  of  appeals.  The  stipulation  is  in  effect  an  agreement 
that  the  transcript  of  record  filed  with  the  application  for  the 
writ  may  be  taken  as  a  return  to  the  writ  and  no  new  tran- 
script made.  The  clerk  returns  the  writ  by  endorsing  thereon 
a  copy  of  the  stipulation.  This  writ  is  returned  to  the  office 
of  the  clerk  of  the  supreme  court,  and  the  case  is  then 
pending  in  the  supreme  court,  upon  the  writ  of  certiorari. 
The  questions  arising  upon  the  record  are  determined  ac- 
cording to  fixed  rules  of  law.^°  A  case  so  removed  to  the 
supreme  court  is  pending  there  as  if  on  the  appeal  of  the  peti- 
tioner, and  only  his  assignments  of  error  will  be  considered  by 
that  court,^^  unless  the  respondent  also  applies  for  certiorari. 
The  burden  is  upon  the  petitioner,  and  he  is  allowed  to  open 
and  close  the  argument,  as  in  the  case  of  an  appeal. 

Whenever  a  case  has  been  reviewed  and  determined  by  the 
supreme  court  on  a  writ  of  certiorari  to  a  circuit  court  of  ap- 
peals the  mandate  issues  directly  to  and  the  cause  is  remanded 
to  the  proper  district  or  circuit  court  for  further  proceedings 
in  pursuance  of  such  determination.^^ 

§  309.     Certifying  questions  to  the  supreme  court. 

The  provisions  of  the  bankrupt  statute,  with  reference  to 
certifying  questions  to  the  supreme  court  from  other  courts  of 
the  United  States  and  giving  the  supreme  court  power  to  ex- 
ercise jurisdiction  of  such  matters,  manifestly  adopt  the  same 
rule,  with  reference  to  certifying  c|uestions  in  bankruptcy  cases, 
that  applies  to  certificates  in  other  cases."^ 

It  therefore  becomes  necessary  to  examine  the  United  States 
laws  now  in  force  with   reference  to  such  certificates.     The 


••"  Amer.    Const.   Co.   v.   Jackson-         '"'•''  B.  A.  1898,  Sec.  25^.   Sec  Love- 
ville  Ry.  Co.,  148  U.  S.  372.  land's  Forms  Fed.  Prac,  Nos.  1431 

51  Hubbard  v.  Tod,  171  U.  S.  474-      to   1435,  and   notes   thereto. 

52  Act  of  March  3,  1891,  26  Stat, 
rit  L.  826,  Sec.   10. 


804  LAW    AND    PROCliEDINGS    IN    BANKRUPTCY. 

supicnic  cnurt  is  the  only  coiirl  to  wliicli  ([ucstions  may  be 
certified.  The  Revised  Statutes  of  the  United  States  provided 
for  certifying-  questions  to  the  supreme  court  in  certain  cases 
wliere  tliere  was  a  division  of  opinion  l)etween  the  judges 
holding  the  inferior  court. "'^^  These  sections,  however,  were 
repealed  by  the  circuit  court  of  appeals  act.^'^  The  only  pro- 
visions now  in  force  for  certifying  questions  to  the  supreme 
court  for  its  action  are  found  in  the  act  creating  the  circuit 
courts  of  appeals.  °®  This  act  provides  for  a  certificate  in  two 
classes  of  cases.  First,  a  certificate  from  a  district  or  circuit 
court  with  reference  to  the  jurisdiction  of  that  court;  and, 
second,  a  certificate  from  a  circuit  court  of  appeals  of  any 
question  or  proposition  of  law  concerning  which  that  court 
desires  the  instruction  of  the  supreme  court. 

First  :  Certifying  Jurisdictional  Questions. —  Sec- 
tion 5  of  the  court  of  appeals  act "  provides  that  in  any  case 
in  which  the  jurisdiction  of  a  district  or  circuit  court  is  in 
issue  the  question  of  jurisdiction  alone  may  be  certified  from 
the  court  below  to  the  supreme  court  for  decision. 

This  provision  applies  to  the  jurisdiction  of  district  courts, 
and  will  therefore  include  the  jurisdiction  of  that  court  with 
reference  to  bankruptcy  cases.  When  and  how  such  certifi- 
cate should  be  made  has  been  considered  by  the  supreme 
court  in  a  number  of  cases  with  reference  to  the  jurisdiction 
of  the  circuit  courts. ^^  The  principles  announced  in  these 
cases  will  be  useful  in  certifying  questions  of  the  jurisdiction 
of  the  district  courts  in  bankruptcy. 

The  application  for  a  certificate  of  the  question  of  jurisdic- 
tion is  made  to  the  district  court.  It  is  a  matter  of  right  and 
not  of  judicial  discretion. 

Second  :  Certifying  Questions  of  Law  from  Cir- 
cuit Courts  of  Appeals. —  Section  6  of  the  circuit  court  of 

5*R.  S.  Sees.  650-651-652-693-697.  "Act  of  March  3,  1891,  26  Stat. 

iJs  March   3,   1891,  26   Stat,   at   L.  at  L.  826,   Sec.  5.     This   section  is 

826,   Sec.    12;   U.    S.   V.   Rider,    163  printed  in  full  at  page  791-2. 

U.  S.  132;  U.  S.  V.  Hewecker,  164  ^8  McLish  v.  Roff,  141  U.  S.  661; 

U.  S.  46.  U.    S.    V.    Jahn,    155    U.    S.     109; 

=«  Act  of  March  3,  1891,  26  Stat.  Shields  v.  Coleman,  157  U.  S.  168; 

at  L.  826.  Davis,   etc.,    Co.   v.   Barber,    157   U. 


APPELLATE    PROCEEDINGS.  805 

appeals  act  ^^  provides  "  that  in  every  such  subject  within  its 
appellate  jurisdiction  the  circuit  court  of  appeals  at  any  time 
may  certify  to  the  supreme  court  of  the  United  States  any 
questions  or  propositions  of  law  concerning  which  it  desires 
the  instruction  of  that  court  for  its  proper  decision.  And 
thereupon  the  supreme  court  may  either  give  its  instruction 
on  the  questions  and  propositions  certified  to  it,  which  shall 
be  binding  upon  the  circuit  courts  of  appeals  in  such  case,  or 
it  may  require  that  the  whole  record  and  cause  may  be  sent 
up  to  it  for  its  consideration,  and  thereupon  shall  decide  the 
whole  matter  in  controversy  in  the  same  manner  as  if  it 
had  been  brought  there  for  review  by  writ  of  error  or  ap- 
peal." "" 

It  should  be  observed  that  the  questions  to  be  certified 
under  this  provision  rest  within  the  discretion  of  the  circuit 
court  of  appeals.  It  is  not  a  discretion  the  exercise  of  which 
may  be  invoked  by  a  party  as  of  right.  The  certification  is 
for  the  instruction  of  the  court  upon  doubtful  questions.  In 
cases  of  magnitude  and  upon  indirect  and  doubtful  questions 
of  law  the  court,  upon  the  argument,  may  properly  indulge 
the  suggestion  of  counsel  as  to  the  desirability  of  the  advice 
and  instruction  of  the  supreme  court.  It  is  not,  however, 
good  practice  to  file  a  motion  for  a  certificate,  nor  will  the 
court  usually  grant  such  a  motion.""'  Unless  the  circuit  court 
of  appeals  is  in  doubt  with  reference  to  some  question  of  law, 
and  asks  for  information,  the  supreme  court  will  not  enter- 
tain the  certificate."^  The  circuit  court  of  appeals  will  not 
ordinarily  certify  a  question  in  advance  of  the  argument,""  nor 
after  it  has  decided  the  case."^  The  circuit  court  of  appeals 
may  certify  certain  questions  in  a  case  and  file  an  opinion  on 

S.     673;     Colvin     V.     Jacksonville,  Works,    77    Fed.    Rep.    774;    PiiH- 

158  U.   S.   457 ;    Davis    V.    Geissler,  man     Palace    Car    Co.    v.    Central 

162  U.  S.  290;   Maynard  v.   Hccht,  Transportation  Co.,  83  Fed.  Rep.  i. 

151   U.   S.  324;   Chappell   v.   U.  S.,  Rut    see    Farmers    &    Merchants 

160   U.    S.    499;    Van    Wagenen   v.  State   Bank  v.  Armstrong,  49   Fed. 

Sewall,  160  U.  S.  369.  Rep.  600. 

°9  Act  of  March  3,  1891,  26  Stat.  "i  Columbus   Watch   Co.   v.    Roh- 

at  L.  826,  Sec.  6.  hins,  148  U.  S.  266. 

"o  Louisville,     etc.,     Ry.     Co.     v.  "-'  Louisville,     etc.,     Ry.     Co. ,    v. 

Pope,    74    Fed.    Rep.    1  :    Andrews  Pope,  74  Fed.  Rep.  i. 

V.      National      Foundry      &      Pipe  "•"*  The  Majestic,  69  Fed   Rep.  844. 


8o6  LAW  AND  rRoci:i:i>ixc".s  in  bankruptcy. 

other  points  in  the  same  ease."'      In  sneh  cases  the  final  decree 
or  judgment  will  await  the  decision  of  the  sui)reme  court. 

In  certifying-  a  ([uestion  or  jjroposition  of  law  to  the  su- 
preme court  the  certilicate  should  be  entitled  in  the  circuit 
court  of  appeals,  and  should  contain  such  a  statement  of  the 
facts  as  may  be  necessary  to  the  determination  of  the  ques- 
tions of  law  certified.     It  should  not  contain  the  v;hole  record. 

A  certificate  should  not  in  efTect  certify  the  whole  case  to 
the  supreme  court,  but  only  certain  (piestions  or  propositions 
of  law.  unmixed  with  c/uestions  of  fact  or  of  mixed  law  and 
fact."°  The  certificate  should  show  that  the  instructions  of 
the  supreme  court  is  desired  in  the  particular  case  upon  a 
particular  question  as  to  the  proper  decision.''"  The  cjuestions 
propounded  should  present  distinct  points  or  propositions 
clearly  stated  so  that  each  can  be  distinctly  answered  without 
reference  to  other  issues  of  law^  involved  in  the  case.'^^ 

The  certificate  should  be  signed  by  the  judges  constituting 
the  circuit  court  of  appeals  sitting  in  the  particular  case. 
The  clerk  of  the  circuit  court  of  appeals  attaches  to  this 
certificate  a  certificate  to  the  effect  that  the  certificate  was 
duly  filed  and  entered  of  record  in  the  clerk's  office  by  order 
of  the  court,  and,  as  directed  by  the  court,  the  certificate  is 
forwarded  to  the  supreme  court  for  its  action  thereon. 

The  certificate,  including  a  statement  of  facts,  is  transmitted 
to  the  clerk  of  the  supreme  court  and  filed  and  docketed  by 
him.  The  case  is  set  down  for  argument  upon  the  certificate 
like  a  case  u])on  an  appeal  or  writ  of  error.  Counsel  are 
permitted  to  file  briefs  and  make  oral  arguments. 

Upon  the  determination  of  the  supreme  court  a  certificate 
of  its  answers  to  the  propositions  of  law,  under  the  hand  and 
seal  of  the  clerk  of  the  supreme  court,  is  sent  to  the  circuit 
court  of  appeals.  In  case  the  circuit  court  of  appeals  has 
decided  the  other  questions  at  issue  in  the  case,  a  decree  may 
be  usually  entered  upon  the  certificate  without  further  argu- 

*"'*  Sigafus  V.  Porter,  84  Fed.  Rep.  Graver  v.   Faurot,    162   U.    S.  43S ;  . 

430;    McCormick    Harvesting    Ma-  U.    S.   v.   Union   Pac.   Ry.   Co.,    168 

chine     Co.     v.     Aultman,    69    Fed.  U.    S.    505 ;    Warner    v.    New    Or- 

Rep.    371 ;    Compton    v.    Jesup,    68  leans,  167  U.  S.  467. 

Fed.   Rep.  263,   s.  c.   on   Certificate,  «'■•'  Columbus   Watch   Co.  v.   Rob- 

167  U.  S.  I.  bins,   148  U.   S.  266. 

•''Cross  V.  Evans,  167  U.   S.  60;  •''^  U.    S.   v.   Union   Pac.   Ry.   Co., 


APPELLATE  PROCEEDINGS.  807 

ment.  In  case  the  circuit  court  of  appeals  desires  further 
argument,  it  may  order  the  whole  case  reargued  in  view  of 
the  certificate  of  the  supreme  court.  In  any  case  the  final 
decree  is  entered  in  the  circuit  court  of  appeals  from  which 
the  question  was  certified. 

§  310.     Appeals  to  the  supreme  courts  of  the  territories. 

The  supreme  courts  of  the  territories,  in  vacation  in  cham- 
bers and  during  their  respective  terms,  as  now  or  as  they 
may  be  hereafter  held,  are  invested  with  appellate  jurisdic- 
tion of  controversies  arising  in  bankruptcy  proceedings  from 
the  courts  of  bankruptcy  from  which  they  have  appellate 
jurisdiction  in  other  cases. ^ 

Appeals,  as  in  equity  cases,  may  be  taken  in  bankruptcy 
proceedings  from  the  courts  of  bankruptcy  to  the  supreme 
court  of  the  territories  in  the  following  cases,  to  wit :  (  i )  from 
a  judgment  adjudging  or  refusing  to  adjudge  the  defendant  a 
bankrupt;  (2)  from  a  judgment  granting  or  denying  a  dis- 
charge; and  (3)  from  a  judgment  allowing  or  rejecting  a  debt 
or  claim  of  five  hundred  dollars  or  over.^  * 

Such  appeal  must  be  taken  within  ten  days  after  the  judg- 
ment appealed  from  has  been  rendered,  and  may  be  heard 
and  determined  by  the  appellate  court  in  term  or  vacation,  as 
the  case  may  be.'*  The  appeal  is  allowed  by  a  judge  of  the 
court  appealed  from  or  of  the  court  appealed  to,  and  is  regu- 
lated, except  as  otherwise  provided  in  the  act,  by  the  rules 
governing  appeals  in  equity  in  the  courts  of  the  United  States." 

§  311.  The  twofold  jurisdiction  of  the  circuit  court  of  appeals. 
The  bankru])t  statute  confers  upon  the  circuit  courts  of 
apj)eals  power  to  revise  the  orders  and  decrees  of  a  court  of 
bankruptcy  by  two  different  proceedings  and  for  two  different 
purposes,  first,  it  invests  these  courts  with  jurisdiction  in 
equity,  "  either  interlocutory  or  final,  to  superintend  and  revise 
any  matter  of  law  in  the  procecflings  of  the  several  inferior 
courts  of  bankruj)tcy  within  their  jurisdiction;"  '*  and,  second, 

168    U.    S.    505 ;    McHenry    v.    Al-  ~  Gen.  Ord.  36.   Consult  also  Sees. 

ford,    168    U.    S.    651;    Warner    v.  315  ct  scq.,  post. 

New  Orleans,  167  U.  S.  467.  "*  B.  A.  1898,  Sec.  24^.     See  Sec. 

1  B.  A.  i8q8.  Sec.  24a.  312,  (yost. 

»*B.  A.  1898,  Sec.  25a. 


8o8  LAW    AND    I'ROCEEDINGS    IN    BANKRUPTCY. 

it  invests  these  courts  with  ai)i)eU;ile  jurisihction,  as  in  e(iuity, 
in  the  followiui,^  cases,  [o  wit:  (  i  )  from  a  jiuli^nient  adjudg- 
ing or  refusing  to  adjudge  the  defendant  a  bankrupt;  (2) 
from  a  judgment  granting  or  denying  a  discharge;  and  (3) 
from  a  judgment  allowing  or  rejecting  a  debt  or  claim  of  five 
Inindrcd  dollars  or  over.'' 

In  the  first  case  the  appellate  court  acts  not  upon  appeal, 
but  by  a  petition  of  a  complaining  party,  and  is  given  author- 
ity to  re\iew  and  revise  a  matter  of  law  only  in  the  proceed- 
ings of  the  bankrupt  court  that  is  complained  of.  In  the  second 
case  the  review  is  as  in  equity,  which  may  rest  upon  a  question 
of  fact  or  a  fiuestion  of  law,  or  both. 

In  some  cases  the  moving  party  being  uncertain  as  to  the 
nature  of  his  remedy,  has  both  appealed  and  filed  a  ])etition 
for  review  and  allowed  the  court  to  select  the  proper  proceed- 
ing and  dismiss  the  other.*  It  has  been  held  that  an  appeal 
mav  be  treated  as  a  ])etition  for  review  wdien  only  a  question 
of  law  is  presented,'^  but  not  where  questions  of  fact  and  law 
are  both  involved  in  the  appeal."  Which  is  the  proper  method 
of  review  in  particular  cases  is  considered  in  the  following 
sections. 

§  312.     The  supervisory  powers  of  the  circuit   courts  of  ap- 
peals. 

The  several  circuit  courts  of  appeal  have  jurisdiction  in 
equity,  either  interlocutory  or  final,  to  superintend  and  revise 
in  matter  f)f  law  the  proceedings  of  the  several  inferior  courts 
of  bankruptcy  within  their  jurisdiction.^  A  similar  power 
was  conferred  upon  circuit  courts  by  the  act  of  1867  ^  and  by 
the  act  of  1841.'* 

3B.  A.   1898,  Sec.  25a.     See  Sec.  « /n  re  Whitener    (C.   C.   A.   5th 

314,  post.  Cir.),  105  Fed.   Rep.    180,  5  Am.  B. 

*  In  re  County  of  Worcester,   102  R.   198. 

Rep.   808,  4  Am.   B.   R.  496;   In   re  Ml  A.   1898,  Sec.  24&.     The  Cir- 

Fisher,  103  Fed.  Rep.  860,  4  Am.  B.  cuit  Court  of  Appeals  for  the  Eighth 

R.  646;  In  re  Dickson,  iii  Fed.  Rep.  Circuit  has  no  revisory  jurisdiction 

y^,  7  Am.  B.   R.   186;   Hutchinson  over    courts    of    bankruptcy    in    the 

V.  Le  Roy,  113  Fed.  Rep.  202,  8  Am.  Indian   Territory.     In  re  Blair,    106 

B.  R.  20.  rc<^'-  Rep.  662. 

5  Chesapeake  Shoe  Co.  v.  Scldner  «  K.   S.   Sec.  4986. 

(C.   C.  A.  4th  Cir.),   122  Fed.   Rep.  "5   Stat,   at    L.   440,   Sec.   6. 
593.  10  Am.  B.  R.  466. 


APPELLATE    PROCEEDINGS.  809 

The  provision  of  the  present  statute  confers  a  complete 
supervision  in  matters  of  law  over  all  the  proceedings  of  the 
court  of  bankruptcy  within  the  limits  specitied.  It  extends 
not  only  to  all  cases,  but  to  all  questions  arising  under  the 
statute;  in  other  words,  the  circuit  courts  of  appeals  may  re- 
view the  whole  case  after  a  final  decree  and  decide  upon  it, 
or  it  may  assume  jurisdiction  of  any  particular  proceeding  or 
order  arising  in  the  prbgress  of  the  case.  The  power  is  ex- 
pressly extended  to  "  interlocutory  or  final  "  orders  or  decrees. 

The  supervisory  power  of  the  circuit  courts  of  appeals  is 
confined  to  orders  made  in  a  bankruptcy  proceeding  as  dis- 
tinguished from  suits  at  law  or  in  equity.^**  Questions  of  law 
arising  in  the  process  of  a  jury  trial  in  bankruptcy  can  not  be 
reviewed  under  this  provision."  The  revisory  jurisdiction 
does  not  include  orders  or  judgments  of  the  court  of  bank- 
ruptcy or  of  the  district  judge  which  can  be  reviewed  on 
appeal  under  the  bankrupt  act.^^  Thus  where  the  ])roceedings 
in  the  district  court  result  in  a  judgment  adjudging  or  re- 
fusing to  adjudge  the  defendant  a  bankrupt,  or  a  judgment 
granting  or  denying  a  discharge,  or  a  judgment  allowing  or 
rejecting  a  debt  or  claim  of  five  hundred  dollars  or  over,  they 
can  only  be  reviewed  and  revised  by  an  appeal  duly  taken.^^ 

The  revisory  jurisdiction  does  not  include  a  review  of  orders 
made  by  a  referee.  To  review  an  order  of  a  referee  a  cer- 
tificate must  be  taken  from  the  referee  to  the  district  judge 
and  the  matter  passed  upon  by  him.  This  order  may  then  be 
reviewed  by  a  circuit  court  of  appeals." 

This  power  is  not  to  be  exercised  by  the  appellate  court 
until  after  the  action  of  the  court  of  bankruptcy.     The  power 

'o/h  re  Jacobs,  99  Fed.  Rep.  539,  &  Co.   (C.  C.  A.  7th  Cir.),  91  Fed. 

3  Am.  B.  R.  671;  Scott  v.  Wilson,  Rep.  96,  i  Am.  B.  R.  234;  Mueller 

115  Fed.  Rep.  284,  8  Am.  B.  R.  349;  v.  Nugent,  184  U.  S.  i ;  In  re  Tves 
In   re  Rusch    (C.   C.   A.  7th    Cir.),  (C.  C.   A.  6th  Cir.),  113  Fed.  Rip. 

116  Fed.    Rep.    270,   8    Am.    B.    R.      911,  7  Am.   B.   R.  692;  In  re   See- 
518.  bold   (C.  C.  A.  5th  Cir.),  105  Fed. 

11  Flliott  V.  Toeppner,  187  U.  S.  Rep.  910,  5  Am.  B.  R.  358;  In  re 
329.  9  Am.  B.  R.  50.  FKKert    CC.    C.    A.,    7th    Cir.),    102 

12  B.    A.   1898.  Sec.  25.     See  also  Fed.  Rep.  735,  4  Am.  B.  R.  449. 
Sec.   314,  post.     In  re  Good    (C.  C.  '^  As  was  done  in  Mueller  v.  Nu- 
A.   8th   Cir).  99   Fed.   Rep.   389.   3  Rent,  184  U.  S.   i;  Louisville  Trust 
Am.  B.  R.  605 ;  In  re  Rouse,  Hazard  Co.  v.  Comingor,  184  U.  S.  18. 


8lO  LAW    AND    PROCKEDINGS    IN    BANKRUPTCY. 

to  supcrintciul  aiul  revise  extends  only  to  (inestions  and  mat- 
ters which  have  been  fairly  presented  to  and  passed  upon  by 
the  court  of  bankruptcy.  The  exercise  of  such  revisory  power 
does  not  operate  to  transfer  the  entire  i)roceedings  into  the 
circuit  court  of  appeals,  to  be  there  continued  as  in  a  court  of 
the  tirst  instance.  Its  jurisdiction  is  appellate  and  not  original. 
Where  the  decree  or  order  is  affirmed,  it  stands  as  the  decree  or 
'order  of  the  court  of  bankruptcy,  and  is  to  be  carried  into  due 
execution  by  that  court. 

It  should  be  observed,  also,  that  the  supervisory  power  of 
the  appellate  courts  extends  only  to  matters  of  law."  They 
can  not  superintend  or  revise  matters  of  fact  or  mixed  mat- 
ters of  fact  and  law.'^  In  this  respect  the  present  statute 
differs  from  the  act  of  1867.  Although  the  former  act  pro- 
vided for  revising  matters  of  fact  as  well  as  points  of  law,  it 
is  noticeable  that  under  the  act  the  questions  presented  were 
generally  mere  points  of  law.  There  were  a  few  cases  in 
which  evidence  was  admitted  in  the  circuit  courts."  It  is 
clear  that  such  proceedings  can  not  be  had  under  the  present 
act. 

In  the  exercise  of  the  revisory  jurisdiction  under  Sec.  24b 
the  circuit  courts  of  appeals  have  reviewed  an  order  of  a  court 
of  bankruptcy  giving  or  refusing  priority  of  claims  irrespective 
of  the  value,'^  or  with  reference  to  a  homestead  exemption,^* 
or  refusing  to  stay  proceedings  in  a  state  court, ^®  or  to  vacate 

"Mueller  v.   Nugent,    184  U.    S.  Cas.,    s.    c.    5    Biss.    359;    Bank    v. 

I ;     Cunningham    v.     German     Ins.  Cooper,  20  Wall.  171. 

Bank  (C.  C.  A.  6th  Cir.),  103  Fed.  ^"^  In  re  Rouse,  Hazard  &  Co.  (C. 

Rep.  932,  4  Am.  B.  R.  192;  Courier-  C.  A.  7th  Cir.),  91  Fed.  Rep.  96,  i 

Journal  Job  Printing  Co.  v.  Brewing  Am.  B.    R.  234. 

Co.,  loi  Fed.  Rep.  699,  4  Am.  B.  R.  is  Bashinski  v.  Talbott  (C.  C  A. 

183.  Sth  Cir.),  119  Fed.  Rep.  337,  9  Am. 

15 /n   re   Purvine    (C.   C.    A.    Sth  B.   R.  513;   In  re  Irvin    (C.   C.  A. 

Cir.),  96  Fed.  Rep.  192,  2  Am.  B.  R.  Sth  Cir.),  120  Fed.  Rep.  733,  9  Am. 

787;  In  re  Union  Trust  Co.   (C.  C.  B.    R.    689;    White    v.    Thompson 

\.   ist  Cir.),   122  Fed.  Rep.  937.  (C.  C  A.  5th  Cir.),  119  Fed.  Rep. 

i«  Langley    v.    Perry,    No.    8067,  868,  9  Am.  B.  R.  653 ;  In  re  Holden 

Fed.    Cas.,    s.    c.   2    N.    B.    R.    596;  CC.  C.   A.  9th  Cir.),  7  Am.  B.  R. 

Farrin  v.  Crawford,  No.  4686,  Fed.  615. 

Cas.,  s.   c.  2   N.   B.  R.  602;   In  re  '^^  In  re  Kanter  &  Cohen    (C.   C. 

Alexander,  No.  160,  Fed.  Cas.,  s.  c.  A.   2d   Cir.),    121    Fed.   Rep.  9^4,  9 

Chase,   295.     But   see   In   re   Great  Am.  B.  R.  372;   In  re  Seebold   (C. 

Western   Tel.   Co.,   No.   5739,   Fed.  C.  A.  5th  Cir.),  105  Fed.  Rep.  910, 


APPELLATE    PROCEEDINGS. 


8l] 


and  set  aside  an  order  setting  aside  a  discharge  and  to  rein- 
state the  discharge,'''  or  refusing  to  enjoin  the  bankrupt  from 
prosecuting  a  second  appHcation  for  his  discharge,"^  or  refus- 
ing to  reconsider  a  decision  allowing  claims  and  for  the  recov- 
ery of  dividends,"  or  to  sell  the  property  of  an  adverse 
claimant,"^  or  refusing  to  allow  a  creditor  to  amend  his  speci- 
fication in  opposition  to  a  bankrupt's  discharge,-*  or  that  a 
party  to  a  bankruptcy  proceeding  is  guilty  of  contempt  in 
refusing  to  obey  an  order  of  the  court,"^  or  directing  the  trus- 
tee to  return  certain  property  to  persons  claiming  it,  which 
property  was  claimed  by  the  trustee  to  be  a  part  of  the  bank- 
rupt's estate, ^f  or  directing  a  payment  to  the  trustee  in  bank- 
ruptcy of  a  sum  of  money,'^  or  allowing  an  amendment  to  an 
involuntary  petition.-*  or  directing  an  officer  of  the  court  to 
take  possession  of  the  bankrupt's  property  including  that  which 
was  found  in  the  custody  of  a  third  party  and  was  claimed 
adversely,-*'  or  determining  whether  a  preference  must  be  sur- 
rendered or  not  before  proving  claim,^**  or  determining  con- 
flicting claims  to  property  in  the  possession  of  a  court  of 
bankruptcy,^^   or   ascertaining   and   liquidating   liens,^"  or  to 


5  Am.  B.  R.  3S8;  White  v.  Thomp- 
son (C.  C.  A.  5th  Cir.),  119  Fed. 
Rep.  868;  In  re  San  Gabriel  Sani- 
torium  Co.  (C.  C.  A.  9th  Cir.),  in 
Fed.  Rep.  892,  7  Am.  B.  R.  206. 

207,1  re  Hawk  (C.  C.  A.  8th  Cir.), 
114  Fed.  Rep.  916,  8  Am.  B.  R.  71. 

21  In  re  Feigenbaiim  CC.  C.  A. 
2d  Cir.),  121   Fed.  Rep.  69,  9  Am. 

B.  R.  595. 

2- /h  re  Lewensohn  fC.  C.  A.  2d 
Cir.),  121  Fed.  Rep.  538,  9  Am.  B. 
R.  368. 

2^  Beach  v.  Macon  Grocery  Co. 
(C.  C.  A.  sth  Cir.),  120  Fed.  Rep. 
736,  8  Am.  B.  R.  751. 

" /«  re  Carley  (C.  C.  A.  3d  Cir.), 
117  Fed.  Rep.  130,  8  Am.  B.  R.  720; 
Kentucky  Nat.  Bank  v.  Carley   (C. 

C.  A.  3d  Cir.),  121  Fed.  Rep.  822. 
25  CarlinR     v.     Seymour     Lumber 

Co.  (C.  C.  A.  sth  Cir.).  113  Fed. 
Rep.  483.  8  Am.  B.  R.  29:  Mueller 
V.  Nugent,   184  U.  S.   i ;  Louisville 


Trust  Co.   V.   Comingor,   184  U.   S. 
18. 

2« /»  re  Garcewich  (C.  C.  A.  2d 
Cir.),  115  Fed.  Rep.  87,  8  Am.  B.  R. 

149- 

-'■  Hutchinson  v.  LeRoy  (C.  C.  A. 
1st  Cir.),  113  Fed.  Rep.  202,  8  Am. 

B.  R.  20. 

-'* /»  re  Sears  (C.  C.  A.  2d  Cir.), 
117  Fed.  Rep.  294,  8  Am.  B.  R.  713. 

29 /;i  re  Young  (C.  C.  A.  8th 
Cir.),  Ill  Fed.  Rep.  158,  7  .'\m.  B. 
R.  14. 

•■"'  In  re  Dickson  (C.  C.  A.  ist 
Cir.),  Ill  Fed.  Rep.  726,  7  Am.  B. 
R.  186;  In  re  .Abraham  Steers  Lum- 
ber Co.  (C.  C.  A.  2d  Cir.),  112 
Fed.  Rep.  406.  7  Am.  B.   R.  332. 

•■'1  In  re  Lemmon  &  Gale  Co.   (C. 

C.  A.  6th  Cir.),  112  Fed.  Rep.  296, 
7  km.   B.  R.  2QI. 

^■-/„  r*  Shirley  (C.  C.  A.  6th 
Cir.).  112  Fed.  Rep.  301.  7  Am.  B. 
R.  299;  In  re  Pekin  Plow  Co.  (C. 


8l2 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


enjoin  executicui  in  a  state  court  against  a  trustee, ■'"'  or  to  set 
asitle  an  order  of  dismissal  and  to  reinstate  an  involuntary 
petition.''*  or  sustainiui;-  demurrer  to  petition  filed  for  the  pur- 
pose of  vacating  an  atljudication  in  bankruptcy,"'''  or  to  sell 
property  of  the  bankrupt  free  from  liens."'"  or  recpiiring  the 
bankrupt  or  other  person  to  surrender  to  the  trustee  property 
alleged  to  be  in  his  possession  belonging  to  the  estate  in  bank- 
ruptcv,'^'  or  as  to  the  vacating  of  an  adjudication  upon  a  judg- 
ment lien  under  Sec  67/,""*  or  re(|uiring  the  surrender  of  prop- 
erty by  an  assignee  for  the  benefit  of  creditors,"'"  or  requiring 
a  bankrupt  to  endorse  a  liquor  license  for  sale,*"  or  to  remove 
a  trustee,''^  or  with  reference  to  the  extradition  of  bankrupt,*^ 
or  appointing  trustee  when  creditors  fail  to  elect  one.*^ 

^  313,     Application  to  superintend  and  revise  matters  of  law. 

The  supervisory  power  of  the  circuit  courts  of  appeals  is  ex- 
ercised on  due  notice  and  petition  by  a  party  aggrieved.** 

The  exercise  of  this  general  jurisdiction  is  not  placed  by 
the  act  under  specified  regulations  and  restrictions,  like  the 
proceeding  by  appeal  or  writ  of  error.*'''  Congress  has  left 
these  regulations  to  the  discretion  of  the  circuit  courts  of 
appeals,  and  to  the  rules  to  be  prescribed  by  the  supreme  court 
As  yet  the  supreme  court  has  prescribed  no  rules  concerninj^ 


C.  A.  8th  Cir.),  112  Fed.  Rep.  308, 
7  Am.  B.  R.  369 ;  In  re  Beaver  Coal 
Co.  (C.  C.  A.  9th  Cir.).  113  Fed. 
Rep.  889.  7  Am.  B.  R.  542. 

33 /m  re  Neely  (C.  C.  A.  2d  Cir.), 
113  Fed.  Rep.  210,  7  Am.  B.  R.  312. 

3*  /»  re  Jemison  Mercantile  Co. 
(C.  C.  A.  5th  Cir.),  112  Fed.  Rep. 
966,  7  Am.   B.  R.  588. 

35 /n  re  Ives  (C.  C.  A.  6th  Cir.), 
113  Fed.  Rep.  911,  7  Am.  B.  R.  692. 

38 /n  re  Union  Trust  Co.  (C  C. 
A.  ist  Cir.),  122  Fed.  Rep.  937; 
In  re  Utt  (C.  C.  A.  7th  Cir.),  105 
Fed.  Rep.  754,  5  Am.  B.  R.  383. 

3T  Mueler  v.  Nugent,  184  U.  S.  i ; 
Louisville  Trust  Co.  v.  Comingor, 
184  U.  S.  18;  In  re  Purvine,  96  U. 
S.  192.  2  Am.  B.  R.  787. 

3*/»   re  Richards,   96   Fed.    Rep. 


935,  3  Am.  B.  R.  145;  In  re  Beaver 
Coal  Co.,  113  Fed.  Rep.  889,  7  Am. 
B.  R.  542. 

3»  /w  rc  Gutwillig,  92  Fed.  Rep. 
337;  Davis  V.  Bohle,  92  Fed.  Rep. 
325 ;  In  re  Abraham,  93  Fed.  Rep. 
767.  2  Am.  B.  R.  266. 

40  In  re  Fisher,  103  Fed.  Rep.  860, 
4  Am.  B.  R.  646. 

*i  In  re  Perkins,  No.  10982,  Fed 
Cas.,  s.  c,  5  Biss.  254. 

*~  In  re  Hassenbusch  (C.  C.  A. 
6th  Cir.).  108  Fed.  Rep.  35- 

*3/„  re  McGill  (C.  C.  A.  6th 
Cir).  106  Fed.  Rep.  57. 

■•^B.   A.   1898,   Sec.  24.b. 

*^  Mr.  Justice  Chase,  in  constru- 
ing the  act  of  1867.  In  re  Alexan- 
der. No.  160,  Fed.  Cas.,  s.  c.  Chase, 
295- 


APPELLATE  PROCEEDINGS.  813 

it  Until  it  does,  the  circuit  courts  of  appeals  may  prescribe 
rules  and  regulations,  so  far  as  they  do  not  conflict  with  the 
statute. 

The  act  prescribes  no  time  within  which  the  application 
for  a  review  must  be  presented.  An  appeal  is  required  to  be 
taken  within  ten  days.*"  Not  so  with  a  petition  for  a  review. 
Undoubtedly  the  application  should  be  made  within  a  rea- 
sonable time,  in  order  that  the  proceedings  to  settle  the  bank- 
rupt's estate  may  not  be  delayed,  but  neither  the  act  nor  any 
rule  of  the  supreme  court  determines  what  that  time  is.  It 
must,  therefore,  be  left  to  depend  upon  the  circumstances  of 
each  case.  It  should  generally  be  fixed  in  analogy  in  the 
period  designated  within  which  appeals  must  be  taken.*^ 

The  application  for  a  review  and  revision  of  the  action  of  a 
court  of  bankruptcy  can  be  made  only  by  a  person  aggrieved 
by  such  action.*** 

A  second  petition  to  review  the  same  matter  as  a  previous 
petition  will  not  be  permitted.*" 

The  Petition. —  The  application  for  the  exercise  of  super- 
visory power  is  made  by  petition. '''  The  petition  should  be 
filed  in  the  circuit  court  of  appeals  for  the  circuit  in  which  the 
court  of  bankruptcy,  whose  action  is  to  be  reviewed,  is  held." 
It  should  be  entitled  in  the  appellate  court  with  the  style  of  the 
case,  and  should  state  the  proceedings  in  the  court  of  bank- 
ruptcy sufficient  to  show  the  jurisdiction  of  that  court,  and 
clearly  and  specifically  point  out  the  question  of  law  decided 
by  the  district  court,  charging  that  the  petitioner  is  aggrieved 
thereby,  and  praying  the  circuit  court  of  appeals  to  review 
and  revise  the  decision  of  the  court  below."     An  allegation  by 

««B.   A.   1898,   Sec.  2Sa.  ^C.  C.  A.  5th  Cir.).   120  Fed.  Rep. 

<T  Rank  v.   Cooper,  20  Wall.   171;  736. 

hi  re  Economical   PrintinR  Co.   (C.  '-"W.    A.    i8g8.   Sec.   24^. 

C.   A.  2d  Cir.),   106  Fed.  Rep.  839,  " /m   re  Williams,   105  Fed.  Rep. 

5  Am.  B.  R.  697;  In  re  Good  (C.  C.  906,  5  Am.  B.  R.  198,  note. 

A.  8th  Cir.>.  3   Am.   B.  R.  605.  99  " /«  '"''  Ricliards    (C.   C.   A.   7th 

Fed.  Rep,  38^^  Cir.),  96  Fed.  Rep.  935.  3  Am.  B.  R. 

♦"B.  A.  1898,  Sec.  24b;  Ala.  &  C.  14.S;    /"    '''    '^'il^c    ^C.    C.    A.    ist 

R.  Co.  V.  Jones.  No.  127,  Fed.  Cas.,  Cir.),   104  Fed.  Rep.  287,  4  Am.  B. 

s.   c.   7  N.   B.   R.    145:   /»   re  Baker  R.  778;  />i  re  Seehold  CC.  C  A.  5th 

(C.  C.   A.   1st  Cir).   104  Fed.  Rep.  Cir),  105  Fed.  Rep.  910,  5  Am.  B. 

287,  4  Am.  B.  R.  77^-  R-  3S8. 

■•9  Beach    v.    Macon    Grocery    Co. 


Sl4  LAW    AND    PROCEEDINGS    IN    15ANKRUPTCY. 

the  petitioner  tliat  he  is  agi^rievod  is  not  snt'licient,  nnless  it 
is  also  allegeti  in  what  the  error  consists.'"'  The  nature  of 
the  error  should  he  distinctly  stated  for  the  information  of  the 
api^ellate  court  and  as  a  matter  of  notice  to  the  opposing 
party.  ^'^ 

It  is  not  necessary  for  the  petition  to  allege  any  value  in 
relation  to  the  question  or  matters  concerning  which  a  review 
is  sought.^'* 

The  petition  should  be  signed  and  verihed  by  the  petitioner. 
The  order  of  the  court  of  bankruptcy  is  usually  attached  as  an 
exhibit  to  the  petition.  Other  i)apers  necessary  to  establish 
the  facts  alleged  in  the  petition  may  also  be  attached.'^^  No 
record,  however,  is  made  as  upon  an  api)eal.  The  papers 
should  show  that  the  questions  of  law,  sought  to  be  reviewed, 
were  passed  upon  by  the  court  below  and  the  opinion  of  that 
court  is  not  sufficient  for  this  purj^ose.^® 

All  persons  interested  in  the  controversy  should  e  made 
parties  to  the  petition  and  have  notice  of  the  filing  of  it.  Where 
the  trustee  represented  the  creditors  in  the  bankruptcy  court 
he  only  need  be  made  party  respondent  in  the  circuit  court  of 
appeals.^'^ 

Petitions  for  review  may  be  amended  m  the  discretion  of 
the  court. ^^ 

Proceedings  on  a  Petition  to  Review  and  Revise  Mat- 
ters OF  Law. —  Upon  filing  a  petition  for  review  in  a  circuit 
court  of  appeals  due  notice  must  be  given  adverse  parties.^^ 
The  notice  required  may  be  given  by  the  petitioner  or  his  at- 

BSLittlefield  v.   Del.   &  Hud.  Ca-  (C.  C.  A.   ist  Cir.),   125  Fed.  Rep. 

nal  Co.,  No.  8400,  Fed.  Cas.,  s.  c.  3  226. 

Cliff.    371;    In   re    Sutherland,    No.  ■•'In  re  Vtt   (C.  C.  A.  7th  Cir.), 

13636,   Fed.  Cas.,  s.  c.  2  Biss.  405;  105  I-^cd.  Rep.  754,  5  Am.  B.  R.  383. 

In  re  Casey,  No.  2495,  Fed.  Cas.,  s.  ^"*  Gen.  Ord.    11;  Knight  v.   Che- 

c.  TO  Blatch.  376;  In  re  Clark,  No.  ney.  No.  7883,  Fed.  Cas.,  s.  c.  5  N. 

2802,  Fed.  Cas.,  s.  c.  9  Blatch.  379.  B.  R.  305 ;  Littlefield  v.  Del.  &  Hud. 

5*/n  re  Rouse,  Hazard  &  Co.,  91  Canal  Co.,  No.  8400,  Fed.  Cas.,  s.  c. 

Fed.  Rep.  gS;  In  re  Clark,  No.  2802,  3  Cliff.  371. 

Fed.  Cas.,  s.  c.  9  Blatch.  379.  ^o  b.    A.    1898,    Sec.    24&;    In   re 

^^In   re  Richards    (C.   C.    A.  7th  Utt    (C.  C.  A.  7th   Cir.),   105  Fed. 

Cir.),  96  Fed.  Rep.  935,  3  Am.  B.  Rep.   754,   5  Am.   B.   R.  383;  In  re 

R.  145.  Aliraham.  93  Fed.  Rep.  767,  2  Am. 

°«  In   re   Boston   Dry   Goods    Co.  B.  R.  266. 


APPELLATE    PROCEEDINGS.  815 

torney  or  other  person  delivering  a  copy  of  the  petition  to  the 
respondent  and  proof  of  service  made  either  in  the  form  of  an 
affidavit  or  acceptance  of  service.  The  proof  of  service  should 
be  filed  in  the  appellate  court.  The  clerk  of  the  appellate  court 
may  be  requested  to  serve  a  copy  of  the  printed  petition  upon 
the  respondent  or  his  attorneys  after  the  petition  has  been 
docketed  and  printed.  This  is  sufficient  notice,  but  the  better 
practice  is  to  serve  a  formal  notice.**"  The  service  of  a  peti- 
tion upon  a  person  who  acted  as  counsel  for  the  respondent 
in  the  original  proceedings  is  sufficient."^ 

The  proceedings  in  review  are  a  part  of  the  original  case, 
and  for  the  purpose  of  review  the  parties  are  still  in  court. 
The  proceeding  in  review  is  intended  to  be  speedy  and  sum- 
mary, and  a  reasonable  notice  to  counsel  accomplishes  the  ends 
of  justice.  A  defective  service  is  cured  by  appearance  in  the 
court  of  appeals."^ 

Upon  filing  the  petition  the  case  is  docketed,  and  the  peti- 
tion and  exhibits  printed  as  in  other  cases.  The  case  is  regu- 
larly heard  upon  the  petition  and  exhibits  filed  therewith.  The 
circuit  court  of  appeals  may  direct  certain  original  papers  to 
be  sent  up.  if  necessary,  to  ascertain  the  facts.  No  answer  is 
required  to  the  petition,  unless  called  for  by  a  rule  or  order  of 
court  for  the  reason  that  the  petition  and  exhibits  must  show 
the  question  of  law  to  be  reviewed,*'"''  No  new  evidence  is 
introduced  in  the  appellate  court.  The  court  of  appeals  acts 
to  review  the  question  of  law  upon  the  statement  of  facts 
presented  by  the  petition  and  papers  before  it.  It  is  not  proper 
to  permit  an  issue  of  fact  to  be  made.  The  appellate  court 
revises  only  questions  of  law.  The  practice  under  the  act  of 
1867  was  somewhat  different  in  this  respect,  for  the  reason 
that  the  circuit  courts  were  authorized  to  examine  both  law 
and  facts. 

Counsel  are  ])ermitted  to  file  briefs  and  make  arguments. 
The  attorney  for  the  petitioner  opens  and  closes  the  argument. 

""For    fnrm    of   notice   see    Form  "•'' Pjv   rule   of   court    llu-   time    to 

No.   176,  t^ost.  plead  to  a  petition  is  limited   in  the 

"1  Ala.  &  C.  R.  Co.  V.  Jones,  No.  circuit  court  of  appeals  for  the  ist 

T2fi,  Fed.  Cas.,  s.  c.  5  N.  R.  R.  97.  circuit.     In  re  Baker.  104  Fed.  Rep. 

«2.Ma.  &  C.  R.  Co.  V.  Jones,  No.  2R7,  .1  Am.  B.  R.  778. 
124,  Fed.  Cas.,  s.  c.  5  N.  B.  R,  97. 


8l6  LAW    AND    I'ROCEKDlNiJS    IN    BANKRUPTCY. 

Tlie  order  of  tlie  circuit  court  of  appeals  in  such  cases  is 
regularly  an  affinnance.  reversal  or  modification  of  the  order 
of  the  court  below,  with  such  directions  as  justice  may  require. 
The  appellate  court  does  not  execute  the  order,  but  by  its 
mandate  it  directs  the  court  of  bankruptcy  with  reference  to 
what  should  be  done,  as  in  the  case  of  an  appeal  or  writ  of 
error. 

No  appeal  lies  to  the  supreme  court  from  the  decision  of  the 
circuit  court  of  appeals  upon  a  bill  for  review."*  The  only 
method  of  obtaining-  a  revision  of  such  decision  by  the  supreme 
court  is  by  writ  of  certiorari. ^'^ 

§  314.     Appellate   jurisdiction    in   bankruptcy   of   the   circuit 
courts  of  appeals. 

As  has  been  observed,  the  present  statute  does  not  afifect  the 
appellate  jurisdiction  of  the  circuit  courts  of  appeals,  either 
in  equity  or  law  cases.**" 

The  appellate  powers  of  the  circuit  courts  of  appeals,  in 
bankruptcy,  are  contained  in  section  25  of  the  act.  They  are 
"  That  appeals,  as  in  equity  cases,  may  be  taken  in  bank- 
ruptcy ])roceedings  from  the  courts  of  bankruptcy  to  the  cir- 
cuit court  of  appeals  of  the  United  States,  and  to  the  supreme 
court  of  the  territories,  in  the  following  cases,  to  wit,  ( i )  from 
a  judgment  adjudging,  or  refusing  to  adjudge  the  defendant 
a  bankrupt;  (2)  from  a  judgment  granting  or  denying  a 
discharge;  and  (3)  from  a  judgment  allowing  or  rejecting  a 
debt  or  claim  of  five  hundred  dollars  or  over." 

Unless  a  case  falls  within  one  of  these  three  classes  it  can 
not  be  reviewed  on  appeal."^  Thus  no  appeal  lies  from  an 
interlocutory  order  made  during  the  examination  of  a  bank- 
s'Conro  V.  Crane,  94  U.  S.  441.  tate  Co.  (C.  C.  A.  7th  Cir.),  ri2 
Consult  Morgan  v.  Thornhill,  11  Fed.  Rep.  643,  7  Am.  B.  R.  441; 
Wall.  6s;  Hill  v.  Thompson,  94  U.  In  re  Whitener  (C.  C.  A.  5th  Cir.), 
S.  322.  105  Fed.  Rep.  180,  5  Am.  B.  R.  198 ; 

^'^  See  Writs  of  certiorari,  Sec.  Fisher  v.  Cushman  (C.  C.  A.  ist 
307,  ante.  Cir.),   103   Fed.  Rep.  860,  4  Am.  B. 

8«  Sec.  302,  ante.  R.  646;  Hutchinson  v.  Le  Roy  (C. 

"^Goodman  v.  Brenner  (C.  C.  A.       C.  A.   ist  Cir),  113  Fed.  Rep.  202, 
5th  Cir.),  109  Fed.  Rep.  481,  6  Am.      8  Am.  B.  R.  20. 
B.  R.  470;  In  re  Columbia  Real  Es- 


APPELLATE    PROCEEDINGS.  817 

rupt  requiring  him  to  produce  books,"^  or  a  decree  in  a  suit  to 
recover  property  from  the  trustee  as  property  that  belonged 
to  the  plaintiff  and  not  to  the  bankrupt's  estate."'-*  Where  a 
case  falls  within  one  of  these  provisions  the  review  should  be 
by  appeal  and  not  by  invoking  the  supervisory  powers  of  the 
circuit  courts  of  appeals."** 

First.  From  a  Judgment  Adjudging  or  Refusing  to 
Adjudge  the  Defendant  a  Bankrupt. —  It  seems  that  an 
appeal  under  this  clause  lies  only  in  involuntary  proceedings 
because  the  word  "  defendant  "  implies  that  the  proceeding  is 
instituted  against  the  debtor  by  his  creditors.  A  creditor  is 
not  permitted  to  contest  an  adjudication  in  voluntary  bank- 
ruptcy ^^  and  could  not  therefore  be  aggrieved  by  a  decision 
either  refusing  or  making  an  adjudication.  Whether  the 
bankrupt  would  be  permitted  to  review  on  appeal  a  judgment 
refusing  an  adjudication  on  his  petition  is  very  doubtful. 

It  is  clear  that  an  appeal  in  an  ordinary  involuntary  pro- 
ceeding may  be  taken  by  either  the  petitioning  creditors  or  the 
bankrupt  to  review  a  judgment  either  refusing  or  making  an 
adjudication.'-  It  has  been  held  that  an  appeal  will  not  He 
from  an  order  dismissing  a  petition  for  intervention  by  a 
creditor  for  the  purpose  of  a  rehearing  to  oppose  the  adjudica- 
tion." An  assignee  for  the  benefit  of  creditors,  who  has 
intervened  to  contest  the  petition  has  a  right  to  appeal  from 
the  decree  adjudging  the  defendant  to  be  bankrupt.'^* 

"8  Goodman  V.  Brenner   (C.  C.  A.  wholly    without    jurisdiction."      See 

5th  Cir.),  lOQ  Fed.  Rep.  481,  6  Am.  Sec.   312,   ante. 

^    R-   470.  71 /„    ,.^   jejiu     g^    p^.j     j^pp    g^g^ 

«»/«   rr  Whitcncr    (C.  C.   A,  5th  2  Am.  B.  R.  498. 

Cir.).   105   Fed.  Rep.   180,  5  Am.   B.  '^^  simonson  v.  Sin.sheimcr   (C.  C. 

^    '9fi.  A.  6th  Cir.),   100  Fed.    Rep.  426.  3 

T"/;/  re  Good  fC.  C.  A.  8th  Cir.),  Am.  B.  R.  824;  Parmentcr  Mfg.  Co. 

99  Fed.  Rep.  389,  3  Am.  B.  R.  605;  v.   Stoever   (C.   C.   A.    ist  Cir.),  97 

In  re  Dickson   (C.  C.  A.   ist  Cir.),  Fed.    Rep.    330,  3   Am.    B.    R.   220; 

III  Fed.  Rep.  726,  7  Am.  B.  R.  186.  West  Co.  v.  Lea,  174  U.  S.  590. 

Consult   In   re   Rouse,   Hazard   &  See  also  Elliott  v.  Toeppner,  187 

Co.,  91   Fed.  Rep.  96,  in  which  the  U.  S.  327,  9  Am.  B.  R.  50. 

court  held    that  the  case  presented  ^.i  /„  ^e  Columbia  Real  Estate  Co. 

was    not    within    the   appellate,    but  (C.  C.  A.  7th  Cir.),  112  Fed.  Rep. 

properly    in    the   supervisory,   juris-  643,  7  Am.  B.  R.  441. 

diction,   and   that   if   it    had   been   a  ^4 /„  ^,,  ^^^ypr  (Q  q   a.  2d  Cir.), 

proceeding     in     which     an     appeal  q8  T'cd.  Rep.  976.  3  Am.  B.  R.  559. 
would  lie,  it  said  :     "  Wc  should  be 


8l8  LAW    AND    PROCEEDINGS   ir    BANKRUPTCY. 

Second.  From  a  Judgment  Granting  or  J^enying  a 
Discharge. —  It  is  clear  that  under  this  clause  u  creditor  or 
the  bankrupt  may  appeal  from  the  judgment  of  the  court  of 
bankruptcy  either  granting  or  refusing  a  discharge  to  the 
liankrui)t  in  voluntary  or  involuntary  proceedings."  A  trus- 
tee will  tiot  ordinarily  be  permitted  to  prosecute  an  appeal 
from  such  judgments,  for  the  reason  that  the  contest  is  be- 
tween creditors  and  the  bankrupt  and  does  not  affect  the  ad- 
ministration of  the  bankrupt's  estate  in  any  respect.  It  has 
been  held  that  an  appeal  lies  from  an  order  refusing  to  confirm 
a  composition  of  creditors  on  the  ground  that  this  is  in  effect 
refusing  a  discharge.^*' 

Third.  From  Judgments  Allowing  or  Rejecting 
Claims. —  A  judgment  allowing  or  rejecting  a  debt  or  claim 
of  a  creditor  against  the  estate  of  the  bankrupt  may  be  re- 
viewed on  appeal  provided  the  sum  in  controversy  amounts 
to  five  hundred  dollars  or  over.'^  This  applies  to  voluntary 
and  involuntary  proceedings.  "A  debt  or  claim  of  five  hun- 
dred dollars  or  over  "  refers  to  a  debt  or  claim  attempted  to 
be  proved  in  the  bankruptcy  proceedings  against  the  bank- 
rupt's estate  for  the  purpose  of  receiving  a  dividend  and  does 
not  include  all  debts  or  claims  arising  in  the  administration 
of  the  bankrupt's  estate.'*  It  includes  an  attorney's  fee  ^^  and 
also  a  claim  proved  as  a  secured  debt.*^  Where  an  appeal  is 
founded  upon  a  claim  or  debt,  the  circuit  court  of  appeals  may 
determine   as   incident   thereto   the   question   of   the   validity 


75 /n  re  Marshall   Paper  Co.   (C  (C.  C.  A.  ist  Cir.),  105  Fed.  Rep. 

C.  A.  ist  Cir.),   102  Fed.  Rep.  872,  915,  5  Am.  B.  R.  350. 

4  Am.   B.    R.  468 ;  In  re  Feldsteiii  tt  b.  A.    1898,   Sec.  25. 

(C.  C.   A.  2d  Cir.),   115  Fed.  Rep.  7« /«  re  Whitener   (C.  C  A.  Sth 

.259,  8  Am.  B.  R.  160;  In  re  Gaylord  Cir.),   105  Fed.  Rep.   180,  5  Am.  B. 

(C.  C.  A.  2d  Cir.),   112   Fed.  Rep.  R.    198. 

668,  7  Am.  B.  R.  i.  ''^  In  re  Curtis  (C.  C.  A.  7th  Cir.), 

76  U.  S.  V.  Hammond    (C.  C.  A.  100  Fed.  Rep.  784,  4  Am.  B.  R.  17; 

6th  Cir.),  104  Fed.  Rep.  862,  4  Am.  In   re  Roche    (C.   C.   A.   5th   Cir.), 

B.  R.  736,  overruling  In  re  Adler,  loi  Fed.  Rep.  956,  4  Am.  B.  R.  369; 

103  Fed.  Rep.  444,  4  Am.  B.  R.  583 ;  Randolph  v.  Scruggs,  190  U.  S.  533. 

Marshall,    Field   &   Co.    v.    Wolf   &  f*" /«  rr  Roche  (C.  C.  A.  5th  Cir.), 

Bro.   fC.  C.  A.  Sth  Cir.),   120  Fed.  loi  Fed.  Rep.  956,  4  Am.  B.  R.  369; 

Rep.  815.    But  see  Ross  v.  Saunders  Randolph  v.  Scruggs,  190  U.  S.  533. 


APPELLATE  PROCEEDINGS.  819 

and  priority  of  such  claim  in  connection  with  a  lien  or  other 
security  of  the  same.*^ 

Where  a  claim  is  disallowed  the  creditor  owning  the  claim 
may  prosecute  an  appeal.  Where  a  claim  is  allowed  the 
trustee  representing  all  of  the  creditors  is  the  proper  peifson 
to  prosecute  the  appeal.^"  It  has  been  held  that  a  creditor 
may  appeal  from  the  allowance  of  a  claim  of  another  creditor 
in  case  the  trustee  refuses  to  appeal.^"''  A  better  practice  is  for 
the  dissatisfied  creditor  to  procure  an  order  of  the  court  of 
bankruptcy  to  either  direct  an  appeal  by  the  trustee  or  permit 
the  creditor  to  appeal  in  the  name  of  the  trustee.^* 

Cross-Appeals. —  It  is  sometimes  necessary  for  an  appellee 
to  prosecute  an  appeal  in  order  to  obtain  relief  in  the  appellate 
court.®^  This  is  called  a  cross-appeal.  An  appellee  is  en- 
titled to  urge  any  ground  in  the  appellate  court  to  support  the 
decree  below,  but  if  he  feels  aggrieved  by  any  portion  of 
the  decree,  it  is  necessary  for  him  to  prosecute  an  independent 
appeal,  with  assignment  of  errors,  citation  and  bond,  in  the 
same  manner  as  the  appellant,  for  the  purpose  of  correcting 
the  decree  in  this  respect.  One  record  will  be  sufficient  or- 
dinarily for  both  appeals. 

Writs  of  Error. —  It  will  be  obserx-ed  that  there  is  no  pro- 
vision in  the  act  for  reviewing  a  proceeding  in  bankru]:)tcy 
on  a  writ  of  error.  The  act  provides  for  jury  trials  in  certain 
cases,**  which  may  result  in  a  judgment  adjudging  or  refusing 
to  adjudge  the  defendant  a  bankrupt.  There  may  be  also  a 
jury  trial  with  reference  to  the  facts  in  connection  with  the 
application   for  a  discharge,   and  possibly  with   reference  to 

81  Cunningham    v.     German     Ins.  ^^  In  re  Roche  (C.  C.  A.  5th  Cir.), 

Bank  (C.  C.  A.  6th  Cir.),  loi  Fed.  loi  Fed.  Rep.  956,  4  Am.  B.  R.  369; 

Rep.  977,  4  Am.  B.  R.  192;  Hutch-  McDaniel  v.  Stroud    (C.  C.  A.  4th 

inson  v.  Otis,  190  U.  S.  552,  10  Am.  Cir.),  106  Fed.  Rep.  486,  5  Am.  B. 

B.  R.  135 ;  In  re  Worcester  County  R.  685. 

(C.  C.  A.   1st  Cir.),  102  Fed.  Rep.  '^'Chatficld  v.  O'Dwycr  (C.  C.  A. 

808,  4  Am.  B.  R.  496.  8th  Cir.),  loi  Fed.  Rep.  797,  4  Am. 

*•=  Foreman  v.  Burleigh   (C.  C.  A.  B.   R.   313.      See  also   McDaniel   v. 

ist  Cir.),  109  Fed.  Rep.  313,  6  Am.  Stroud  (C.  C.  A.  4th  Cir.),  106  Fed. 

B.    R.    230 ;    Livingstone   v.    Heine-  Rep.  4S6,  5  Am.  B.  R.  685. 

man    (C.  C.  A.  6th  Cir.),  120  Fed.  '*•''•  McGahan   v.   Anderson    (C.   C. 

Rep.   786,   10  Am.  B.  R.  39;  Chat-  A.  4th  Cir.),  7  Am.  B.  R.  641,  113 

field  V.  O'Dwyer  (C.  C.  A.  8th  Cir.),  Fed.   Rep.   115. 

loi  Fed.  Rep.  797,  4  Am.  B.  R.  313.  »«  B.  A.  1898,  Sec.  19. 


8jO  law    AM)    I'K(Ki:i:i)IiNGS    IN    BANKRUPTCY. 

allowiui;-  or  rcjcctins;-  a  tlcht.  The  (lucstion  therefore  arises, 
when  such  jury  trial  is  had.  as  In  the  manner  of  reviewing 
the  jndi^nient  in  sucii  cases.  i'wo  inetht)tls  only  were  known 
to  the  common  law  tt)  reexamine  a  jury  trial,  namely,  to  s^rant 
a  new  trial  hy  the  cmirt  where  the  issue  was  tried,  or  to  which 
the  record  was  returnable ;  or,  second,  to  award  a  venire  facias 
de  novo  by  an  appellate  court  for  some  error  of  law  which 
intervened  in  the  proceedings.**'  It  has  been  held  that  a  cir- 
cuit court  of  appeals  has  power  to  review  a  jury  trial  upon  a 
writ  of  error. ^* 

§  315.     Time  within  which  an  appeal  must  be  taken. 

An  appeal  must  be  taken  within  ten  days  after  the  judg- 
ment appealed  from  has  been  rendered,  and  may  be  heard 
and  determined  by  the  appellate  court  in  term  or  vacation,  as 
the  case  may  be.®"  The  ten  days'  limitation  for  appeal  applies 
only  to  bankruptcy  proceedings  and  does  not  limit  the  time 
for  taking  appeals  in  independent  suits  relating  to  bankruptcy 
matters.''^'  In  computing  this  time  the  number  of  days  are 
computed  by  excluding  the  first  and  including  the  last,  unless 
the  last  fall  on  a  Sunday  or  holiday,  in  which  event  the  day 
last  included  shall  be  the  next  day  thereafter  which  is  not  a 
Sunday  or  a  legal  holiday.®^  The  word  "  holiday  "  includes 
Christmas,  the  fourth  of  July,  the  twenty-second  of  February, 
and  any  day  appointed  by  the  president  of  the  United  States 
or  the  congress  of  the  United  States  as  a  holiday  or  as  a  day 
of  ])ublic  fasting  or  thanksgiving.®^  In  computing  this  time 
Sundavs  and  holidays  are  counted,  except  when  the  last  day 
w^ould  fall  on  Sunday  or  a  holiday. ''^     The  time  begins  to  run 

*>■'  Ins.  Co.  V.  Comstock,  16  Wall.  7  Am.  B.  R.  181 ;  In  re  Good  (C.  C. 

258.     See  also  Elliott  v.  Toeppner,  A.   8th   Cir.),  99  Fed.    Rep.   389,   3 

187  U.  S.  327,  9  Am.  B.  R.  50.  Am.  B.  R.  605 ;  In  re  Alden  Electric 

8«  Duncan  v.  Landis  (C.  C.  A.  3d  Co.    (C.   C.   A.  7th   Cir.),   123  Fed. 

Cir.),  106  Fed.  Rep.  839,  5  Am.  B.  Rep.  415,  10  Am.  B.  R.  370. 

R.   649.      See   also   Elliott   v.   Toep-  ••"  Steele   v.    Buel,    104   Fed.    Rep. 

pner,    187  U.   S.   327,  9   Am.   B.   R.  968.    5   Am.    B.    R.    165;    Bonneville 

50.  Nat.  Bank  v.  Blakey,  107  Fed.  Rep. 

*•»  B.  A.  1898,  Sec.  25a;  Norcross  891,  6  Am.  B.  R.  13. 

V.    Mercantile    Co.    (C.    C.    A.    8th  »i  B.  A.  1898,  Sec.  31. 

Cir.),   loi   Fed.  Rep.  796,  4  Am.  B.  »2  g    a.  1898,   Sec.   i,  clause  14. 

R.  317;  Peterson  v.  Nash  Bros.   (C.  »'' York's    Case.    No.    18139,    Fed. 

C.  A.  8th  Cir.),   112  Fed.  Rep.  311,  Cas.,  s.  c.   i    Abb.    (U.   S.)    503. 


APPELLATE  PROCEEDINGS.  821 

only  from  the  time  that  the  judgment  is  actually  entered  or 
filed. '-'^  When  a  judgment  is  amended  the  time  may  begin  to 
run  from  the  date  of  the  amendment.®^  When  a  rehearing  is 
had  and  a  judgment  entered  thereon,  the  time  begins  to  run 
from  the  date  of  the  entry  of  the  last  judgment.^® 

The  limit  of  time  is  statutory  and  can  not  be  extended  by 
either  a  court  of  bankruptcy  or  an  appellate  court."'  It  is  not 
necessary,  however,  to  give  the  appeal  bond,"**  or  file  the  tran- 
script of  record  in  the  appellate  court,""  or  issue  a  citation  ^^'^ 
within  the  ten  days.  These  are  necessary  to  the  due  prosecu- 
tion of  an  appeal,  but  are  not  jurisdictional. 

§  316.     How  to  take  an  appeal  in  bankruptcy. 

Whenever  a  party  feels  himself  aggrieved  by  a  judgment 
of  a  court  of  bankruptcy  in  one  of  the  cases  specified  in  section 
25  he  may  prosecute  an  appeal  to  the  circuit  court  of  appeals 
"as  in  equity."  Appeals  in  equity  are  subject  to  the  same 
rules,  regulations  and  restrictions  as  are  or  may  be  prescribed 
in  law  in  cases  of  writs  of  error.^"^ 

An  appeal  is  regularly  "  taken  "  by  presenting  to  the  judge 
of  the  court  of  bankruptcy  or  one  of  the  judges  of  the  circuit 

0*  Rubber  Co.  v.  Goodyear,  6  Wall.  315,  ante.     As  to  the  bond,  see  Sec. 

153;  Radford  v.  Folsom,   123  U.  S.  320,  fjost. 

725;   Polleys  V.  River  Ins.  Co.   113  o"  Green  v.  Elbert,  137  U.  S.  615, 

U.  S.  81 ;  Del  Valle  v.  Harrison,  93  and  cases  cited  in  opinion.     See  also 

U.  S.  233 ;   Peterson  v.  Nash  Bros.  Sec.  325.  post. 

(C.   C.  A.  8th  Cir.),  112  Fed.  Rep.  '""Columbia  Iron  Works  v.   Na- 

311.  7  Am.  B.  R.  181;  Rush  v.  Lake  tional  Lead  Co.  (C.  C.  A.  6th  Cir.), 

(C   C.  A.  9th  Cir.),  10  Am.  B.  R.  126  Fed.  Rep.  — ,  11  Am.  B.  R.  — ; 

455,   122  Fed.   kep.  561.  Green    v.    Elbert,    137    U.    S.    615; 

"'*  U.  S.  V.  Gomez,  i  Wall.  690.  Richardson  v.  Green,  130  U.  S.  104; 

»" /n  re  Worcester  County  (C.  C.  Hewitt    v.    Filbert,    116   U.    S.    142; 

A.    1st   Cir.),   102   Fed.  Rep.  808,  4  Evans  v.  State  Bank,  134  U.  S.  330; 

Am.   B.   R.  496.  Altenberg  v.  Grant,  54  U.  S.   App. 

"  Credit  Co.  v.  Ark.  Cent.  R.  Co.,  312,  s.  c.  83  Fed.  Rep.  980. 

128  U.  S.  258;  In  re  Alden  Electric  101  Qen.  Ord.  36;  R.  S.  Sec.  1012. 

Co.    (C.   C.  A.   7th   Cir.),   123  Fed.  As  to  procedure  on  writ   of  error. 

Rep.  415,   10  Am.   B.   R.  370.  see  R.  S.  Sees.  997,  et  scq.;  rules  of 

"^  Dos  Hcrmanos,  10  Wheat.  306;  the    supreme    court;    and    the    rules 

Pcugh    V.    Davis,     no    U.    S.    227;  of    the    circuit    courts    of    appeals, 

Dodge  V.  Knowles,  114  U.  S.  430.  which  are  compiled  in  90  Fed.  Rep. 

As    to    what    is    necessary    to    be  p.    li. 
done  within  the  ten  days,  see  Sec. 


822  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY, 

court  of  appeals  '"-  a  petition  for  appeal,  assignments  of  error 
aiul  an  appeal  bond.  I  f  the  papers  are  regular,  the  judge  to 
whom  they  are  i)resented  allows  the  appeal  and  approves  the 
bond.  The  signing  of  a  citation/"^  or  the  approving  of  a 
bond  ^^^*  within  time  is  a  sufficient  allowance  of  an  appeal. 
An  appeal  will  not  be  allowed  unless  an  assignment  of  errors 
is  presented  with  the  petition. ^"■'''  The  giving  of  a  bond  is  not 
essential  to  the  taking,  although  it  is  to  the  due  prosecution 
of  the  appeal."*^  A  mandamus  will  lie  to  compel  a  judge  to 
allow  an  appeal. ^"^  A  simpler  proceeding,  however,  is  to 
apply  to  one  of  the  judges  of  the  appellate  court,  if  the  trial 
judge  refuses  to  allow  the  appeal. 

xAn  appeal  may  be  allowed  in  open  court. ^"^  In  such  case 
no  citation  is  necessary.^*"*  Such  an  allowance  of  an  appeal  to 
be  regular  should  be  entered  upon  the  minutes.^"® 

Whichever  mode  is  adopted,  the  allowance  of  the  appeal 
constitutes  the  taking  of  an  appeal  contemplated  by  the  stat- 
ute.^^"  The  appeal  must,  in  some  way,  be  presented  to  the 
court  which  made  the  decree  appealed  from,  thereby  putting 
an  end  to  its  jurisdiction  over  the  cause,  and  making  it  its 
duty  to  send  it  to  the  appellate  court.  This  is  done  by  filing 
the  papers   in  the  clerk's  office  within  the  time  limited  by 

102  Gen.     Ord.     ^,6 ;     Norcross    v.  The  Dos  Hermanos,  lo  Wheat.  306 ; 

Mercantile  Co.  (C.  C.  A.  8th  Cir.),  Peugh    v.    Davis,    no    U.    S.    227; 

Id  Fed.  Rep.  796,  4  Am.  B.  R.  317.  Dodge  v.  Knowles,  114  U.  S.  438. 

As   to   the   necessity  of  filing  an  ^"^  U.  S.  v.  Adams,  6  Wall.  loi ; 

assignment  of  errors  before  the  al-  U.  S.  v.  Gomez,  3  Wall.  752 ;  Sage 

lowance    of    an    appeal,    see    In    re  v.  R.  R.  Co.,  96  U.  S.  712. 

Dunning    (C.    C.    A.    gth    Cir.),   94  io«  Brockett   v.    Brockctt,   2   How. 

Fed.   Rep.   709 ;   Lloyd   v.   Chapman  238 ;  Rciley  v.  Lamar,  2  Cranch,  344. 

(C.  C.  A.  9th   Cir.),  93  Fed.  Rep.  loo  Vansant  v.  Gas  Light  Co.,  99 

599.  U.  S.  213. 

i<'3  Brown  v.  McConnell,  124  U.  S.  i^"  Columbia   Iron   Works  v.   Na- 

489.  tional  Lead  Co.  (C.  C.  A.  6th  Cir.), 

10*  R.  R.  Co.  V.  Bradleys,  7  Wall.  126  Fed.  Rep.  — ,  11  Am.  B.  R.  — 

575;   Brandies  v.   Cochrane,    105   U.  The  Dos  Hermanos,  10  Wheat.  306 

S.  262;  Sage  V.  R.  R.  Co.,  96  U.  S.  Pengh    v.    Davis,    no    U.    S.    227 

712.  Dodge  V.  Knowles,  n4  U.  S.  438 

105  Rule  n,  C.  C.  A.,  90  Fed.  Rep.  Noonan  v.  Chester  Park  Athletic 
clxvi.  Co.,  93  Fed.  Rep.  576 ;  Wickelman  v. 

106  Columbia  Iron  Works  v.  Na-  Dick  Co.,  85  Fed.  Rep.  851,  s.  c.  29 
tional  Lead  Co.  (C.  C.  A.  6th  Cir.),  C.  C.  A.  436. 

126  Fed.  Rep.  — ,  n  Am.  B.  R.  — . 


APPELLATE    PROCEEDINGS.  823 

Statute/"     This  must  be  done  within  ten  days  after  the  judg- 
ment appealed  from  has  been  rendered."" 

A  judge  of  a  court  of  bankruptcy  is  not  required  to  make 
findings  of  fact  for  the  purpose  of  an  appeal  from  his  deci- 
sion."^ 
§  317.     Parties  to  an  appeal. 

An  appeal  can  only  be  prosecuted  by  a  party  to  the  pro- 
ceedings upon  which  the  judgment  was  entered,  and  who  has 
been  aggrieved  thereby.  The  right  of  appeal  depends  upon 
whether  the  appellant  is.  in  a  legal  sense,  aggrieved;  and 
that  must  be  determined  by  considering  not  upon  what  grounds 
the  judge  has  proceeded,  but  what  effect  his  action  has  upon 
the  claims  of  the  appellant."*  The  party  appealing  must  have 
an  interest  in  the  proceedings.  Where  he  has  parted  with 
all  his  interest  in  the  subject  of  litigation  pendente  lite  he 
can  not  appeal  from  a  judgment  which  injuriously  affects  such 
interest."^ 

Where  a  claim  is  disallowed  the  creditor  may  prosecute  an 
appeal.  Where  a  claim  is  allowed  the  trustee,  representing 
all  of  the  creditors,  is  the  proper  person  to  prosecute  the  ap- 
peal."® It  has  been  held  that  a  creditor  may  appeal  from  the 
allowance  of  a  claim  of  another  creditor  in  case  the  trustee 
refuses  to  appeal."^     A  better  practice  is  for  the  dissatisfied 

"1  Credit    Co.    v.    Ark.    Cent.    R.  ^^^  /„   yg   Meyers,    105    Fed.    Rep. 

Co.,     128    U.     S.     258 ;     Farrar    v.  353,  5  Am.  B.  R.  4. 

Churchill,  135  U.  S.  609.  "*  See    Farmers'    Loan    &    Trust 

In   Balance  v.   Forsyth,  21    How.  Co.  v.  Waterman,  106  U.  S.  265. 

389,   no  appeal   was  taken  in  court  i^''  See    Meyer    v.    Pritchard,    23 

below,   and  the   appellant   was  per-  Law.  Coop.,  S.  C.  R.  961 ;  Lord  v. 

mitted    to    withdraw    the    transcript  Veazie,  8   How.  251 ;    Cleveland  v. 

for  purpose  of  taking  an  appeal.  Chamberlain,    I    Black,   419. 

In   Credit    Co.   v.    .^rk.    Cent.    R.  i^o  Foreman  v.  Burleigh  (CCA. 

Co.,  supra,  the  appeal  was  allowed  ist  Cir.),  109  Fed.  Rep.  313,  6  Am. 

by   a  justice  of  the  supreme  court  B.  R.  230;  Livingstone  v.  Ilcineman 

in   Washington,   D.    C,   on   the   last  (C   C  A.  6th   Cir.),  120  Fid.   Rep. 

day   within   which   an   appeal   could  786,   10  Am.  B.   R.  39;   Chatficld  v. 

be  taken,  but  was  not  presented  to  O'Dwyer   (C   C  A.  8th  Cir.),    loi 

the    circuit    court    until    five    days  Fed.  Rep.  jrtj,  4  Am.  B.  R.  313. 

thereafter.     The     appeal     was     not  ''^/)/    re    Roche    (C    C    A.    Sth 

taken  in  time.  Cir.),  loi   Fed.  Rep.  956,  4  Am.  B. 

112  B.  A.  1898,  Sec.  25a;  Sec.  315,  R-  .369;  McDanicl  v.  Stroud  (C  C 

ante.  A.  4th   Cir.).   106   Fed.  Rep.  486,  5 

Am.  B.  R  685. 


8j4       ^•^^^'  -^NL)  PROCEEDINGS  IN  BANKRUPTCY. 

creditor  to  procure  an  t)riler  of  tlic  court  of  bankruptcy  to 
cither  direct  an  appeal  by  the  trustee  or  permit  tlie  creditor  to 
appeal  in  the  name  of  the  trustee."" 

On  an  api)eal  by  a  creditor  from  an  order  approving  a  com- 
position all  the  assenting  creditors  who  have  received  money 
due  them  under  the  composition  must  be  made  parties  to  the 
appeal."" 

A  creditor  or  the  bankrupt  are  the  proper  parties  to  take  an 
appeal  from  a  judgment  granting  or  refusing  a  discharge.  A 
trustee  will  not  ordinarily  be  permitted  to  prosecute  an  appeal 
from  such  judgments,  for  the  reason  that  the  contest  is  be- 
tween creditors  and  the  bankrupt  and  does  not  affect  the  ad- 
ministration of  the  bankrupt's  estate  in  any  respect. 

Where  an  appeal  is  prosecuted  from  a  judgment  adjudging 
or  refusing  to  adjudge  the  defendant  a  bankrupt  it  should 
be  prosecuted  by  the  bankrupt  or  by  the  petitioning  creditors 
or  a  creditor  intervening  for  the  purpose  of  contesting  the 
adjudication/-"  but  not  by  one  who  intervenes  after  the  judg- 
ment for  the  purpose  of  rehearing  the  order  of  adjudication.^^^ 

It  is  well  settled  that  all  the  parties  against  whom  a  joint 
judgment  is  rendered  must,  except  where  they  have  distinct 
and  separate  interests  and  the  decree  is  several  and  does  not 
jointly  affect  them  all.  unite  in  the  appeal.^"  Thus  it  would 
seem  that  where  an  appeal  is  taken  from  a  judgment  adjudg- 
ing a  partnership  bankrupts,  that  all  the  partners  should  unite 
in  the  appeal.  Where  an  appeal  is  taken  from  a  judgment 
rejecting  a  joint  debt  or  claim,  the  owners  of  such  claim 
should  unite  in  the  appeal.  Where  an  appeal  is  taken  from 
a  judgment  refusing  to  adjudge  a  defendant  a  bankrupt,  that 
all  the  petitioning  creditors  at  least,  and  probably  also  such 
creditors  as  may  have  ai)i)eared  to  join  in  the  petition  under 
section  59/,  should  unite  in  the  appeal. 

"sChatfield    v.    O'Dwyer    (C.   C.  ^-'>  In    re    Meyer    (C    C.    A.    2d 

A.  8th  Cir.),   loi   Fed.  Rep.   797,  4  Cir.),  98  Fed.  Rep.  976,  3  Am.  B. 

Am.  B.  R.  313.     See  also  McDaniel  R.  559. 

V.  Stroud   CC.  C.  A.  4th  Cir.),  106  ^^i  /„    ^^    Columbia    Real    Estate 

Fed.  Rep.  486,  5  Am.  B.  R.  685.  Co.    (C.  C.  A.  7tli    Cir.),  112  Fed. 

"0  Marshall,  Field  &  Co.  v.  Wolf  Rep.  643,  7  Am.  B.  R.  441. 

&   Bro.   Dry   Goods   Co.    fC.    C.   A.  i^-^  Hardee   v.    Wilson,    146  U.   S. 

8th   Cir.),   120  Fed.  Rep.  815.  179. 


APPELLATE    PROCEEDINGS. 


825 


Where  one  of  several  persons  having  a  joint  interest  desires 
to  appeal  and  the  others  interested  with  him  do  not,  he  may- 
appeal  alone  without  joining  the  others  as  appellants  by 
showing  a  valid  excuse  for  not  joining  them.  This  can  be 
done  only  by  a  summons  and  severance  or  some  equivalent 
proceeding,  such  as  a  request  to  the  others  and  their  refusal 
to  join  in  the  appeal,  or  at  least  a  notice  to  them  to  appear 
and  their  failure  to  do  so.^"^  This  must  be  evident  upon  the 
record  of  the  court  appealed  from  in  order  to  enable  the  party 
prevailing  in  that  court  to  enforce  his  decree  against  those 
who  do  not  wish  to  have  it  reviewed,  and  to  prevent  him  and 
the  appellate  court  from  being  vexed  by  successive  appeals  in 
the  same  matter.^-*  Where  an  appellant  obtains  an  order  of 
severance  in  the  court  below,  and  does  not  make  parties  to  his 
appeal  some  of  the  parties  below  who  are  interested  in  main- 
taining the  decree,  he  can  not  ask  its  reversal  on  anv  matter 
which  will  injuriously  affect  their  interests.^"^ 


i23  0'Do\vd  V.  Russell,  14  Wall. 
404;  Inglehart  v.  Stansbury,  151  U. 
S.  68;  Masterson  v.  Herndon,  10 
Wall.  416. 

In  Masterson  v.  licrndon.  supra, 
the  supreme  court  said  :  "  We  do 
not  attach  importance  to  the  tech- 
nical mode  of  proceeding  called  sum- 
mons and  severance.  We  should 
have  held  this  appeal  good  if  it  had 
appeared  in  any  way  by  the  record 
that  Maverick  had  been  notified  in 
writing  to  appear,  or,  if  appearing, 
had  refused  to  join.  But  the  mere 
allegation  of  his  refusal,  in  the  pe- 
tition of  the  appellant,  does  not 
prove  this.  We  think  there  should 
be  a  written  notice  and  due  service, 
or  the  record  should  show  his  ap- 
pearance and  refusal,  and  that  the 
court  on  that  ground  granted  an  ap- 
peal to  the  party  who  prayed  for  it, 
as  to  his  own  interest.  Such  a  pro- 
ceeding would  remove  the  objec- 
tions made  to  permitting  one  to  ap- 
peal without  joining  the  other;  that 
is,  it  would  enable  the  court  below 


to  execute  its  decree  so  far  as  it 
could  be  executed  on  the  party  who 
refused  to  join,  and  to  stop  that 
party  from  bringing  an  appeal  for 
the  same  matter.  The  latter  point 
is  one  to  which  this  court  has  al- 
ways attached  much  importance,  and 
it  has  strictly  adhered  to  the  rule 
under  which  this  case  must  be  dis- 
missed, and  also  to  the  general  prop- 
osition that  no  decree  can  be  ap- 
pealed from  which  is  not  final  in 
the  sense  of  disposing  of  the  whole 
matter  in  controversy  so  far  as  it 
has  been  possible  to  adhere  to  it 
without  hazarding  the  substantial 
rights  of  parties  interested.  We  dis- 
miss this  appeal  with  less  regret, 
as  there  is  still  time  to  obtain  an- 
other on  proceedings  not  liable  to 
tlic   objection    taken   to   this." 

'-■•Inglehart  v.  Stansbury.  151  U. 
S.  68,  and  cases  collatcfl  in  the 
opinion. 

'-'■'Terry  v.  Abraham,  93  U.  S. 
,38. 


8_'6  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

It  is  etiually  well  settled  that  where  the  judgment  is  sever- 
able in  fact  and  in  law  one  party  thereto  may  be  allowed  to 
]irosecnte  an  appeal  therefrom  without  joining  a  codefendant 
who  does  not  desire  to  appeal.^""  Thus  it  would  seem  that 
an  appeal  from  a  juilgment  rejecting  several  distinct  debts  or 
claims  that  any  one  debtor  or  claimant  would  be  entitled  to 
prosecute  an  appeal  without  joining  the  others.  Where  such 
an  appeal  is  taken  it  carries  with  it  so  much  of  the  case  and 
such  of  the  parties  as  are  necessary  for  the  determination  of 
his  rights.^" 

All  the  parties  whose  rights  would  be  affected  should  be 
made  appellees.  Thus,  in  an  appeal  by  a  bankrupt  from  an 
adjudication  in  bankruptcy  upon  an  involuntary  petition,  he 
should  make  appellees  the  petitioning  creditors  and  probably 
such  other  creditors  as  have  entered  their  appearance  to  join  in 
the  petition  under  section  59/.  In  an  appeal  from  a  judgment 
denying  a  discharge  the  bankrupt  should  make  the  creditors 
opposing  the  discharge  appellees.  In  an  appeal  by  creditors 
from  a  judgment  rejecting  a  debt  or  claim  the  trustee  should 
l)e  made  appellee.  He  represents  all  the  creditors  and  there- 
fore the  creditors  are  not  necessary  parties.  In  an  appeal 
from  a  judgment  refusing  to  adjudicate  the  defendant  a  bank- 
rupt, or  granting  a  discharge,  the  bankrupt  only  should  be 
made  appellee.  In  an  appeal  from  a  judgment  allowing  a  debt 
or  claim  of  five  hundred  dollars  or  over  the  creditor  or  cred- 
itors only,  owning  such  claims,  need  be  made  appellees. 

On  an  appeal  by  a  bankrupt  from  an  order  refusing  to 
conform  a  composition  the  creditors  must  be  made  appellees 
and  the  trustee  does  not  represent  them  for  this  purpose.^^* 
When  an  appeal  is  taken  by  a  creditor  from  an  order  approv- 
ing a  composition  all  the  creditors  assenting  to  such  composi- 
tion and  having  received  money  due  them  under  the  com- 
position must  be  made  parties  to  the  appeal.^^® 

126  Forgay  v.  Conrad,  6  How.  201 ;  ist  Cir.),  105  Fed.  Rep.  915,  5  Am. 
City  National  Bank  v.  Hunter,  129      B.  R.  350. 

U.  S.  557,  578;  Brewster  v.  Wake-  i^o  ]\iarshall,  Field  &  Co.  v.  Wolf 

field,  22  How.  118,  128.  &  Bro.   Dry  Goods   Co.    (C.   C.   A. 

127  Milner  v.  Meek,  95  U.  S.  252.  8th  Cir.),  120  Fed.   Rep.  815. 

128  Ross   V.    Saunders    (C.    C.   A. 


APPELLATE  PROCEEDINGS.  82/ 

§  318.     Petition  for  appeal. 

The  petition  for  appeal  is  regularly  entitled  in  the  court  of 
bankruptcy,  together  with  the  style  of  the  case.  It  may  be 
substantially  in  the  following  words :  "  The  above-named  A. 
B.,  conceiving  himself  aggrieved  by  the  judgment  made  and 

entered  on  the day  of ,  in  the  above-entitled  cause, 

does  hereby  appeal  from  such  judgment  to  the  United  States 

circuit  court  of  appeals  for  the  circuit,  for  the  reasons 

specified  in  the  assignment  of  errors,  which  is  filed  herewith, 
and  he  prays  that  this  appeal  may  be  allowed,  and  that  a 
transcript  of  the  record,  proceedings  and  papers  upon  which 
such  judgment  was  made,  duly  authenticated,  may  be  sent  to 
the  United  States  circuit  court  of  appeals  for  the  cir- 
cuit." ^^^  This  petition  should  be  signed  by  the  petitioner  or 
his  counsel  and  dated.  The  judge  ordinarily  endorses  upon 
the  petition  that  the  foregoing  claim  of  appeal  is  allowed  and 
signs  it.  together  with  the  date  of  the  allowance.  The  approv- 
ing of  an  appeal  bond  or  signing  a  citation  is  a  sufficient 
allowance.""* 

§  319.     Assignments  of  error. 

The  appellant  must  file  with  the  clerk  of  the  court  below, 
with  his  petition  for  the  appeal,  an  assignment  of  errors,  which 
shall  set  out  separately  and  particularly  each  error  asserted 
and  intended  to  be  urged. "^  Xo  appeal  will  be  allowed  until 
such  assignment  of  errors  lias  been  filed.  Such  assignment 
of  errors  forms  part  of  the  transcript  of  the  record  and  must 
be  printed  with  it.  \\'hen  this  is  not  done,  counsel  will  not 
be  heard,  except  at  the  request  of  the  court,  and  errors  n©t 
assigned  according  to  tliis  rule  will  be  disregarded,  but  the 
court,  at  its  option,  may  notice  a  plain  error  not  assigned."^ 

'30  See  Form  No.  166,  post.  v.  Chapman  (C.  C.  A.  glh  Cir.),  93 

ISO*  R.  R.  Co.  V.  Bradleys,  7  Wall.  Fed.  Rep.  599. 

577;   Sage   V.   R.   R.   Co.,  96  U.   S.  For   forms  of   assignnunl  of  cr- 

712;  Brown  v.  McConnell,  124  U.  S.  rors,  see  Loveland's  Forms  of  Fed. 

489.  Prac,  Nos.  140,3  to  1407. 

'•"Rule   II,  C.   C.   .\..  and    cases  '•"'zDnfonr   v.    Lang,   4    C.    C.    \. 

collated    in   90   Fed.   Rep.,  p.   cxivi,  663.    s.    c.    54    Fed.    Rep.   913,   917; 

ct  scq.:   In    re   Dunning    CC.   C.   A.  Mitchell  v.  Marker,  10  C.  C.  A.  306, 

9th  Cir.),  94  Fed.  Rep.  709:   Lloyd  s.  c.  62  Fed.  Rep.  139;  McClellan  v. 


828 


LAW     AND    PKOCKKDINCS    IN     HANKRUPTCY. 


It  has  boon  hoKl  that   w  horo  iho  assignment  of  errors  is  in- 
cluded in  the  petition  it  is  sufticient/''^ 

§  320.     Bond  on  appeal. 

An  appeal  bond  is  ordinarily  essential  to  the  prosecution  of 
an  appeal,  although  it  is  not  to  the  taking  of  an  appeal.^^*  It 
has  been  permitted  to  be  given  by  the  appellant  in  the  appellate 
court/"'''     Trustees  are  not  required  to  give  such  bonds.^''" 

The  bond  on  appeal  is  regularly  conditioned  that  the  plain- 
tiff shall  prosecute  his  appeal  to  effect  and  answer  all  damages 
and  costs  if  he  fail  to  make  such  plea  good/"  All  the  appel- 
lants need  not  join  in  the  bond.'''*  The  bond  is  made  payable 
to  the  appellees.^''"  It  should  not  be  made  pavable  to  any 
other  person."" 

The  amount  of  the  bond  is  fixed  by  the  judge  allowing  the 
appeal.  He  is  the  sole  and  exclusive  judge  of  what  it  should 
be  and  his  decision  is  final  unless  he  violates  a  statute  or  rule 
of  practice."'  The  judge  can  not  delegate  the  approval  of  the 
bond  to  the  clerk  "-  or  to  a  commissioner."''     It  is  not  neces- 


Pyeatt,  50  Fed.  Rep.  686,  s.  c.  I  C. 
C.  A.  613 ;  Haldame  v.  U.  S.,  69  Fed. 
Rep.  819,  s.  c.  16,  C.  C.  A.  447; 
Prichard  v.  Budd,  76  Fed.  Rep.  710, 
s.  c.  22  C.  C.  A.  504.  Rule  2  C.  C. 
A.,  and  cases  collated  in  90  Fed. 
Rep.,  p.  cxlvi,  et  seq. 

133  Central  Trust  Co.  v.  Continen- 
tal Trust  Co.,  86  Fed.  Rep.  Si7,  s.  c. 
30  C.  C.  A.  235. 

134  R.  S.  Sees.  1000  and  1012; 
Dodge  V.  Knowles,  114  U.  S.  430; 
Peugh  V.  Davis,  no  U.  S.  227;  The 
Dos  Hermanos,  10  Wheat.  306,  311. 

135  Anson,  Bangs  &  Co.  v.  Blue 
Ridge  R.  R.  Co.,  23  How.  i ;  Brobst 
V.  Brobst,  2  Wall.  96;  Seymour  v. 
Freer,  5  Wall.  822.  See  also  Peugh 
V.  Davis,  no  U.  S.  227. 

136  B.  A.   1898,  Sec.  25c. 


137  For  form  of  bond,  see  Form 
No.  169,  post.  See  also  Gay  v.  Par- 
part,  loi  U.  S.  391 ;  Chateaugay  Ore 
and  Iron  Co.,  35  Fed.  Rep.  804; 
Phosphate  v.  Edwards,  70  Fed.  Rep. 
728,  s.  c.  17  C.  C.  A.  358. 

138  Brockett  v.  Brockett,  2  How. 
238. 

ISO  Bigler  v.  Waller,  12  Wall.  142. 
1*0  Davenport      v.      Fletcher,      16 
How.   142. 

1*1  Jerome  v.   McCarter,  21   Wall. 

17. 

142  O'Reilly  v.  Edrington,  96  U. 
S.  724;  Nat'l  Bank  v.  Omaha,  96 
U.  S.  7:^7 ;  Freeman  v.  Clay.  48  Fed. 
Rep.  849,  s.  c.  I  C.  C.  A.  ns. 

i«Haskins  v.  R.  R.  Co.,  109  U. 
S.  106. 


APPELLATE    PROCEEDINGS.  829 

sary  that  the  judge  approve  the  bond  in  court.'  The  appel- 
late court,  however,  may  change  the  amount  of  the  bond,  in 
a  proper  case,  where  the  circumstances  have  changed  so  that 
the  security  which  was  good  and  sufficient  at  the  time  it  was 
taken  does  not  continue  to  be  so.-  Where  an  appeal  bond  is 
defective  the  appellate  court  will  not,  for  that  reason,  dismiss 
the  appeal,  but  will  give  the  appellant  an  opportunity  to  fur- 
nish new  security.* 

§  321.     Supersedeas. 

An  appeal  does  not  necessarily  operate  as  a  supersedeas  to 
stay  proceedings  in  a  court  of  bankurptcy.  A  supersedeas  is 
a  statutory  right.  It  follows  as  a  matter  of  law  from  a  com- 
pliance by  the  appellant  with  the  provisions  of  the  act  of 
congress  in  that  behalf.*  Without  such  compliance  no  court 
can  confer  it.^ 

The  statute  which  regulates  the  matter  of  supersedeas  is 
as  follows:  "In  any  case  where  a  writ  of  error  may  be  a 
supersedeas  the  defendant  may  obtain  such  supersedeas  by 
serving  the  writ  of  error,  by  lodging  a  copy  thereof  for  the 
adverse  party  in  the  clerk's  office  where  the  record  remains, 
within  sixty  days,  Sundays  exclusive,  after  the  rendering  of 
the  judgment  complained  of,  and  giving  the  security  required 
by  law  on  the  issuing  of  the  citation.  But  if  he  desires  to 
stay  process  on  the  judgment,  he  may,  having  served  his  writ 
of  error  as  aforesaid,  give  tlie  security  required  by  law  within 
sixty  days  after  the  rendition  of  such  judgment,  or  afterward 
with  the  permission  of  a  justice  or  judge  of  the  appellate 
court.  And  in  such  cases  where  a  writ  of  error  may  be  a 
supersedeas,  executions  shall  not  issue  until  the  expiration  of 
[the  said  term  of  sixty)  (ten)  days.  "  " 

'  Hudgins    v.    Kemp,   iS    Mow.  Co.,  112  U.S.  506;  Union   racific 

530.  Co.  V.  Callaghan,  i6r  U.  S.  95. 

2  Jerome  v.  McCarter,    21  Wall.  *  R.   S.  vSec.    1007;    Goddard   v. 

17;  Williams  v.  Claflin.  103  U.  vS.  Ordway,    94    U.  S.    672;    Gay  v. 

753;   Harwood  v.    DiekerhofT,    117  Parpart.  loi   U.  vS.  391. 

U.     S.  200;    John.son  v.    Water.s,  •'•  I<'rcnch  v.  Shoemaker.  12  Wall. 

108  U.  vS.  4.  100;  Kitchen    v.    Randolph,  93  IT. 

'Davis    V.  Wakelee,    156  U.S.  8.86;  vSa<?e   v     R.    R.   Co.,  93  U. 

684-5;    N.   O.    In.s.    Co.    V.    Albro  S.  416. 

*  R.  S.  Sec.  1007. 


830  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

The  allowance  of  an  appeal  with  reference  to  superseding  a 
judgment  is  considered  the  equivalent  of  a  writ  of  error.  It 
has  accordingly  been  held  that  an  appeal,  to  operate  as  a 
supersedeas,  must  be  perfected  and  the  security  given  in 
accordance  with  the  provision  quoted  above.'  Where  a  peti- 
tion for  rehearing,  or  a  motion  to  set  aside  the  judgment,  is 
filed,  the  time  does  not  begin  to  run  until  such  petition  or 
motion  has  been  denied.'^ 

The  application  for  a  supersedeas  is  regularly  made  to  the 
court  of  bankruptcy  and  not  to  the  appellate  court.*  The 
amount  of  the  bond  is  fixed  by  the  judge  allowing  it.  He  is 
the  sole  and  exclusive  judge  of  what  it  should  be,  and  his 
decision  is  final,  unless  he  violates  a  statute  or  rule  of  prac- 
tice.* The  appellate  court,  however,  may,  in  a  proper  case 
and  under  proper  circumstances,  change  the  amount  of  the 
bond,^  or  vacate  a  supersedeas  when  the  approval  of  the  bond 
was  obtained  by  fraud  or  perjury;  and  in  such  cases  may 
refuse  to  accept  a  new  bond."  The  approval  of  the  bond 
need  not  be  in  writing.'  The  signing  of  a  citation  and  tak- 
ing the  oath  of  the  sureties  as  to  their  sufficiency  is  a  suffi- 
cient approval  of  the  bond.^  The  bond  when  approved  is  a 
matter  of  record  in  the  bankruptcy  court,  and  a  copy  thereof 
should  be  included  in  the  transcript  of  the  record, 

§  322.     Citation. 

The  object  of  a  citation  on  an  appeal  is  to  give  notice  of 
the  removal  of  the  case  into  the  appellate  court.      The  citation 

1  Adams  v.  Law,  16  How.  148;  will  grant  a  supersedeas,  see 
Hudgins  v.  Kemp,  18  How.  535;  Hunt  v.  Oliver,  109  U.  S.  177; 
French  v.  Shoemaker,  112  Wall.  Railroad  v.  Bradleys,  7  Wall.  575. 
100;  Bigler  v.  Walker,  12  Wall.  <  Jerome  v.  McCarter,  21  Wall. 
149;   Kitchen  v.  Randolph,  93  U.  17. 

S.  86.  •''Jerome  v.  McCarter,  21  Wall. 

2  Texas  &  P.  Ry.  Co.  v.  Mur-  17;  Williams  v.  Claflin,  103  U.  S. 
phy.  III  U.  S.  488;  Brockett  v.  753;  Harwood  v.  DiekerhoflF,  117 
Brockett,  2  How.  238;  Memphis  U.  S.  200;  Johnson  v.  Waters, 
V.  Brown,  94  U.  S.  715.     In  com-  108  U.  S.  4. 

puting  this  time,  Sundays  are  ex-  «  R.  R.  Co.  v.  Schutte.  100  U.  S. 

eluded.     See  Danville  v.  Brown,  644. 

128  U.  S.  503.  '  Davidson    v.   Lanier,  4  Wall. 

8  Covington     Stock     Yards    v.  447. 

Keith,  121  U.  S.  248.  « Silver  v.  Ladd,  6  Wall.  440. 

As  to  when  the  appellate  court 


APPELLATE    PROCEEDINGS.  83 1 

is  usually  presented  to  and  signed  by  the  judge^  at  the  time 
the  appeal  is  allowed.  It  may,  however,  be  signed  by  the 
judge  subsequently  or  issued  by  the  appellate  court.-  The 
issuing  of  the  citation  is  not  jurisdictional,  but  the  court  will 
not  hear  a  case  until  the  parties  are  brought  into  court  by 
citation.'  The  order  in  cases,  where  all  of  the  necessary  pai- 
ties  have  not  been  served,  is  that  the  case  stand  over  for  the 
purpose  of  giving  the  appellant  an  opportunity  to  apply 
for  a  citation. 

The  chief  justice,  speaking  for  the  supreme  court,  has  said 
of  the  practice  in  the  matter  of  appeals:^  "It  must  be  regarded 
as  settled  that  (i)  where  an  appeal  is  allowed  in  open  court, 
and  perfected  during  the  term  at  which  the  decree  or  judg- 
ment appealed  from  was  rendered,  no  citation  is  necessary; 
(2)  where  the  appeal  is  allowed  at  the  term  of  the  decree  or 
judgment,  but  not  perfected  until  after  the  term,  a  citation 
is  necessary  to  bring  in  the  parties;  but  if  the  appeal  be 
docketed  here  at  our  next  ensuing  term,  or  the  record  reaches 
the  clerk's  hands  seasonably  for  that  term,  and  legal  excuse 
exists  for  lack  of  docketing,  a  citation  may  be  issued  by  leave 
of  this  court,  although  the  time  for  taking  the  appeal  has 
elapsed  ;  (3)  where  the  appeal  is  allowed  at  a  term  subsequent 
to  that  of  the  decree  or  judgment,  a  citation  is  necessary,  but 
may  be  issued  properly  returnable,  even  after  the  expiration 
of  the  time  for  taking  the  appeal,  if  the  allowance  of  the 
appeal  were  before;  (4)  but  a  citation  is  one  of  the  necessary 
elements  of  an  appeal  taken  after  the  term,  and  if  it  is  not 
issued  and  served  before  the  end  of  the  next  ensuing  term  of 
this  court,  and  not  waived,  tile  appeal  becomes  inoperative." 
Although  the  bankrupt  act  confers  new  and  distinct  powers 
and  jurisdiction  upon  certain  courts  in  bankrnptcy,  it  adopts 

1  R.  S.  Sees.  998  and  909.  l""or  s  Mendenliall  v.  Ilall,  134  U.S. 
Form  of  Citation,  sec  Form  No.  559 ;  Chicago  &  P.  R.  Co.  v.  Blair, 
170,  post.  100  u.  S.  661  ;  R.   R.   Equipment 

2  Columbia  Iron  Works  v.  Na-  Co.  v.  Southern  Ry.  Co..  C.  C.  A., 
tional  Lead  Co.  fC  C.  A.  6lh  dr.),  ^.^^^^    ^.^^^^.^    ^^^-^^^     j^j^^^,^    ^ 

127  Fed.  Ren.  99,  ii  Am.  B.  R.  — ;  „  ^                  o*  *     r>      1 

.,      ,               S     ^         T'    c     ^  1899;  Evans  v.   State  Bank,   134 

Aitenl.erg  v.   Grant,  54  I.  S.   .'\pp  ^\  r,-  1       1               /•^ 

o     T-    I    T5        ^u«     \}     \i  U-  S.  330;  Richard.son  v.  Green, 

312,  s.  c.  83   red.  Rep.  980;   K.   K  •'•'    '  ' 

Equipment  Co.  v.  Southern  Rv.  C      '30  U.  S.  104. 

C.  C.  A.,  Ctli  Cir.,  decided  Marcli  7.  '  ^"  Jacobs  v.  George,  150  U.  S. 

1899.  4'5 


832  I-AW     ANH    rUOC-KKOTXC^S    IN"     UA  N"  KKl"  PTCY, 

the  several  courts  as  organized,  including  their  respective 
terms. 

The  citation  must  be  served  upon  the  appellee  or  his  attor- 
ney of  record  in  the  court  below.'  It  may  be  served  by  the 
marshal.  The  usual  practice,  however,  is  for  counsel  for  the 
appellee  to  accept  service  in  writing  uporf  the  citation  with- 
out formal  service  by  the  marshal.-  Where  the  citation  is 
actually  issued  upon  the  allowance  of  an  appeal  the  omission 
to  serve  it  before  the  first  day  of  the  term  does  not  avoid  the 
appeal.  A  new  citation  may  be  ordered  to  be  issued  and 
served.'  It  is  not  a  sufficient  proof  of  service  of  a  citation 
to  file  an  affidavit  that  notice  of  citation  was  given  to  defend- 
ant's attorneys  by  depositing  in  the  postoffice  a  copy  of  said 
citation,  postpaid,  addressed  to  them  at  their  respective  places 
and  giving  the  names  and  places.* 

Where  a  party  dies  before  an  appeal  is  allowed  and  prose- 
cuted, the  suit  should  be  revived  in  the  court  of  bankruptcy 
and  the  citation  should  be  addressed  to  the  proper  party  in 
the  record  at  that  time.^ 

All  appeals  and  citations  must  be  mad°  returnable  not 
exceeding  thirty  days  from  the  day  of  signing  the  citation, 
whether  the  return  day  fall  in  vacation  or  in  term  time,  and 
be  served  before  the  return  day.^ 

A  general  appearance  by  the  appellee,  at  the  term  the  record 
is  filed,  is  a  waiver  of  the  issuing  and  serving  of  a  citation. 7 
The  appearance  of  counsel  at  a  subsequent  term  and  making 
a  motion  to  dismiss  does  not  waive  a  citation.*     A   general 

1  Bacon  v.  Hart,  i  Black,  39;  17  C.  C.  A.  358;  Altenberg  v. 
Chicago  &  P.  R.  Co.  v.  Blair,  100  Grant,  83  Fed.  Rep.  980,  s.  c.  28 
U.  S.  661  ;  Nations  v.  Johnson,  24  C.  C.  A.  244  ;  Central  Trust  Co.  v. 
How.  195.  Continental  Trust   Co.,    86    Fed. 

2  Bigler  V.  Waller,  12  Wall.  142.  Rep.  s.   c.  517,  s.   c.   30  C.  C.  A. 

3  Dayton  v.  Lash,  94  U.  S.  112;  235;    Freeman   v.   Clay,  48    Fed. 
Altenberg  v.  Grant,  83  Fed.  Rep.  Rep.  849,  s.  c.  i  C.  C.  A.  115. 
980,  s.  c.  28  C.  C.  A.  244.  7  Richardson  v.  Green,    130  U. 

<  Tripp  V.  Santa  Rosa  Street  R.  S.  104;  Buckingham  v.   McLean, 

Co.,  144  U.  S.  126.  Assignee  in  bankruptc5%  13  How. 

^Bigler  v.  Waller,  12  Wall.  142.  150;  U.   S.   v.  Armejo,   131    U.  S. 

0  Rule   14,     C.  C.    A.,    90    Fed.  Appendix,  Ixxxii. 
Rep.    clviii ;     Phosphate    Co.    v.  « Radford  v.  Folsom,    123  U.  S. 

Edwards,  70  Fed.   Rep.   728,  s.  c.  725. 


APPELLATE    PROCEEDINGS.  833 

appearance  can  not  be  withdrawn  or  changed  to  a  special  ap- 
pearance without  leave  of  court/ 

A  writ  of  mandamus  is  not  ordinarily  granted  to  compel  a 
judge  to  sign  a  citation."  If  the  judge  refuses  to  sign  a  cita- 
tion, resort  should  be  had  to  a  judge  of  the  appellate  court. 

§  323.     The  record. 

\\^hen  an  appeal  has  been  allowed,  a  transcript  of  the  record 
of  the  proceedings  in  the  court  of  bankruptcy  must  be  prepared 
and  filed  in  the  appellate  court.  It  is  the  duty  of  the  clerk 
to  make  it  after  and  not  before  he  is  directed  by  counsel  to 
do  so.  His  fees  are  prescribed  by  statute "  and  should  be  paid 
before  the  transcript  is  delivered  for  filing.  If  a  clerk  refuses 
to  produce  the  transcript  he  may  be  compelled  to  do  so  by 
mandamus  or  order  of  court.* 

No  case  will  be  heard  until  a  complete  record,  containing 
in  itself,  and  not  by  reference,  all  the  papers,  exhibits,  deposi- 
tions and  other  proceedings,  which  are  necessary  to  the  hear- 
ing in  the  appellate  court,  shall  be  filed.'^  Where  a  case  has 
been  before  an  appellate  court  on  a  former  appeal  the  record 
on  the  second  appeal  should  be  complete  in  itself,  for  the  reason 
that  an  appellate  court  is  not  bound  to  take  judicial  notice  of  its 
own  records.**  The  record  should  contain  only  such  matter 
as  is  .necessary  to  the  hearing,  and  not  irrelevant  matter  or 

'  U.  S.  V.  Armejo,  131  U.  S.  Ap-  R.   165,  the  court  said:     "While  it 

pendix,   Ixxxii ;    U.    S.   v.    Curry,   6  is    well    settled    that    we    can    take 

How.   106.  judicial   knowledge  of  our  own   re- 

'^Ex  parte  Virginia  Commission-  cords,    it    is    not    at    all    clear    that 

ers,  112  U.  S.  177.  we   are   always    required    to   do   so. 

3R  S.  Sec.  828.  Machine  Co.  v.  Goddard,  3,7  C.  C. 

*U.  S.  V.  Gomez,  3  Wall.  766;  U.  A.  221,  95  Fed.  Rep.  664,  666.     The 

S.  V.  Booth,   18  How.  477.  proper  and  safe   way  of  proceeding 

^  Rule   14,  C.  C.  A.,  90  Fed.  Rep.  even  with   reference  to  the  tribunal 

clvii;  Williams  Bros.  v.  Savage   (C.  in   which   the  prior   record   remains, 

C.  A.  4th  Cir.),   120  Fed.   Rep.  497,  is  by  pica  and  proof.     Nevertheless, 

Q   .\m.    B.    R.   720;    Cunningham   v.  as  the  practice  with   reference  to  a 

German    Ins.    Bank    (C.    C    A.   6th  petition  of  the  character  now  before 

Cir).   103   Fed.   Rep.  932.  4   Am.   B.  us  is  not  yet  fully  understood,  even 

R.  192;  Devries  v.  Shanahan   (C.  C.  if  it  may  be  said  to  he   thoroughly 

A.  4th  Cir.),   122  Fed.   Rep.  629,   10  settled,    we    will    avail    ourselves   of 

Am.  B.  R,  518.  the    right    which    we    have    to    take 

'• />!    re    Osborne    (C.    C.    .\.    ist  judicial  knowledge  of  our  own  pro- 

Cir.),    115    Fed.    Rep.    i,   8   Am.    B.  ceedings." 


834  LAW    AND    PROCEEDINGS    IN    BANKRl'l'TCY. 

useless  lepelilicnis.'  It  is  the  duty  of  the  parties  or  their  coun- 
sel to  atteuil  to  this.'  lu  takiui;-  appeals  iu  haukruptey  it  will 
frequently  occur  that  many  papers  and  proceedings  ought  not 
to  he  included  in  the  record.  That  the  clerk  may  not  be  left 
in  doubt,  he  may  require  of  the  attorney  for  the  appellant  a 
praecipe,  stating  specifically  what  the  record  shall  contain,  and 
attach  a  copy  of  the  pr.necipe  to  the  transcript.^  The  certificate 
in  such  case  should  be  that  it  is  a  true  and  correct  transcript, 
according  to  the  pnecipe.  If  the  attorney  for  the  appellee  asks 
him  to  include  other  parts  of  the  record  in  the  transcript,  he 
may  apply  to  the  court  of  bankru])tcy  for  directions  in  respect 
to  such  matter.**  \\'here  the  record  is  filed  in  an  appellate 
court  and  it  is  made  to  appear  l)y  the  ap])ellee  that  necessary 
papers,  etc.,  have  been  omitted  in  making  the  transcript,  they 
may  be  supplied  upon  application  to  that  court.^"  Where  wit- 
nesses are  examined  orally,  the  testimony  ])resented  in  that 
form  or  its  substance  must  be  stated  in  writing  and  made  a 
part  of  the  record,  or  it  will  be  entirely  disregarded  on  appeal. ^^ 
Exhibits  attached  to  depositions  are  properly  included  in  a 
record.^'  The  opinion  of  the  court  of  bankruptcy,  if  in  writ- 
ing, should  be  annexed  to  the  transcript."  The  transcript 
must  be  authenticated  under  the  seal  of  the  court  and  be 
signed   by   the   clerk.^*     Where   the    certificate   is   under   the 

''See  observation  of  the  supreme  131,  s.  c.  5  C.  C.  A.  53;  R.  R.  Co. 

court  in  Railway  Co.  v.  Stewart,  95  v.  Schutte,  100  U.  S.  644,  647. 

U.  S.  279,  284 ;  Burnham  v.   Street  "  Hoe  v.  Kahler,  27  Fed.  Rep.  145. 

Ry.  Co.,  87  Fed.  Rep.  168,  s.  c.  30,  10  R.  R.  Co.  v.  Schutte,  100  U.  S. 

C.  C.  A.  594;  Nasfiua  &  Lowell  R.  644,    647.      See    also    Certiorari    to 

Corp.  V.  Boston  &  Lowell  R.  Corp.,  complete  record,   Sec.  306,  ante. 

61    Fed.   Rep.  237,   s.   c.  9  C.   C.   A.  ^i  Williams    Bros.   v.    Savage    (C. 

468;   Union   Pac.   R.    Co.   v.   U.   S.,  C.  A.  4th  Cir.),  120  Fed.  Rep.  497, 

116  U.  S.  402.  9  Am.  B.  R.  720;  Blease  v.  Garling- 

If  the  record  contains  such  parts  ton,  92  U.  S.   i.     See  Rule  of  May 

as   is   called   for  by  either  party   it  15,  1893,  149  U.  S.  793. 

is    sufficient;    Blanks    v.    Klein,    49  1- Clark  Thread  Co.  v.  Williman- 

Fed.  Rep.   i,  s.  c.  i  C.  C.  A.  254.  tic  Linen  Co.,  140  U.  S.  481. 

"Cunningham     v.     German     Ins.  i-'Rule  14  C.  C.  A. 

Bank  (C.  C  A.  6th  Cir.),  103  Fed.  "Blitz  v.  Brown,  7  Wall.  693. 

Rep.  932,  4  Am.  B.   R.   192;  Burn-  A  certificate  signed  "A.  B.,  clerk 

ham  V.  Street  Ry.  Co.,  87  Fed.  Rep.  of  said  court,  by  C.  D.,  deputy,"  is 

168,  s.  c.  30  C.  C.  A.  594.     See  also  a    sufficient    signature;    Garneau    v. 

Penn.  Co.  v.  Ry.  Co.,  55  Fed.  Rep.  Dozicr,  100  U.  S.  7. 


APPELLATE    PROCEEDINGS. 


835 


seal  of  the  court  it  may  be  amended  by  adding  the  signature 
of  the  clerk.'^ 

A  judge  of  a  court  of  bankruptcy  is  not  required  to  make 
findings  of  fact  for  the  record  on  an  appeal  from  his  decision.^® 

§  324.     Amendments  to  the  record. 

Where,  from  inadvertence  or  mistake  of  the  clerk  of  the 
court  below,  or  from  any  other  cause,  the  record  transmitted 
to  the  appellate  court  is  defective  or  incorrect,  the  errors  or 
mistakes  are  regularly  corrected  by  a  writ  of  certiorari  to 
bring  up  a  full  and  true  transcript  of  the  record.^^  The  clerk 
of  the  court  of  bankruptcy  may  supply  an  omission  in  a  record 
by  certifying  such  omitted  parts  without  an  order  of  court.'* 
He  can  not  in  this  manner  correct  an  erroneous  statement  in  a 
transcript. '** 

Appeals  are  heard  upon  the  pleadings  and  proofs  below. 
No  new  evidence  can  l)e  admitted,  and  the  record  will  not 
ordinarily  be  amended  in  the  appellate  court.""     It  is  true,  an 


IS  Idaho  &  Ore.  Land  Imp.  Co. 
V.  Bradbury,  132  U.  S.  509. 

18  In  re  Meyers,  105  Fed.  Rep. 
353,  5  Am.  B.  R.  4. 

1^  See  Sec.  306,  ante. 

In  Devries  v.  Shanahan  (C.  C.  A. 
4th  Cir.),  10  Am.  B.  R.  518,  the 
court  said :  "  The  record  in  this 
case,  whilst  it  suggests  facts  ma- 
terial to  its  consideration,  does  not 
set  them  forth  as  clearly  as  is  neces- 
sary to  its  decision.  It  is,  therefore, 
ordered  that  the  cause  be  remanded 
to  the  district  court,  with  instruc- 
tions to  require  all  the  facts  con- 
nected with  the  failure  to  prove  and 
prosecute  the  claim  of  the  estate  of 
John  M.  Orcm,  deceased,  against 
the  bankrupt  estate  of  W.  Morris 
Orem,  prior  to  the  petition  of  the 
appellee,  to  be  inquired  into  and 
reported  to  it,  and,  when  such  facts 
are  so  reported,  to  pass  upon  ihc 
same." 

In  Barbour  v.  Coit  (C.  C.  .\.  6th 
Cir.),  118  Fed.  Rep.  272,  the  fol- 
lowing order  was  made  :     "  The  de- 


cree of  the  district  court  of  the 
United  States  is  reversed  and  the 
cause  remanded  to  said  cpurt,  with 
directions  that  the  cause  be  remitted 
to  the  referee  by  said  court  with 
directions  that  he  take  proof  of  the 
pleadings  in  said  Ohio  case,  and 
that  upon  the  record  as  thus  com- 
pleted the  referee  proceed  to  re- 
hear the  matter.  This  order  is 
made  because  the  case  is  not  prop- 
erly prepared  for  decision'  and  be- 
cause great  injustice  may  be  done 
if  the  cause  is  to  be  decided  on 
present  record.  The  order  is  made 
upon  our  own  motion  on  authority 
of  Estho  V.  Lear.  7  Pet.  130-1,  and 
Illinois  Cent.  Rd.  v.  Illinois,  146 
II.  S.  387.  The  costs  of  this  appeal 
will   be   divided." 

1**  Crandall  v.  Nevada.  6  Wall.  35. 

1"  Iltulgins  V.  Kemp,  18  Mow.  530. 

-"  r.icifu-  K.  Co.  V.  Ketchum,  95 
U.  S.  I  ;  Udali  v.  Steamship  "Ohio," 
17  How.  17;  Iludgins  v.  Kemp.  18 
How.  530;  The  Protector,  11  Wall. 

82. 


8^6  LAW    AND    PROCEEDINGS    IN     HANKRUPTCY. 

anioiulniont  may  l>o  had  in  the  appellate  eourt  by  consent  of 
parties."  ami  si)  als.)  aniemlnients  have  been  allowed  in  the 
appellate  court  to  .substitute  the  name  of  an  officer  as  appellant 
in  place  of  his  jiredecessor  in  oltice;''  and  where  it  appeared 
by  the  certificate  of  the  clerk  that  he  had  committed  a  clerical 
error  in  the  transcript  it  was  corrected  in  the  appellate  court 
without  issuing  a  writ  of  certiorari.-'' 

§  325.     Perfecting  an  appeal  and  filing  the  record. 

An  api)eal  is  taken  within  the  contemplation  of  the  statute 
when  it  is  allowed  and  the  papers  filed  in  the  clerk's  office.'* 
The  taking  of  an  ai)i)eal  deprives  the  court  of  bankruptcy  of 
jurisdiction  to  further  consider  matters  involved  in  the  appeal. 
It  can  only  assist  in  perfecting  the  appeal.  An  appeal  does  not 
affect  its  jurisdiction  over  other  matters  in  the  proceedings 
from  which  no  appeal  is  taken.  Perfecting  an  appeal  by  giv- 
ing a  bond.-^  issuing  and  serving  a  citation,"^  and  filing  the 
record  in  the  appellate  court  is  essential  to  the  prosecution  of 
a  suit  in  an  appellate  court. 

It  is  the  duty  of  the  appellant  to  file  the  record  with  the 
clerk  of  the  a])pellate  court  by  or  before  the  return  day, 
whether  in  vacation  or  in  term  time."  The  appeal  and  cita- 
tion must  l)e  made  returnable  not  exceeding  thirty  days  from 
the  date  of  the  signing  of  the  citation.-®  The  time  for  filing 
the  record  may  be  enlarged  before  its  expiration  by  the  justice 

In     Kennedy     v.     Georgia     State  --  Bowden  v.  Johnson,   107  U.   S. 

Bank,    8    How.    610,    the    supreme  251  ;    Gates    v.    Goodloe,    lOi    U.    S. 

court   said:      "There   is   nothing   in  612;  U.  S.  v.  Hopewell,  51  Fed.  Rep. 

the  nature  of  appellate  jurisdiction,  798,  s.  c.  2  C.  C.  A.  510. 

proceeding    according    to    the    com-  23  Woodward  v.  Brown,  13  Pet.  I. 

mon  law,  which  forbids  the  granting  24  Sec.    316,    ante. 

of  amendments,   etc.,  but   the   prac-  -^  Sec.    320,    ante. 

tice   has  been   to   remand   the  cause  -*•  Sec.    322,    ante. 

to  the  lower  court  for  amendment."  -''  Rule  16,  C.  C.  A.,  90  Fed.  Rep. 

See  also  Denny  v.  Pironi,  141  U.  S.  clix ;   In  re  Alden  Electric   Co.    (C. 

121;   Metcalf  V.  Watertown,  128  U.  C.  A.  7th  Cir.),  123  Fed.  Rep.  415, 

S.  586;  Tug  River  Coal  &  Salt  Co.  10  Am.  B.  R.  370.     See  also  Pender 

V.  Brigel,  67  Fed.  Rep.  625,  remand-  v.  Brown   (C.   C.   A.  4th  Cir.),   120 

ed  and   amendment  allowed   in   cir-  Fed.  Rep.  496. 

cuit  court  in  7:^  Fed.  Rep.  13-  ""*  R"le  14  C.  C.  A.,  90  Fed.  Rep. 

21  As    was    done    in    Fletcher    v.  clviii. 

Peck,  6  Cranch,  87. 


APPELLATE    PROCEEDINGS.  837 

or  judge  who  signed  the  citation,  and  the  order  of  enlargement 
should  be  filed  with  the  clerk  of  the  appellate  court.-**  This 
rule  is  directory,  and  it  is  within  the  sound  discretion  of  the 
appellate  court  to  relieve  parties  who  have  not  complied  with 
it.^**  Unless  the  record  is  filed  during  the  next  term  succeed- 
ing the  allowance  of  the  appeal,  the  appeal  has  spent  its  force 
and  should  be  dismissed. ^^  One  term  is  held  annually  by  the 
circuit  court  of  appeals  in  the  several  judicial  circuits. ^^  Where 
the  appellant  without  fault  on  his  part  is  prevented  from  filing 
the  transcript  within  such  time  by  the  fraud  of  his  opponent 
or  the  contumacy  of  the  clerk  or  the  order  of  the  court  below, 
his  time  to  file  the  transcript  may  be  enlarged  by  the  appellate 
court. ^■''  Where  the  record  is  filed  at  the  next  term,  but  after 
the  return  day,  or  the  time  as  enlarged  for  filing  it,  and  before 
a  motion  to  dismiss  is  filed,  the  objection  that  the  record  was 
not  filed  in  time  is  not  sufficient  to  dismiss  the  appeal.^* 

If  the  appellant  fails  to  file  his  record  on  or  before  the  return 
day,  the  appellee  may  have  the  case  docketed  and  dismissed 
upon  producing  a  certificate,  whether  in  term  time  or  in  vaca- 
tion, from  the  clerk  of  the  court  of  bankruptcy,  stating  the 
case  and  certifying  that  such  appeal  has  been  duly  allowed.^' 

2"  Rule  16,  C.  C  A.,  90  Fed.  Rep.  v.  Brown    (C.  C.  A.  4th  Cir.),  120 

clix.  Fed.    Rep.   496. 

An  order  extending  the  time  for         ^3  See    U.    S.   v.   Gomez,  3   Wall, 

filing   the    record    on    appeal,    made  752 ;    .\bleman    v.    Booth,   21    How. 

after   the   time   had    expired,    is    in-  506,  512. 

effective.     In  re  Alden  Electric   Co.         •'■*  Bingham   v.    Morris,   7   Crunch, 

(C.  C.  A.  7th  Cir.),  123  Fed.  Rep.  99;    Farmers  Loan   &  Trust  Co.  v. 

415,  10  Am.  B.  R.  370.  Chicago  N.  P.  R.  Co.,  73  Fed.  Rep. 

No  other  judge  is  entitled  to  ex-  314,  s.  c.  19  C.  C.  A.  477;  Altenberg 

tend  the  time  for  filing  record;  West  v.  Grant,  83  Fed.  Rep.  980,  s.  c.  28 

V.   Irwin,  54   Fed.   Rep.  419,   s.   c.  4  C.    C.   A.    244;   Jones   v,    Mann,    72 

C.  C.  A.  401.  1'\'(\.  Rep.  85,  s.  c.  18  C.  C.  A.  442; 

^"Florida     v.     Charlotte     Harbor  Andrews    v.    Thum,    64    Fed.    Rep. 

Phosphate    Co.,    70    Fed.    Rep.    883,  149.  s.  c.   12  C.  C.  A.  77;  R.  R.  Co. 

s.  c.  17  C.  C.  A.  472.  V.  Ellsworth,  77  Fed.  Rep.  664,  s.  c. 

31  Wanton  v.  DeWolf,    142  U.   S.  23  C.  C.  A.  393;   Nashua  &  Lowell 

138;  Evans  v.  State  Bank,  134  U.  S.  R.     Corp.     v.     Boston     &     Lowell 

.130;   Grigsby   v.    Purcell,  99  U.   S.  R.  Corp.,  61  Fed.  Rep.  237,  s.  c.  9 

505.  C.  C.  A.  468. 

•"■2  Act  of  .March  3.  1891,  26  Stat.         ••"••  Rule  16.  C.  C.  A.,  90  Fed.  Rep. 

.-It  T,.  826.  Sec.  3.     In  some  circuits  clx.     See  Lnveiand's  Forms  of  Fed. 

more  than  one  term  is  held.    Pender  Prac,  Form  No.  1490. 


838  LAW    AM)    PROCEEDINGS    IN    BANKRUPTCY. 

In  no  case  is  the  appellant  entitled  to  docket  the  case  and  file 
the  record  after  the  same  has  been  docketed  and  dismissed, 
unless  by  order  of  the  court."''"  The  appellee  may,  at  his  op- 
tion, docket  the  case  and  tile  a  copy  of  the  record  with  the  clerk 
of  the  appellate  court ;  and  if  the  case  is  docketed  and  a  copy 
of  the  record  filed  with  the  clerk  of  the  appellate  court  by  the 
appellant  within  the  period  limited  and  prescribed  l)y  the  rules 
or  by  the  appellee  at  any  time  thereafter,  the  case  shall  stand 
for  argimient  af  the  term."'" 

Upon  filing  the  transcript  of  record  the  appearance  of  coun- 
sel for  the  party  docketing  the  case  must  be  entered.''^ 

Filing  the  record  and  docketing  the  case  in  the  appellate 
court  confers  iurisdiction  upon  that  court  of  that  case. 

§  326.     Proceedings  in  a  circuit  court  of  appeals. 

The  practice  in  a  circuit  court  of  appeals  generally  is  sub- 
stantially the  same  as  that  of  the  supreme  court  of  the  United 
States.  In  certain  respects  it  has  been  changed  by  rules. 
When  a  transcript  of  record  is  filed  in  the  ofifice  of  the  clerk, 
it  is  his  duty  to  docket  the  case.  He  enters  upon  a  docket  all 
the  cases  brought  to  and  pending  in  the  court  in  their  proper 
chronological  order.  The  transcript  of  the  record  is  then 
printed  in  the  manner  prescribed  by  the  rules  of  the  circuit 
court  of  appeals  in  which  the  case  is  pending.^"  The  printing 
rules  vary  in  the  several  courts.  Printed  briefs  are  required. 
The  number  of  briefs,  what  they  shall  contain,  and  the  time 
within  which  they  must  be  filed  is  prescribed  by  the  rules 
of  the  several  circuit  courts  of  appeals.**'     Counsel  must  also 

This  was  done  In  re  Alden  Elec-  v-.  Iron  Co.,  52  Fed.  Rep.  838,  s.  c. 

trie   Co.    (C.   C.   A.   7th    Cir.),    123  3   C.   C.  A.  294;    Lincoln  v.   Street 

Fed.  Rep.  415,  10  Am.  B.  R.  370.  Light   Co.,  59   Fed.   Rep.   756,  s.  c. 

30  Rule  16,  C.  C.  A.,  90  Fed.  Rep.  8  C.  C.  A.  253 ;  Vider  v.  O'Brien,  62 

clx ;    Florida    v.    Charlotte    Harbor  Fed.  Rep.  326,  s.  c.  10  C.  C.  A.  385 ; 

Phosphate    Co.,    70   Fed.    Rep.   883,  Ry.  Co.  v.  Reeder,  76  Fed.  Rep.  550, 

s.  c.   17  C.   C.   A.  472.  s.  c.  22  C.  C.  A  314;  Doe  v.  Mining 

"  Rule  16,  C.  C.  A.,  90  Fed.  Rep.  Co.,  70  Fed.  Rep.  455,  s.  c.  17  C.  C. 

clx.  A.  190. 

"« Rule  16,  C.  C.  A.,  90  Fed.  Rep.  In     Milwaukee     v.     Schailer     & 

clx.  Schniglau    Co.,    91    Fed.    Rep.    858, 

^'^  Sec  Rule  23.   C.   C.    A.  the  circuit  court  of  appeals  for  the 

^"^  Rule  24,  C.  C.  A.;  Van  Gunden  seventh  circuit  said:     "Error  is  as- 


APPELLATE    PROCEEDINGS. 


839 


examine  the  rules  of  the  particular  court  in  which  a  case  is 
pending  with  reference  to  the  time  allowed  for  argument  and 
the  manner  of  setting  the  case  for  hearing. 

On  an  appeal  the  afipellate  court  will  review  both  law  and 
facts  as  distinguished  from  the  supervisory  jurisdiction  where 
only  questions  of  law  are  subject  to  review." 

The  decree  of  an  appellate  court  is  regularly  an  affirmance, 
reversal  or  modification  of  the  decree  of  the  court  below.  The 
decree  should  provide  for  the  costs  and  may  allow  interest  in 
a  proper  case.*"  It  may  contain  a  direction  to  the  court  below 
with  reference  to  further  proceedings  to  be  taken  by  the  court 
of  bankruptcy.  The  appellate  court  does  not  execute  its  own 
decrees,  but  directs  the  court  of  bankruptcy  with  reference  to 
what  should  be  done  by  it.  The  mandate  is  directed  to  the 
particular  court  which  is  constituted  a  court  of  bankruptcy 
from  which  the  appeal  was  taken. 


signed  upon  the  several  rulings 
stated,  but  the  brief  for  the  appel- 
lant does  not  contain,  as  required 
by  rule  24,  'a  specification  of  the 
errors  relied  upon.'  The  intention 
of  that  rule  is  that  the  brief  shall 
contain,  in  the  order  stated,  (i)  a 
statement  of  the  case,  (2)  a  specifi- 
cation of  errors  relied  upon,  and 
(3)  a  brief  of  the  argument.  Each 
of  these  should  be  under  an  appro- 
priate   heading,    in    enlarged    type." 

*i  Courier-Journal  Job  Printing 
Co.  V.  Brewing  Co.  (C.  C.  A.  6th 
Cir.),  loi  Fed.  Rep.  699,  4  Am.  B. 
R.  183;  Rush  V.  Lake  (C.  C.  A. 
0th  Cir.),  10  Am.  B.  R.  455",  ^"  re 
Rouse,  Hazard  &  Co.  (C.  C.  A. 
7th  Cir.'),  gi  Fed.  Rep.  96,  i  Am. 
B.  R.  234. 

♦2  In  Hutchinson  v.  Otis  (C.  C. 
A.  I  St  Cir.),  115  Fed.  Rep.  937,  8 
Am.  B.  R.  382,  the  court  said: 
"Ordinarily,  an  appellant,  or  other 
party,  who  has  postponed  by  a  pro- 
ceeding in  an  appellate  tribunal  the 
payment  of  an  amount  justly  due, 
should  pay  damages  therefor  equal. 


at  least,  to  legal  interest,  even  if  he 
has  not  received  any  increment  of 
the  fund  corresponding  thereto.  In 
Hutchinson  v.  Le  Roy  (C.  C.  A. 
1st  Cir.).  8  Am.  B.  R.  20,  113  Fed. 
202,  we  allowed  interest  against 
the  petitioner ;  but  there  the  fund 
which  it  was  determined  belonged 
to  him,  had  been  held  adversely 
from  the  outset,  as  it  grew  oiit  of  a 
tort  of  the  bankrupt  which  arose 
before  proceedings  in  bankruptcy 
were  commenced.  In  the  present 
case,  however,  the  fund  came  into 
the  hands  of  the  trustee  in  bank- 
ruptcy, not  through  any  tort,  but 
through  the  oversight  of  Otis,  Wil- 
cox &  Co.  The  trustee  merely  held 
it  until  the  courts  could  determine 
to  whom  it  belonged,  and  the  re- 
cord does  not  show  that  the  trustee 
has  received  any  increment  thereof. 
Under  the  circumstances,  and  as 
this  appeal  was  taken  by  the  trustee 
in  his  official  capacity  to  settle 
a  question  involving  substantial 
doubts,  we  think  that  interest  should 
not   be  allowed." 


840  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

A  petition  for  reheariiif^;'  may.  in  the  discretion  of  the  court, 
be  allowed  at  any  time  durini;"  the  term,  hut  will  not  he  allowed 
after  the  end  of  the  term  at  which  the  decree  was  entered/' 
The  proper  practice  for  a  party  who  desires  a  rehearing  is  to 
submit  a  printed  brief  or  petition  or  suggestion  of  the  points 
tiiought  important  without  oral  argument.**  No  reply  to  the 
l)etition  is  allowed  to  the  other  side,  nor  does  the  court  usually 
write  an  opinion  when  the  petition  is  denied.  If  the  court  so 
desires,  it  will  order  the  adverse  counsel  to  file  a  brief,  showing 
why  a  rehearing  should  not  be  granted,  or  it  may  order  the  case 
to  be  reheard  or  may  modify  its  decree  or  opinion  if  it  con- 
tains incorrect  statements. 

§  327.     Death  of  a  party.*'' 

Whenever,  pending  a  writ  of  error  or  appeal  in  a  circuit 
court  of  appeals,  either  party  shall  die,  the  proper  representa- 
tives in  the  personalty  or  realty  of  the  deceased  party,  ac- 
cording to  the  nature  of  the  case,  may  voluntarily  come  in 
and  be  admitted  parties  to  the  suit,  and  thereupon  the  case 
is  heard  and  determined  as  in  other  cases,  and  if  such 
representatives  do  not  voluntarily  become  parties,  then  the 
other  party  may  suggest  the  death  on  the  record,  and 
thereupon,  on  motion,  obtain  an  order  that,  unless  such 
representatives  shall  become  parties  within  sixty  days,  the 
party  moving  for  such  order,  if  defendant  in  error,  is  en- 
titled to  have  the  writ  of  error  or  appeal  dismissed ;  and  if 
the  party  so  moving  shall  be  plaintiff  in  error,  he  shall  be 
entitled  to  open  the  record  and  on  hearing  have  the  judgment 
or  decree  reversed  if  it  be  erroneous :  Provided^  however^  that 
a  copy  of  every  such  order  shall  be  personally  served  on  said 
representative  at  least  thirty  days  before  the  expiration  of 
such  sixty  days. 

When  the  death  of  a  party  is  suggested  and  the  represent- 
atives of  the  deceased  do  not  a])pear  within  ten  days  after 
the  expiration  of  such  sixty  days,  and  no  measures  are  taken 

<='  Hudson  V.  Guestier,  7  Cranch,  **  Public    Schools    v.    Walker,    9 

I  ;   Rule   29    C.   C.   A. ;    Bushnell   v.  Wall.  603. 

Crooke    Min.    &    Smelting   Co.,    150  ■••'  Rule   19,  C.  C.  A. 
U.  S.  83,  and  cases  there  collated. 


APPELLATE    PROCEEDINGS. 


841 


by  the  opposite  party  within  that  time  to  compel  their  ap- 
pearance, the  case  abates. 

When  either  party  to  a  suit  in  a  circuit  or  district  court  of 
the  United  States  desires  to  prosecute  a  writ  of  error  or 
appeal  to  a  circuit  court  of  appeals  from  any  final  judg- 
ment or  decree  rendered  in  the  circuit  or  district  court, 
and  at  the  time  of  suing  out  such  writ  of  error  or  appeal 
the  other  party  to  the  suit  is  dead  and  has  no  proper 
representative  within  the  jurisdiction  of  the  court  which 
rendered  such  final  judgment  or  decree,  so  that  the  suit 
can  not  be  revived  in  that  court,  but  has  a  proper  represent- 
ative in  some  state  or  territory  of  the  United  States,  or  in 
the  District  of  Columbia,  the  party  desiring  such  a  writ  of 
error  or  appeal  may  procure  the  same,  and  may  have  pro- 
ceedings on  such  judgment  or  decree  superseded  or  stayed 
in  the  same  manner  as  is  now  allowed  by  law  in  other  cases, 
and  thereupon  proceeds  with  such  writ  of  error  or  appeal 
as  in  other  cases.  And  within  thirty  days  after  the  filing 
of  the  record  in  the  appellate  court  the  plaintiff  in  error  or 
appellant  must  make  a  suggestion  to  the  court,  supported 
by  affidavit,  that  the  said  party  was  dead  when  the  writ 
of  error  or  appeal  was  taken  or  sued  out,  and  had  no 
proper  representative  within  the  jurisdiction  of  the  court 
which  rendered  such  judgment  or  decree,  so  that  the  suit 
could  not  be  revived  in  that  court,  and  that  said  party  had  a 
proper  representative  in  some  state  or  territory  of  the  United 
States,  or  in  the  District  of  Columbia,  and  stating  therein  the 
name  and  character  of  such  representative  and  the  state  or 
territory  or  district  in  which  such  representative  resides;  and 
upon  such  suggestion  he  may  on  motion  obtain  an  order  that, 
unless  such  representative  shall  make  himself  a  party  within 
ninety  days,  the  plaintiff  in  error  or  appellant  is  entitled 
to  open  the  record,  and,  on  hearing,  have  the  judgment  or 
decree  reversed  if  the  same  be  erroneous:  Provided,  hoivcvcr, 
that  a  proper  citation  reciting  the  substance  of  such  order  is 
served  upon  such  representative,  either  personally  or  by  being 
left  at  his  residence  at  least  thirty  days  before  tiie  exj)irali(in 
of  such  ninety  days :  Provided  also,  that  in  every  such  case, 
if  the  representative  of  the  deceased  party  does  not  appear 
within  ten  days  after  the  expiration  of  such  ninety  days,  and 


84J  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

the  measures  al)o\c  provitled  tit  conipol  the  appearance  of 
siicli  representati\  c  lia\c  not  been  taken  within  the  time,  as 
above  required,  by  the  o^jposite  party,  the  case  abates:  And 
provided  also,  that  the  said  representative  may  at  any  time 
before  or  after  said  suggestion  come  in  and  be  made  a  party 
to  the  suit,  and  thereupon  the  case  proceeds  and  is  heard  and 
determined  as  in  other  cases. 

§  328.     The  mandate. 

\\'hen  a  case  is  tinally  determined,  a  mandate  or  other  proper 
process  in  the  nature  of  procedendo  is  issued  to  the  court  of 
bankruptcy  for  the  purpose  of  informing  that  court  of  the 
proceedings  in  the  appellate  court,  so  that  further  proceedings 
may  be  had  in  court  of  bankruptcy  as  to  law  and  justice  may 
appertain.'  It  is  not  necessary  to  recite  in  the  mandate  every 
step  in  the  various  stages  of  a  cause."  It  should  contain  the 
decree  of  the  appellate  court  and  its  directions  to  the  court  of 
bankruptcy. 

The  court  of  bankruptcy  is  bound  by  the  decree  contained 
in  the  mandate  as  the  law  of  the  case,  and  must  carry  it  into 
execution  according  to  the  mandate.  That  court  can  not 
vary  it  or  examine  it  for  any  other  purpose  than  execution ; 
or  give  any  other  or  fifrther  relief;  or  review  it,  even  for 
apparent  error,  upon  any  matter  decided  on  the  appeal,  or 
intermeddle  with  it  other  than  to  settle  so  much  as  has  been 
remanded.^  If  the  court  of  bankruptcy  mistakes  or  miscon- 
strues the  decree  of  the  circuit  court  of  appeals  and  does  not 
give  full  effect  to  the  mandate,  its  action  may  be  controlled 
either  by  a  new  appeal  or  by  writ  of  mandamus  to  execute 
the  mandate.*  The  court  of  l)ankruptcy  may  consider  and 
decide  any  matters  left  open  by  the  mandate  of  the  appellate 
court ;  and  its  decision  of  such  matters  can  be  reviewed  by  a 

1  Rule  32,  C.  C.  A.  re    Postal    Telegraph    Co.,   85    Fed. 

2  Andrews  v.  Thum,  72  Fed.  Rep.  Rep.  853,  s.  c.  29  C.  C.  A.  456 ; 
290,  s.  c.  18  C.  C.  A.  566.  Perkins    v.    Fourniquet,     14    How. 

3  Texas  &  Pac.  Ry.  v.  Anderson,  313,  330;  In  re  Washington  & 
149  U.  S.  237 ;  Sibbald  v.  U.  S.,  Georgetown  R.  R.,  140  U.  S.  91 ; 
12  Pet.  488,  492.  City    Bank    v.    Hunter,    152    U.    S. 

*  Bissell    Carpet    Sweeper    Co.    v.      512;     City     Bank,     Petitioner,     153 
Goshen      Sweeper     Co.,      72     Fed.      U.  S.  246. 
Rep.  519  s.  c.   19  C.  C.  A.  25;  In 


APPELLATE    PROCEEDINGS. 


84: 


nevv  appeal  only.^  The  opinion  of  the  appellate  court  at  the 
time  of  rendering  its  decree  may  be  consulted  to  ascertain 
what  was  intended  by  its  mandate ;  and  either  upon  an  appli- 
cation for  a  writ  of  mandamus  or  u^xdu  a  new  appeal,  it  is  for 
the  appellate  court  to  construe  its  own  mandate  and  to  act 
accordingly.^ 


5/«  rc  Sandford  Fork  &  Tool 
Co.,  160  U.  S.  247;  Hinckley  v. 
Morton,  103  U.  S.  764;  Mason  v. 
Pewabic  Co.,  153  U.  S.  361 ; 
Nashua  &  Lowell  R.  R.  v.   Boston 


&  Lowell  R.  R.,  51   Fed.  Rep.  929, 
s.  c.  5  U.  S.  App.  97. 

«  Gaines  v.  Rugg,  148  U.  S.  228, 
238,  244;  Supervisors  v.  Kennicott, 
94  U.  S.  498;  West  V.  Brashear,  14 
Pet.  51- 


GENERAL  ORDERS  AND  FORMS 


844 


GENERAL  ORDERS  IN  BANKRUPTCY.        845 


GENERAL  ORDERS  IN  BANKRUPTCY. 


In  pursuance  of  the  powers  conferred  by  the  Constitution  and 
laws  upon  the  Supreme  Court  of  the  United  States,  and  particularly 
by  the  act  of  Congress  approved  July  i,  1898,  entitled  "An  act  to 
establish  a  uniform  system  of  bankruptcy  throughout  the  United 
States,"  it  is  ordered,  on  this  28th  daj'  of  November,  1898,  that  the 
following  rules  be  adopted  and  established  as  general  orders  in 
bankruptcy,  to  take  effect  on  the  first  Monday,  being  the  second 
day,  of  January,  1899.  And  it  is  further  ordered  that  all  proceed- 
ings in  bankruptcy  had  before  that  day,  in  accordance  with  the  act 
last  aforesaid,  and  being  in  substantial  conformity  either  with  the 
provisions  of  these  general  orders,  or  else  with  the  general  orders 
established  by  this  court  under  the  bankrupt  act  of  1867  and  with 
any  general  rules  or  special  orders  of  the  courts  in  bankruptcy, 
stand  good,  subject,  however,  to  such  further  regulation  by  rule  or 
order  of  those  courts  as  may  be  necessary  or  proper  to  carry  into 
force  and  effect  the  bankrupt  act  of  1898  and  the  general  orders  of 
this  court. 

See  B.  A.  1898.  Sec.  30. 

I. 

Docket. 

The  clerk  shall  keep  a  docket,  in  which  the  cases  shall  be 
entered  and  numbered  in  the  order  in  which  they  are  com- 
menced. It  shall  contain  a  memorandum  of  the  filing  of 
the  petition  and  of  the  action  of  the  court  thereon,  of  the 
reference  of  the  case  to  the  referee,  and  of  the  trans- 
mission by  him  to  the  clerk  of  his  certified  record  of  the 
proceedings,  with  the  dates  thereof,  and  a  memorandum 
of  all  proceedings  in  th(i  case  except  those  duly  entered  on 
the  referee's  certified  record  aforesaid.  The  docket  shall 
be  arranged   in   a   manner  convenient   for   reference,    and 

shall  nt  all  times  be  open  to  public  inspection. 

» 

Sec  WCK.  87,  fil,  aiili . 


846  LAW   AND    PROCEEDINGS    IN    BANKRUPTCY. 

II. 

Filing  of  Papers. 

The  clerk  or  the  referee  shall  indorse  on  each  paper  filed 
with  him  the  day  and  hour  of  filing,  and  a  brief  statement 
of  its  character. 

8iH>  sees.  34,  37,  CA,  i:?7  and  142,  nvff. 

Consult  I'urt'  Dean,  No.  3699,  Fed.  Cas.,  s.  c.  i  N.  B.  R.  249. 
As  to  correcting  an  erroneous  filing,  see  Alabama,  etc.,  R.  Co. 
V.  Jones,  No.   127,  Fed.  Cas.,  s.  c.  7  N.  B.  R  145. 

III. 

Process. 

All  process,  summons  and  subpoenas  shall  issue  out  of  the 
court,  under  the  seal  thereof,  and  be  tested  by  the  clerk; 
and  blanks,  with  the  signature  of  the  clerk  and  seal  of  the 
court,  may,  upon  application,  be  furnished  to  the  referees. 

See  sees.  31,  37,  71  and  207,  ante.  Consult  also  R.  S.  Sees. 

911-913. 

IV. 

Conduct  of  Proceedings. 

Proceedings  in  bankruptcy  may  be  conducted  by  the  bank- 
rupt in  person  in  his  own  behalf,  or  by  a  petitioning  or 
opposing  creditor;  but  a  creditor  will  only  be  allowed  to 
manage  before  the  court  his  individual  interest.  Every 
party  may  appear  and  conduct  the  proceedings  by  attorney, 
who  shall  be  an  attorney  or  counsellor  authorized  to  prac-  > 
tice  in  the  circuit  or  district  court.  The  name  01  ihe 
attorney  or  counsellor,  with  his  place  of  business,  shall  be 
entered  upon  the  docket,  with  the  date  of  the  entry.  All 
papers  or  proceedings  offered  by  an  attorney  to  be  filed 
shall  be  indorsed  as  above  required,  and  orders  granted  on 
motion  shall  contain  the  name  of  the  party  or  attorney 
making  the  motion.  Notices  and  orders  which  are  not,  by 
the  act  or  by  these  general  orders,  required  to  be  served  on 
the  party  personally  may  be  served  upon  his  attorncj^. 

See  sees.  61,  80  and  27G,  ante. 


GENERAL  ORDERS  IN  BANKRUPTCY.        847; 


Frame  of  Petitions. 

All  petitions  and  the  schedules  filed  therewith  shall  be 
printed  or  written  out  plainly,  without  abbreviation  or  inter- 
lineation, except  where  such  abbreviation  and  interlineation 
may  be  for  the  purpose  of  reference. 

See  sees.  59  aud  69,  ante. 

That  an  illegible  petition  can  not  be  filed,  see  Anon.,  i  N.  B.  R. 
215;  In  re  Malcom,  Xo.  8986,  Fed.  Cas.,  s.  c.  4  Law  Rep.  488. 

That  illegible  schedules  should  be  amended,  m  re  Hall,  No.  5922, 
Fed.  Cas.,  s.  c.  2  N.  B.  R.  192. 

That  dots  can  not  be  used  to  indicate  anything  necessary  to  be 
stated,  in  re  Orne,  No.  10582,  Fed.  Cas.,  s.  c.   i  Ben.  420. 

VI. 

Petition  in  Different  Districts. 

In  case  two  or  more  petitions  shall  be  filed  against  the 
same  individual  in  different  districts,  the  first  hearing  shall 
be  had  in  the  district  in  which  the  debtor  has  his  domicil, 
and  the  petition  may  be  amended  by  inserting  an  allegation 
of  an  act  of  bankruptcy  committed  at  an  earlier  date  than 
that  first  alleged,  if  such  earlier  act  is  charged  in  either  of 
the  other  petitions;   and  in  case  of  two  or  more  petitions 
against  the  same  partnership  in  different  courts,  each  hav- 
ing jurisdiction  over  the  case,  the  petition  first  filed  shall 
be  first  heard,  and  may  be  amended  by  the  insertion  of  an 
allegation  of  an  earlier   act   of  bankruptcy  than   that  first 
alleged,  if  such  earlier  act  is  charged  in  either  of  the  other 
petitions;   and,    in  either  case,   the  proceedings  upon  the 
other  petitions  may  be  stayed  until  an  adjudication  is  made 
upon  the  petition  first  heard;   and  the  court  which  makes 
the  first  adjudication  of  bankruptcy  shall  retain  jurisdiction 
over  all  proceedings  therein  until  the  same  shall  be  closed. 
In  case  two  or  more  petitions  shall  be  filed  in  different  dis- 
tricts by  different  members  of  the  same  partnership  for  an 
adjudication  of   the  bankruptcy   of  said   partnership,    the 
court  in  which  the  petition  is  first  filed,  having  jurisdiction, 
shall   take  and   retain   jurisdiction  over  all  proceedings  in 


848  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

such  bankruptcy  until  the  same  shall  be  closed;  and  if  such 
petitions  shall  be  filed  in  the  same  district,  action  shall  be 
first  had  upon  the  one  first  filed.  But  the  court  so  retain- 
ing jurisdiction  shall,  if  satisfied  that  it  is  for  the  greatest 
convenience  of  parties  in  interest  that  another  of  said 
courts  should  proceed  with  the  cases,  order  them  to  be 
transferred  to  that  court. 

Soo  stvs.  fiS  and  S)8,  tDitc. 

Consult  :n  re  Boston  H.  &  E.  R.  R.  Co.,  No.  1678,  Fed.  Cas.,  s.  c. 
9  Blatch.  409. 

vn. 

Priority  of  Petitions. 

Whenever  two  or  more  petitions  shall  be  filed  by  credi- 
tors against  a  common  debtor,  alleging  separate  acts  of 
bankruptcy  committed  by  said  debtor  on  differe'-it  days 
within  four  months  prior  to  the  filing  of  said  petitions,  and 
the  debtor  shall  appear  and  show  cause  against  an  adju- 
dication of  bankruptcy  against  him  on  the  petitions,  that 
petition  shall  be  first  heard  and  tried  which  alleges  the 
commission  of  the  earliest  act  of  bankruptcy;  and  in  case 
the  several  acts  of  bankruptcy  are  alleged  in  the  dif¥eren».; 
petitions  to  have  been  committed  on  the  same  day,  the 
court  before  which  the  same  are  pending  may  order  them 
to  be  consolidated,  and  proceed  to  a  hearing  as  upon  one 
petition;  and  if  an  adjudication  of  bankruptcy  be  made 
upon  either  petition,  or  for  the  commission  of  a  single  act 
of  bankruptcy,  it  shall  not  be  necessary  to  proceed  to  a 
hearing  upon  the  remaining  petitions,  unless  proceedings 
be  taken  by  the  debtor  for  the  purpose  of  causing  such 
adjudication  to  be  annulled  or  vacated. 

See  sees.  68  and  98,  ante. 

VIII. 

Proceedings  in  Partnership  Cases. 

Any  member  of  a  partnership,  who  re/ uses  to  join  in  a 
petition  to  have  the  partnership  declared  bankroipt,  shall 
be  entitled  to  resist  the  prayer  of  the  pet  tion   in  the  same 


GENERAL  ORDERS  IN  BANKRUPTCY.        849 

manner  as  if  the  petition  had  been  filed  by  a  creditor  of 
the  partnership,  and  notice  of  the  filing  of  the  petition 
shall  be  given  to  him  in  the  same  manner  as  provided  by 
law  and  by  these  rules  in  the  case  of  a  debtor  petitioned 
against;  and  he  shall  have  the  right  to  appear  at  the  time 
fixed  by  the  court  for  the  hearing  of  the  petition,  and  to 
make  proof,  if  he  can.  that  the  partnership  is  not  insolvent 
or  has  not  committed  an  act  of  bankruptcy,  and  to  make 
all  defences  which  any  debtor  proceeded  against  is  entitled 
to  take  by  the  provisions  of  the  act;  and  in  case  an  adjudi- 
cation of  bankruptcy  is  made  upon  the  petition,  such  part- 
ner shall  be  required  to  file  a  schedule  of  his  debts  and  an 
inventory  of  his  property  in  the  same  manner  as  is  required 
by  the  act  in  cases  of  debtors  against  whom  adjudication  of 
bankruptcy  shall  be  made. 
See  sec.  98,  ante. 

IX. 

Schedule  in  Tnvoluutary  Bankruptcy. 

In  all  cases  of  involuntary  bankruptcy  in  which  the 
bankrupt  is  absent  or  can  not  be  found,  it  shall  be  the  duty 
of  the  petitioning  creditor  to  file,  within  five  days  after  the 
date  of  the  adjudication,  a  schedule  giving  the  names  and 
places  of  residence  of  all  the  creditors  of  the  bankrupt, 
according  to  the  best  information  of  the  petitioning  credi- 
tor. If  the  debtor  is  found,  and  is  served  with  notice  to 
furnish  a  schedule  of  his  creditors  and  fails  to  do  so,  the 
petitioning  creditor  may  apply  for  an  attachment  against 
the  debtor,  or  may  himself  furnish  such  schedule  as  afore- 
said. 

See  sees.  33  aiul  81,  nnte. 

As  to  the  duty  of  the  referee  to  cause  such  schedules  to  be  filed, 
see  B.  A.  1898.  Sec.  39,  clause  6 

X. 

Indemnity  for  Expenses. 

Before  incurring  any  expense  in  publishing  or  mailing 
notices,  or  in  travelling,  or  in  procuring  the  attendance  of 
witnesses,  or  in  perpetuating  testimony,  the  clerk,  marshal 


850  LAW   AND    PROCEEDINGS    IN    BANKRUPTCY. 

or  referee  may  require,  from  the  bankrupt  or  other  person 
in  whose  behalf  the  duty  is  to  be  performed,  indemnity 
for  such  expense.  Money  advanced  for  this  purpose  by 
the  bankrupt  or  other  person  shall  be  repaid  him  out  of 
the  estate  as  part  of  the  cost  of  administering  the  same. 

See  sees.  36,  88,  40  and  (>1,  (oite. 

Compare  B.  A.  1898,  Sees.  62  and  646,  clause  i. 

XI. 

Amendments. 

The  court  may  allow  amendments  to  the  petition  and 
schedules  on  application  of  the  petitioner.  Amendments 
shall  be  printed  or  written,  signed  and  verified,  like  orig- 
inal petitions  and  schedules.  If  amendments  are  made  to 
separate  schedules,  the  same  must  be  made  separately,  with 
proper  references.  In  the  application  for  leave  to  amend, 
the  petitioner  shall  state  the  cause  of  error  in  the  paper 
originally  filed. 
See  sees.  62,  63  and  92,  ante. 

xn. 

Duties  of  Referee. 

I.  The  order  referring  a  case  to  a  referee  shall  name  a 
day  upon  which  the  bankrupt  shall  attend  before  the 
referee;  and  from  that  day  the  bankrupt  shall  be  subject 
to  the  orders  of  the  court  in  matters  relating  to  his  bank- 
ruptcy, and  may  receive  from  the  referee  a  protection 
against  arrest,  to  continue  until  the  final  adjudication  on 
his  application  for  a  discharge,  unless  suspended  or  vacated 
by  order  of  the  court.  A  copy  of  the  order  shall  forth- 
with be  sent  by  mail  to  the  referee,  or  be  delivered  to  him 
personally  by  the  clerk  or  other  officer  of  the  court.  And 
thereafter  all  the  proceedings,  except  such  as  are  required 
by  the  act  or  by  these  general  orders  to  be  had  before  the 
judge,  shall  be  had  before  the  referee. 

2.  The  time  when  and  the  place  where  the  referees  shall 
act  upon  the  matters  arising  under  the  several  cases  referred 
to  them  shall  be  fixed  by  special  order  of  the  judge,  or  by  the 
referee;  and  at  such  times  and  places  the  referees  may  perform 
the  duties  which  they  are  empowered  by  the  act  to  perform. 


GENERAL  ORDERS  IX  BANKRUPTCY.        851 

3.  Applications  for  a  discharge,  or  for  the  approval  of  a 
composition,  or  for  an  injunction  to  stay  proceedings  of  a 
court  or  officer  of  the  United  States  or  of  a  State,'  shall  be 
heard  and  decided  by  the  judge.  But  he  may  refer  such 
an  application,  or  any  specified  issue  arising  thereon,  to 
the  referee  to  ascertain  and  report  the  facts. 

See  sees.  29,  fi2,  77,  90,  103,  204,  206  and  246,  antp. 
Consult  in  re  Holmes,  No.  6632,  Fed.  Cas.,  s.  c.  8  Ben.  74;  ///  re 
Hatcher,  No.  6210,  Fed.  Cas.,  s.  c.  i  N.  B.  R.  390;  In  rd' Staflford, 
No.  13274,  Fed.  Cas.,  s.  c.   13  N.  B.  R.  378. 

XIII. 

AppointTiient  and  Remoyal  of  Trustee. 

The  appointment  of  a  trustee  by  the  creditors  shall  be 
subject  to  be  approved  or  disapproved  by  the  referee  or  by 
the  judge;  and  he  shall  be  removable  by  the  judge  only. 
See  sees.  107  and  142,  ante. 

XIV. 

No  Official  or  General  Trustee. 

No  official  trustee  shall  be  appointed  by  the  court,  nor 
any  general  trustee  to  act  in  classes  of  cases. 
See  sec.  142,  anle. 

XV. 

Trustee  Not  Appointed  in  Certain  Cases. 

If  the  schedule  of  a  voluntary  bankrupt  discloses  no 
assets,  and  if  no  creditor  appears  at  the  first  meeting,  the 
court  may,  by  order  setting  out  the  facts,  direct  that  no 
trustee  be  appointed;  but  at  any  time  thereafter  a  trustee 
may  be  appointed,  if  the  court  shall  deem  il  desirable.  If 
no  trustee  is  appointed  as  aforesaid,  the  court  may  order 
Ihat  no  meeting  of  the  creditors  other  than  the  first  meeting 
«hall  be  called. 

See  sers.  100,  108,  142  iind  271,  ante. 


8;')!'  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

XVI. 

Notice  to  Trustee  of  His  Appoiiitnient. 

It  shall  be  the  duty  of  the  referee,  immediately  upon 
the  appointment  and  approval  of  the  trustee,  to  notify  him 
in  person  or  by  mail  of  his  appointment;  and  the  notice 
shall  require  the  trustee  forthwith  to  notify  the  referee  of 
his  acceptance  or  rejection  of  the  trust,  and  shall  contain 
a  statement  of  the  penal  sum  of  the  trustee's  bond. 

See  sees.  29,  107  aud  142,  ante. 

XVII. 

Duties  of  Trustee. 

The  trustee  shall,  immediately  upon  entering  upon  his 
duties,  prepare  a  complete  inventory  of  all  the  property 
of  the  bankrupt  that  comes  into  his  possession.  The 
trustee  shall  make  a  report  to  the  court,  within  twenty 
days  after  receiving  the  notice  of  his  appointment,  of  the 
articles  set  off  to  the  bankrupt  by  him,  according  to  the 
provisions  of  the  forty-seventh  section  of  the  act,  with  the 
estimated  value  of  each  article,  and  any  creditor  may  take 
exceptions  to  the  determination  of  the  trustee  within 
twenty  days  after  the  filing  of  the  report.  The  referee 
may  require  the  exceptions  to  be  argued  before  him,  and 
shall  certify  them  to  the  court  for  final  determination  at 
the  request  of  either  party.  In  case  the  trustee  shall  neg- 
lect to  file  any  report  or  statement  which  it  is  made  his 
duty  to  file  or  make  by  the  act,  or  by  any  general  order  in 
bankruptcy,  within  five  days  after  the  same  shall  be  due, 
it  shall  be  the  duty  of  the  referee  to  make  an  order  requir- 
ing the  trustee  to  show  cause  before  the  judge,  at  a  time 
specified  in  the  order,  why  he  should  not  be  removed  from 
office.  The  referee  shall  cause  a  copy  of  the  order  to  be 
served  upon  the  trustee  at  least  seven  days  before  the 
time  fixed  for  the  hearing,  and  proof  of  the  service  thereof 
to  be  delivered  to  the  clerk.  All  accounts  of  trustees  shall 
be  referred  as  of  course  to  the  referee  for  audit,  unless 
otherwise  specially  ordered  by  the  court. 


GENERAL  ORDERS  IN  BANKRUPTCY.       853 

See' sees.  144,  186  and  264,  ante. 

As  to  computing  the  twenty  days  when  property  is  in  litigation, 
see  in  re  Shields,  No.  12785,  Fed.  Cas.,  s.  c.  i  N.  B.  R.  603. 

As  to  the  meaning  of  "  may  "  in  this  rule,  see  in  re  Perdue,  No. 
10975,  Fed.  Cas.,  s.  c.  2  N.  B.  R.  183. 

As  to  filing  exceptions,  see  in  re  Perdue,  No.  10975,  Fed.  Cas.,  s. 
c.  2  N.  B.  R.  183;  In  re  Gainey,  No.  5181,  Fed.  Cas.,  s.  c.  2  N.  B. 
R.  525;  In  re  Jackson,  No.  7127,  Fed.  Cas.,  s.  c.  2  N.  B.  R.  508. 

XVIII. 

Sale  of  Property. 

1.  All  sales  shall  be  by  public  auction  unless  otherwise 
ordered  by  the  court. 

2.  Upon  application  to  the  court,  and  for  good  cause 
shown,  the  trustee  may  be  authorized  to  sell  any  specified 
portion  of  the  bankrupt's  estate  at  private  sale;  in  which 
case  he  shall  keep  an  accurate  account  of  each  article 
sold,  and  the  price  received  therefor,  and  to  whom  sold; 
which  account  he  shall  file  at  once  with  the  referee. 

3.  Upon  petition  by  a  bankrupt,  creditor,  receiver  or 
trustee,  setting  forth  that  a  part  or  the  whole  of  the  bank- 
rupt's estate  is  perishable,  the  nature  and  location  of  such 
perishable  estate,  and  that  there  will  be  loss  if  the  same  is 
not  sold  immediately,  the  court,  if  satisfied  of  the  facts 
stated  and  that  the  sale  is  required  in  the  interest  of  the 
estate,  may  order  the  same  to  be  sold,  with  or  without 
notice  to  the  creditors,  and  the  proceeds  to  be  deposited  in 
court, 

Se©  k('<;k  .  259  and  260,  aide. 

XIX. 

Accounts  of  Marshal. 

The  marshal  shall  make  return,  under  oath,  of  his  actual 
and  necessary  expenses  in  the  service  of  every  warrant 
addressed  to  him,  and  for  custody  of  property,  and  other 
services,  and  other  actual  and  necessary  expenses  paid  by 
him,  with  vouchers  therefor  whenever  practicable,  and  also 
with  a  statement  that  the  amounts  charged  by  him  are  just 
and  reasonable. 


854  LAW    AND    PROCEEDINGS    IN    HANKRUPTCY. 

See  seo.  40,  mili'. 

As  to  fees,  see  B.  A.  1898,  vSec.  52<^;  R.  vS.  vSec.  829;  act  of  May 
28,  1896,  Sec.  6,  29  Stat,  at  L.  179. 

As  to  the  necessity  of  producing  vouchers,  or  explaining  why 
they  are  omitted,  see  i/i  re  Comstock.  No.  3075,  Fed.  Cas.,  s.  c.  9  N. 
B.  R.  88;  In  re  Donahoe,  No.  3979,  Fed.  Cas.,  s.  c.  8  N.  B.  R.  453. 
Hut  see  ///  re  Talbot,  No.  13727,  Fed.  Cas.,  s.  c.  2  N.  B.  R.  2^0. 

XX. 

Papers  Filed  After  Reference. 

Proofs  of  claims  and  other  papers  filed  subsequently  to 
the  reference,  except  such  as  call  for  action  by  the  judge, 
may  be  filed  either  with  the  referee  or  with  the  clerk. 

See  sees.  29,  103  iand  187,  ante. 

XXI. 

Proof  of  Debts. 

1.  Depositions  to  prove  claims  against  a  bankrupt's  estate 
shall  be  correctly  entitled  in  the  court  and  in  the  cause. 
When  made  to  prove  a  debt  due  to  a  partnership,  it  must 
appear  on  oath  that  the  deponent  is  a  member  of  the  part- 
nership; when  made  by  an  agent,  the  reason  the  deposition 
is  not  made  by  the  claimant  in  person  must  be  stated;  and 
when  made  to  prove  a  debt  due  to  a  corporation,  the  depo- 
sition shall  be  made  by  the  treasurer,  or,  if  the  corporation 
has  no  treasurer,  by  the  officer  whose  duties  most  nearly 
correspond  to  those  of  treasurer.  Depositions  to  prove 
debts  existing  in  open  account  shall  state  when  the  debt 
became  or  will  become  due;  and  if  it  consists  of  items 
maturing  "^t  different  dates  the  average  due  date  shall  be 
stated,  in  default  of  which  it  shall  not  be  necessary  to  com- 
pute interest  upon  it.  All  such  depositions  shall  contain 
an  averment  that  no  note  has  been  received  for  such 
account,  nor  any  judgment  rendered  thereon.  Proofs  of 
debt  received  by  any  trustee  shall  be  delivered  to  the 
referee  to  whom  the  cause  is  referred. 

2.  Any  creditor  may  file  with  the  referee  a  request  that 
all  notices  to  which  he  may  be  entitled  shall  be  addressed 
to  him  at  any  place,  to  be  designated  by  the  post-office 
box    or    street    number,    as    he    may   appoint;   and    there- 


GENERAL  ORDERS  IN  BANKRUPTCY.        855 

after,  and  until  some  other  designation  shall  be  made  by 
such  creditor,  all  notices  shall  be  so  addressed;  and  in  other 
cases  notices  shall  be  addressed  as  specified  in  the  proof 
of  debt. 

3.  Claims  which  have  been  assigned  before  proof  shall 
be  supported  by  a  deposition  of  the  owner  at  the  time  of 
the  commencement  of  proceedings,  setting  forth  the  true 
consideration  of  the  debt  and  that  it  is  entirely  unsecured, 
or  if  secured,  the  security,  as  is  required  in  proving  secured 
claims.  Upon  the  filing  of  satisfactory  proof  of  the  assign- 
ment of  a  claim  proved  and  entered  on  the  referee's  docket, 
the  referee  shall  immediately  give  notice  by  mail  to  the 
original  claimant  of  the  filing  of  such  proof  of  assignment; 
and,  if  no  objection  be  entered  within  ten  days,  or  within 
further  time  allowed  by  the  referee,  he  shall  make  an  order 
subrogating  the  assignee  to  the  original  claimant.  If  objec- 
tion be  made,  he  shall  proceed  to  hear,  and  determine  the 
matter. 

4.  The  claims  of  persons  contingently  liable  for  the 
bankrupt  may  be  proved  in  the  name  of  the  creditor  when 
known  by  the  party  contingently  liable.  When  the  name 
of  the  creditor  is  unknown,  such  claim  may  be  proved  in 
the  name  of  the  party  contingently  liable;  but  no  dividend 
shall  be  paid  upon  such  claim,  except  upon  satisfactory 
proof  that  it  will  diminish  pro  tanto  the  original  debt. 

3.  The  execution  of  any  letter  of  attorney  to  represent 
a  creditor,  or  of  an  assignment  of  claim  after  proof,  may 
be  proved  or  acknowledged  before  a  referee,  or  a  United 
States  commissioner,  or  a  notary  public.  When  executed 
on  behalf  of  a  partnership  or  of  a  corporation,  the  person 
executing  the  instrument  shall  make  oath  that  he  is  a 
member  of  the  partnership,  or  a  duly  authorized  officer 
of  the  corporation  on  whose  behalf  he  acts.  When  the 
person  executing  is  not  personally  known  to  the  officer 
taking  the  proof  or  acknowledgment,  his  identity  shall  be 
established  by  satisfactory  proof. 

6.  When  the  trustee  or  any  creditor  shall  desire  the  re- 
examination of  any  claim  filed  against  the  bankrupt's 
estate,  he  may  apply  by  petition  to  the  referee  to  whom 
the  case  is  referred   for  an  order  for  such  re-examination, 


856  LAW    AND    I'ROCKEDINGS    IN    BANKRUPTCY, 

and  thereupon  the  referee  shall  make  an  order  fixing  a 
time  for  hearing  the  petition,  of  which  due  notice  shall  be 
given  by  mail  addressed  to  the  creditor.  At  the  time 
appointed  the  referee  shall  take  the  examination  of  the 
creditor,  and  of  any  witnesses  that  may  be  called  by  either 
party,  and  if  it  shall  appear  from  such  examination  that 
the  claim  ought  to  be  expunged  or  diminished,  the  referee 
may  order  accordingly. 

See  sees.  105,  131,  133,  140,  207  and  atif),  ante. 

As  to  re-exaniination  of  claims,  vi  re  Lount,  No.  8543,  Fed.  Cas., 
s.  c.  II  N.  B.  R.  315;  /n  re  Robinson,  No.  11938,  Fed.  Cas.,  s.  c.  8 
Ben.  406;  Canby  v.  McLear,  No.  2378,  Fed.  Cas.,  s.  c.  13  N.  B.  R.  22. 

XXII. 

Taking  of  Testimony. 

The  examination  of  witnesses  before  the  referee  may  be 
conducted  by  the  party  in  person  or  by  his  counsel  or 
attorney,  and  the  witnesses  shall  be  subject  to  examination 
and  cross  examination,  which  shall  be  had  in  conformity 
with  the  mode  now  adopted  in  courts  of  law.  A  deposi- 
tion taken  upon  an  examination  before  a  referee  shall  be 
taken  down  in  writing  by  him,  or  under  his  direction,  in 
the  form  of  narrative,  unless  he  determines  that  the  examina- 
tion shall  be  by  question  and  answer.  When  completed  it 
shall  be  read  over  to  the  witness  and  signed  by  him  in  the 
presence  of  the  referee.  The  referee  shall  note  upon  the 
deposition  any  question  objected  to,  with  his  decision 
thereon;  and  the  court  shall  have  power  to  deal  with  the 
costs  of  incompetent,  immaterial,  or  irrelevant  depositions, 
or  parts  of  them,  as  may  be  just. 

See  sees.  31,  34,  140  and  208,  ante. 

XXIII. 

Orders  of  Referee. 

In  all  orders  made  by  a  referee,  it  shall  be  recited,  accord- 
ing as  the  fact  may  be,  that  notice  was  given  and  the  man- 
ner thereof;  or  that  the  order  was  made  by  consent;  or  that 
no  adverse  interest  was  represented  at  the  hearing;  or  that 
the  order  was  made  after  hearing  adverse  interests. 

See  sec .  29,  ante. 


GENERAL    ORDERS    IN    BANKRUPTCY.  857 

XXIV. 

Transmission  of  Proved  Claims  to  Clerk. 

The  referee  shall  forthwith  transmit  to  the  clerk  a  list  of 
the  claims  proved  againt  an  estate,  with  the  names  and 
addresses  of  the  proving  creditors. 

XXV. 

Special  Meeting  of  Creditors. 

Whenever,  by  reason  of  a  vacancy  in  the  office  of  trus- 
tee, or  for  any  other  cause,  it  becomes  necessary  to  call  a 
special  meeting  of  the  creditors  in  order  to  carry  out  the 
purposes  of  the  act,  the  court  may  call  such  a  meeting, 
specifying  in  the  notice  the  purpose  for  which  it  is  called. 
See  8ec.  108,  ante. 

XXVI. 

Accounts  of  Referee. 

Every  referee  shall  keep  an  accurate  account  of  his  trav- 
elling and  incidental  expenses,  and  of  those  of  any  clerk  or 
other  officer  attending  him  in  the  performance  of  his  duties 
in  any  case  which  may  be  referred  to  him;  and  shall  make 
return  of  the  same  under  oath  to  the  judge,  with  proper 
vouchers  when  vouchers  can  be  procured,  on  the  first 
Tuesday  in  each  month. 

See  sec.  3fi,  ante. 

XXVII. 

Review  by  Judge. 

When  a  bankrupt,  creditor,  trustee,  or  other  person  shall 
desire  a  review  by  the  judge  of  any  order  made  by  the 
referee,  he  shall  file  with  the  referee  his  petition  therefor, 
setting  out  the  error  complained  of;  and  the  referee  shall 
forthwith  certify  to  the  judge  the  question  presented,  a 
summary  of  the  evidence  relating  thereto,  and  the  finding 
and  order  of  the  referee  thereon. 

See  HfT-s.  21*,  :}(),  3L''»,  34.  RL',  68,  W),  <»'_>,  105,  141  and  208,  antr. 


858;  LAW   AND    PROCEEDINGS    IN    BANKRUPTCY. 

XXVIII. 

KedtMiiptioii  of  Property  and  Coiiipouiidiiij?  of  Claims. 

Whenever  it  may  be  deemed  for  the  benefit  of  the  estate 
of  a  bankrupt  to  redeem  and  discharge  any  mortgage  or 
other  pledge,  or  deposit  or  Hen,  upon  any  property,  real  or 
personal,  or  to  relieve  said  property  from  any  conditional 
contract,  and  to  tender  performance  of  the  conditions 
thereof,  or  to  compound  and  settle  any  debts  or  other  claims 
due  or  belonging  to  the  estate  of  the  bankrupt,  the  trustee, 
or  the  bankrupt,  or  any  creditor  who  has  proved  his  debt,' 
may  file  his  petition  therefor;. and  thereupon  the  court  shall 
appoint  a  suitable  time  and  place  for  the  hearing  thereof, 
notice  of  which  shall  be  given  as  the  court  shall  direct,  so 
that  all  creditors  and  other  persons  interested  may  appear 
and  show  cause,  if  any  they  have,  why  an  order  should  not 
be  passed  by  the  court  upon  the  petition  authorizing  such 
act  on  the  part  of  the  trustee. 
See  sees.  253,  256  and  263,  ante. 

XXIX. 

Payment  of  Moneys  Deposited. 

No  moneys  deposited  as  required  by  the  act  shall  be 
drawn  from  the  depository  unless  by  check  or  warrant, 
signed  by  the  clerk  of  the  court,  or  by  a  trustee,  and  coun- 
tersigned by  the  judge  of  the  court,  or  by  a  referee  desig- 
nated for  that  purpose,  or  by  the  clerk  or  his  assistant 
under  an  order  made  by  the  judge,  stating  the  date,  the 
sum,  and  the  account  for  which  it  is  drawn;  and  an  entry  of 
the  substance  of  such  check  or  warrant,  with  the  date 
thereof,  the  sum  drawn  for,  and  the  account  for  which  it  is 
drawn,  shall  be  forthwith  made  in  a  book  kept  for  that 
purpose  by  the  trustee  or  his  clerk;  and  all  checks  and 
drafts  shall  be  entered  in  the  order  of  time  in  which  they 
are  drawn,  and  shall  be  numbered  in  the  case  of  each  estate. 
A  copy  of  this  general  order  shall  be  furnished  to  the 
depository,  and  also  the  name  of  any  referee  or  clerk 
authorized  to  countersign  said  checks. 

See  sec .  269,  ante . 


GENERAL    ORDERS    IN    BANKRUPTCY.  859 

XXX. 

Imprisoned  Debtor. 

If,  at  the  time  of  preferring  his  petition,  the  debtor  shall 
be  imprisoned,  the  court,  upon  application,  may  order  him 
to  be  produced  upon  habeas  corpus,  by  the  jailor  or  any 
officer  in  whose  custody  he  may  be,  before  the  referee,  for 
the  purpose  of  testifying  in  any  matter  relating  to  his  bank- 
ruptcy; and,  if  committed  after  the  filing  of  his  petition 
upon  process  in  any  civil  action  founded  upon  a  claim  prov- 
able in  bankruptcy,  the  court  may,  upon  like  application, 
discharge  him  from  such  imprisonment.  If  the  petitioner, 
during  the  pendency  of  the  proceedings  in  bankruptcy,  be 
arrested  or  imprisoned  upon  process  in  any  civil  action,  the 
district  court,  upon  his  application,  may  issue  a  v^^rit  of 
habeas  corpus  to  bring  him  before  the  court  to  ascertain 
whether  such  process  has  been  issued  for  the  collection  of 
any  claim  provable  in  bankruptcy,  and  if  so  provable  he 
shall  be  discharged;  if  not,  he  shall  be  remanded  to  the 
custody  in  which  he  may  lawfully  be.  Before  granting  the 
order  for  discharge  the  court  shall  cause  notice  to  be  served 
upon  the  creditor  or  his  attorney,  so  as  to  give  him  an 
opportunity  of  appearing  and  being  heard  before  the  grant- 
ing of  the  order. 

See  sees.  204,  218  and  226,  ante. 

The  statute  (Sec.  9)  provides  for  an  exemption  from  arrest  except 
upon  process  founded  upon  "  a  debt  or  claim  from  which  his  dis- 
charge would  not  be  a  release."  Many  debts  are  provable  which 
are  not  released.  The  statute  undoubtedly  controls.  See  Sec.  218, 
ante.  The  same  discrepancy  existed  between  the  statute  of  1867 
and  General  Order  2-],  promulgated  under  that  act.  In  repeated 
decisions  under  that  act  the  rule  was  laid  down  that  if  the  debt  was 
one  from  which  a  discharge  was  not  a  release,  the  bankrupt  could 
not  be  released  from  imprisonment  if  the  arrest  was  based  upon 
such  a  debt,  In  re  Robinson,  6  Blatch.  253,  s.  c.  36  How.  Pr.  176; 
In  re  Patterson,  2  Ben.  155,  s.  c.  No.  10817,  Fed.  Cas. ;  In  re  Boyst, 
2  B.  R.  171 ;  In  re  Kimball.  No.  7769,  Fed.  Cas.,  s.  c.  6  Blatch.  292; 
s.  c.  below.  No.  7768,  Fed.  Cas.,  s.  c.  2  Ben.  554 ;  In  re  Whitehouse, 
I  Lowell,  429,  s.  c.  No.  17564.  Fed.  Cas.;  In  re  Migel,  No.  9538, 
Fed.  Cas.,  2  B.  R.  481  ;  In  re  vSeymour.  Fed.  Cas.  No.  12684,  s-  c. 
I  Ben.  348;  In  re  Williams,  6  Bi.ss.,  233,  s.  c.  No.  17700,  Fed.  Cas. 


860  LAW    AND    PROCKKDINGS    IN    BANKRUPTCY. 

XXXI. 

Petition   for  Discharge. 

The  petition  of  a  bankrupt  for  a  discharge  shall  state 
concisely,  in  accordance  with  the  provisions  of  the  act  and 
the  orders  of  the  court,  the  proceedings  in  the  case  and 
the  acts  of  the  bankrupt. 

See  sec.  2'i'S,  <uitf. 

XXXII. 

Opposition  to  Discharge  or  Composition. 

A  creditor  opposing  the  application  of  a  bankrupt  for  his 
discharge,  or  for  the  confirmation  of  a  composition,  shall 
enter  his  appearance  in  opposition  thereto  on  the  day  when 
the  creditors  are  required  to  show  cause,  and  shall  file  a 
specification  in  writing  of  the  grounds  of  his  opposition 
within  ten  days  thereafter,  unless  the  time  shall  be  enlarged 
by  special  order  of  the  judge. 

See  sees.  247,  275,  276  and  277,  ante. 

Consult  m  re  Grefe,  No.  5794,  Fed.  Cas.,  s.  c.  2  N.  B.  R.  329  ;  In 
re  Baum,  No.  11 16,  Fed.  Cas.,  s.  c.  i  Ben.  274;  In  re  McVey,  No. 
8932,  Fed.  Cas.,  s.  c.  2  N.  B.  R.  257. 

XXXIII. 

Arbitration. 

Whenever  a  trustee  shall  make  application  to  the  court 
for  authority  to  submit  a  controversy  arising  in  the  settle- 
ment of  a  demand  against  a  bankrupt's  estate,  or  for  a 
debt  due  to  it,  to  the  determination  of  arbitrators,  or  for 
authority  to  compound  and  settle  such  controversy  by 
agreement  with  the  other  party,  the  application  shall 
clearly  and  distinctly  set  forth  the  subject-matter  of  the 
controversy,  and  the  reason  why  the  trustee  thinks  it 
proper  and  most  for  the  interest  of  the  estate  that  the 
controversy  should  be  settled  by  arbitration  or  otherwise. 

See  sees.  2.')3  and  ^ly\'^y  mdi' . 


GENERAL    ORDERS    IN    BANKRUPTCY.  861 

XXXIV. 

Costs  in  Contested  Adjudication. 

In  cases  of  involuntary  bankruptcy,  when  the  debtor 
resists  an  adjudication,  and  the  court,  after  hearing,  ad- 
judges the  debtor  a  bankrupt,  the  petitioning  creditor  shall 
recover,  and  be  paid  out  of  the  estate,  the  same  costs 
that  are  allowed  to  a  party  recovering  in  a  suit  in  equity^ 
and  if  the  petition  is  dismissed,  the  debtor  shall  recover 
like  costs  against  the  petitioner. 

XXXY. 

Compensation  of  Clerks,  Referees  and  Trustees. 

1.  The  fees  allowed  by  the  act  to  clerks  shall  be  in  full 
compensation  for  all  services  performed  by  them  in  regard 
to  filing  petitions  or  other  papers  required  by  the  act  to  be 
filed  with  them,  or  in  certifying  or  delivering  papers  or 
copies  of  records  to  referees  or  other  officers,  or  in  receiving 
or  paying  out  money;  but  shall  not  include  copies  furnished 
to  other  persons,  or  expenses  necessarily  incurred  in  pub- 
lishing or  mailing  notices  or  other  papers. 

2.  The  compensation  of  referees,  prescribed  by  the  act, 
shall  be  in  full  compensation  for  all  services  performed  by 
them  under  the  act,  or  under  these  general  orders;  but 
shall  not  include  expenses  necessarily  incurred  by  them  in 
publishing  or  mailing  notices,  in  travelling,  or  in  perpetuat- 
ing testimony,  or  other  expenses  necessarily  incurred  in  the 
performance  of  their  duties  under  the  act  and  allowed  by 

special  order  of  the  judge. 

3.  The  compensation  allowed  to  trustees  by  the  act 
shall  be  in  full  compensation  for  the  services  performed  by 
them;  but  shall  not  include  expenses  necessarily  incurred  in 
the  performance  of  their  duties  and  allowed  upon  the  set- 
tlement of  their  accounts. 

4.  In  any  case  in  which  the  fees  of  the  clerk,  referee  and 
tru.stee  are  not  required  by  the  act  to  be  paid  by  a  debtor 
before  filing  his  petition  to  be  adjudged  a  bankrupt,  the 
judge,  at  any  time  during  the  pendency  of   the  proceedings 


862  LAW   AND    PROCEEDINGS    IN    BANKRUPTCY, 

in  bankruptcy,  may  order  those  fees  to  be  paid  out  of  the 
estate;  or  may.  after  notice  to  the  bankrupt,  and  satis- 
factory proof  that  he  then  has  or  can  obtain  the  money 
with  which  to  pay  those  fees,  order  hini  to  pay  them  within 
a  time  spccitied,  and.  if  he  fails  to  do  so,  may  order  his 
petition  to  be  dismissed. 
See  sees.  38,  Hi  and  148,  ante. 

XXXVI. 

Appeals. 

1.  Appeals  from  a  court  of  bankruptcy  to  a  circuit  court 
of  appeals,  or  to  the  supreme  court  of  a  Territory,  shall  be 
allowed  by  a  judge  of  the  court  appealed  from  or  of  the 
court  appealed  to,  and  shall  be  regulated,  except  as  other- 
wise provided  in  the  act,  by  the  rules  governing  appeals  in 
equity  in  the  courts  of  the  United  States. 

2.  Appeals  under  the  act  to  the  Supreme  Court  of  the 
United  States  from  a  circuit  court  of  appeals,  or  from  the 
supreme  court  of  a  Territory,  or  from  the  supreme  court  of 
the  District  of  Columbia,  or  from  any  court  of  bankruptcy 
whatever,  shall  be  taken  within  thirty  days  after  the  judg- 
ment or  decree,  and  shall  be  allowed  by  a  judge  of  the 
court  appealed  from,  or  by  a  justice  of  the  Supreme  Court 
of  the  United  States. 

3.  In  every  case  in  which  either  party  is  entitled  by  the 
act  to  take  an  appeal  to  the  Supreme  Court  of  the  United 
States,  the  court  from  which  the  appeal  lies  shall,  at  or 
before  the  time  of  entering  its  judgment  or  decree,  make 
and  file  a  finding  of  the  facts,  and  its  conclusions  of  law 
thereon,  stated  separately;  and  the  record  transmitted  to 
the  Supreme  Court  of  the  United  States  on  such  an  appeal 
shall  consist  only  of  the  pleadings,  the  judgment  or  decree, 
the  finding  of   facts,   and  the  conclusions  of  law. 

See  Chapter  XXVII. 

XXXVII. 

General  Provisions. 

In  proceedings  in  equity,  instituted  for  the  purpose  of 


GENERAL  ORDERS  IN  BANKRUPTCY.        863 

carrying  into  effect  the  provisions  of  the  act,  or  for 
enforcing  the  rights  and  remedies  given  by  it,  the  rules  of 
equity  practice  estabhshed  by  the  Supeme  Court  of  the 
United  States  shall  be  followed  as  nearly  as  may  be.  In 
proceedings  at  law,  instituted  for  the  same  purpose,  the 
practice  and  procedure  in  cases  at  law  shall  be  followed  as 
nearly  as  may  be.  But  the  judge  may,  by  special  order  in 
any  case,  vary  the  time  allowed  for  return  of  process,  for 
appearance  and  pleading,  and  for  taking  testimony  and 
publication,  and  may  otherwise  modify  the  rules  for  the 
preparation  of  any  particular  case  so  as  to  faciliate  a  speedy 
hearing. 

XXXYIII. 

Forms. 

The  several  forms  annexed  to  these  general  orders  shall 
be  observed  and  used,  with  such  alterations  as  may  be 
necessary  to  suit  the  circumstances  of  any  particular  case. 

See  sees.  59,  60,  (i'.i  and  138,  ante. 

Consult  in  re  Sallee,  No.  12256,  Fed.  Cas.,  s.  c.  2  N.  B.  R.  228. 


PETITIONS,    SCHEDULES,    ETC.  865 


BANKRUPTCY. 


PETITIONS,  SCHEDULES  ADJUDICATION  AND 
ORDER   OF   REFERENCE. 

No.  1. 

Debtor's  Petition  (i). 

(Official  Form  No.  i.) 

To  the  Honorable  ,  J"dge  of  the  District  Court  of  the 

United  States,  for  the District  of : 

The  petition  of ,  of .  in  the  county  of ,  and 

district  and  state  of , [state  occupation'],  respectfully 

represents : 

That  he  has  had  his  principal  place  of  business  [or,  has  re- 
sided, or,  has  had  his  domicile]  for  the  greater  portion  of  six 
months  next  immediately  preceding-  the  filing  of  this  petition 

at ,  within  said  judicial  district ;  that  he  owes  debts  which 

he  is  unable  to  pay  in  full ;  that  he  is  willing  to  surrender  all 
his  property  for  the  benefit  of  his  creditors  except  such  as  is 
exempt  by  law,  and  desires  to  obtain  the  benefit  of  the  acts  of 
Congress  relating  to  bankruptcy. 

That  the  schedule  hereto  annexed,  marked  A,  and  verified 
by  your  petitioner's  oath,  contains  a  full  and  true  statement  of 
all  his  debts,  and  (so  far  as  it  is  possible  to  ascertain)  the 
names  and  places  of  residence  of  his  creditors,  and  such  further 
statements  concerning  said  debts  as  are  required  by  the  provi- 
sions of  said  acts : 

That  the  schedule  hereto  annexed,  marked  B,  and  verified  by 
your  petitioner's  oath,  contains  an  accurate  inventory  of  all  his 
property,  both  real  and  personal,  and  sucli  further  statements 
concerning  said  property  as  are  rec|uire(l  by  the  provisions  of 
said  acts : 


866  BANKRUPTCY. 

Wherefore  your  petitioner  prays  that  he  may  be  adjudged 
by  the  court  to  be  a  bankrupt  within  the  purview  of  said  acts. 

,  Attorney. 

United  States  of  America,  District  of ,  ss. 

I.  .  the  petitioning-  debtor  mentioned  and  described  in 

the  foregoing  petition,  do  hereby  make  solemn  oath  that  the 
statements  contained  therein  arc  true  according  to  the  best  of 

my  knowledge,  information  and  belief.  , 

Petitioner. 

Subscribed  and  sworn  to  before  me  this day  of , 

A.  D.  19—.   (2.) 

lOfficial  character.'] 

(i)  See  Gen.  Ords.  5  and  11.  B.  A.  1898,  Sec.  4.  As  to  who  may  be 
bankrupts  see  Loveland's  Bankruptcy,  sec.  42  et  seq. 

As  to  the  district  in  which  petition  should  be  filed,  see  in  re  Williams, 
99  Fed.  Rep.  544,  3  Am.  B.  R.  677 ;  m  re  Brice,  93  Fed.  Rep.  942,  2  Am. 

B.  R.  197;  in  re  Waxelbaum,  97  Fed.  Rep.  562,  3  Am.  B.  R.  267. 

As  to  the  form  of  petition,  see  Mahoney  vs.  Ward,  lOO  Fed.  Rep.  278, 
3  Am.   B.   R.  770. 

A  creditor  cannot  intervene  to  oppose  an  adjudication  under  an  or- 
dinary voluntary  petition  by  setting  up  that  the  petitioner  is  not  in- 
solvent.   In  re  Carleton,  8  Am.  B.  R.  270,  Fed.  Rep. 

(2)  Oaths  required  by  the  act,  except  upon  hearings  in  court,  may  be  ad- 
ministered by  referees  and  by  officers  authorized  to  administer  oaths  in  pro- 
ceedings before  the  courts  of  the  United  States,  or  under  the  laws  of  the 
state  where  the  same  are  to  be  taken.  Bankrupt  Act  of  1898,  ch.  4,  sec.  20. 
The  oath  should  be  made  by  the  petitioner  or  some  one  familiar 
with  the  facts.  In  re  Nelson,  98  Fed.  Rep.  76;  Leidigh  Carriage  Co.  vs. 
Stengel  (C.  C.  A.  6  Cir.)  95  Fed.  Rep.  637,  2  Am.  B.  R.  283;  in  re 
Chequasset  Bank,  7  Am.  B.  R.  87 ;  Green  River  Deposit  Bank  vs.  Craig 
Bros.,  6  Am.  B.  R.  381. 


PETITIONS,    SCHEDULES,    ETC. 


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PETITIOiVS,    SCHEDULES,    ETC. 


873 


Schedule  B.  (2) 
Personal  Property. 

N-  B. —  This  sheet  must  be  signed  by  the  debtor  at  the  end  of  the  statement. 


A.  Casli  on  hand, 

B.  Bills  of  exchange,  promissory  notes,  or  securities  of 

any  description    (each  to  be  set  out  separately). 

Promissory   note  of  B.   R.,   endorsed   by  X.   Z., 

C.  Stock   in   trade   in    my   business   of   dry  goods   mer- 

chant    at  — of  the  value, 

D.  Household    goods    and    furniture,    household    stores, 

wearing   apparel,    and    ornaments    of   the    person, 

viz.,  all  situated  at  No. St., , 

,  valued  at, 

E.  Books,  prints,  and  pictures,  viz.,  family  pictures  at 

No. —  St..  .  ,  valued  at, 

F.  Horses,  cows,  sheep,  and  other  animals    (with  num- 

ber of  each  ) .  viz., 

G.  Carriages,  and  other  vehicles,  viz., 

H.     Farming  stock,  and  implements  of  hu.sbandry,  viz.. 

I.  Shipping,  and  shares  in  vessels,  viz., 

K.  Machinery,  fixtures,  apparatus,  and  tools  used  in 
business,  with  the  place  where  each  is  situated, 
viz., 

L.     Patents,  copyrights,  and  trade-marks,  viz.. 

M.  Ooods  or  personal  property  of  any  other  descrip- 
tion, with  the  place  where  each  is  situated,  viz.. 

Total, 


None. 
None. 
None. 
None. 

None. 
None. 

None. 


A.  B., 
Petitioner. 


874 


BANKRUPTCY. 


N.  B. 


Schedule  B.   (3) 

Glioses  in  Action. 

This  sheet  must  be  signed  at  the  end  thereof  by   the  debtor. 


[. —  This  sheet  must  be  signed  at  the  end  thereot  by  tne  ( 
Debts  duo  petitioner  on  open  account,  as  follows: 
J    s.     $ 


J.  S 
L.  R. 
M.  P 


C. 


Stocks  in  incorporated  companies,  interest  in  joint 
stock  companies,  and  negotiable  bonds,  as  follows: 

shares  stock  of  Z.  ¥.  Co. 

The  above  are  held  as  collateral  security  by  

National    Bank    of    as    set    forth    in 

Schedule  A   (2). 

Policies  of  Insurance,  as  follows: 

No.  in  N.  Y.  L.  Co.  surrender  value. 

No.  in  X.  Y.  Z.  Co.  surrender  value. 

Unliquidated  Claims  of  every  nature,  with  their 
estimated  value,  as  follows: 

Deposits  of  money  in  banking  institutions  and  else- 
where, as  follows: 

Total, 

aTr 


Schedule  B.   (4) 

Property  in  reversion,  remainder,  or  expectancy,  including  proprty  held  in  trust  for 
the  debtor  or  subject  to  any  power  or  right  to  dispose  of  or  to  charge. 

jj,  B. —  A  particular  description  of  each  interest  must  be  entered.  If  all  or  any  of 
the  debtor's  property  has  been  conveyed  by  deed  of  assignment,  or  otherwise, 
for  the  benefit  of  creditors,  the  date  of  such  deed  should  be  stated,  the  name 
and  address  of  the  person  to  whom  the  property  was  conveyed,  the  amount 
realized  from  the  proceeds  thereof,  and  the  disposal  of  the  same,  as  far  as 
known  to  the  debtor.  This  sheet  must  be  signed  at  the  end  thereof  by  the 
debtor. 


GENERAL  INTEREST. 


Interest  in  land, 


Personal  property, 

Property  in  money, 
stocks,  shares,  bonds, 
annuities,  etc. 

Rights  and  powers, 
legacies  and  be 
quests. 


PARTICULAR    DESCRIPTION. 


A  beneficial  interest  under  will  of 
J.  B.  to  house  and  lot  on  V.  St. 

held  by  M.  Trust 

Co.   in  trust  for  C.  B.  for  life 

with  remainder  after  her  death 

to  A.  B.,  G.  B.  or  the  survivor. 


Total, 


SUPPOSED  VALUE 
OF  MY  INTEREST. 


None. 


None. 


None. 


PETITIONS,    SCHEDULES,    ETC. 


875 


PROPERTY   HERETOFORE  CONVEYED  FOR  BENEFIT    OF 
CREDITORS. 


What  portion  of  debtor's  property  has  been  conveyed  by 
deed  of  assignment,  or  otherwise,  for  benefit  of  credit- 
ors; date  of  such  deed,  name  and  address  of  party  to 
whom  conveyed;  amount  realized  therefrom,  and  dis- 
posal of  same,  so  far  as  known  to  debtor. 

What  sum  or  sums  have  been  paid  to  counsel,  and  to 
whom,  for  services  rendered  or  to  be  rendered  in  this 
bankruptcy. 

Total, 


amount  reaxized 

from  proceeds 

of    property 

convt:yed. 


None. 


A.  B. 


Schedule  B.   (5) 

A  particular  statement  of  the  property  claimed,  as  exempted  from  the  operation  of  the 

Acts   of    Congress    relating   to    Bankruptcy,   giving   each  item    of   property    and    its 

valuation;   anj,    if   any    portion    of  it   is   real   estate,   its  location,    description,    and 
present    use. 

N.   B. —  This  sheet  must  be  signed  by  the  debtor  at  the  end  of  the  statement. 

Military   uniforms,   arms,   and   equipments. 

Property  claimed  to  be  exempted  by  State  laws,  its  val- 
uation ;  whether  real  or  personal ;  its  description  and 
jirescnt  use;  and  reference  given  to  the  statute  of  the 
State  creating  the  exemption,  as  follows: 

All  household  furniture,  household  stores  and  wearing 
apparel  and  family  fixtures  claimed  by  me  as  a  mar- 
ried man,  the  head  and  support  of  a  family,  under 
section Revised  Statutes  of  . 


Total. 


A.  B. 


Schedule  B.   (6) 

Books,  Papers,   Deeds,   and  Writings  relating  to   Bankrupt's   Business  and  Estate. 

N.   B. —  This  sheet  must  be  signed  at  the  end  thereof  by  the  debtor. 

The  following  is  a  true  list  of  all  books,  papers,  deeds,  and  writings  relating  to  my 
trade,  business,  dealings,  estate,  and  effects,  or  any  part  thereof,  which,  at  the 
date  of  this  i)etition,  are  in  my  possession  or  under  my  custody  and  control 
or  which  are  in  the  possession  or  custody  of  any  person  in  trust  for  me, 
or  for  mv  use,  benefit,  or  advantage;  and  also  of  all  others  which  have 
been  heretofore,  at  any  time,  in  my  possession,  or  under  my  custody  or 
control,  and  which  are  now  held  by  the  parties  whose  names  are  hereinafter 
'   set   forth,   with   the   reason   for  their  custody  of  the   same. 

Books. 

Journal,  ledger,  cash  book,  and  bank  liook. 
Deeds. 

Deed  to  lots and subdivision. 

2  deeds  for  — —  acre  tract  N.  E.  Vi  sect.  T R . 

Papers^ None. 

A.  B.  " 


876 


BANKRIITTCY. 


OATH  TO  SCHEDULE  B. 

Unil<Hl  StJit^s  of  Atnoriea.  District  of  ,  ss. 

On   this  liny  of  .  A.  D.    18 — ,  before  me  personally  came  

.  the  person  nienlioni'd  in  and  who  »ul)Sfribe<l  to  the  forej^oing  sehedule, 

and  who.  beinp;  by  nie  lirst  duly  sworn,  did  declare  the  said  schedule  to  be 
a  stateiiient  of  all  his  estate,  lx>th  real  and  personal,  in  accordance  with 
the  act*  of  Congress  relating  to  bankruptcy. 

,  [Official  character.'^ 

(  \)    Loveland's  Bank.  sees.  (>0  and  81.     Gen.  Ord.  38;  Mahoney  vs.  Ward, 
100  Fed.  Rep.  278.  .S  Am.  li.  R.  770. 

Schedules  should  not  be  filed   with   judge  or  referee  but  with   the  clerk. 
Jn  re  Sykes,  lOU  Fed.  Rep.  (iOik 

Summary  of  Debts  and  Assets. 


[From  the 

statement  of  the  bankrupt  in  Schedules 

A  and 

B.] 

Schedule 

A.... 

« 

K.'.'.'. 
A.... 
A.... 

A.... 

B.... 
B.... 

« 

B.... 

B.... 
B.... 

I    (I) 

I    (2) 

I    (3) 
I    (4) 

2 

3 

4 

5 

I 
2-a 

2-b 
2-C 

2-d 
2-e 

2-f 
2-g 

2-h 
2-i 

2-k 
2-1 

2-m 
3-a 
3-b 
3-c 
3-d 
3-e 

4 

5 
6 

Taxes     and     debts     due     United 
States    

Taxes    due    .states,    counties,    dis- 
tricts, and  municipalities 

Wages    

Other  debts  preferred  by  law 

Secured    claims    

Schedule 

Unsecured   claims    

Schedule 
Schedule 

Notes   and    bills    which   ought   to 
be   paid  by  other  parties  thereto. 
Accommodation  paper  

Schedule   A,    total 

Schedule 
Schedule 

Cash   on   hand 

Bills,    promissory    notes,    and    se- 
curities     

" 

Stock  in  trade       

" 

Household  goods,  etc 

« 

« 

« 

Books,  prints,  and  pictures 

Horses,  cows,  and  other  animals.  . 

Carriages  and  other  vehicles 

Farming  stock  and  implements... 
Shipping  and  shares  in  vessels.  . . . 
Machinery   tools,  etc 

« 

Patents,     copyrights,    and     trade- 
marks     

II 

Other  personal  property 

Schedule 

Debts  due  on  open  accounts 

Stocks,  negotiable  bonds,  etc 

Policies  of  insurance 

" 

Unliquidated  claims  

" 

Deposits   of  money   in  banks  and 
elsewhere    

Schedule 

Property  in   reversion,   remainder, 
trust,  etc 

Schedule 
Schedule 

Property  claimed  to  be  excepted.. 

Books,  deeds,  and  papers 

Schedule  B,  total 

PETITIONS,    SCHEDULES,    ETC.  877 

No.  4. 
Partnership  Petition  (i). 

(Official  Form  No.  2.) 

To  the  Honorable  ,  Judge  of  the  District  Court  of  the 

United  States  for  the District  of : 

The  petition  of  respectfully  represents : 

That  your  petitioners  and have  been  partners  under  the 

firm  name  of ,  having  their  principal  place  of  business  at 

,  in  the  county  of ,  and  district  and  state  of ,  for 

the  greater  portion  of  the  six  months  next  immediately  preced- 
ing the  filing  of  this  petition ;  that  the  said  partners  owe  debts 
which  they  are  unable  to  pay  in  full ;  that  your  petitioners  are 
willing  to  surrender  all  their  property  for  the  benefit  of  their 
creditors,  except  such  as  is  exempt  by  law,  and  desire  to  ob- 
tain the  benefit  of  the  acts  of  Congress  relating  to  bank- 
ruptcy. 

That  the  schedule  hereto  annexed,  marked  A,  and  verified 

by oath,  contains  a  full  and  true  statement  of  all  the  debts 

of  said  partners,  and,  as  far  as  possible,  the  names  and  places 
of  residence  of  their  creditors,  and  such  further  statements  con- 
cerning said  debts  as  are  required  by  the  provisions  of  said 
acts. 

That  the  schedule  hereto  annexed,  marked  B,  verified  by 

oath,  contains  an  accurate  inventory  of  all  the  property, 

real  and  personal,  of  said  partners,  and  such  further  state- 
ments concerning  said  property  as  are  required  by  the  provi- 
sions of  said  acts. 

And  said  further  states  that  the  schedule  hereto  an- 
nexed, marked  C,  verified  by  his  oath,  contains  a  full  and  true 
statetfient  of  all  his  individual  debts,  and.  as  far  as  possible, 
the  names  and  places  of  residence  of  his  creditors,  and  such 
further  statements  concerning  said  debts  as  are  required  by  the 
provisions  of  said  acts;  and  "that  the  schedule  hereto  an- 
nexed, marked  D.  verified  by  his  oath,  contains  an  accurate  in- 
ventory of  all  his  individual  property,  real  and  i)ersonal,  and 


878  BANKRUPTCY. 

such   further  statements  concerning  said  property  as  are  re- 
quired by  the  provisions  of  said  acts. 

And  said  further  states  that  the  schedule  hereto  an- 
nexed, marked  E,  verified  by  his  oath,  contains  a  full  and  true 
statement  of  all  his  individual  debts,  and,  as  far  as  possible, 
the  names  and  places  of  residence  of  his  creditors,  and  such 
further  statements  concerning-  said  debts  as  are  required  by  the 
provisions  of  said  acts;  and  that  the  schedule  hereto  annexed, 
marked  F,  verified  by  his  oath,  contains  an  accurate  inventory 
of  all  his  individual  property,  real  and  personal,  and  such  fur- 
ther statements  concerning  said  property  as  are  required  by 
the  provisions  of  said  acts. 

And  said further  states  that  the  schedule  hereto  annex- 
ed, marked  G,  verified  by  his  oath,  contains  a  full  and  true 
statement  of  all  his  individual  debts,  and,  as  far  as  possible,  the 
names  and  places  of  residence  of  his  creditors,  and  such  further 
statements  concerning  said  debts  as  are  required  by  the  provi- 
sions of  said  acts;  and  that  the  schedule  hereto  annexed, 
marked  H,  verified  by  his  oath,  contains  an  accurate  inventory 
of  all  his  individual  property,  real  and  personal,  and  such  fur- 
ther statements  concerning  said  property  as  are  required  by  the 
provisions  of  said  acts. 

And  said further  states  that  the  schedule  hereto  annex- 
ed, marked  J,  verified  by  his  oath,  contains  a  full  and  true  state- 
ment of  all  his  individual  debts,  and,  as  far  as  possible,  the 
names  and  places  of  residence  of  his  creditors,  and  such  further 
statements  concerning  said  debts  as  are  required  by  the  provi- 
sions of  said  acts;  and  that  the  schedule  hereto  annexed, 
marked  K,  verified  by  his  oath,  contains  an  accurate  inventory 
of  all  his  individual  property,  real  and  personal,  and  such  fur- 
ther statements  concerning  said  property  as  are  required  by  the 
provisions  of  said  acts. 

Wherefore  your  petitioners  pray  that  the  said  firm  may  be 


PETITIONS,    SCHEDULES,   ETC.  ^  ^'^^ 

adjudged  by  a  decree  of  the  court  to  be  bankrupts  within  th^ 
purview  of  said  acts. 


Petitioners. 


,  Attorney. 
-,  the  petitioning  debtors  mentioned  and  described  in  the 


foregoing  petition,  do  hereby  make  solemn  oath  that  the  state- 
ments contained  therein  are  true,  according  to  the  best  of  their 
knowledge,  information  and  belief. 


Petitioners. 

Subscribed  and  sworn  to  before  me  this day  of 

A.  D.  19 — .  -  ' 

[Official  character.'] 


[Schedules   to   be   annexed   corresponding  with   schedules 
Nos.  II 14  and  1115.] 

(i)  See  Loveland's  Bank.  sec.  96  et  seq.  Gen.  Ords.  5  and  7.  The 
general  scheme  with  reference  to  the  settlement  of  the  estates  of  firms 
and  the  partners  is  founded  upon  and  its  provisions  are  merely  declar- 
atory of  recognized  equitable  principles  of  the  admnistration  of  in- 
solvent partners.  In  re  Meyer  (C.  C.  A.  2nd  Cir.)  98  Fed.  Rep.  976,  3 
Am.  B.   R.  559- 

Where  the  petition  is  by  an  individual  partner  the  co-partners  cannot 
come  in  voluntarily  and  make  themselves  parties  to  the  proceedings  for 
the  purpose  of  adjudging  the  firm  bankrupt.  Mahoney  vs.  Ward,  lOO 
Fed.  Rep.  278.  As  to  when  a  partnership  creditor  may  join  in  a  peti- 
tion against  one  of  the  partners  individually  sec  in  re  Mercur,  95  Fed. 
Rep.  634. 

It  has  been  held  that  a  discharge  upon  an  individual  petition  releases 
the  debtor  from  his  liability  for  individual  and  partnership  obligations. 
Jarecki  vs.  M'Elwaine,  107  Fed.  Rci).  249;  in  re  Meyers,  97  Fed.  Rep. 
757,  3  Am.  B.  R.  260.  The  safer  course  is,  however,  to  have  the  partner- 
ship and  himself  adjudicated  bankrupt  upon  a  petition  by  less  than  all 
of  the  partners.     In  re  Russell,  97  Fed.  Rep.  32,  3  Am.  B.  R.  91  I  «»  »•* 


880  BANKKL'l'TCY. 

Murray,  96  Fed.  Rep.  600.  3  Am.  B.  R.  601.  At  least  the  individual 
partner  should  give  notice  to  his  partners  of  the  proceedings  and  his 
desire  to  be  discliarged  from  partnership  debts;  in  re  Meyers,  96  Fed. 
Rep.  408,  S.  C.  97.  Fed.  Rep.  757  ;  in  re  Russell,  97  Fed.  Rep.  32,  3  Am. 
B.  R.  91  ;  JM  ;v  McFaun.  96  Fed.  Rep.  592 :  in  re  Elliott,  2  N.  B.  N.  350. 

A  partnership  has  been  adjudged  bankrupt  upon  a  petition  charging 
an  act  of  bankruptcy  by  one  or  more  but  less  than  all  of  the  partner.s 
where  such  act  was  within  the  scope  of  the  partnership  business  so  as 
to  constitute  in  fact  an  act  of  the  firm.  In  re  Meyer  (C.  C.  A.  2nd  Cir.) 
98  Fed.  Rep.  976,  3  Am.  B.  R.  559;  in  re  Grant,  106  Fed.  Rep.  4(^6;  in  re 
Duguid,  100  Fed.  Rep.  274,  3  Am.  B.  R.  794.  Where  a  partnership  has 
made  a  general  assignment  which  is  charged  as  an  act  of  bankruptcy 
it  should  be  adjudged  bankrupt  irrespective  of  its  solvency.  West  Co. 
vs.  Lea,  174  U.  S.  590. 

For  form  of  notice  when  service  is  made  by  publication,  see  in  re 
Murray,  96  Fed.  Rep.  600,  3  Am.  B.  R.  601. 

A  petition  by  or  against  a  partnership  is  one  proceeding  and  only  on« 
deposit  for  costs  need  be  made.  In  re  Gay,  98  Fed.  Rep.  870,  3  Am.  B. 
R.  529;  in  re  Langslow,  98  Fed.  Rep.  869.  In  some  districts,  however, 
separate  deposits  are  required  for  the  firm  and  each  individual  partnef. 
See  in  re  Barden,  loi  Fed.  Rep.  553,  4  Am.  B.  R.  31. 

A  partnership  may  be  adjudged  bankrupt  in  a  voluntary  or  involun- 
tary proceeding,  without  an  adjudication  against  any  or  some  of  thir 
partners  individually.  In  re  Meyer  (C.  C.  A.  2nd  Cir.)  98  Fed.  Rep.  976, 
3  Am.  B.  R.  559;  in  re  Stokes,  106  Fed.  Rep.  312;  in  re  Duguid,  100  Fed. 
Rep.  274,  3  Am.  B.  R.  794.  Partners  are  not  entitled  to  a  discharge  if 
they  are  not  adjudged  bankrupts.  Strause  vs.  Hooper,  105  Fed.  Rep.  590,  5 
Am.    B.    R.  225. 


No.  5. 

Creditors'  Petition. 

(Official  Form  No.  3.) 

To  the  Honorable .  Judge  of  the  District  Court  of  the 

United  States  for  the District  of : 

The  petition  of ,  of ,  and ,  of ,  and , 

of ,  respectfully  shows : 

That  ,   of  ,  has  for  the  greater  portion  of  six 

months  next  preceding  the  date  of  filing  this  petition,  had  his 
principal  place  of  business  \or,  resided,  or  had  his  domicile] 

at .  in  the  county  of .  and  state  and  district  aforesaid, 

and  owes  debts  to  the  amount  of  $1,000. 


PETITIONS.    SCHEDULES,    ETC.  881 

That  your  petitioners   are  creditors  of  said  ,   having 

provable  claims  amounting  in  the  aggregate,  in  excess  of 
securities  held  by  them,  to  the  sum  of  $500.  That  the  na- 
ture and  amount  of  your  petitioners'  claims  are  as  follows: 


And  your  petitioners  further  represent  that  said is  in- 
solvent, and  that  within  four  months  next  preceding  the  date 

of  this  petition  the  said committed  an  act  of  bankrui)t- 

cy,   in  that  he  did  heretofore,   to  wit,  on  the  day  of 


Wherefore  your  petitioners  pray  that  service  of  this  petition, 

with  a  subpoena,  may  be  made  upon ,  as  provided  in  the 

acts  of  Congress  relating  to  bankruptcy,  and  that  he  may  be  ad- 
judged by  the  court  to  be  a  bankrupt  within  the  purview  of  said 
acts. 


Petitioners. 

,  Attorney. 

United  States  of  America,  District  of ,  ss. 

, . ,  being  three  of  the  petitioners  above  named, 

do  hereby  make  solemn  oath  that  the  statements  contained  in 
the  foregoing  j)etition  subscribed  by  them  are  true. 

Before  me,  ,  this day  of  ,  189 — . 


[Official  character.] 
[Schedules  to  be  annexed   (filed  by  bankrui)t)  correspond- 
ing with  schedules  Nos.  11 14  and  1115.] 


(i)   Loveland's  Bank.,  sec.  66  et  seq.     Gen.  Ords.  5  and  7. 
The  wife  of  a  bankrupt  may  file  a  petition  again.st  her  husband  where 
there  are  less  than  twelve   creditors.     In  re   Novak.    loi    Ft-d.    Rep.   80a 


882  BANKRUrTCY. 

A  pcTSon  wlio  liolils  ail  unli(iniilat<.<l  claim  against  an  insolvent  debtor  is 
not  a  creditor  who  can  tile  a  petition,  hi  ;<•  Brinkmann,  103  Fed.  Rep. 
65,  4  Am.  B.  R.  551;  Beers  vs.  Hanlin,  9<;  Fed.  Rep.  695;  in  re  Morales, 
105  Fed.  Rep.  761.  A  person  who  has  not  surrendered  a  preference  cannot 
join  in  instituting  involuntary  proceedings.  In  re  Rogers  Milling  Co., 
102  Fed.  Rep.  687;  in  re  Gillette,  104  Fed.  Rep.  769,  5  Am.  B.  R.  119;  m 
re  Miller,  104  Fed.  Rep.  764,  5  Am.  B.  R.  140.  A  creditor  who  has  as- 
sented to  a  general  assignment  is  not  to  be  counted  in  determining  the 
number  of  creditors.  In  re  Miner,  104  Fed.  Rep.  520,  4  Am.  B.  R.  710. 
As  to  when  a  creditor  may  be  estopped  by  his  own  consent  to  file  a  pe- 
tition, see  Simonson  vs.  Sinsheimer  (C.  C.  A.  6th  Cir.)  95  Fed.  Rep. 
948;  in  re  Romanow,  92  Fed.  Rep.  510;  Leidigh  Carriage  Co.  vs.  Stengel 
(C.  C.  A.  6th  Cir.)  95  Fed.  Rep.  637;  in  re  Curtis  (C.  C.  A.  7th  Cir.) 
94  Fed.  Rep.  630,  2  Am.  B.  R.  226. 

In  what  court  the  involuntary  petition  should  be  filed,  see  Loveland's 
Bank.,  sec.  68;  in  re  Plotke  (C.  C.  A.  7th  Cir.)  104  Fed.  Rep.  964,  5 
Am.  B.  R.  171;  in  re  Filer,  5  Am.  B.  R.  332;  in  re  Dressel  vs.  North 
State  Lumber  Co.,  107  Fed.  Rep.  255. 

As  to  the  form  of  petition,  see  Mahoney  vs.  Ward,  100  Fed.  Rep.  278. 
See  also  criticism  of  Judge  Woolson,  i  N.  B,  N.  239;  in  re  Taylor  (C. 
C  A.  7th  Cir.)    102  Fed.  Rep.  729,  4  Am.  B.  R.  515. 

The  petition  must  be  in  duplicate.     See  in  re  Bellah,  8  Am.  B.  R.  323. 

The  petition  should  not  include  an  application  for  a  warrant  to  seize 
property.  In  re  Kelly,  91  Fed.  Rep.  504 ;  Mather  vs.  Coe,  92  Fed.  Rep. 
333 ;  in  re  Ogles,  93  Fed.  Rep.  426. 

The  petition  should  be  verified  by  the  petitioner  and  not  by  the  at- 
torney, unless  the  facts  stated  are  within  the  knowledge  of  the  attorney. 
In  re  Nelson,  98  Fed.  Rep.  76 ;  Green  River  Deposit  Bank  vs.  Craig  Bros., 
6  Am.  B.  R.  381  ;  in  re  Chequasset  Lumber  Co.,  7  Am.  B.  R.  87.  The  ob- 
jection that  a  petition  is  not  properly  verified  may  be  waived.  Leidigh 
Carriage  Co.  vs.  Stengel  (C.  C.  A.,  6th  Cir.),  95  Fed.  Rep.  637,  2  Am. 
B.  R.  383,  or  petition  may  be  amended  to  cover  same.  In  re  Bellah, 
8  Am.  B.  R.  310. 

The  act  of  February  5,  1903,  amending  the  Bankruptcy  Act,  as  to  who 
may  be  adjudged  involuntary  bankrupts,  provides  that  subdivision  h  of 
section  four  of  said  act  be,  and  the  same  is  hereby,  amended  so  as  to  read 
as  follows : 

"  h.  Any  natural  person,  except  a  wage-earner,  or  a  person  engaged 
chiefly  in  farming  or  the  tillage  of  the  soil,  any  unincorporated  company, 
and  any  corporation  engaged  principally  in  manufacturing,  trading,  print- 
ing, publishing,  mining  or  mercantile  pursuits,  owing  debts  to  the  amount 
of  one  thousand  dollars  or  over,  may  be  adjudged  an  involuntary  bank- 
rupt upon  default  or  an  impartial  trial,  and  shall  be  subject  to  the  provi- 
sions and  entitled  to  the  benefits  of  this  act.  Private  bankers,  but  not  na- 
tional l)anks  or  banks  incorporated  under  state  or  territorial  laws,  may  be 
adjudged  involuntary  bankrupts." 


PETITIONS,    SCHEDULES,    ETC.  383 

"  The  bankruptcy  of  a  corporation  shall  not  release  its  officers,  directors, 
or  stockholders,  as  such,  from  any  liability  under  the  laws  of  a  state  or  ter- 
ritory or  of  the  United  States." 


No.  6. 

Affidavit  by  Attorneys  to  Creditor's  Petition. 

United  States  of  /\merica.  Southern  District  of  New  York, 
City,  County  and  State  of  New  York,  ss. 

On  this  14th  day  of  November,  1901,  before  me  personally 
appeared  Charles  M.  Leslie  and  John  Ledyard  Lincoln,  who 
severally  made  solemn  oath  that  they  are  attorneys  and  coun- 
selors-at-law  of  the  Supreme  Court  of  the  state  of  Ohio  and  of 
the  District,  Circuit  and  Circuit  Court  of  Appeals  of  the  South- 
ern District  of  Ohio,  and  that  said  John  Ledyard  Lincoln  is  a 
counselor-at-law  admitted  tQ'  practice  in  the  Supreme  Court  of 
the  United  States,  and  that  they  are  the  attorneys  and  agents 
of  the  said  petitioners  in  all  matters  recited  in  and  relating-  to 
the  said  petition;  that  they  have  read  the  foregoing  petition 
and  know  the  contents  thereof,  and  that  the  facts  stated  therein 
are  true;  that  their  sources  of  information  and  the  grounds 
of  their  belief  are  among  other  things,  examination  of  the 
original  notes  recited  in  the  said  petition;  examination  of  the 
books  of  the  said  The  Chequasset  Lumber  Company  now  in 
the  possession  of  the  said  receiver,  Eugene  F.  Perry,  at  66 
Broadway,  in  the  city,  county  and  state  of  New  York;  state- 
ments made  to  them  by  the  officers  of  the  said  petitioning 
banks  and  by  the  said  receiver;  that  the  reason  this  affidavit 
is  made  by  the  said  Leslie  and  Lincoln  is  that  each  of  the  said 
petitioners  is  a  corporation  organized  under  the  laws  of  the 
United  States,  having  its  only  office  and  place  of  business  in 
Cincinnati,  Ohio,  more  than  100  miles  from  the  city  of  New 
York,  and  having  no  officer  within  this  judicial  district;  and 


884  BANKRUPTCY. 

that  tlicv  liave  full  antliority  ivoni  the  said  petitioning  banks 
aiul  have  been  autht)rizccl  by  them  to  make  tliis  affickavit. 

Charles  M.  Leslie. 
John  Ledyard  Lincoln. 

Sworn  to  before  me  this  14th  day  of  November,  1901. 

[Seal.]  John  A.  Valentine, 

Notary  Public,  Kings  Co. 

Certificate  filed  in  N.  Y.  County. 
United  States  of  America,  Southern  District  of  New  York, 
City.  County  and  State  of  New  York,  ss. 

On  this  14th  day  of  November,  1901.  before  me  personally 
appeared  Henry  Melville,  who  made  solemn  oath  that  he  is  an 
attorney-at-law  duly  admitted  to  practice  in  the  District.  Court 
of  the  United  States  for  the  Southern  District  of  New  York, 
and  the  attorney  of  record  of  the  foregoing-  petitioning  cred- 
itors; that  he  has  read  the  foregoing  petition  in  bankruptcy 
and  knows  the  contents  thereof,  and  that  the  facts  stated  there- 
in are  true;  that  the  sources  of  his  information  as  to  the  truth 
of  said  facts  are  the  statements  made  to  him  by  Charles  M. 
Leslie  and  John  Ledyard  Lincoln,  attorneys  and  counselors- 
at-law,  residing  in  the  city  of  Cincinnati  and  state  of  Ohio,  at- 
torneys and  general  counsel  for  the  said  petitioners;  that  the 
said  statements  have  been  made  under  oath,  as  appears  by  the 
foregoing  affidavits  and  otherwise ;  that  the  reason  this  veri- 
fication is  not  made  by  the  ^petitioners  is  that  each  of  tne  peti- 
tioners is  a  corporation  organized  under  the  laws  of  the  United 
States,  having  its  principal  and  only  place  of  business  in  Cin- 
cinnati, Ohios  more  than  one  hundred  miles  from  the  city  of 
New  York,  and  having  no  officer  within  this  judicial  district; 
and  that  the  deponent  has  been  duly  authorized  to  make  this 
verification.  Henry  Melville. 

Sworn  to  before  me  this  14th  day  of  November,  1901. 

[Seal.]  John  A.  Valentine, 

Notary  Public,  Kings  Co. 

Certificate  filed  in  N.  Y.  County. 


PETITIONS,    SCHEDULES,    ETC.  885 

(i)  This  affidavit  was  held  sufficient  in  re  Chequasset  Lumber  Co.,  7 
Am.  B.  R.  87. 

That  an  attorney  may  make  affidavit  when  familiar  with  the  facts,  see 
also  in  re  Nelson,  98  Fed.  Rep.  76;  Leidigh  Carriage  Co.  vs.  Stengel,  95 
Fed.  Rep.  637 ;  2  Am.  B.  R.  283 ;  Green  River  Deposit  Bank  vs.  Craig 
Bros.,  6  Am.   B.  R.  381. 


No.  7. 
Order  to  Show  Cause  upon  Creditors'  Petition, 

(Official  Form  No.  4.) 

In  the  District  Court  of  the  United  States 
For  the District  of . 


In  the  matter  of 


In  Bankruptcy. 


Upon  consideration  of  the  petition  of that be  de- 
clared a  bankrupt,  it  is  ordered  that  the  said  — ■ —  do  appear 

at  this  court,  as  a  court  of  bankruptcy,  to  be  holden  at , 

in  the  district  aforesaid,  on  the  day  of  ,  at  

o'clock  in  the  noon,  and  show  cause,  if  any  there  be, 

why  the  prayer  of  said  petition  should  not  be  granted;  and 

It  is  further  ordered  that  a  copy  of  said  petition,  together 

with  a  writ  of  subpoena,  b^  served  on  said ,  by  delivering 

the  same  to  him  personally  or  by  leaving  the  same  at  his  last 
usual  place  of  abode  in  said  district,  at  least  five  days  before 
the  day  aforesaid. 

Witness  the  honorable ,  judge  of  the  said  ooiirt,  and  the 

seal  thereof,  at ,  in  said  district,  on  the day  of , 

A.  D.  190 — .  , 

[Seal  of  the  court.']  Clerk. 


SS6  BANKRITPTCY. 

No.  8. 
Subpoena  to  Alleged  Bankrupt  (i). 

(Official  Form  No.  5.) 

United  States  of  America, District  of .    To ,  in 

said  district,  greeting: 

For  certain  causes  offered  before  tbe  District  Court  of  the 

United  States  of  America  within  and  for  the district  of 

,  as  a  court  of  bankruptcy,  we  command  and  strictly  en- 
join you,  laying  all  other  matters  aside  and  notwithstanding 
any  excuse,  that  you  personally  appear  before  our  said  Dis- 
trict Court  to  be  holden  at ,  in  said  district,  on  the 

day  of ,  A.  D.  190 — ,  to  answer  to  a  petition  filed 

by in  our  said  court,  praying  that  you  may  be  adjudged 

a  bankrupt ;  and  to  do  further  and  receive  that  which  our  said 
District  Court  shall  consider  in  this  behalf.  And  this  you  are 
in  no  wise  to  omit,  under  the  pains  and  penalties  of  what  may 
befall  thereon. 

Witness  the  honorable ,  judge  of  said  court,  and  the  seal 

thereof,  at ,  this  day  of ,  A.  D.  190 — . 


Clerk. 


[Seal  of  the  court.'] 


(i)   Seen  Gen.  Ord.  3 ;  R.  S.  sees.  911  and  912;  B.  A.  1898,  sec.  i8a. 

Loveland's  Bank.,  sees.  71-76.     Eq.  Rule  13. 

Sees.  18  a  and  b  of  the  Bankruptcy  Act  were  amended  by  the  act  of 
February  5,  1903,  to  read  as  follows : 

"a.  Upon  the  filing  of  a  petition  for  involuntary  bankruptcy,  service 
thereof,  with  a  writ  of  subpoena,  shall  be  made  upon  the  person  therein 
named  as  defendant  in  the  same  manner  that  service  of  such  process  is 
now  had  upon  the  commencement  of  a  suit  in  equity  in  the  courts  of  the 
United  States,  except  that  it  shall  be  returnable  within  fifteen  days,  unless 
the  judge  shall  for  cause  fix  a  longer  time;  but  in  case  personal  service 
cannot  be  made,  then  notice  shall  be  given  by  publication  in  the  same  man- 
ner and  for  the  same  time  as  provided  by  law  for  notice  by  publication  in 
suits  to  enforce  a  legal  or  equitable  lien  in  courts  of  the  United  States, 
except  that,  unless  the  judge  shall  otherwise  direct,  the  order  shall  be  pub- 
lished not  more  than  once  a  week  for  two  consecutive  weeks,  and  the 


PETITIONS,    SCHEDULES,    ETC.  887 

return  day  shall  be  ten  days  after  the  last  publication  unless  the  judge 
shall  for  cause  fix  a  longer  time." 

"  b.  The  bankrupt,  or  any  creditor,  may  appear  and  plead  to  the  petition 
within  five  days  after  the  return  day,  or  within  such  further  time  as  the 
court  may  allow." 

As  to  the  effect  of  a  voluntary  appearance,  see  in  re  Columbia  Real  Es- 
tate Co.,  loi  Fed.  Rep.  965. 

As  to  the  practice  in  bankruptcy  when  service  is  made  by  publication, 
see  in  re  Murray,  96  Fed.  Rep.  600,  3  Am.  B.  R.  301. 

As  to  effect  of  service  beyond  the  jurisdiction  of  the  court,  in  re  Ap- 
pel,  103  Fed.  Rep.  931,  2  N.  B.  N.  907. 


No.  9. 
Denial  of  Bankruptcy  (i). 
(Official  Form  No.  6.) 
In  the  District  Court  of  the  United  States 
For  the District  of . 


In  the  matter  of 


•  In  Bankruptcy. 


At ,  in  said  district,  on  the day  of ,  A.  D., 

190 — . 

And  now  the  said appears  and  denies  that  he  has  com- 
mitted the  act  of  bankruptcy  set  forth  in  said  petition,  or  that 
he  is  insolvent,  and  avers  that  he  should  not  be  declared  bank- 
rupt for  any  cause  in  said  petition  alleged :  and  this  he  prays 
may  be  inquired  of  by  the  court  [or,  he  demands  that  the 
same  may  be  inquired  of  by  a  jury]. 


Subscribed  and  sworn  to  before  me  this  day  of ,  A.  D. 

190—.  , 

[Official  character.'] 

(l)   B.  A.   1898,  sec.  19.     Loveland's  Bank.,  sec.  83. 

The  debtor  may  set  up  any  defense  which  tends  to  prevent  an  adjudi- 
cation, in  re  Paige,  99  Fed.  Rep.  538;  Mather  vs.  Coe,  92  Fed.  Rep.  333; 
in  re   Etheridge  Furniture   Co.,   92   Fed.   Rep.  329. 


8S8  BANKRUPTCY. 

No.  10. 

Order  for  Jury  Trial  (i), 

(Official  Form  No.  7.) 
In  the  District  Court  of  the  United  States 
For  the District  of . 


In  the  matter  of 


In  Bankruptcy. 


At  ,  in  said  district,  on  the  day  of  ,   19 — . 

Upon  the  demand  in  writing  filed  by ,  alleged  to  be  a 

bankrupt,  that  the  fact  of  the  commission  by  him  of  an  act  of 
bankruptcy,  and  the  fact  of  his  insolvency  may  be  inquired  of 
by  a  jury,  it  is  ordered  that  said  issue  be  submitted  to  a  jury. 


Clerk. 

[Seal  of  the  court.'] 

(i)  B.  A.  1898,  sec.  19.     Loveland's  Bank.,  sec.  87. 

Day.  t^j.  Beck  &  Gregg  Hardware  Co.,  8  Am.  B.  R.  175;  Mattoon  Nat. 
Bank,  102  Fed.  Rep.  728;  4  Am.  B.  R.  515;  Leidigh  Carriage  Co.  vs. 
Stengel,  95  Fed.  Rep.  637,  2  Am.  B.  R.  283 ;  in  re  Bauman,  96  Fed.  Rep. 
946,  3  Am.  B.  R.  196. 

A  bankruptcy  proceeding  is  in  equity,  and  does  not  fall  within  the 
seventh  amendment  to  the  Constitution,  governing  the  right  of  trial  by 
jury,  which  can  be  had  in  bankruptcy  only  under  the  provisions  of  sec. 
19  of  the  Bankruptcy  Act.  Elliott  vs.  Toeppner  (Sup.  Ct.),  9  Am.  B. 
R.  50.  In  re  Christensen.  loi  Fed.  Rep.  243,  4  Am.  B.  R.,  99;  the 
only  issues  to  be  submitted  as  of  right  to  a  jury  are  those  of  insolvency, 
and  the  fact  of  an  act  of  bankruptcy  in  involuntary  proceedings  as  pro- 
vided in  sec.  19.  Simonson  vs.  Sinsheimer,  3  Am.  B.  R.  824  (C.  C.  A., 
6th  Cir.),  100  Fed.  Rep.  426. 

As  to  the  right  to  a  trial  by  jury,  see  in  re  Rude,  4  Am.  B.  R.  319;  Day 
vs.  Hardware  Co.,  8  Am.  B.  R.  175. 


PETITIONS,    SCHEDULES,    ETC.  H89 

No.  11. 
Answer  to  Creditor's  Petition  (i). 

The  District  Court  of  the  United  States  for  the District 

of . 

In  the  matter  of  E.  F.  &  Co.,  F.  Brothers, 

and  N.  &  Co.,  Petitioners, 

vs. 
A.  B.  &  Company,  Respondents. 

Joint  plea  of  the  defendant,  A.  B.,  C.  B.  and  D.  B.,  part- 
ners under  the  firm  name  and  style  of  A.  B.  &  Company. 

The  defendants,  A.  B.,  C.  B.  and  D.  B.,  partners  under  the 
firm  name  and  style  of  A.  B.  &  Company,  by  protestation,  not 
confessing  nor  acknowledging  all  or  any  of  the  matters  or 
things  in  the  said  petition  of  said  petitioners  mentioned  and 
contained  to  be  true,  in  such  manner  and  form  as  the  same  are 
therein  set  forth  and  alleged,  for  plea  to  the  whole  of  said 
petition : 

These  defendants  say  that  said  petitioners  are  not,  nor  is 
either  of  them,  creditors  or  a  creditor  in  the  manner  or  form 
alleged  in  their  said  petition,  of  these  defendants  or  their 
said  firm,  and  that  the  alleged  demands  of  said  petitioners 
mentioned  and  referred  to  in  their  said  petition,  are  not  prov- 
able against  defendants  or  their  said  firm  as  in  petition  al- 
leged, nor  do  the  alleged  demands  of  said  petitioners  against 

defendants'  firm  amount  to  $ ,  and  that  the  petitioners, 

E.  F.  &  Company,  were  not  at  the  time  of  filing  said  petition 
herein,  entitled  to  demand  of  defendants'  firm  for  the  alleged 

sale  or  delivery  referred  to  in  petition,  the  sum  of  $ ,  nor 

any  other  sum  on  account  of  said  alleged  sale  or  delivery,  nor 

is  said  sum  of  $ ,  or  any  other  sum  for  the  alleged  sale 

and  delivery  of  said  goods,  due  to  said  petitioners,  E.  F.  & 
Company.  That  the  petitioners,  F.  Bros.,  had  no  such  de- 
mand as  set  forth  in  petition,  nor  had  the  demand  amounting 


'LppO  BANKRUPTCY. 

to  $ .  nor  was  that  sum,  or  any  other  sum,  due  from  de- 
fendants' firm  to  said  F.  Bros,  for  said  goods,  nor  for  the 
alleged  sale  or  delivery  referred  to  in  petition  by  F.  Bros,  to 
defendants'  firm.  That  the  petitioners,  N.  &  Company,  had 
no  such  demand  as  set  forth  in  said  petition  for  any  goods, 
wares  or  merchandise   sold  or  delivered,    amounting  in  the 

aggregate  to  $ ,  or  any  other  such  sum  due,  owing  or 

unpaid  for  any  such  sale  or  delivery  of  goods. 

These  defendants  further  say  that  heretofore,  to  wit,  sev- 
eral months  before  this  proceeding  was  instituted,  to  wit,  on 

,  an  action  in  equity  was  instituted  in  the  Circuit  Court 

for  the  county  of and  state  of ,  at ,  in  and  by 

which  the  defendant,  L.  C,  as  trustee,  was  plaintiff,  and  these 
defendants  and  all  creditors  of  these  defendants  and  their 
said  firm  were  defendants,  in  which  said  L.  C.  set  forth  the 
assignment  for  the  benefit  of  creditors,  and  sued  for  a  settle- 
ment of  his  trust  as  assignee  thereunder,  and  that  in  that  set- 
tlement suit  all  of  the  petitioners  in  this  proceeding,  long  be- 
fore the  institution  of  this  proceeding,  were  parties  defendant, 
and  entered  their  appearance  and  filed  their  claims  therein, 
and  have  ever  since  such  entry  of  their  appearance  been  at  all 
times  and  are  now  parties  to  said  settlement  suit  in  said  Cir- 
cuit Court  of  county,  ,  therein  suing  and  seeking 

in  the  state  court  to  recover  their  proportion,  as  creditors  of 
defendants'  firm,  of  the  assets  of  defendants'  firm  so  assigned, 
which  proportion  would  be  the  same  proportion  that  they 
would  obtain  if  said  estate  were  distributed  in  bankruptcy  in 
this  court ;  they  have  never  dismissed  their  proceeding  in  said 
court,  but  were,  at  the  time  of  the  institution  of  this  proceed- 
ing, and  still  are,  seeking  to  recover  in  said  action  their  pro- 
portionate share  of  the  proceeds  of  said  estate  as  creditors 
thereof,  and  that  before  the  service  of  process  or  any  notice  or 
information  of  this  proceeding  the  defendant,  L.  C,  as  assig- 
nee of  these  defendants,  under  orders  of  the Circuit  Court, 

which  had  jurisdiction  of  the  estate,  the  parties  and  the  action 


PETITIONS,    SCHEDULES,    ETC.  891 

at  that  time,  paid  into  court  into  the  hands  of  the  receiver 
of  the  court,  and  deposited  in  court  in  said  action,  all  of  the 
funds  in  his  hands,  to  wit,  all  of  the  proceeds  of  the  estate  of 
these  defendants  so  assigned  to  him  for  the  benefit  of  creditors, 
and  all  of  said  funds  have  been  ever  since  and  now  are  in 
said  court  in  said  action  in  the  actual  control  and  custody 
of  the  court  for  distribution  therein,  and  but  for  the  pro- 
ceedings in  this  court  would  be  ready  now  for  prompt  distri- 
bution among  the  creditors  in  the  same  proportion  and  in  the 
same  manner  that  they  would  be  distributed  here,  without  the 
extra  costs  of  the  proceedings  in  this  court,  and  these  de- 
fendants rely  on  and  plead  said  other  action,  suit  and  proceed- 
ing in  the  Circuit   Court  of  county,   in  the  state  of 

,  in  bar  and  estoppel  of  petitioners'  claim  herein,  and  as 

a  good  and  valid  defense  to  said  proceeding. 

These  defendants  further  state  that  before  the  institution 
of  this  proceeding,  there  was  an  agreement  and  composition 
offered  by  defendants'  said  firm  to  their  creditors,  including  the 
petitioners  in  this  proceeding,  at  the  rate  of  fifty  cents  on  the 
dollar,  which  proposition  was  offered  by  defendants  to  peti- 
tioners and  other  creditors  and  accepted  by  petitioners,  and 
almost  all  of  the  creditors  of  defendant,  and  that  as  between 
defendants'  firm  and  petitioners,  the  original  indebtedness  and 
obligation  was  by  said  agreement  of  composition  terminated, 
and  the  right  of  petitioners  against  said  defendants'  firm  is 
no  longer  upon  the  original  accounts,  sale  or  delivery  of  goods 
and  original  indebtedness,  but  upon  the  contract  or  composi- 
tion and  compromise  agreed  upon  between  defendants'  firm  and 
said  petitioners  and  other  creditors  of  defendants'  firm. 

These  defendants  further  say  that  this  proceeding  was  not 
instituted,  nor  has  it  ever  been  prosecuted  in  good  faith  on 
behalf  of  the  petitioners  or  any  of  them  for  the  relief  afforded 
by  the  National  Bankruptcy  Law  of  icSgS,  entitled  "An  Act 
to  establish  a  uniform  system  of  bankrujitcy  througliout  the 
United  States,"  but  was  instituted  for  sinister,  oppressive  and 


802  BANKRl'PTCY. 

vicious  purposes,  this  proceeding  being  part  of  a  plan  or 
scheme  beg-un  by  |>ctitiotiers  in  1898  for  the  avowed  purpose 
of  forcing-  defendants  and  their  said  tinn  to  pay  said  petition- 
ers more  than  other  parties  claiming  to  be  creditors  of  defend- 
ants' firm,  were  to  receive  any  more  than  the  assigned  estate 
could  pay. 

Tliese  defendants  further  state  that  in  December,  ,  the 

defendant,  L.  C,  as  assignee  of  defendants'  firm,  filed  said 

suit  in  the Circuit  Court  of  the  state  of ,  asking  as 

aforesaid,  a  settlement  of  his  accounts  and  distribution  of  tlie 
proceeds  of  the  assigned  estate  among  the  creditors  of  de- 
fendants' firm,   without  preference  as  provided  by  the  laws 

of  ,  that  the  petitioners  in  this  proceeding,  as  parties  to 

said  suit,  joined  therein  and  united  in  an  order  entered  in  that 

action,  referring  said  action  in  the Circuit  Court  to  the 

commissioner  of  said  court  as  a  Commissioner  in  Chancery 
to  make  a  settlement  of  the  accounts  to  said  L,  C,  as  assignee, 
and  a  distribution  among  the  creditors ;  that  excepting  a  few 
outstanding  accounts  of  little  or  no  value,  all  of  the  assets 
of  defendants'  said  firm  assigned  to  said  L,  C.  have  long  since 
been  converted  into  money  and  the  proceeds  paid  into  court  as 
hereinbefore  set  forth,  for  distribution;  that  said  court  is 
now,  and  has  been  for  some  time,  ready  to  distribute  said  fund 
ammong  the  creditors  in  the  same  proportion,  and  with  the 
same  respective  legal  rights  as  they  would  be  distributed  in 
this  court,  and  in  this  proceeding,  if  the  funds  should  be 
brought  into  this  court,  waiting  only  for  the  time  for  cred- 
itors to  present  their  claims  as  required  by  law,  to  pass,  which 

time  expired  .     That  the  proceedings  herein  were  taken 

and  the  petition  of  petitioners  herein  filed  long  after  said 
State  Court  had  taken  and  exercised  complete  jurisdiction 
and  control  of  the  defendants'  said  firm  and  their  said  estate 
assigned  to  said  L.  C,  and  of  the  said  assignment  and  all  of 
the  claims  of  all  of  the  creditors  of  defendants'  said  firm,  and 
of  all  the  estate  of  defendants'  said  firm,  and  had  all  of  the 


PETITIONS,    SCHEDLLES.    ETC.  893 

transactions,  property  and  parties  under  its  jurisdiction  and 
control,  and  of  all  of  the  proceeds  of  all  of  its  property  in 
its  possession,  and  was  ready  to  distribute  the  proceeds  and 
long  after  the  assignee  had  paid  the  said  proceeds  into  court 
in  that  proceeding,  where  the  same  now  remains,  and  that 
neither  these  defendants  nor  said  L.  C,  nor  either  of  them, 
has  or  has  ever  had  since  the  time  of  the  filing  of  petition 
of  petitioners  herein,  any  possession  or  control  of  said  es- 
tate, or  any  part  thereof,  or  of  the  proceeds  thereof,  all  of 
which  matters  and  things  these  defendants  do  aver  and  plead 
to  the  petitioners'  said  petition,  and  humbly  crave  whether 
they  shall  make  any  further  answer  to  the  said  petition. 

And  these  defendants  not  waiving  their  said  pleading,  but 
relying  thereon,  for  answer  to  the  said  bill  and  in  support 
of  said  plea  say  that  they  and  each  of  them  know  not  and  have 
not  been  informed  save  by  said  petitioners'  said  petition,  and 
cannot  set  forth  as  to  their  belief  or  otherwise;  that  the  pe- 
titioners were  partners  as  set  forth  in  petition,  and  they  deny 
that  the  demands  of  petitioners  set  forth  in  petition  were  or 
are  provable  against  defendants"  firm  in  accordance  with  the 
provisions  of  the  Act  referred  to  in  said  petition,  or  at  all ; 
deny  that  the  demands  of  petitioners  against  defendants'  firm 

exceeded  $ ,  or  any  other  sum  above  $ ,  and  deny 

that  petitioners,  or  either  of  tbem,  at  the  time  of  filing  the 
petition  in  this  proceeding,  had  any  such  claim  or  demand  as 
set  forth  in  petition,  or  any  other  claim  or  demand  except- 
ing a  claim  upon  the  contract  and  agreement  between  peti- 
tioners and  defendants'  firm,  to  compromise  at  fifty  cents  on 
the  dollar.  They  deny  that  the  defendant,  L.  C,  had  at  the 
time  of  the  filing  the  petition  herein,  or  has  now,  the  sum 

of  $ ,  or  any  other  sum,  realized  from  the  said  assigned 

estate  or  any  proceeds  of  the  said  assigned  estate. 

These  defendants,  for  further  answer  herein,  state  that 
they  are  advised  and  believed  that  neither  the  petitioners,  mir 
either  of  them,  nor  any  creditor  of  these  defendants,  desires 


S04  BANKRIPTCY. 

the  court  to  proceed  further  on  said  petition  in  involuntary 
bankruptcy;  that  no  creditor  has  apjiHed  to  the  court  for  an 
adjudication  in  bankruptcy;  that  the  matter  was  not  brought 
to  the  court's  attention  by  any  creditor,  but  was  brought  to 
the  court's  attention  without  the  intervention  or  desire  or 
suggestion  of  any  creditor  by  some  one  of  the  officers  of  the 
court,  and  not  for  the  benefit  of  any  creditor. 

These  defendants  deny  all  and  all  manner  of  unlawful  com- 
bination and  confederacy  wherewith  they  are  by  said  petition 
charged,  without  this,  that  there  is  any  other  matter,  cause  or 
thing  in  said  petition  contained,  material  or  necessary  for 
these  defendants  to  make  answer  unto  and  not  herein  or  hereby 
well  and  sufficiently  answered,  confessed,  traversed  and  avowed 
or  deny,  is  true  to  the  knowledge  or  belief  of  these  defendants, 
all  of  which  matters  and  things  these  defendants  are  ready  and 
willing  to  aver,  maintain  and  prove  as  this  honorable  court 
shall  direct,  and  humbly  pray  to  be  hence  dismissed  with 
their  reasonable  costs  and  charges  in  this  behalf  most  wrong- 
fully sustained.  Y.  &  Y., 

Attorneys  for  Defendants. 
State  of ,  County  of ,  ss. 

A.  B.,  makes  solemn  oath  and  says  he  is  the  above  named 
defendant ;  so  much  of  the  foregoing  answer  as  concerns  my 
own  acts  and  deeds  is  true  to  the  best  of  my  knowledge,  and 
so  much  thereof  as  concerns  the  acts  or  deeds  of  any  other 
person  or  persons  I  believe  to  be  true.  A.  B. 

Sworn  to  before  me  this day  of . 

[Seal.']  N.  R.,  Notary  Public, 

County, . 

(i)  See  note  to  No.  1121. 


PETITIONS,    SCHEDULES,    ETC.  895 

No.  12. 

Petition  of  Administrator  of  Deceased  Partner  Asking  Leave 
to  Settle  Partnership  Affairs  (i). 

District  Court  of  the  United  States, District  of . 

In  re  A.  B.  &  Co. 
To  the  Honorable  E.  S.,  Judge  of  the  District  Court  of  the 
United  States  for  the  District  of . 

The  petition  of  the  Memphis  Trust  Company,  adminis- 
trator of  A.  B.,  deceased.- 

Petitioner  respectfully  shows  that  it  was  appoliited  adminis- 
trator of  A.   B.,    deceased,    by  the   Probate   Court  of  

county,  ,  at  its  August  Term,  .     It  files  herewith 

certified  copies  of  its  letters  of  administration. 

It  shows  further  that  the  said  A.  B.  was  the  senior  member 
of  said  firm  of  A.  B.  &  Co.,  referred  to  in  the  original  petition 
herein.  It  shows  further  that  the  individual  assets,  real  and 
personal,  of  the  said  A.  B.,  deceased,  together  with  the  part- 
nership assets  of  the  said  firm  of  A.  B.  &  Co.  will,  as  it  verily 
believes,  be  more  than  sufficient  to  pay  all  of  the  individual 
debts  of  the  said  A.  B.,  and  the  firm  liabilities  of  A.  B.  & 
Co.  It  shows  further  that  before  the  petition  in  bankruptcy 
was  filed  herein  against  the  said  C.  B.  and  D.  B..  it  had  taken 

steps  in  the  Chancery  Court  of county,  ,  to  have  the 

partnership  property  and  assets  of  said  firm  of  A.  B.  &  Co., 
administered  by  said  Chancery  Court.    On  its  application  said 

Chancery  Court  of county, ,  appointed  a  receiver  for 

said  partnership  assets  on  the day  of ,  and  said  re- 
ceiver was  in  charge  of  said  assets  when  the  petition  in  bank- 
ruptcy was  filed  in  this  cause. 

Petitioner  now  ])resents  this  petition  to  tliis  honorable  court 
for  the  Durpose  of  showing  that  as  administrator  of  said  A.  B., 
deceased,  it  does  not  consent  if  said  C.  B.  and  D.  B.  are  ad- 
judged bankrupts,  that  partnership  property  shall  be  admin- 
istered in  l)ankruj)tcy. 


^96  BANKKll'TCY. 

Petitioner  shows  further  that  at  its  instance  and  on  its 
appHcation  said  partnership  husiness  is  now  being  settled 
tln-ough  said  receivership  mentioned  above  as  expeditiously  as 
its  nature  will  permit. 

Petitioner  now  asks  leave  to  file  this  petition  herein,  and 
thereby  set  up  its  right  to  settle  said  partnership  business  in 
the  manner  set  forth  above. 

Turley  &  Wright, 
Solicitors  for  Mem.  Trust  Co.,  Admr. 

(i)  Taken  from  the  record  in  Vaccaro  vs.  Security  Bank,  103  Fed. 
Rep.  436. 


No.  13. 
Order  Permitting  Creditor  to  Join  in  Creditor's  Petition. 

[C  apt  ion. 1 

Be  it  remembered  that  this  cause  came  on  for  hearing  on 

this  day  upon  the  petition  of  the  Security  Bank  of and 

other  creditors  of  the  said  A.  B.  &  Co.,  the  exhibits  to  said 

petition  and  the  proof,  etc.,  when  H.  W.,  a  citizen  of  , 

appeared  by  his  counsel,  and  represented  to  the  court  that  he  is 
a  creditor  of  said  A.  B.  &  Co.  (his  debt  being  evidenced  by 
the  promissory  note  of  said  firm  of  date  February  20th.  1897, 

and  due  December  20th,  1897,  and  for  the  sum  of  $ with 

interest  at  six  per  cent,  per  annum  from  date),  and  asked  that 
he  be  allowed  to  join  in  the  i>etition  filed  herein  for  involuntary 
bankruptcy,  and  the  court  doth  hereby  order  that  the  said  H. 
W.  be  and  he  is  hereby  allowed  to  become  a  party  of  this  pro- 
ceeding and  that  his  name  be  inserted  in  the  original  petition 

as  one  of  the  petitioning  creditors.     Done  this  day  of 

,  A.  D. . 


PETITIONS,    SCHEDULES,    ETC.  897 

No.  14. 
Special  Warrant  to  Marshal  (i). 
(Official  Form  No.  8.) 
In  the  District  Court  of  the  United  States 
For  the District  of . 


In  the  matter  of 


.In  Bankruptcy. 


To  the  Marshal  of  said  district  or  to  either  of  his  deputies, 
greeting : 

Whereas  a  petition  for  adjudication  of  bankruptcy  was,  on 

the day  of ,  A.  D.  19 — .  filed  against ,  of  the 

county  of and  state  of ,  in  said  district  and  said  peti- 
tion is  still  pending;  and  whereas  it  satisfactorily  appears  that 
said  has  committed  an  act  of  bankruptcy  [or,  has  neg- 
lected, or,  is  neglecting,  or,  is  about  to  so  neglect  his  property 
that  it  has  thereby  deteriorated,  or,  is  thereby  deteriorating,  or, 
is  about  thereby  to  deteriorate  in  value],  you  are  therefore  au- 
thorized and  required  to  seize  and  take  possession  of  all  the 

estate,  real  and  personal,  of  said  .  and  of  all  his  deeds, 

books  of  account  and  papers,  and  to  hold  and  keep  the  same 
safely  subject  to  the  further  order  of  the  court. 

Witness  the  honorable ,  judge  of  the  said  court  and  the 

seal  thereof,  at ,  in  said  district,  on  the of ,  A. 

D.  19—. 


Clerk. 
[Seal  of  the  court. 1 

RETURN    BY    MARSHAL   THEREON. 

By  virtue  of  the  within  warrant,  I  have  taken  possession  of 

the  estate  of  the  within-named  .  and  of  all  his  deeds, 

books  of  account  and  papers  which  have  come  to  my  knowledge. 


Marshal   \or,  Deputy  Marshal] 


898 


BANKRUPTCY. 
FEES    AND    EXPENSES. 


1 .  Service  of  warrant 

2.  Necessary  travel,  at  the  rate  of  six  cents  a  mile  each  way 


3.     Actual  expenses  in  custody  of  property  and  other  serv- 
ices,  as   follows 


[Here  state  the  particulars.] 


Marshal  [or,  Deputy  Marshal]. 

District  of ,  A.  D.  19 — . 

Personally  appeared  before  me  the  said ,  and  made  oath 

that  the  above  expenses  returned  by  him  have  been  actually  in- 
curred and  paid  by  him,  and  are  just  and  reasonable. 

> 
Referee  in  Bankruptcy. 

(i)   B.  A.  1898,  sec.  69  and  sec.  3^.     Loveland's  Bank.,  sec.  79. 

An  application  to  seize  property  should  not  be  joined  in  petition  for 
an  adjudication.  In  re  Kelly,  91  Fed.  Rep.  504;  Mather  vs.  Coe,  92  Fed. 
Rep.  333- 


No.  15. 

Bond  of  Petitioning  Creditor   (i). 

(Official  Form  No.  9.) 
Know  all  men  by  these  presents :     That  we,  ,  as  prin- 
cipal, and  ,  as  sureties,  are  held  and  firmly  bound  unto 

in  the  full  and  just  sum  of dollars,  to  be  paid  to 


tl^e  said  ,  executors,  administrators  or  assigns,  to  which 

payment,  well  and  truly  to  be  made,  we  bind  ourselves,  our 


PETITIONS,    SCHEDULES,    ETC.  899 

heirs,  executors  and  administrators,  jointly  and  severally  by 
these  presents. 

Signed  and  sealed  this day  of A.  D.  189 — . 

The  condition  of  this  obligation  is  such  that  whereas  a  peti- 
tion in  bankruptcy  has  been  filed  in  the  District  Court  of  the 

United  States  for  the District  of ,  against  the  said 

,  and  the  said  has  applied  to  that  court  for  a  war- 
rant to  the  marshal  of  said  district,  directing  him  to  seize  and 

hold  the  property  of  said subject  to  the  further  orders  of 

said  District  Court. 

Now  therefore  if  such  a  warrant  shall  issue  for  the  seizure 

of  said  property  and  if  the  said shall  indemnify  the  said 

for  such  damages  as  he  shall  sustain  in  the  event  such 

seizure  shall  prove  to  have  beeen  wrongfully  obtained,  then 
the  above  obligation  to  be  void;  otherwise  to  remain  in  full 
force  and  virtue. 

Sealed  and  delivered  in  presence  of  \_SeaI.'\ 

[Seal.^l 

[Seal.] 

Approved  this  day  of ,  A.  D.  190 — . 


District  Judge, 
(i)   B.  A.  1898,  sec.  se.     Loveland's  Bank.,  sec.  79. 


No.  16. 
Bond  to  Marshal   (i). 

(Official  Form  No.  10.) 

Know  all  men  by  these  presents:     That  we.  .  as  prin- 
cipal, and  ,  as  sureties,  are  held  and  firmly  bound  unto 

,  marshal  of  the  United  States  for  the  District  of 

,  in  the  full  and  just  sum  of  dollars,  to  be  paid  to 

the   said   .    his   executors,    administrators   or   assigns,   to 


•KX)  UANKRUPTCV. 

w  liich  payment,  well  and  truly  to  be  made,  we  bind  ourselves, 
our  heirs,  executors  and  administrators,  jointly  and  severally, 
by  these  presents. 

Signed  anil  sealed  this day  of ,  A.  D.  190 — . 

The  condition  of  tliis  obligation  is  such  that  whereas  a  peti- 
tion in  bankruptcy  has  been  filed  in  the  District  Court  of  the 

United  States  for  the District  of .  against  the  said 

,  and  the  said  court  has  issued  a  warrant  to  the  marshal 

of  the  United  States  for  said  district,  directing  him  to  seize  and 

hold  property  of  the  said ,  subject  to  the  further  order  of 

the  court,  and  the  said  property  has  been  seized  by  said  mar- 
shal as  directed,  and  the  said  District  Court,  upon  a  petition  of 
said ,  has  ordered  the  said  property  to  be  released  to  him. 

Now,  therefore,  if  the  said  property  shall  be  releasd  accord- 
ingly to  the  said  ,  and  the  said  ,  being  adjudged  a 

bankrupt,  shall  turn  over  said  property  or  pay  the  value  thereof 
in  money  to  the  trustee,  then  the  above  obligation  to  be  void ; 
otherwise  to  remain  in  full  force  and  virtue. 

Sealed  and  delivered  in  the  presence  of         [Seal.'] 

[Seal.] 

[Seal.] 


Approved  this day  of ,  A.  D.  19 — . 


District  Judge, 


(i)   B.  A.  1898,  sec.  69. 


No.  17. 

Petition  to  Enjoin  Bankrupt  or  His  Agent  from  Disposing  of 
Property  of  the  Estate. 

In  the  District  Court  of  the  United  States  for  the District 

of . 

In  the  matter  of  E.  B.,  bankrupt.     In  bankruptcy. 

Respectfully  represents  E.  M.,  trustee  of  the  bankrupt  herein, 
that  as  shown  by  the  testimony  in  this  case  the  said  bankrupt 


PETITIONS,    SCHEDULES.    ETC.  901 

pretends  that  the  $ ,  being  the  proceeds  of  the  sale  of  the 

stock  of  goods  and  the  mortgage  upon  the  real  estate  on  Third 

Street,  in ,  is  in  the  possession  of  his  son,  F.  B. ;  that  as 

shown  by  the  record  in  this  cause  an  order  was  entered  requir- 
ing the  said  F.  B.  to  appear  before  the  referee  herein  and  testify 
concerning  the  estate  herein,  and  that  said  order  has  been  re- 
turned "not  found,"  and  that  a  second  order  to  such  effect  for 
his  appearance  has  been  entered  and  the  same  is  now  in  the 
hands  of  the  officers  for  execution.  He  says  that  the  said 
F.  B.  so  conceals  his  whereabouts  that  it  is  impossible  for 
this  petitioner,  and,  as  he  is  informed,  for  the  marshal  of 
this  court  having  said  second  order  for  execution,  to  learn 
of  his  said  whereabouts;  that  petitioner  is  informed  that 
there  are  persons  offering  to  divulge  the  whereabouts  of 
the  said  F.  B.  so  that  said  order  can  be  executed,  upon  the 
payment  of  the  sum  of  $50.00, 

He  further  reports  that  as  shown  by  the  evidence  herein  the 
said  F.  B.  was  authorized  by  the  bankrupt  herein  to  receive  the 

said  fund  of  $ ,  and  that  while  said  bankrupt  pretends  that 

he  requested  the  payment  of  said  money  by  said  F.  B.  to  said 
bankrupt  he  has  made  no  effort  to  get  said  money  and  put  it 
into  the  hands  of  this  petitioner  either  as  receiver  of  this  court 
or  as  trustee,  and  that,  notwithstanding  that  said  bankrupt  fur- 
ther pretends  that  he  and  his  son  were  proposing  to  use  said 
money  to  settle  with  the  creditors  and  start  another  business 
elsewhere ;  and  petitioner  further  reports  that  notwithstanding 

the  said  F.  B.  was  present  in up  to  the  time  of  the  proceed- 

ing  in  bankruptcy  herein,  he  immediately  thereon  or  imme- 
diately thereafter  concealed  his  whereabouts  from  this  peti- 
tioner and  has  kept  them  so  concealed  since  that  time. 

Petitioner  further  refers  to  the  record  herein  as  to  the  order 

entered  herein  on  the day  of ,  A.  D. ,  directing 

the  said  F.  B.  to  pay  said  sum  of  money  to  this  petitioner  on  or 

before    the   day    of  ,    and    though    petitioner    says 

that  he  does  not  know  whether  said  money  is  in  the  hands  of 
said  E.  B.  or  under  his  control  or  in  the  hands  of  the  said  F.  B., 


902  BAXKRIPTCY. 

or  under  his  contn^l.  he  is  tearful  that  said  fund  will  be  dissi- 
pated, and  that  said  order  may  not  be  wholly  effectual  unless  an 
injunction  or  restraining-  order  be  entered  herein  enjoining  or 
restraining  the  said  F.  B.  from  disposing  of  any  part  of  said 
funds  and  further  ordering  him  to  pay  said  fund  into  the  hands 
of  this  petitioner.  Petitioner  says  that  from  the  evidence  in 
this  case  already  taken  it  appears,  and  petitioner  believes,  that 

the  said  sum  of  $ is  a  part  of  the  estate  and  property  of  the 

bankrupt  herein ;  that  the  same  did  not  come  into  the  hands  of 
the  said  F.  B.,  if  at  all.  as  a  common  or  simple  debtor,  and  that 
he  does  not  occupy  that  relation  to  this  estate,  but  that  said 
sum  is  a  fund  belonging  to  this  estate  and  should  be  in  the 
hands  of  this  petitioner. 

The  premises  considered,  he  prays  for  instruction  as  to  the 
said  matter  as  herein  set  up  concerning  the  payment  of  the  said 
sum  of  $50.00  as  an  aid  to  ascertain  the  whereabouts  of  the 
said  F.  B. ;  he  prays  for  an  order  enjoining  and  restraining  the 
said  F.  B.  from  disposing  of  the  said  money  or  any  part  thereof 
and  further  ordering  and  directing  him  to  pay  all,  or  so  much 
thereof  as  he  may  have  in  his  hands  into  the  hands  of  this  pe- 
titioner. 

X.  &  X., 
Attorneys  for  Trustee. 

E.  M.  says  that  he  is  trustee  of  the  estate  of  the  bankrupt 
herein,  and  that  the  statements  contained  in  the  foregoing  pe- 
tition are  true,  as  he  believes.  E.  M. 

Subscribed  and  sworn  to  before  me  by  E.  M.,  this day 

of  ,  A.  D.  .  W.  W.,  Notary  Public, 

Within  and  for  County  of 

State  of . 

(l)   Taken    from  the  record   in   Mueller  vs.    Nugent,    184   U.    S.   I. 


PETITIONS,    SCHEDULES,    ETC.  903 

No.  18. 

Motion  for  Injunction. 

In  the  District  Court  of  the  United  States, 
For  the District  of 

In  the  matter  of  A.  B.,  Bankrupt  No. in  bankruptcy. 

At ,  in  said  District,  on  the day  of  A.  D. 

190 — ,  District  of  ,  ss. 

R.  X,  Esq..  attorney  for  petitioning  creditors  [or  as  may 
be]  moves  the  court  for  a  writ  of  injunction  against  E.  F.,  G. 
H.  and  J  .K.  according  to  the  prayer  of  petition  filed  by  R.  S., 
E.  T.  and  G.  W.  in  this  matter.  R.  X. 

Attorney  for  [as  may  he.'\ 


No.  19. 
Temporary  Restraining  Order. 

[Caption.] 

And  now.  this day  of 190 — ,  on  motion  of  said 

attorney,  it  appearing  to  the  court  that  notice  of  this  motion 
has  been  duly  given  to  the  proper  parties,  viz.,  E.  F..  G.  H. 
and  J.  K.  and  that  there  is  danger  of  irreparable  injury  to  the 
creditors  of  the  said  debtor,  unless  the  act  sought  to  be  en- 
joined is  at  once  restrained,  it  is  ordered  that  the  above  motion 

be  heard  at  a  session  of  said  court,  to  be  held  at ,  on  the 

day  of A.  D.  190 — ,  at  10  a.  m.;  and  it  is  further 

ordered  that,  until  the  decision  of  this  court  \.\\Mn\  the  said  mo- 
tion, the  said  parties  against  whom  an  injunction  is  prayed  be 
restrained,  and  they  are  hereby  commanded,  under  such  pen- 
alties as  are  inflicted  by  the  laws  of  the  United  States,  to  ab- 
stain from  any  and  all  interference,  by  execution,  levy,  sale,  or 
in  any  other  manner  whatever,  with  the  property  or  estate  of 
the  above  named  debtor. 

(i)   B.  A.  1898,  sec.  2,  clause  15;  sec.  718,  R.  S. 


904  BANKRUPTCY. 

No.  20. 
Petition  to  Stay  Pending  Suit.i 

In  tho  Pistrict  Couvi  of  the  Vmatod  States 
For  tin District  of . 

In  re  A  11,  I 
Bankrui»t    \ 

Your  petitiinier.  A  ^I.  vospootfnlly  sliows  tlmt  A  B  was  duly 

adjudicated  a   l)aiikru|)t   herein  on  the  day  of  19 — 

upon   a    petition   tiled    the   (hiy   of  ,    19 — ,   and   your 

petitioner  A   ]\I   was  on   the  day   of  appointed   and 

duly  (lualified  as  trustee  of  the  estate  of  the  said  A  li  in  l)ank- 
ruptcy,  and  is  now  acting  as  the  said  trustee. 

That  amon<r  the  debts  scheduled  by  said  bankrupt  proceedinjis 

is  one  for dollars  ($ ),  due  C  D  and  that  such  debt 

is  of  such  a  nature  as  to  be  released  by  a  discharfje  in  bankruptcy. 

That  at  tin-  time  of  the  filing  of  the  petition,  on  which  said 

adjudication  was  made  a  suit  was  pendin<;  in  the  court  of 

entitled   C   D  vs.   A  B,  founded  upon  the  debt  aforesaid 

from  which  a  discharge  in  bankruptcy  would  be  a  release,  and 
that  the  suit  is  still  pending  therein,  and  that  if  such  suit  is  not 
stayed,  great  injury  will  be  done  your  petitioner  and  the  estate 
of  A  B  to  be  administered  in  bankruptcy  herein. 

Wherefore  your  petitioner  prays  tliat  further  proceedings  in 
said  suit  may  be  stayed  pnrsu^nt  to  the  bankruptcy  laws  of  the 
United  States  in  such  cases  made  and  provided,  and  that  an 
injunction  may  be  issued  out  of  this  Honorable  Court  directed 
to  the  said  C  D,  restraining  him,  his  agents,  servants,  attorneys 
and  counselors  from  further  prosecuting  said  suit  in  said  court 
and  for  such  other  and  further  relief  as  to  the  c(mrt  may  seem 
just.  A.  M., 

Trustee    Petitioner. 

State  of /  gg_ 

County  of \ 

I,  A  M,  the  petitioner  mentioned  in  the  foregoing  petition,  do 
hereby  make  solemn  oath  that  the  statements  of  fact  contained 
therein  an-  ti-ue  to  the  best  of  my  knowledge,  information  and 
belief.  ^-  M. 

Subscribed  and  sworn  to  before  me  this day  of 19 — . 

J.  N. 
Notary  Public  in  and  for  said  County  and  State. 

iTliis  petition  may  be  nsed  with  sliplit  chanpes  for  stay  prior  to  an 
adjudication,  Tlie  bankrupt  or  the  ])etitioninK  creditors  may  apply  lor  a 
Ktay  if  )io  trustee  has  been  appointed. 

See  also  Loveland's  Bank.,  sec.  22. 


PETITIONS,  SCHEDULKS,  EOT.  905 

No.  21. 
Injunction  to  Stay  Suit.   (1) 


The  United  States  of  Aiuericu,  ) 

District  of >  ss. 

Division  ] 


The  President  of  tlie  United  States  of  America,  to  R.  S.  and 
S.  T.,  greeting: 

Whereas,  a  petition  has  been  filed  on  the  bankruptcy  side  of 

the  District  Court  of  the  United  States  for Division  of  the 

District  of  ,  praying  for  an  injunction  to  restrain  the 

prosecution  of  a  certain  suit  pending  in  the  court  in  the 

county  of  state  of  in  which  you  are  plaintiffs  and 

A.  B.  bankrupt  is  defendant,  and  has  obtained  an  allowance 
for  an  injunction,  as  prayed  for  in  said  petition,  from  the 
District  Court  of  the  United  States  for  the  -District  of . 

Now,  therefore,  we,  having  regard  to  the  matters  in  said  peti- 
tion contained,  do  hereby  command  and  strictly  enjoin  you,  the 
said  R.  S.  and  S.  T..  or  either  of  you,  and  each  of  your  agents, 
servants,  attorneys  or  counsellors,  from  furtlier  prosecuting  said 
suit  in  said  court,  and  from  taking  any  further  steps  or  proceed- 
ing in  said  action  or  suit  now  pending,  as  aforesaid,  which  com- 
mands and  injunction  you  are  respectively  required  to  observe 

and  obey  until  twi^lve  months  after  the  day  of  ,  the 

date  the  said  A.  B.  was  adjudged  a  bankrupt,  or  if  within  that 
tiine  the  said  A.  P>.  applies  for  a  discharge,  then  until  the 
question  of  such  discharge  is  determined,  or  until  our  said  Dis- 
trict Court  shall  make  further  order  in  the  premises. 

Hereof  fail  not,  under  the  i)enalty  of  the  law  thence  ensuing. 

Witness,  the  Honorable  G.  R.,  District  Judge  of  the  United 

States  for  the District  of ,  this day  of A.  D., 

19 — ,  and  in  the  year  of  the  independence  of  the  Ignite.  1 

States  of  America. 

n.  K., 

Clerk  of  saitl  Court. 
[Seal.] 

(1)  Sco  I^ovfliirid's  Bank.,  we.  22. 


CfQQ  BANKRUPTCY. 

No.  22. 

Order    Denying   Preliminary   Injunction    Against    Execution 

Creditors. 

[Caption.] 

Ordered  that  the  application  of  the  trustee  for  a  preliminary 
injunction  against  the  E.  F.  Company  and  C.  &  D.,  re- 
straining them  from  proceeding  with  their  executions  against 

the  bankrupt's  wife,  be  denied  and  the  petition  filed  ,  in 

that  behalf  be  dismissed,  also  that  the  sheriff  be  directed  to  pay 
the  money  in  his  hands  to  the  plaintiffs  in  the  executions,  as  if 
the  proceedings  here  had  not  been  taken.  But  this  order  is 
without  prejudice  to  the  trustee  to  proceed  at  law  or  in  equity 
in  any  court  of  competent  jurisdiction  to  recover  the  money 
from  the  execution  creditors  aforesaid,  as  he  may  be  ad- 
vised. 

The  complainant  herein  will  pay  the  costs  of  this  cause,  for 
which  execution  is  hereby  awarded  against  him,  and  K.  D., 
surety  on  his  cost  bond  herein. 


No.  23. 
Petition  for  the  Appointment  of  a  Receiver. 

[Caption.] 

Respectfully  show,  American  Cutlery  Co.,  A.  M.,  engaged  in 
business  under  the  name  and  style  of  W.  &  Co.  H.  L.,  and  R. 

Foundry  Co..  that  heretofore,  to  wit,  on  the day  of , 

,  your  petitioners  filed  an  involuntary  petition  in  bankrupt- 


cy against  the  A.  B.  Co.,  to  which  petition  reference  is  here 
made  for  the  specific  allegations  thereof.  That  the  estate  of 
said  The  A.  B.  Co.,  consisting  of  goods,  wares  and  merchan- 
dise, accounts,  etc.,  have  been  set  over,  transferred  and  deliv- 
ered to  the  assignee,  C.  W.,  with  general  authority  to  sell  and 
dispose  of  the  same,  and  that  furthermore  certain  creditors  of 


PETITIONS,    SCHEDULES,    ETC.  907 

said  company  are  seeking  the  appointment  of  a  receiver  to  take 
charge  of  said  property,   under  the  orders  of  the  Chancery 

Court  of County, ;  that  said  property  is  in  danger  of 

being  disposed  of  in  some  way  not  to  the  best  advantage  of 
your  petitioners,  and  that  large  costs  are  being  incurred,  which 
are  unnecessary  and  improi^er,  and  that  therefore  there  may  be 
considerable  loss  to  the  estate. 

Wherefore,  your  petitioners  pray  that  a  temporary  receiver 
to  take  charge  of  said  estate,  until  a  trustee  can  be  elected,  be 
at  once  appointed  by  your  honor,  and  be  empowered  to  take 
charge  of  and  impound  all  of  the  property  of  said  The  A.  B. 
Co.  and  hold  the  same  subject  to  the  further  orders  of  this 
court. 

American   Cutlery   Co., 

W.  &  Co., 

H.  L., 

R.  Fdy.  Co., 

By  R.  X., 
Their  Attorney. 


No.  24. 
Order  Refusing  to  Appoint  a  Receiver. 

[Caption.] 

And   on   the   day   of  ,    came   the    parties,    by 

their  attorneys.  The  court  being  now  fully  advised  of  the  pe- 
titioners' motion  for  the  appointment  of  a  receiver  herein,  it 
is  therefore  considered  by  the  court  that  the  said  motion  be.  and 
the  same  is  hereby,  overruled. 


908  BANKRUPTCY. 

No.  25. 
Order  Appointing  a  Receiver  in  Bankruptcy  (i). 

The  District  Court  of  the  United  States,   )    ^    . 

„.      .        ^  C    In  bankruptcy. 
District  of .                               )  '     ^ 


In  the  matter  of  the  petition  of  A.  B.  &  Company  and  others 
to  have  The  F,  Company  declared  bankrupt. 

This  cause  coming  on  to  be  heard  upon  the  petition  of  A.  B. 
&  Company  a  creditor,  to  have  a  receiver  appointed  for  said 
alleged  bankrupt  The  F.  Company,  and  due  notice  having 
been  served  of  this  application,  and  it  appearing  to  the  court 
that  it  is  absolutely  necessary  for  the  preservation  of  the  es- 
tate of  said  alleged  bankrupt  that  a  receiver  be  forthwith  ap- 
pointed, to  take  charge  of,  hold,  manage  and  conduct  the  es- 
tate, property  and  assets  of  said  alleged  bankrupt ; 

It  is  therefore  ordered,  adjudged  and  decreed  that  W.  R.  be 
and  he  is  hereby  appointed  receiver  of  all  the  assets  and  prop- 
erty of  every  kind  and  character  of  and  belonging  to  the  said 
F.  Company,  and  said  receiver  is  hereby  clothed  with  all  the 
power  and  authority  of  receivers  in  bankruptcy  in  like  cases. 

It  is  further  ordered  that  said  receiver  within  three  days 
from  this  date,  file  a  bond  as  such  receiver,  in  the  usual  form, 

in  the  penal  sum  of  $ with  surety  to  be  approved  by  the 

clerk  of  this  court. 

It  is  further  ordered  that  said  receiver  continue  and  con- 
duct the  business  of  said  alleged  bankrupt  until  the  fufther  or- ' 
der  of  this  court,  and  said  receiver  is  hereby  authorized  and 
directed  to  employ  any  and  all  necessary  help,  including  coun- 
sel, in  the  administration  of  his  trust,  therefore  personally  came 
the  said  W.  R.  and  qualified  as  such  receiver. 

(i)  The  authority  for  the  appointment  of  receivers  in  bankruptcy  is 
purely  statutory.  For  the  powers  of  a  receiver,  see  Booneville  Nat. 
Bank  vs.  Blakey,  107  Fed.  Rep.  891,  6  Am.  B.  R.  13.  He  may  be  author- 
ized  to   conduct   the   bankrupt's    business    for   a    limited    period.      Bank- 


PETITIONS,    SCHEDULES,    ETC.  909 

ruptcy  Act  1898,  sec.  21.  clause  5.  A  receiver  should  be  appointed  by  the 
judge,  but  in  his  absence  the  referee  may  make  the  appointment.  In  re 
Kelly  Dry  Goods  Co.,  102  Fed.  Rep.  747,  4  Am.  B.  R.  528;  in  re  Florcken, 
107  Fed.   Rep.  241. 

Sec.  2,  clause  5,  of  the  Bankruptcy  Act  was  amended  by  the  Act  of  Feb- 
ruary 5,   1903,  to  read  as  follows: 

"(5)  Authorize  the  business  of  bankrupts  to  be  conducted  for  limited 
periods  by  receivers,  the  marshals,  or  trustees,  if  necessary  in  the  best 
interests  of  the  estates,  and  allow  such  officers  additional  compensation 
for  such  services,  but  not  at  a  greater  rate  than  in  this  act  allowed 
trustees  for  similar  services." 


No.  26. 
Order  to  Put  Receiver  in  Possession. 

[Caption.^ 

It  appearing  to  the  referee  from  the  petition  of  J.  M.,  re- 
ceiver,  filed   herein  on  the  day  of  ,   that  he,  the 

said  J.  M.,  as  receiver,  acting  under  an  order  of  this  referee, 

acting  in  the  absence  of  the  judge  of  this  court  from  the 

Division  of  the District  of ,  lawfully  proceeded  to 

take  charge  of  all  of  the  properties  of  the  defendant.  A.  B.  Co., 
in  the  possession  of  C.  W.,  assignee,  under  authority  and  power 
contained  in  said  order  of  appointment,  and  it  further  appear- 
ing to  the  referee  that  the  said  C.  W.  has  refused  to  surrender 
the  possession  thereof  to  the  said  J.  M.,  receiver,  who  is  an  of- 
ficer of  this  court  under  appointment  of  date  — —,  and  that 
the  said  C.  \V.  has  openly,  defiantly  and  in  disobedience  of  an 
order  of  this  court  refused  to  set  over  and  surrender  to  the  said 
J.  M.  the  moneys  and  other  properties  belonging  to  the  defend- 
ant company  and  in  his  possession,  and  unlawfully  withholds 
the  same  from  the  said  receiver,  it  is,  therefore,  ordered  that 

the  marshal  of  the  United  States  for  the Division  of  the 

District  of ,  i)roceed  at  once  to  take  charge  of  and 

seize  all  of  tlie  proj)crtics  of  the  defendant.  The  A.  B.  Co.,  of 
whatsoever  kind  and  description  in  the  possession  of  C.  W.,  as- 
signee, or  his  agents,  or  the  agents  or  employes  of  the  said  A. 


910  BANKRUPTCY. 

B.  Company,  and  put  the  said  j.  M.,  receiver,  in  lawful  and 
peaceable  iK)ssession  thereof,  and  the  said  marshal  will  carry 
into  effect  this  order  and  report  his  action  to  this  referee.    This 

day  of . 

R.   D. 
Referee  in  Bankruptcy. 


No.  27. 
Marshal's  Return  on  Above  Order. 

United  States  of  America, 

District  of .  ss. 

Came  to  hand  this  the day  of  ,  and  executed 

as  therein  commanded,  by  making  known  the  contents  of  said 
writ,  and  receiving  from  the  said  C.  W.,  assignee,  the  front 
door  keys  of  the  four  story  brick  building.  No.  401  Main  St., 
and  all  contents  therein  of  this  date.  Also  front  door  keys  to 
the  four  story  brick  building,  No.  257  Main  St.,  and  all  con- 
tents of  said  building  of  this  date,  and  all  keys  and  combina- 
tions to  one  large  iron  safe  in  building  No.  401  Main  St., . 

Also  three  checks  amounting  to  sixteen  and  40-100  dollars  and 
cash  $9.06  fnine  and  06-iooj  for  which  I  gave  the  said  C.  W 
a  receipt,  and  for  which  a  receipt  was  taken  from  the  said  J 
M.,  receiver.    Formal  demand  was  also  made  upon  the  said  C 
W.,  assignee,  for  any  and  all  cash  belonging  to  the  said  A.  B 

Co.  in  his  possession  as  assignee  in  any  of  the  banks  of 

which  demand  was  refused  by  the  said  C.  W. 

V.  F. 
United  States  Marshal. 


PETITIONS,    SCHEDULES,    ETC.  911 

No.  28. 
Adjudication  that  Debtor  is  not  Bankrupt  (i). 

(Official  Form  No.  ii.) 

In  the  District  Court  of  the  United  States 
For  the District  of . 


In  the  matter  of 


In  Bankruptcy. 


At ,  in  said  district,  on day  of ,  A.  D.  19 — , 

before  the  honorable ,  judge  of  the District  of . 

This  cause  came  on  to  be  heard  at ,  in  said  court,  upon 

the  petition  of that be  adjudged  a  bankrupt  with- 
in the  true  intent  and  meaning  of  the  acts  of  Congress  relating 
to  bankruptcy,  and  [here  state  the  proceedings,  whether  there 
was  no  opposition,  or,  if  opposed,  state  what  proceedings  were 
hadi . 

And  thereupon,  and  upon  consideration  of  the  proofs  in 
said  cause  [and  the  arguments  of  counsel  thereon,  if  anyl,  it 
was  found  that  the  facts  set  forth  in  said  petition  were  not 

proved ;  and  it  is  therefore  adjudged  that  said was  not  a 

bankrupt,  and  that  said  petition  be  dismissed  with  costs. 

Witness  the  honorable .  jt^lge  of  said  court,  and  the  seal 

thereof,  at ,  in  said  district,  on  the day  of ,  A. 

D.  19—.  , 

Clerk. 
[Seal  of  the  court. 1 

(i)   B.  A.   1898,  sec.   i8d  and   e.     Loveland's   Bank.,  sec.  88. 

An  order  of  adjudication  should  not  be  made  until  the  expiration  of 
the  time  for  creditors  to  intervene  and  oppose  the  petition,  although 
the  bankrupt  appears  and  files  a  written  admission  of  the  acts  of  bank- 
ruptcy and  waives  service.  In  re  Humbert  Co.,  100  Fed.  Rep.  439;  in 
re  Columbia  Real  Estate  Co.,  loi  Fed.  Rep.  965.  Day  vs.  Beck  &  Gregg 
Hardware  Co.,  8  Am.  B.  R.  175. 


912  BANKRUPTCY. 

No.  29. 

Adjudication  of  Bankruptcy  (i). 

(Official  Form  No.  12.) 

In  the  District  Court  of  the  United  States 
For  the District  of . 


In  the  matter  of 


Bankrupt . 


In  Bankruptcy. 


At  ,  in  said  district,  on  the  day  of ,  A.  D. 

19 — .  before  the  honorable .  judge  of  said  court  in  bank- 
ruptcy, the  petition  of that be  adjudged  a  bankrupt, 

within  the  true  intent  and  meaning  of  the  acts  of  Congress  re- 
lating to  bankruptcy,  having  been  heard  and  duly  considered, 
the  said  is  hereby  declared  and  adjudged  bankrupt  ac- 
cordingly. 

Witness  the  honorable ,  judge  of  said  court,  and  the  seal 

thereof,  at  in  said  district,  on  the day  of ,  A. 

D.  19—.  . 

Clerk. 
ISral  of  the  court.l 

(i)   B.  A.   1898,  sec.  iSd  and  c.     Loveland's  Bank.,  sec.  88. 

An  order  of  adjudication  should  not  be  made  until  the  expiration  of 
the  time  for  creditors  to  intervene  and  oppose  the  petition,  although 
the  bankrupt  appears  and  files  a  written  admission  of  the  acts  of  bank- 
ruptcy and  waives  service.  lu  re  Humbert  Co.,  lOO  Fed.  Rep.  439;  in 
re  Columbia  Real  Estate  Co..  loi  Fed.  R(fp.  965.  Day  vs.  Beck  &  and 
Gregg  Hardware  Co.,  8  Am.  B.  R.  175. 

A  secured  or  general  creditor  or  a  person  who  is  not  interested  in 
an  adjudication  will  not  be  entitled  to  make  a  motion  to  set  it  aside. 
In  re  Columbia  Real  Estate  Co.,   lOi  Fed.  Rep.  965. 


PPITITIONS,  SCHKDIILKS,   ETO.  913 

No.   30. 
Order  of  Adjudication  and  Desi^atingf  Newspaper.^ 

In  the  District  Court  of  the  United  States 

District  of 

In  the  matter  of  A.  B..  bankrupt.  ]  t     -d     i 

^      I  In  Bankruptcy. 

At ,  in  said  district,  on  the day  of ,  190 — ,  be- 
fore the  said  Court  in  Bankruptcy,  the  petition  of  A.  B.  that 
he  be  adjudged  bankrupt  within  the  true  intent  and  meaning 
of  the  acts  of  Congress  relating  to  bankruptcy,  having  been 
heard  and  duly  considered,  the  said  A.  B.  is  hereby  declared 
and  adjudged  bankrupt  accordingly. 

It  is  further  ordered  that  all  notices  required  to  be  published 
in  the  above  entitled  matter,  and  all  orders  which  the  court 

may  direct  to  be  published,  be  inserted  in  a  newspaper 

published  in  the County  of ,  State  of .  within 

the  territorial  district  of  this  court,  and  in  the  County  within 
which  said  bankrupt  resides. 

Dated, 

District  Judge. 

(i)  The  above  form  is  used  in  some  districts.  In  others  a  general 
designation  of  newspapers  for  each  county  is  made  which  by  its  terms  is 
applicable  to  all  subsequent  cases. 


914  BANKRUPTCY. 

No.  31. 
Order  of  Reference  (i). 

(Official  Form  No.  14.) 

In  the  District  Court  of  the  United  States 
For  the District  of . 


In  the  matter  of 


Bankrupt. 


'In  Bankruptcy. 


Whereas, ,  of ,  in  the  county  of ,  and  district 

aforesaid,  on  the day  of ,  A.  D.  19.  .,  was  duly  ad- 
judged a  bankrupt  upon  a  petition  filed  in  this  court  by  [or, 

against]  him  on  the day  of ,  A.  D.  19 — ,  according 

to  the  provisions  of  the  acts  of  Congress  relating  to  bankrupt- 
cy. 

It  is  thereupon  ordered  that  said  matter  be  referred  to , 

one  of  the  referees  in  bankruptcy  of  this  court,  to  take  such 
further  proceedings  therein  as  are  required  by  said  acts;  and 

that  the  said  shall  attend  before   said   referee  on  the 

day  of  at  ,  and  thenceforth  shall  submit  to 

such  orders  as  may  be  made  by  said  referee  or  by  this  court  re- 
lating to  said bankruptcy. 

Witness  the  honorable ,  judge  of  the  said  court,  and  the 

seal  thereof,  at ,  in  said  district,  on  the day  of , 

A.  D.  190 — .  ^ 

Clerk. 

[Seal  of  the  court.'] 

(i)   B.  A.   1898,  sec.  i8d  and  e.    In  re  Bellamy,  No.  1268,  Fed.  Cas.,  s. 
c.  I  Ben.  474;  Gen.  Ord.  12.     Loveland's  Bank   sec.  90. 


PETITIONS,    SCHEDULES,    ETC.  915 

No.  32. 

Order  of  Reference  in  Judge's  Absence  (i). 

(Official  Form  No.  15.) 

In  the  District  Court  of  the  United  States 
For  the District  of . 


In  the  matter  of 


In  Bankruptcy. 


Whereas,  on  the day  of ,  A.  D.  19—,  a  petition 

was  filed  to  have  ,  of ,  in  the  county  of  ,  and 

district  aforesaid,  adjudged  a  bankrupt  according-  to  the  pro- 
visions of  the  acts  of  Congress  relating  to  bankruptcy;  and 
whereas,  the  judge  of  said  court  was  absent  from  said  district 
at  the  time  of  filing  said  petition  [or,  in  case  of  involiinfary 
bankruptcy,  on  the  next  day  after  the  last  day  on  which  plead- 
ings might  have  been  filed,  and  none  have  been  filed  by  the 
bankrupt  or  any  of  his  creditors],  it  is  thereupon  ordered  that 
the  said  mater  be  referred  to ,  one  of  the  referees  in  bank- 
ruptcy of  this  court,  to  consider  said  petition  and  take  such 
proceedings  therein  as  are  required  by  said  acts;  and  that  the 

said shall  attend  before  said  referee  on  the day  of 

,  A.  D.  19 — ,  at . 

Witness  my  hand  and  the  seal  of  the  said  court,  at .  in 

said  district,  on  the day  of ,  A.  D.  19 — . 


Clerk. 
[Seal  of  the  court."] 

(1)  B.  A.  1898,  sec.  18/  and  g;  Gen.  Ord.  12. 


91()  BANKRUPTCY. 

No.  33. 

Referee's  Oath  of  Office. 

(Official  Form  No.  i6.) 

I,  ,  do  solemnly  swear  that  I  will  administer  justice 

without  respect  to  persons,  and  do  equal  right  to  the  poor  and 
to  the  rich,  and  that  T  will  faithfully  and  impartially  discharge 
and  perform  all  the  duties  incumbent  on  me  as  referee  in  bank- 
ruptcy, according  to  the  best  of  my  abilities  and  understand- 
ing, agreeably  to  the  constitution  and  laws  of  the  United 
States.    So  help  me  God. 


Subscribed  and  sworn  to  before  me  this day  of 

A.  D.  190 — .  


District  Judge. 
(1)  B.  A.  1898,  sec.  36. 


No.  34. 
Bond  of  Referee  (i). 

(Official  Form  No.  17.) 

Know  all  men  by  these  presents :    That  we, ,  of ,  as 

principal,  and  ,  of ,  and  ,  of ,  as  sureties, 

are  held  and  firmly  bound  to  the  United  States  of  America  in 

the  sum  of dollars,  lawful  money  of  the  United  States,  to 

be  paid  to  the  said  United  States,  for  the  payment  of  which, 
well  and  truly  to  be  made,  we  bind  ourselves,  our  heirs,  execu- 
tors and  administrators,  jointly  and  severally,  by  these  pres- 
ents. 

Signed  and  sealed  this day  of ,  A.  D.  19 — . 

The  condition  of  this  obligation  is  such  that  whereas  the  said 

has  been,  on  the day  of ,  A.  D.  19 — ,  appointed 

by  the  honorable  ,  judge  of  the  District  Court  of  the 


PETITIONS,    SCHEDULES.    ETC.  917 

United  States  for  the District  of ,  a  referee  in  bank- 
ruptcy in  and  for  the  county  of  ,  in  said  district,  under 

the  acts  of  Congress  relating  to  bankruptcy. 

Now,  therefore,  if  the  said  shall  well  and  faithfully 

discharge  and  perform  all  the  duties  pertaining  to  the  said  of- 
fice of  referee  in  bankruptcy,  then  this  obligation  to  be  void; 
otherwise  to  remain  in  full  force  and  virtue. 

Signed  and  sealed  in  the  presence  of  [Seal.l 

[Seall 

\SeaL'] 

Approved  this day  of ,  !A.  D.  19 — . 


District  Judge. 
(1)  B.  A.  1898,  sec  5a 


918  BANKRUPTCY. 


PROCEEDINGS  BEFORE  REFEREE. 

No.  35. 
Notice  of  First  Meeting  of  Creditors  (i). 

(Official  Form  No.  i8.) 

In  the  District  Court  of  the  United  States 

For  the District  of .    In  Bankruptcy. 


In  the  matter  of 


Bankrupt. 


.  In  Bankruptcy. 


To  the  creditors  of ,  of ,  in  the  county  of and 

district  aforesaid,  a  bankrupt : 

Notice  is  hereby  given  that  on  the day  of ,  A.  D. 

1 8 — ,  the  said was  duly  adjudicated  bankrupt;  and  that 

the  first  meeting  of  his  creditors  will  be  held  at ,  in , 

on  the day  of ,  A.  D.  19 — ,  at o'clock  in  the 

noon,  at  which  time  the  said  creditors  may  attend,  prove 

their  claims,  appoint  a  trustee,  examine  the  bankrupt  and  trans- 
act such  other  business  as  may  properly  come  before  said  meet- 
ing. 


Referee  in  Bankruptcy. 
.  19—. 

(i)   B.  A.  1898,  sees.  55  and  586  and  c;  Gen.  Ord.  12. 
How  to  conduct  the  first  meeting  of  creditors  see  in  re  Eagles,  99  Fed 
Rep.  695,  3  Am.  B.  R.  733- 


PROCEEDINGS  BEFORE  A  REEEEEE.  919 

No.  36. 

Affidavit  in  Proof  of  Publication  of  Notice  of  the  First  Cred- 
itors' Meeting. 

The  District  Court  of  the  United  States 

District  of Division — In  bankruptcy. 

State  of , 


County  of ,  ss. 

Personally  appeared  before  me,  a  notary  public,  in  and  for 
said  County,  E.  S.,  for  the  publisher  of  The  Court  Index,  who, 
being  duly  sworn,  says  that  the  annexed  advertisement  was 
published times,  on  the ,  190 — ,  and  that  said  publi- 
cation was  made  in  The  Court  Index,  a  newspaper  printed  and 
of  general  circulation  in  said  county,  and  the  paper  duly  desig- 
nated by  the  District  Court  of  the  United  States  for Dis- 
trict of , Division,  sitting  as  a  Court  of  Bankruptcy, 

for  the  publication  of  all  notices  required  to  be  published 

within  the  District  of County,  under  the  act  of  Congress, 

approved  July  i,  1898,  entitled  "An  Act  to  Establish  a  Uni- 
form System  of  Bankruptcy  Throughout  the  United  States." 

E.  S. 

Sworn  to  before  me,  and  signed  in  my  presence,  this ■ 

day  of ,  190 — . 

J.N. 
Notary  Public,  within  and  for 

County,  . 

,  190 — . 


I  hereby  certify  that  this  day  I  mailed  a  copy  of  the  notice 
above  set  forth  to  each  of  the  creditors  named  in  the  schedules 
filed  herein.  A.  M., 

Referee  in  Bankniptcy. 


920  BANKRUPTCY. 

No.  37. 
Appointment,  Oath,  and  Report  of  Appraisers  (i), 

(Official  Form  No.  13.) 

In  the  District  Court  of  the  United  States 
For  the District  of . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


It  is  ordered  that ,  of ,  of ,  and 


of ,  three  disinterested  persons,  be,  and  they  are  hereby, 

appointed  appraisers  to  appraise  the  real  and  personal  prop- 
erty belonging  to  the  estate  of  the  said  bankrupt  set  out  in  the 
schedules  now  on  file  in  this  court,  and  rept>rt  their  ap- 
praisal to  the  court,  said  appraisal  to  be  made  as  soon  as  may 
be,  and  the  appraisers  to  be  duly  sworn. 

Witness  my  hand  this  day  of  ,  A.  D.  19 — . 


Referee  in  Bankruptcy. 
District  of ,  ss. 


Personally  appeared  the  within-named  and  severally 

made  oath  that  they  will  fully  and  fairly  appraise  the  aforesaid 
real  and  personal  property  according  to  their  best  skill  and 
judgment.  , 


Subscribed  and  sworn  to  before  me  this day  of 

A.  D.  19—.  


[Official  character.] 

We.  the  undersigned,  having  been  notified  that  we  were  ap- 
pointed to  estimate  and  appraise  the  real  and  personal  property 
aforesaid,  have  attended  to  the  duties  assigned  us,  and  after  a 


PROCEEDINGS  BEFORE  REFEREE. 


921 


strict  examination  and  careful  inquiry,   we  do  estimate  and 
appraise  the  same  as  follows: 


Dollars.    Cents. 


(i)  B.  A.  1898,  sec.  yob. 


In  witness  whereof  we  hereunto  set  our  hands,  at ,  this 

—  day  of ,  A.  D.  19 — .  . 


No.  38. 

List  of  Debts  Proved  at  First  Meeting. 

(Orticial  Form  No.  19.) 

In  the  District  Court  of  the  United  States 
For  the District  of . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


At 


-,  in  said  district,  on  the 


day  of 


-,  A.  D. 


19 — .  l)efore ,  referee  in  bankruptcy. 

The  following  is  a  list  of  creditors  who  have  this  day  proved 
their  debts : 


922 


BANKRUPTCY. 


Names  of  creditors 


Debts  proved. 


Referee  in  Bankruptcy. 


No.  39. 


General   Letter   of  Attorney   in  Fact  when   Creditor   is   not 
Represented  by  Attorney  at  Law  (i). 

(Official  Form  No.  20.) 

In  the  District  Court  of  the  United  States 
For  the District  of . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


To 


I, 


-,  of ,  in  the  county  of 


and  state  of 


do  hereby  authorize  you,  or  any  one  of  you,  to  attend  the  meet- 
ing or  meetings  of  creditors  of  the  bankrupt  aforesaid  at  a 
court  of  bankruptcy,  wherever  advertised  or  directed  to  be 
holden,  on  the  day  and  at  the  hour  appointed  and  iiotified  by 
said  court  in  said  matter,  or  at  such  other  place  and  time  as 
may  be  appointed  by  the  court  for  holding  such  meeting  or 
meetings,  or  at  which  such  meeting  or  meetings,  or  any  ad- 
journment or  adjournments  thereof  may  be  held,  and  then  and 


PROCEEDINGS  BEFORE  REFEREE.  923 

there  from  time  to  time,  and  as  often  as  there  may  be  oc- 
casion, for  me  and  my  name  to  vote  for  or  against  any  pro- 
posal or  resokition  that  may  be  then  submitted  under  the  acts 
of  Congress  relating  to  bankruptcy ;  and  in  the  choice  of  trus- 
tee or  trustees  of  the  estate  of  the  said  bankrupt,  and  for  me 
to  assent  to  such  appointment  of  trustee;  and  with  like  pow- 
ers to  attend  and  vote  at  any  other  meeting  or  meetings  of  cred~ 
itors,  or  sitting  or  sittings  of  the  court,  which  may  be  held 
therein  for  any  of  the  purposes  aforesaid;  also  to  accept  any 
composition  proposed  by  said  bankrupt  in  satisfaction  of  his 
debts,  and  to  receive  payment  of  dividends  and  of  money  due 
me  under  any  composition,  and  for  any  other  purpose  in  my 
interest  whatsoever,  with  full  power  of  substitution. 

In  witness  whereof  I  have  hereunto  signed  my  name  and 

affixed  my  seal  the  day  of ,  A.  D.   19 — . 

[Seal.] 

Signed,  sealed  and  delivered  in  presence  of 


Acknowledged  before  me  this  day  of  ,   A.   D. 

19—-  , 

[Official  character.^ 

(i)  When  executed  on  behalf  of  a  partnership  or  of  a  corporation  the 
person  executing  the  instrument  must  make  oath  that  he  is  a  member 
of  the  partnership,  or  a  duly  authorized  officer  of  the  corporation  on 
whose  behalf  he  acts.     Gen.  Ord.  21,  par.  5. 

An  attorney  at  law  cannot  vote  at  a  creditors'  meeting  without  pro- 
ducing a  letter  of  attorney,  duly  appointing  him  an  attorney  in  fact. 
In  re  Sugenheimer,  91  Fed.  Rep.  744;  in  re  Blankfein,  97  Fed.  Rep.   km 


P24 


BANKRUPTCY. 

No.  40. 

Special  Letter  of  Attorney  in  Fact. 

(Official  Form  No.  21.) 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


To 


I  hereby  authorize  you,  or  any  one  of  you,  to  attend  the  meet- 
\ng  of  creditors  in  this  matter,  advertised  or  directed  to  be  hold- 
en  at ,  on  the day  of ,  before ,  or  any  ad- 
journment thereof,  and  then  and  there for and  in 

name  to  vote  for  or  against  any  proposal  or  resolution 


that  may  be  lawfully  made  or  passed  at  such  meeting  or  ad- 
journed meeting,  and  in  the  choice  of  trustee  or  trustees  of  the 
estate  of  the  said  bankrupt. 

In  witness  whereof  I  have  hereunto  signed  my  name  and  af- 
fixed my  seal  the day  of ,  A.  D.  19 — . 

[Seal.l 

Signed,  sealed  and  delivered  in  presence  of 


Acknowledged  before  me  this 


day  of 


-,  A.  D.  19—. 


[^Official  character.'] 


See  note  to  Form  No.  39. 


PROCEEDINGS  BEFORE  REFEREE. 


925 


No.  41. 

Appointment  of  Trustee  by  Creditors,    (i)- 

(Official  Form  No.  22.) 

In  the  District  Court  of  the  United  States 
For  the District  of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


At  ,  in  said  district,  on  the  day  of ,  A.  D. 

19 — ,  before ,  referee  in  bankruptcy. 

This  being  the  day  appointed  by  the  court  for  the  first  meet- 
ing of  creditors  in  the  above  bankruptcy,  and  of  which  (hie 
notice  has  been  given  in  the  [Jicre  insert  the  names  of  the  nezcs- 
papers  in  zvhich  notice  was  published^,  we,  whose  names  are 
hereunder  written,  being  the  majority  in  number  and  in  amount 
of  claims  of  the  creditors  of  the  said  bankrupt,  whose  claims 
have  been  allowed,  and  who  are  present  at  this  meeting,  do 

hereby  appoint .  of ,  in  the  county  of and  state 

of ,  to  be  the  trustee of  the  said  bankrupt's  estate  and 


effects. 

Signatures  of  creditors. 

Residences  of  tlie  same. 

Amount  of  delit. 

Dolls. 

Cts. 

Ordered  that  the  above  appointment  of  trustee —  be  and  the 
same  is  hereby  approved 


Referee  in  Bankruptcy. 

(i)   B.  A.  1898,  sec.  44  and  sec.  5or.     No  official  or  pencral  trustee  can 
be  appointed  by  the  court.     Gen.  Ord.  14. 

A   trustee   is   elected   by   the    majority   of   (he   creditors   present    at    the 


926  BANKRUPTCY. 

meeting  and   not  of  those   who   have   proved   claims   against   the   estate. 
In  re  Henschel,  113  Fed.  Rep.  443,  7  Am.  B.  R.  662. 

If  the  creditors  fail  to  appoint,  the  referee  may  do  so,  but  if  the  ref- 
eree refuses  to  confirm  the  trustee  elected  by  creditors,  he  cannot  appoint 
but  should  call  another  meeting  for  the  purpose  of  a  new  election.  In  re 
Lewcnsohn,  3  Am.  B.  R.  299,  98  Fed.  Rep.  576;  in  re  Mackellar,  116  Fed, 
Rep.   547. 


No.  42. 
Appointment  of  Trustee  by  Referee.  (1). 

(Official  Form  No.  23.) 

In  the  District  Court  of  the  United  States 
For  the District  of . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


At  .  in  said  district,  on  the day  of ,  A.  D. 

19 — ,  before  ,   referee   in  bankruptcy. 

This  being-  the  day  appointed  by  the  court  for  the  first  meet- 
ing of  creditors  under  the  said  bankruptcy  and  of  which  due 
notice  has  been  given  in  the  [^liere  insert  the  names  of  the  mzvs- 
papers  in  which  notice  zvas  puhlishcd'],  I,  the  undersigned  ref- 
eree of  the  said  court  in  bankruptcy,  sat  at  the  time  and  place 
above  mentioned,  pursuant  to  such  notice,  to  take  the  proof  of 
debts  and  for  the  choice  of  trustee  under  the  said  bankruptcy ; 
and  I  do  hereby  certify  that  the  creditors  whose  claims  had 
been  allowed  and  were  present,  or  duly  represented,  failed  to 
make  choice  of  a  trustee  of  said  bankrupt's  estate,  and  there- 
fore I  do  hereby  appoint ,  of ,  in  the  county  of 

and  state  of ,  as  trustee  of  the  same. 


Referee  in  Bankruptcy. 


PROCEEDINGS  BEFORE  REFEREE.  927 

(l)  B.  A.  1898,  sec.  44.  No  general  or  official  trustee  can  be  appointed 
to  act  in  cases  generally.     Gen.  Ord.  14. 

A  referee  cannot  appoint  a  trustee  simply  because  he  declines  to  ap- 
prove one  elected  by  the  creditors.  He  must  call  another  meeting  for 
an  election.  In  re  Lewensohn,  3  Am.  B.  R.  299,  98  Fed.  Rep.  576;  in 
re  Mackellar,  116  Fed.  Rep.  547. 


No.  43. 

Notice  to  Trustee  of  His  Appointment  (i). 

(Official  Form  No.  24.) 

In  the  District  Court  of  the  United  States 
For  the District  of . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


To ,  of ,  in  the  county  of ,  and  district  afore- 
said : 
I  hereby  notify  you  that  you  were  duly  appointed  trustee  [or, 
one  of  the  trustees]  of  the  estate  of  the  above-named  bank- 
rupt at  the  first  meeting  of  the  creditors,  on  the day  of 

A.  D.  19 — ,  and  I  have  approved  said  appointment.  The 

penal  sum  of  your  bond  as  such  trustee  has  been  fixed  at 


dollars.    You  are  required  to  notify  ine  forthwith  of  your  ac- 
ceptance or  rejection  of  the  trust. 

Dated  at ,  the day  of ,  A.  D.  19 — . 


Referee  in  Bankruptcy. 

(i)   Gen.  Ord.   16.     The  creditors  fix  the  amount  of  tlie  bond.     B.  A. 
1898,  sec.  50c. 


'•^-S  BANKRUPTCY. 

No.  44. 
Bond  of  Trustee,     (i). 

(Official  lH)rm  No.  25.) 

Know  all  men  by  tiiese  presents :  That  we, ,  of 

.  as  principal,  and .  of ,  and ,  of 

as  sureties,  are  held  and  firmly  bound  unto  the  United 


States  of  America  in  the  sum  of dollars,  in  lawful  money 

of  the  United  States,  to  be  paid  to  the  said  United  States,  for 
which  payment,  well  and  truly  to  be  made,  we  bind  ourselves 
and  our  heirs,  executors  and  administrators,  jointly  and  sev- 
erally by  these  presents. 

Signed  and  sealed  this day  of ,  A.  D.  190 — . 

The  condition  of  this  obligation  is  such,  that  whereas  the 

above-named was,  on  the day  of ,  A.  D. 

190 — ,   appointed  trustee  in  the  case  pending  in  bankruptcy 

in  said  court,  wherein is  the  bankrupt,  and  he,  the 

said ,  has  accepted  said  trust  with  all  the  duties 

and  obligations  pertaining  thereunto : 

Now,  therefore,  if  the  said ,  trustee  as  aforesaid, 

shall  obey  such  orders  as  said  court  may  make  in  relation  to 
said  trust,  and  shall  faithfully  and  truly  account  for  all  the 
moneys,  assets  and  efifects  of  the  estate  of  said  bankrupt  which 
shall  come  into  his  hands  and  possession,  and  shall  in  all  re- 
spects faithfully  perform  all  his  official  duties  as  said  trustee, 
then  this  obligation  to  be  void;  otherwise,  to  remain  in  full 
force  and  virtue. 

Signed  and  sealed  in 
presence  of 

[Seal.] 

[Seal.] 

[Seal.'] 

(i)  B.  A.  1898,  sees.  50b  and  c. 


PROCEEDINGS  BEFORE  REFEREE.  929 

No.  45. 
Order  Approving  Trustee's  Bond. 

(Official  Form  No.  26.) 

At  a  court  of  bankruptcy,  held  in  and  for  the District 

of ,  at , .  this day  of .  190. — . 

Before  ,   referee   in  bankruptcy,   in  the   District 

Court  of  the  United  States  for  the District  of . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


It  appearing  to  the  court ,  of  ,  and  in  said 

district,  has  been  duly  appointed  trustee  of  the  estate  of  the 
above-named  bankrupt,  and  has  given  a  bond  with  sureties  for 
faithful  performance  of  his  official  duties,  in  the  amount  fixed 
by  the  creditors  [or,  by  order  of  the  court],  to  wit.  in  the  sum 

of dollars,  it  is  ordered  that  the  said  bond  be  and  the  same 

is  hereby  approved.  , 

Referee  in  Bankruptcy. 


No.  1156. 

Order  that  no  Trustee  be  Appointed,     (i). 

(Official  Form  No.  27.) 

In  the  District  Court  of  the  United  States  for  the Dis- 
trict of . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


It  appearing  that  the  schedule  of  the  bankrupt  discloses  no 


9:^0  BANKRUPTCY. 

assets,  and  that  no  creditor  has  appeared  at  the  first  meeting, 
and  that  tlic  appointment  of  a  trustee  of  the  bankrupt's  estate 
is  not  now  desirable,  it  is  hereby  ordered  that,  until  further 
order  of  the  court,  no  trustee  be  appointed  and  no  other  meet- 
ing of  the  creditors  be  called. 


Referee  in  Bankruptcy, 
(i)  Gen.   Ord.   15. 


No.  47. 
Order  for  Examination  of  Bankrupt,     (i). 

(Official  Form  No.  28.) 

In  the  District  Court  of  the  United  States  for  the Dis- 
trict of . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


At ,  on  the day  of ,  A.  D.  19 — . 

Upon  the  application  of ,  trustee  of  said  bankrupt  [or, 

creditor  of  said  bankrupt],  it  is  ordered  that  said  bankrupt  at- 
tend before  ,  one  of  the  referees  in  bankruptcy  of  this 

court,  at  ,  on  the day  of ,  at  —  o'clock  in  the 

noon,  to  submit  to  examination  under  the  Acts  of  Con- 
gress relating  to  bankruptcy,  and  that  a  copy  of  this  order  be 
delivered  to  him,  the  said  bankrupt,  forthwith. 


Referee  in  Bankruptcy. 

(l)  B.  A.   1898,  sec.  7.  clause  g;  sec.  21,  and  sec.  38,   clause  2.     Gen. 
Ord.  22.     See   nlso  note  to  No.   48. 


PROCEEDINGS  BEFORE  REFEREE.  9;31 

No.  48. 

Examination  of  Bankrupt  or  Witness.       (i). 

(Official  Form  No.  29.) 

In  the"District  Court  of  the  United  States  for  the Dis- 
trict of . 

1 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


At  ,  in  said  district,  on  the  day  of  ,  A.  D. 

ig — ^  before ,  one  of  the  referees  in  bankruptcy  of  said 

court. 

,  of  ,  in  the  county  of  ,  and  state  of  , 

being  duly  sworn  and  examined  at  the  time  and  place  above 
mentioned,  upon  his  oath  says  [here  insert  substance  of  exam- 
ination of  party].  ;. 

Referee  in  Bankruptcy. 

(i)  Loveland's  Bank.,  sec.  204.  B.  A.   1898.  sec.  21.     Gen.  Ord.  22. 

Sec.  210  of  the  Bankruptcy  Act  is  amended  by  act  of  Feb.  5.  1903.  to  read : 

"a.  A  court  of  bankruptcy  may,  upon  application  of  any  officer,  bank- 
rupt, or  creditor,  by  order  require  any  designated  person,  including  the 
bankrupt  and  his  wife,  to  appear  in  court  or  before  a  referee  or  the  judge 
of  any  state  court,  to  be  examined  concerning  the  acts,  conduct,  or 
property  of  a  bankrupt  whose  estate  is  in  process  of  administration  under 
this  act;  provided,  that  the  wife  may  be  examined  only  touching  business 
transacted  by  her  or  to  which  she  is  a  party,  and  to  determine  the  fact 
whether  she  has  transacted  or  been  a  party  to  any  business  of  the  bank- 
rupt." 

A  large  latitude  of  inquiry  is  allowed  in  the  examination  of  the  bank- 
rupt and  other  persons  closely  connected  with  him  in  his  business  deal- 
ings for  the  purpose  of  discovering  the  assets  and  unearthing  frauds 
and  upon  any  reasonable  surmise  that  they  have  the  assets  of  the  debtor. 
In  re  Horgan  (C.  C.  A..  2nd  Cir.),  98  Fed.  Rep.  414.  .3  Am.  B.  R.  253; 
in  re  Bard,  108  Fed.  Rep.  208;  in  re  Foerst,  93  Fed.  Rep.  190.  i  Am.  B. 
R.  259;  in  r^-  Carley.  106  Fed.  Rep.  862,  5  Am.  B.  R.  5.S4:  Peophs' 
Bank  vs.   Brown    (C.  C  A.   3rd   Cir.)    112  Fed.   Rep.  652;  7  Am.   B.   R. 


932  BANKRUPTCY. 

475:  IK  re  Cliffe.  97  Fed.  Rep.  540.  3  Am.  H.  R.  257.  A  trustee  in  in- 
solvency iiiuler  a  .state  law  may  lie  exammed.  In  re  Pitrsell,  114  Fed. 
Rep.  371.  S  Am.  B.  R.  yO. 

It  is  not  necessary  that  there  be  a  formal  application  for  an  examina- 
tion showing  the  particular  questions  proposed  to  be  asked  or  the  par- 
ticular facts  as  to  which  the  examination  is  to  be  made.  In  re  Howard, 
95  Fed.  Rep.  415,  2  Am.   B.  R.   582. 

Testimony  taken  upon  the  examination  of  the  bankrupt  is  taken  in 
the  whole  pending  proceeding  and  inay  be  introduced  and  read  upon 
the  hearing  of  a  petition  for  a  discharge.  In  re  Wilcox  (C  C.  A.,  2nd 
Cir.),  109  Fed.  Rep.  628,  6  Am.  B.  R.  362;  in  re  Cooke,  109  Fed.  Rep.  631, 
5  Am.  B.  R.  434;  in  re  Bard,  108  Fed.  Rep.  208.  But  where  a  claimant 
was  not  in  fact  a  party  and  could  not  exercise  the  right  of  cross  exam- 
ination at  the  time  the  witnesses  were  examined,  the  witnesses,  includ- 
ing the  bankrupt,  must  be  recalled  unless  the  party  consents  to  the  use 
of  the  testimony  as  it  appears  in  the  proceedings.  In  re  Kellar,  6  Am. 
B.  R.  334- 

It  has  been  held  that  a  bankrupt  or  other  witness  is  not  entitled  as 
a  matter  of  right  to  be  attended  and  cross-examined  by  his  own  attor- 
ney. In  re  Cobb,  7  Am.  B.  R.  104;  in  re  Howard,  95  Fed.  Rep.  415,  2  Am. 
B.  R.  582. 


No.  49. 
Summons  to  Witness  (i). 

(Official  Form  No.  30.) 


To : 

Whereas,  ,  of ,  in  the  county  of ,  and  state  of 

,  has  been  duly  adjudged  bankrupt,  and  the  proceeding 

in  bankruptcy  is  pending  in  the  District  Court  of  the  United 
States  for  the district  of . 

These  are  to  require  you,  to  whom  this  summons  is  directed, 

personally  to  be  and  appear  before ,  one  of  the  referees  in 

bankruptcy  of  the  said  court,  at  ,  on  the  day  of 

at o'clock  in  the noon,  then  and  there  to  be  examined 

in  relation  to  said  bankruptcy. 

Witness  the  Hon.  ,  judge  of  said  court,  and  the  seal 

thereof  at ,  this day  of ,  A.  D.  19 — . 

Clerk. 


PROCEEDINGS    BEFORE    REFEREE. 
RETURN    OF    SUMMONS    TO    WITNESS. 

In  the  District  Court  of  the  United  States  for  the 

trict  of  . 


933 


Dis- 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


On  this 
— .  of- 


—  day  of  ,  A.  D.   19 — ,  before  me  came 

-,  in  the  county  of ,  and  state  of .  antl 

makes  oath,  and  says  that  he  did,  on  ,  the  day 

of  ,   A.    D.    19 — ,    personally   serve  ,    of  ,    in 

the  county  of ,  and  state  of ,  with  a  true  copy  of  the 

summons  hereto  annexed,  by  delivering  the  same  to  him ;  and 
he  further  makes  oath,  and  says  that  he  is  not  interested  in  the 
proceeding  in  bankruptcy  named  in  said  summons. 


Subscribed  and  sworn  to  before  me  this 
A.  D.  19—. 

(I)  Gen.  Ord.  3.     R.  S.  sec.  911.  ^i  ^^Q- 


day  of 


No.  50. 
Minutes  of  Creditors'  Meeting   (i). 

The  District  Court  of  the  United  States 
For  the District  of 

In  the  matter  of  N.  W.,  bankrupt. 

Before  A.  M..  referee,  on  the day  of .  iQ— .  at  — 

o'clock.     Present:     The  referee,  bankrupt  and  various  attor- 
neys for  creditors,  and  also  creditors. 

The  motion  of  the  B.  Mfg.  Co.,  filed  on  the day  of 


();>4  UAXKKITTCY. 

IQ — .  coming  on  for  hcarini;-.  1  heard  cviilcnce  in  relation  to  the 
same,  and  ordered  as  follows,  viz. : 

1  ordered  and  ilirected  the  trustee  to  pay  over  to  W.  K.,  at- 
torney for  the  B.  Mfg.  Co.,  the  sum  of  $ being  $ less 

ten  per  cent,  the  amount  of  merchandise  belonging  to  said  com- 
pany and  held  on  consignment  by  the  bankrupt  and  since  sold 
by  the  receiver  herein  and  realizing  said  sum ;  I  finding  the  said 
amount  to  belong  to  the  said  company,  I  also  ordered  and  di- 
rected the  trustee  to  turn  over  to  said  com])any  all  the  

now  on  hand,  or  that  may  hereafter  come  to  the  trustee's  hands, 
the  same  being  the  proi)erty  of  said  company  and  never  sold 
by  them.     I  also  found  that  the  said  comi>any  has  a  claim  as 

per  schedule,  for  $ goods  sold  up  to  the day  of , 

19 — .  the  same  being  a  general  claim.     I  also  found  that  the 

said  company  has  an  additional  claim  for  the  sum  of  $ 

goods  sold  from  the day  of ,  19 — ,  up  to  the  date  of 

assignment,  the  same  being  a  general  claim. 

The  attorney  for  the  C.  B.  Association,  mortgagee  consent- 
ing, I  directed  the  trustee  to  commence  proceedings  for  the  sale 
of  real  estate  under  mortgage  in  the  District  Court  of  the 
United  States,  said  mortgagee  agreeing  to  enter  its  appearance 
and  consent  to  jurisdiction.  And  I  directed  the  same  proceed- 
ings to  be  brought  in  relation  to  the  other  mortgaged  real  es- 
tate, in  the  event  similar  consent  of  mortgagee  can  be  se- 
cured. 

The  bill  of  the  heirs  of  G.  \Y.  for  rent  from  the day  of 

,  19 — ,  to  the day  of 19 — ,  amounting  to  $ 

being  presented  as  a  claim  entitled  to  preference  on  the  ground 
of  expense  incurred  by  the  assignee  and  trustee,  and  it  appear- 
ing that  possession  was  not  taken  until  the day  of , 

19 — .  I  accordingly  reduced  said  claim  to  $ ,  which  sum  I 

directed  the  trustee  to  pay  as  a  preferred  claim. 

The  matter  of  disposition  of  the  assigned  bankrupt's  stock 
of  merchandise,  etc.,  being  heard,  on  motion  of  the  creditors 
the  trustee  herein  was  directed  to  sell  the  same  at  private  sale 
at  not  less  than per  cent,  of  the  appraised  value,  and  was 


PROCEEDINGS  BEFORE  REFEREE.  935 

also  authorized  to  employ  a  man  to  assist  in  said  work  at  not 
exceeding  $ a  week. 

The  bankrupt  stated  that  his  wife  withdraws  all  claims  here- 
in, and  that  she  would  not  file  any  claim  herein. 

The  application  of  F.  Q.,  for  the  payment  of  the  proceeds 

of bales  out  of bales  of ,  sent  to  the  bankrui)t  on 

consignment,  was  heard,  and  it  appearing  that  said  goods  were 

on  consignment  and  that  bales  have  been  sold  by  the 

trustee  herein  as  receiver  herein,  for  the  sum  of  $ ,  it  is  or- 
dered that  said  sum  less per  cent,  the  usual  commission, 

to  wit  the  sum  of  $ be  paid  to  said  F.  O.  as  a  preferred 

claim  herein. 

It  also  appearing  that  the  trustee  herein  has  in  his  possession 

bales  of  spoiled sent  by  F.  O.  to  the  bankrupt  on 

consignment,  and  which  property  was  not  appraised  herein  or 
included  in  the  appraisement,  I  ordered  that  the  trustee  deliver 
said  property  to  the  said  F.  O. 

The  application  of  the  appraisers  for  $ compensation 

each,  was  rejected  by  me  as  excessive  charges,  and  on  motion 
of  the  creditors  and  with  their  consent,  I  directed  the  trustee  to 
pay  to  each  of  the  appraisers  herein  the  sum  of  $ . 

In  relation  to  the  dis]X)sition  of  the  bank  stock  and  the  B. 
Brewing  Co.  bonds,  the  trustee  was  directed  to  get  offers  for 
the  purchase  of  the  same,  and  report  to  the  referee. 

In  relation  to  policy  No. N.  Y.  L.  Insurance  Company, 

the  trustee  was  directed  to  inquire  into  its  value  of  the  com- 
pany, and  report  to  the  referee. 

The  trustee  was  ordered  to  collect  from  E.  T,,  assignee,  the 
sum  of  $ ,  collected  l)y  the  said  assignee. 

The  trustee  was  directed  to  pay  all  tax  bills  and  delinquent 
taxes  on  real  or  personal  property. 

The  trustee  was  directed  to  sell  the  real  estate  at ,  for 

not  less  than per  cent,  of  its  appraised  value. 

The  bankrui)t  was  examined  and  further  examination  con- 
tinued until day  of ,  19 — .  at  —  o'clock,  and  the  trus- 
tees authorizcfl  to  employ  an  accomitant  to  fiuMiish  to  the  court 


936  BANKRUPTCY. 

and  creditors  information  of  i)ayments  made  by  the  bankrupt 
within  the  jiast  four  months  preceding  liis  assignment. 

(i)   Taken   from  tlic   record  hi  re  Nicholas  Wolff,  pending  in  the  Dis- 
trict  Court  of  the  United   States    for  the   Southern   District  of  Ohio. 


No.  51. 
Order  that  Bankrupt  Deliver  Assets  to  Trustee  (i), 

\^Caption.'\ 

This  cause  having  been  referred  to  the  undersigned  A.  M., 
as  referee,  after  an  examination  of  said  bankrupt  and  evidence 
having  been  fully  had  before  said  referee  in  accordance  with  the 
statutes  in  such  cases  made  and  ])rovided,  the  evidence  having 
been  submitted  upon  argiunent,  the  undersigned  referee  does 
hereby  make  the  following  order  on  said  A.  B.,  bankrupt : 

First.  That  said  bankrupt  A.  B.,  within  twenty  days  from 
and  after  the  service  of  a  copy  of  this  order  having  been  made, 

pav  to  B.  M.  Esq.,  trustee,  the  sum  of  $ ,  and  deliver  to  said 

trustee,    United    States    three    per    cent,    coupon    bonds    of 
the  face  value  of  $ ,  or  $ in  money. 

Second.  That  in  the  event  of  the  said  A.  B.  failing  or  neg- 
lecting to  obey  this  order  to  pay  to  the  said  trustee  the  above 
amount  and  deliver  said  bonds  or  money,  the  said  B.  M.,  as 
such  trustee,  is  hereby  ordered  and  directed  to  institute  pro- 
ceedings against  the  above  named  A.  B.  in  accordance  with  the 
provisions  of  Section  29  of  the  Bankrupt  Act  of  1898,  and 

It  is  further  ordered  that  a  copy  of  this  order  be  served  per- 
sonally upon  the  said  A.  B.,  the  said  bankrupt,  and  by  mail 
upon  R.  X.  Esq.,  attorney  for  the  bankrupt,  and  on  B.  M.  Esq., 
said-  trustee. 

Dated  at this  — —  day  of .  A.  M., 

Referee. 

(l)  For  proceedings  if  bankrupt  fails  to  obey  this  order,  see  Nos. 
115.   et  seq. 


PROCEEDINGS  BEFORE  REFEREE.  937 

No.  52. 
Order  that  Trustee  Apply  to  be  Made  Party  to  Suit  in  State 

Court. 

lCaptio)i.] 

At  ,  in  said  district,  on  the  day  of  .  A.  D. 

.  before  A.  M.,  Referee  in  Bankruptcy. 

On  motion  of  the  S.  Trust  Company,  trustee  herein,  it  is 
ordered  that  said  trustee  file  a  petition  to  be  made  a  party  to 

the  suit  pending  in  the Circuit  Court,  styled  L.  S.,  etc., 

-gainst  D.  G.,  etc..  and  said  trustee  is  further  directed  in  said 

petition  to  pray  the  Honorable Circuit  Court  to  turn  over 

to  it.  the  S.  Trust  Company,  trustee  in  bankruptcy,  the  fund 

in  said Circuit  Court,  in  the  cause  aforesaid. 

A.  M., 
Referee  in  Bankruptcy. 


No.  53. 
Order  of  State  Court  to  Pay  Over  to  Trustee  in  Bankruptcy 

Fund  in  Court. 

State  of  . 

Circuit  Court.  Common  Pleas  Division. 
L.  C.  assignee  of  C.  D.  &  Co..  Plaintiff, 

vs. 
D.  G.  etc.,  Defendants. 

Motion  and 
Order. 
This  day  came  the  A.  B.  Trust  Company.  Trustee  in  P.ank- 
ruptcy  of  C.  D.  &  Co.,  D.  G.  and  C.  D..  by  R.  Y..  its  att.M-ney. 
and  presented  to  the  court  its  petition  ])resented  to  the  court 

June  ,  and  heretofore  filed  herein  claiming  the  fund  in 

court  herein,  together  with  the  exhibits  referred  to  therein  and 
the  notice  therewith  served  on  the  plaintiff.  L.  C,  assignee  of 
C.  D.  &  Co.,  and  on  M.  A.  of  the  firm  of  M.  A.,  D.  A.  and  J. 
G..  attorneys  for  said  plaintiff,  and  also  presented  a  copy  of  said 
letter  to  said  L.  C.  assignee,  and  his  said  attorneys,  showing 
that  the  motion  would  be  presented  at  this  time  and  hour,  viz., 


93S  BANKRUrXCY. 

on  the clay  of at  lo  o'clock  a.  m,  and  answer  of  M. 

A..  D.  A.  &  J.  G..  attorneys  thereto,  and  thereupon  said  pe- 
titioner, by  R,  Y.,  attorney,  moved  the  court  that  the  said  peti- 
tioner, the  A.  B.  Trust  Conijiany.  Trustee  in  Bankruptcy  of 
said  bankrupts,  C.  D.  &  Co.,  D.  G.  and  C.  D.,  be  made  a  party 
defendant  to  this  action,  and  thereuix)n  said  trustee  moved  the 
court  that  said  petition  be  taken  as  the  answer  and  petition  of 
the  said  A.  B.  Trust  Company,  as  such  trustee,  claiming  the 
fund  in  court  herein,  which  is  so  ordered  by  the  court,  and 
thereupon  the  said  A.  B.  Trust  Company,  Trustee  in  Bankrupt- 
cy of  said  C.  D.  &  Company,  D.  G.  and  C.  D.,  moved  the  court 
for  leave  to  withdraw  from  the  fund  in  court  herein  the  sum  of 

$ ,  and  thereupon,  the  court  being  sufficiently  advised,  it  is 

ordered  by  the  court  that  the  said  petitioner,  the  A.  B.  Trust 
Company,  Trustee  in  Bankruptcy,  of  said  C  D.  &  Co.,  D.  G. 
and  C.  D.,  be,  and  is,  allowed  to  withdraw  this  day  from  the 

fund  in  court  the  sum  of  $ . 

E.  R. 

Judge  of  the Circuit  Court, 

Common  Pleas  Division. 


No.  54. 
Proof  of  Unsecured  Debt  (i). 

(Official  Form  No.  31.) 

In  the  District  Court  of  the  United  States 
For  the District  of . 

In  the  matter  of  A.  B.,  bankrupt. 

At ,  in  said  district  of ,  on  the day  of , 

A.  D.  190 — ,  came  E.  F.,  of ,  in  the  county  of ,  in 

said  district  of ,  and  made  oath,  and  says  that  A.  B.,  the 

person  by  [or,  against]  whom  a  petition  for  .adjudication  of 
bankruptcy  has  been  filed,  was  at  and  before  the  filing  of  said 
petition,  and  still  is,  justly  and  truly  indebted  to  said  deponent 
in  the  sum  of dollars ;  that  the  consideration  of  said  debt 


PROCEEDINGS  BEFORE  REFEREE.  939 

is  as  follows :  Goods  sold  and  delivered  at  the  dates  and  for 
the  agreed  prices  set  forth  in  the  statement  of  account  hereto 
attached  and  made  part  hereof  as  Exhibit  "  A  " ;  that  no  part 
of  said  debt  has  been  paid  [except ]  ;  that  there  are  no  set- 
offs or  counterclaims  to  the  same  [except ]  ;  and  that  de- 
ponent has  not,  nor  has  any  person  by  his  order,  or  to  his 
knowledge  or  belief,  for  his  use,  had  or  received  any  manner 
of  security  for  said  debt  whatever.  '    E.  E., 

Creditor. 

Subscribed  and  sworn  to  before  me  this day  of , 

A.  D.  19—.  j.  ^l- 

[Official  cliaracter.'\ 

(i)   Gen.  Ord.  21.     Loveland's  Bank.,  sees.   109-141. 

If  the  debt  to  be  proven  is  an  open  account,  maturing  on  a  single 
date,  the  following  statement  should  be  added,  to  wit: 

"  Said   debt  became    [or,   will  become]    due  on  the  day  of  , 

19 — ^  and  no  note  has  been  received  for  such  account  nor  any  judgment 
rendered   thereon." 

If  it  consists  of  items  maturing  at  different  dates,  the  following  ad- 
dition  to  said   form   is   suggested: 

"  The  average  due  date  of  the  different  items  of  said  account  is  the 

day  of  ,  19 — ,  and  no  note  has  been  received  for  such  account 

nor  any  judgment  rendered  thereon." 

If  proof  is  being  made  by  the  assignee  of  a  claim  transferred  before 
proof,  it  must  be  supported  by  a  deposition  of  the  owner  at  the  time  of 
the  commencement  of  the  proceedings,  setting  forth  the  true  considera- 
tion of  the  debt,  and  that  it  is  entirely  unsecured  [or,  if  secured,  the 
amount  and  character  of  secilriiies]. 

The  consideration  must  be  stated.  In  re  Scott.  93  Fed.  Rep.  418;  in  re 
Stevens,   107  Fed.  Rep.  243. 

Debts  which  are  provable  against  the  estate  of  a  bankrupt  arc  stated 
in  sec.  63  of  the  Bankrupt  Act  of  1898.  It  has  been  held  that  sec.  63b 
of  the  Bankrupt  Act  does  not  authorize  the  liquidation  and  proof  of 
claims  except  when  they  may  be  included  in  one  of  the  five  classes  in 
par.  a  in  that  section.     In  re  Hirschman.  104  Fed.  Rep.  69,  4  Am.  B.  R. 

715- 

Referee  is  entitled  to  25c  for  every  proof  of  claim  filed  for  allowance 
to  be  paid  from  the  estate,  if  any,  as  a  part  of  the  costs  of  administration. 
Act  of  February  5.  1903.  Sec.  9. 

The  following  claims  have  been  held   not   to  1..-   pn.v.il.li-  aurain'^t    the 

estate  of  the  bankrupt : 


940  BANKRrPTCY. 

A  debt  not  in  existence  at  the  time  of  the  filing  of  the  petition, 
althoiigli  arising  before  the  adjudication.  In  re  Burka,  104  Fed.  Rep. 
320,  5  Am.  B.  R.   12. 

Claims  arising  ex  delicto  are  only  provable  when  recovery  may  be 
had  ex  contractu.  In  re  Hirschman,  104  Fed,  Rep.  69,  4  Am.  B.  R.  715; 
Beers  vs.  Hanlin,  99  Fed.  Rep.  695,  3  Am.  B.  R.  745. 

Or  alimony ;  Audubon  vs.  Shufeldt,   181  U.  S.  575. 

Or  a  fine  in  a  criminal  case.  In  re  Moore,  iii  Fed.  Rep.  145,  6  Am. 
B.  590.     But  see  in  re  Alderson,  98  Fed.  Rep.  588,  3  Am.  B.  R.  544. 

Or  rent  to  accrue  in  the  future  against  the  estate  either  as  a  li- 
quidated or  unliquidated  claim.  Arnstein,  loi  Fed.  Rep.  706;  in  re  Jef- 
ferson. 93  Fed.  Rep.  948;  in  re  Mahler,  105  Fed.  Rep.  428;  Bray  et  al. 
vs.  Cobb,  100  Fed.  Rep.  270;  Atkins  vs.  Wilcox  (C.  C.  A.,  5th  Ct.),  105 
Fed.  Rep.  598;  in  re  Ells,  98  Fed.  Rep.  968. 

Or  contingent  claims.  In  re  Rosenzweig,  118  Fed.  Rep.  112; 
in  re  Swift  (C.  C.  A.,  ist  Cir.),  112  Fed.  Rep.  315,  7  Am.  B.  R.  374; 
Coding  vs.  Rosenthal,  Sup.  Ct.  Mass.  61   N.   E.  Rep.  222. 

A  contract  of  endorsement  is  provable.  In  re  Gerson  (C.  C.  A.,  3rd 
Cir.),  6  Am.   B.  R.   11,   107  Fed.   Rep.  897. 

It  has  been  held  that  where  a  company  which  was  furnishing  its  cus- 
tomers ice  at  so  much  per  ton,  payable  weekly,  under  contracts  cover- 
ing a  period  of  several  years,  broke  such  contracts  and  became  unable 
to  continue  them  in  the  future,  the  claims  of  the  customers  for  damages 
sustained  by  reason  of  the  company's  inability  to  fulfil  the  executory  por- 
tions of  the  contracts  were  "  provable  claims  "  in  involuntary  bankruptcy 
proceedings  against  the  company.     In  re  Stern,  116  Fed.  Rep.  604. 


No.  55. 
Proof  of  Secured  Debt  (i). 

(Official  Form  No.  32.) 

In  the  District  Court  of  the  United  States  for  the  — —  Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


At ,  in  said  district  of ,  on  the day  of , 

A.  D.   19 — ,  came  ,  of  .  in  the  county  of  ,  in 


PROCEEDINGS  BEFORE  REFEREE.  941 

said  district  of ,  and  made  oath,  and  says  that ,  the 

person  by  [or,  against]  whom  a  petition  for  adjudication  of 
bankruptcy  has  been  filed,  was  at  and  before  the  fihng  of  said 
petition,  and  still  is,  justly  and  truly  indebted  to  said  depo- 
nent in  the  sum  of  dollars ;  that  the  consideration  of 

said  debt  is  as  follows : ; 

that  no  part  of  said  debt  has  been  paid  [except J ; 

that  there  are  no  set-offs  or  counterclaims  to  the  same  [except 

]  ;  and  that  the  only  securities  held  by 

this  deponent  for  said  debt  are  the  following : 


Creditor. 

Subscribed  and  sworn  to  before  me  this day  of , 

A.  D.  .  , 

I  Official  character.^ 

(i)    See  note  to  Form  No.  64. 

Where  a  creditor  in  proving  his  debt  fails  to  mention  his  security  he 
will,  as  a  general  rule  be  deemed  to  elect  to  prove  as  an  unsecured  cred- 
itor, and  to  have  surrendered  his  sccuritv.  The  courts,  however,  have 
permitted  such  a  creditor  to  amend  to  change  it  from  unsecured  to  se- 
cured. In  re  Scott,  93  Fed.  Rep.  418;  in  re  Stevens,  107  Fed.  Rep.  243; 
in  re  Meyers,  99  Fed.  Rep.  691;  in  re  Wilder,  loi  Fed.  Rep.  104;  in  re 
Falls  City  Shirt  Co.,  98  Fed.  Rep.  592,  3  Am.  B.  R.  427. 

In  re  Cathcart  (Southern  District  of  Ohio),  mechanic's  lien  holders 
proved  their  claims  as  unsecured  creditors  and  voted  for  and  elected  a 
trustee  who  reduced  the  estate  to  money.  Thereafter  these  lien  holders 
proved  their  liens  and  were  permitted  to  amend  their  proof  of  claims 
and  assert  their  security  and  were  awarded  priority  over  mortgagees 
under  a  mortgage  subordinated  to  the  mechanic's  liens.  Judge  i'homp- 
son  affirmed  this  ruling  of  the  referee  August  21st,  1902.  (Case  not  re- 
ported.) 


942  BANKRUPTCY. 

No.  56. 
Proof  of  Debt  Due  Corporation,    (i). 

(Official  Form  No.  33.) 
In  the  District  Court  of  the  United  States  for  the Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


J 


At ,  in  said  district  of ,  on  the day  of , 

A.   D.    19 — ,   came  ,   of  ,   in  the  county  of  , 

and  state  of ,  and  made  oath,  and  says  that  he  is of 

the ,  a  corporation  incorporated  by  and  under  the  laws  of 

the  state  of  .  and  carrying  on  business  at  ,  in  the 

county  of ,  and  state  of ,  and  that  he  is  duly  author- 
ized to  make  this  proof,   and  says  that  the  said  ,   the 

person  by  \or,  against]  whom  a  petition  for  adjudication  of 
bankruptcy  has  been  filed,  was  at  and  before  the  filing  of  said 
petition,  and  still  is,  justly  and  truly  indebted  to  said  corpo- 
ration in  the  sum  of dollars;  that  the  consideration  of 

said  debt  is  as  follows: 


that  no  part  of  said  debt  has  been  paid  ]except- 


]  ;  that  there  are  no  set-offs 


or  counterclaims  to  the  same  ]  except 


J ;  and  that  said  corporation  has 

not,  nor  has  any  person  by  its  order,  or  to  the  knowledge  or 
belief  of  said  deponent,  for  its  use,  had  or  received  any  man- 
ner of  security  for  said  debt  whatever.  , 

of  said  Corporation. 


Subscribed  and  sworn  to  before  me  this day  of 

A.  D.   19—.  


[Official  character.'] 
(i)   The  proof  should  hz  made  by  the  treasurer,  Gen.  Ord.  21.     See  also 
note  to  Form  No.  54.» 


PROCEEDINGS  BEFORE  REFEREE.  943 

No.  57. 
Proof  of  Debt  by  Partnership,    (i). 

(Official  Form  No.  34.) 

In  the  District  Court  of  the  United  States  for  the Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


At ,  in  said  district  of ,  on  the day  of , 

A.   D.    19 — ,   came  ,   of  ,   in   the  county   of  , 

in  said  district  of ,  and  made  oath,  and  says  that  he  is 

one  of   the  firm   of  ,    consisting  of   himself   and   

,  of ,  in  the  county  of ,  and  state  of ;  that 


the  said  ,  the  person  by   [or,  against]   whom  a  petition 

for  adjudication  of  bankruptcy  has  been  filed,  was  at  and 
before  the  filing  of  said  petition,  and  still  is,  justly  and  truly 

indebted  to   this   deponent's   said   firm   in   the  sum   of  

dollars;  that  the  consideration  of  said   debt   is  as   follows 

that  no  part  of  said  debt  has  been  paid  [except ] 

that  there  are  no  set-offs  or  counterclaims  to  the  same  [except 

]  ;  a;id  this  deponent  has  not,  nor  has  his 

said  firm,  nor  has  any  person  by  their  order,  or  to  this  de- 
ponent's knowledge  or  belief,  for  their  use,  had  or  received 
any  manner  of  security  for  said  debt  whatever. 


Creditor. 

Subscribed  and  sworn  to  before  me  this day  of 

A.   D.    19—.  , 

[Official  character.'] 

(l)   See  note  to  Form  No.  64. 


;)44  BANKRUPTCY. 

No.  58. 
Proof  of  Debt  by  Agent  or  Attorney,    (i). 

(Official  Form  No.  35.) 

In  the  District  Court  of  tlie  United  States  for  the Dis- 
trict of . 


In  the  matter  of 


Bankrupt. 


In  luankruptcy. 


J 


At ,  in  said  district  of ,  on  the day  of , 

A.   D.    19 — ,   came  .   of  .   in   the   county  of  , 

and  state  of .  attorney  [or,  authorized  agent],  of ,  in 

the  county  of  ,  and  state  of  ,  and  made  oath,  and 

says  that  ,  the  person  by  ^or,  against]  whom  a  peti- 
tion for  adjudication  of  bankruptcy  has  been  filed,  was  at  and 
before  the  filing  of  said  petition,  and  still  is,  justly  and  truly 

indebted  to  the  said  ,  in  the  sum  of  dollars;  that 

the  consideration  of  said  debt  is  as  follows : 

_^_ » 

that  no  part  of  said  debt  has  been  paid  [except 


]; 

and  that  this  deponent  has  not,  nor  has  any  person  by  his 
order,  or  to  this  deponent's  knowledge  or  belief,  for  his  use, 
had  or  received  any  manner  of  security  for  said  debt  what- 
ever. And  this  deponent  further  says  that  this  deposition 
can  not  be  made  by  the  claimant  in  person  because  

. — . . » 

and  that  he  is  duly  authorized  by  his  principal  to  make  this 

affidavit,  and  that  it  is  within  his  knowledge  that  the  afore- 
said debt  was  incurred  as  and  for  the  consideration  above 
stated,  and  that  such  debt,  to  the  best  of  his  knowledge  anrl 
belief,   still  remains  unpaid  and  unsatisfied. 


PROCEEDINGS  BEFORE  REFEREE. 


945 


Subscribed  and  sworn  to  before  me  this day  of 

A.   D.    19—.  . 

[Official  character.'] 

(i)   See  note  to  Form  No.  64. 


No.  59. 
Proof  of  Secured  Debt  by  Agent,    (i)- 

(Official  Form  No.  36.) 

In  the  District  Court  of  the  United  States  for  the Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


J 


At .  in  said  district  of .  on  the day  of , 

A.    D.    19 — .   came  .    of   .   in   the  county   of  -, 

and  state  of .  attorney  [or,  authorized  agent],  of ,  m 

the  county  of  .  and  state  of  .  and  made  oath,  and 

says  that  ,  the  person  by  [or,  against]  whom  a  peti- 
tion for  adjudication  of  bankruptcy  has  been  filed,  was  at  and 
before  the  filing  of  said  petition,  and  still  is.  justly  and  truly 

indebted  to  the  said  .  in  the  sum  of  dollars;  that 

the  consideration  of  said  debt  is  as  follows: 


that  no  part  of  said  debt  has  been  paid  [except — 

^ 1; 

that  there  are  no  set-offs  or  counterclaims  to  the  same  fexccpt 

1; 

and  that  the  only  securities  held  by  said  for  said  debt 

are  the  following . 


IMT)  BANKRUrTCY. 

and  this  deponent  further  says  that  this  deposition  can  not  be 

made  by  the  claimant  in  person  because  ■ 

» 

and  that  he  is  (hily  authorized  by  his  principal  to  make  this 
deposition,  and  that  it  is  within  his  knowledge  that  the  afore- 
said debt   was  incurred  as  and   for  the  consideration  above 

stated.  . 

Subscribed  and  sworn  to  before  me  this day  of , 

A.  D.   19—. 


[OiJicial  character.'] 

(l)   See  note  to  Form  No.  54. 


No.  60. 
Affidavit  of  Lost  Bill  or  Note. 

(Official  Form  No.  37.) 

In  the  District  Court  of  the  United  States  for  the  Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


Jn  Bankruptcy. 


On  this day  of ,  A.  D.  19 — ,  at ,  came 

-  of ,  in  the  county  of ,  and  state  of ,  and 


makes  oath,  and  says  that  the  bill  of  exchange  [or,  note],  the 
particulars  whereof  are  underwritten,  has  been  lost  under  the 
following  circumstances,  to  wit : . 


and  that   he,   this   deponent,   has  not  been  able  to  find  the 
same;  and  this  deponent  further  says  that  he  has  not,  nor 


PROCEEDINGS  BEFORE  REFEREE. 


947 


has  the  said  ,  or  any  person  or  persons,  to  their  use,  to 

this  deponent's  knowledge  or  behef,  negotiated  the  said 
bill  [or,  note],  nor  in  any  manner  parted  with  or  assigned  the 
legal  or  beneficial  interest  therein,  or  any  part  thereof;  and 
that  he,  this  deponent,  is  the  person  now  legally  and  beneficially 
interested  in  the  same. 

Bill  or  note  above  referred  to. 


Date. 

Drawer  or  maker. 

Acceptor. 

Sum. 

Subscril)ed  and  sworn  to  before  me  this  day  of 

A.  D.  19—. 

[Official  character. 1 


No.  61. 

Order  Allowing  Claim. 

[Caption.] 

This  cause  coming  on  to  be  heard  upon  the  motion  of  the 
German  Bank  for  allowance  of  its  claim  together  with  a  Hen 
by  virtue  of  a  mortgage,  and  after  hearing  counsel  for  the  said 
bank  and  also  counsel  for  tlie  trustee  and  counsel  for  objecting 
creditors,  it  is  now  ordered  that  the  claim  of  the  said  bank 

be  and  the  same  is  hereby  allowed  for  the  sum  of  $ as  a 

general  claim  without  security  or  preference,  this  being  the 
amount  of  the  claim  with  interest  to  the  date  of  the  adjudication 
in  bankruptcy.  A.  M.. 

Referee  in  Bankruptcy. 


948  BANKRUPTCY. 

No.  62. 
Order  Allowing  Claims. 
"[CaptioH.] 

At  ,  in  said  district,  on  tlie  day  of  — ■ — .  A.  D. 

-,  before  A.  M.,  referee  in  bankrnptcy. 


This  canse  coming  on  to  be  heard  npt)n  tlie  claims  of  E.  F., 
First  National  Bank  and  Third  National  Bank,  and  after  hear- 
ing counsel  for  the  parties  and  for  creditors  objecting  to  said 
claims,  it  is  now  ordered  that  the  claim  of  E.  F.  be,  and  the 

same  is  hereby  allowed  for  the  sum  of  $ ,  as  a  general 

and  unsecured  claim ;  said  sum  being-  the  balance  due  up(Mi 
said  debt,  with  interest  to  the  date  of  adjudication.  It  is  fur- 
ther ordered  that  the  claim  of  the  First  National  Bank  be. 

and  the  same  is  hereby  allowed  for  the  sum  of  $ as  a 

general  or  unsecured  claim,  said  sum  being  made  up  of  the 

unpaid  principal  of  said  sum,  to  wit,  $ .  with  interest  to 

the  date  of  adjudication.  It  is  further  ordered  that  the 
claim  of  the  Third  National  Bank  be.  and  the  same  is  hereby 
allowed  as  a  mortgage  claim  to  the  extent  of  $ ,  with  in- 
terest thereon  from  the day  of .  that  being  the  day 

demand  by  filing  claims  was  made,  until  the  same  shall  be 
paid,  but  this  lien  shall  be  subordinate  to  the  mortgage  of  the 
S.  Trust  Company ;  and  further  the  balance  of  the  claim  of 

the  Third  National  Bank  is  allowed  for  the  sum  of  $ 

as  a  general  or  unsecured  claim. 

The  question  of  priority  between  the  Third  National  Bank 
and  parties  holding  claims  for  labor  performed  and  materials 
and  supplies  furnished  is  reserved.  A.  M., 

Referee  in  Bankruptcy. 


No.  63. 
Order  Disallowing  Claim. 
[Caption.] 

At  .  in  said  district,  on  the day  of .  A.  D. 

— .  before  A.  M..  Referee  in  Bankruptcy. 
The  claim  of  the  E.   F.  Company  having  been  presented 


PROCEEDINGS  BEFORE  REFEREE.  ^-49 

for  allowance  and  objection  thereto  having-  been  made  by  the 
trustee,  now  after  hearing  counsel  in  favor  of  and  in  opposition 
thereto,  the  said  objection  is  sustained,  and  it  is  ordered  that 
the  said  claim  be,  and  the  same  hereby  is,  disallowed. 

A.  M., 
Referee  in  Bankruptcy. 


No.  64. 

Order  Allowing  Attorney  Fee   (i). 

[Captio)i.] 

At ,  in  said  district,  on  the  day  of  ,  A.  D. 

-,  before  A.  M.,  Referee  in  Bankruptcy 


The  petition  of  the  trustee  for  an  allowance  to  R.  X., 
Esq.,  for  services  rendered  by  him  in  securing  the  transfer 
of  the  fund  from  the  state  court  to  the  trustee  in  bankruptcy 
coming  on  to  be  heard  after  notice  to  all  counsel  of  record, 
and  after  hearing  such  counsel  it  is  ordered  that  the  said 
R.  X.,  Esq..  be,  and  he  is,  hereby  allowed  the  sum  of  $500.00 
for  the  services  aforesaid,  and  the  trustee  is  directed  to  pay 
said  sum  to  him  at  once.  A.  M., 

Referee  in  Bankruptcy. 

(l)  A  referee  may  allow  a  reasonable  attorney's  fee  as  a  part  of  the 
costs  of  administering  an  estate.  In  re  Stotts,  93  Fed.  Rep.  438;  in  re 
Tcbo,   loi   Fed.   Rep.  419;  in   re  Dreeben.  loi   Fed.   no. 

Reasonable  fees  have  been  allowed  the  attorney  for  the  bankrupt  in 
voluntary  cases.  Fifty  dollars  was  allowed  in  re  Beck.  92  Fed.  Rep.  88f); 
fifty  dollars  in  re  Kross,  96  Fed.  Rep.  816,  being  thirty  dollars  for  serv- 
ices prior  to  the  application  for  discharge,  and  twenty  dollars  for  prose- 
cuting said  application ;  two  hundred  dollars  in  re  Burrus,  97  Fed.  Rep. 
926;  fifty  dollars  in  re  Salaberry,  107  Fed.  Rep.  95;  fifty  dollars  in  re 
Smith,  108  Fed.  Rep.  39.  Where  a  referee  is  not  satisfied  witli  the 
services  rendered  the  bankrupt,  he  may  suspend  claim  for  a  time  owing 
to  the  absence  of  the  b.-inkrupt,  but  must  make  an  allowance  on  such 
evidence  as  he  may  have  within  a  reasonable  time.  In  re  Dreeben.  loi 
Fed.  Rep.  no.  A  voluntary  bankrupt  cannot  recover  fees  paid  nn  at- 
torney in  preparing  a  petition  and  schedule'^  or  the  deposit  fee  nf  twen- 
ty-five  dollars.     In   re  Matthews,  97  Fed.    Rep.   772.     A    fee   for  the   at- 


950  BANKRUPTCY. 

tornej-  for  the  trustee  in  voluntary  proceedings  has  been  allowed,  in  re 
Stotts,  93  Fed.  Rep.  438;  but  see  in  re  Smith,  108  Fed.  Rep.  39,  and 
a  fee  has  been  refused  where  bankrupt's  allorney  received  from  the 
bankrupt's  brother  a  larger  fee  than  he  would  ordinarily  be  allowed  by 
the  court  out  of  the  estate.     In  re  O'Connell.  98  Fed.  Rep.  83. 

The   attorney   for    the   creditors    in    involuntary   proceedings   has   been 
allowed  a  fee  for  services  which  varied  according  to  the   services  ren- 
dered.    One  hundred  dollars  was  allowed  in  re  Harrison  Mercantile  Co., 
95  Fed.  Rep.  123;  seventy-five  dollars  in  re  Woodard,  95  Fed.  Rep.  955; 
two  thousand  dollars  in   re   Curtis,   100  Fed.   Rep.   784;   fifteen   hundred 
dollars  in  re  Rude,  loi   Fed.  Rep.  805 ;  seventy-five  dollars  in  re  Silver- 
man, 97  Fed.  Rep.  325,  and  twenty-five  dollars  in  re  Carolina  Cooperage 
Co.,  96   Fed.   Rep.   950.     Bankrupt's   attorney   in   involuntary   proceedings 
has  been  allowed  a  fee  of  twenty-five  dollars  per  day  for  attending  ex- 
aminations, in  re  Mayer,  loi   Fed.   Red.  695,  but  was  refused  compensa- 
tion  for  services   defending  the  bankrupt   against   charges  of  fraud  and 
concealment   of    assets   or   other   matters    involving   the    bankrupt's   per- 
sonal   liability,    civil    or   criminal,    including    a    promised    retainer,    in    re 
Mayer,    loi    Fed.    Rep.   695.      The   attorney   for   a   trustee   when    such    is 
deemed  necessary  is  entitled  to  compensation.     In  re  Little   River  Lum 
ber  Co.,  loi   Fed.  Rep.  558.     A  trustee  who  was  an  attorney  at  law  has 
been    allowed    compensation    for    his    professional    services    such    as    he 
would   have  been  obliged  to  pay  had   he  employed  other  counsel,  in  re 
Mitchell,  I  Am.  B.  R.  687 ;  to  the  same  effect  in  re  Welge,  I  Fed.  Rep. 
216,  contra  in  re  Muldaur  No.  9905  Fed.  Cas.,  S.  C.  2  Ben.  65.     The  at- 
torney  for    a   trustee   is   not   entitled   to   a    fee    for   professional    services 
for  attending  examinations   where    his   services   were   rendered   in   behalf 
of  creditors  who  were  his  real   clients,  in   re    Rozinsky,    loi    Fed.   Rep. 
229,  or  in  general  where  when  the  attorney  for  the  trustee  is  also  attor- 
ney for  the  creditors;  in   re  Carolina  Cooperage  Co.,  96  Fed.  Rep.  950. 
A  fee  of  seven  hundred  dollars  has  been  allowed  counsel  for  a  receiver, 
in  re  Gerson,  2  N.  B.  N.  &  R.  497 ;  but  see  in  re  Kelly  Dry  Goods  Co., 
102  Fed.  Rep.  747,  4  Am.    B.   R.   528.     Attorneys   for   creditors  are  not 
entitled   to   fees    for   attending   creditors'    meetings    or   procuring  bidders 
for   property   at   a    sale,    in    re    Harrison    Mercantile    Co.,    95    Fed.    Rep. 
123;  in  re  Rozinsky,   loi   Fed.   Rep.  229.     The  court  will   not  enforce  a 
provision  in   a  mortgage  for  the  payment   "of  an  attorney's   fee  of  ten 
per  cent,  of  the  amount  of  the  debt,"  in  re  Roche,  loi  Fed.  Rep.  956. 

Attorney's  fees  are  costs  of  administration  under  the  Bankrupt  Act, 
sec.  64&,  and  are  entitled  to  have  priority.  The  amount  may  be  fixed  by 
the  judge  or  referee  without  notice  to  creditors,  in  re  Stotts,  93  Fed. 
Rep.  438.  The  amount  rests  in  the  discretion  of  the  court,  in  re  Beck, 
92  Fed.  Rep.  889:  in  re  Burrus,  97  Fed.  Rep.  926;  in  re  Curtis  (C.  C.  A. 
7th  Cir.),  100  Fed.  Rep.  784,  4  Am.  B.  R.  17;  in  re  Tebo,  loi  Fed.  419; 
in  re  Mayer,  loi  Fed.  Rep.  695,  but  this  discretion  may  be  reviewed  on 
appeal,  in  re  Roche  (C.  C.  A.,  sth  Cir.),   loi    Fed.   Rep.  958,  4  Am.  B.  R. 


PROCEEDINGS  BEFORE  REFEREE.  951 

369;  in  re  Curtis  (C.  C.  A.,  7th  Cir),  100  Fed.  Rep.  784,  4  Am.  B.  R.  17. 

A  court  of  bankruptcy  cannot  ordinarily  tax  as  costs  attorneys  fees 
upon  the  dismissal  of  a  petition  in  involuntary  bankruptcy,  in  re  Ghi- 
lione,  93  Fed.  Rep.  186.  When,  however,  an  application  to  seize  and 
hold  the  property  of  the  bankrupt  pending  the  hearing  has  been  granted 
and  the  petition  afterwards  dismissed,  the  court  may  allow  attorneys 
fees  as  costs  of  the  proceedings,  in  re  Abraham  (C.  C.  A.,  5th  Cir.),  93 
Fed.   Rep.   767    (785). 

A  court  of  bankruptcy  has  refused  to  dismiss  a  voluntary  petition  un- 
til the  attorney  for  the  trustee  had  been  paid.  In  re  Salaberry,  107  Fed. 
Rep.  95. 


No.  65. 

Order  Allowing   Attorney's   Fees    (Another   Form)    (i). 

\_Caption.'\ 

This  cause  coming  on  to  be  heard  upon  the  report  of  A. 
M.,  referee,  upon  appHcation  for  the  allowance  of  attorney's 
fees,  the  court  upon  consideration  thereof  does  allow  F.  Y., 
R.  Y.  and  R.  S.,  attorneys  for  creditors,  a  joint  fee  in  the 

sum  of  $ ,  but  the  court  refuses  to  allow  a  fee  to  R.  X., 

counsel  for  the  bankrupt, 
(i)    See  note  to  No.    64. 


No.  66 
Petition  to  Expunge  Claim  (i). 

District  Court  of  the  United  States  for  the  District  of 

,  Division. 

In  the  matter  of  F.  H.,  doing  business 

as  F.  H.  &  Son,  Bankrupt. 

No.  . 

In  Bankruptcy. 

Respectfully  represents  B.  S.,  trustee  of  the  estate  of  said 
bankrupt,  that  the  D.  M.  Grocery  Co.,  which  has  this  day 
filed  its  certain  claim  herein  for  allowance  and  which  said 
claim  has  been  allowed,  has  received  preferences  within  the 
four  months  next  immediately  preceding  the  date  of  the  filing 


f)'y2  BANKRUPTCY, 

of  the  petition  herein  and  have  not  surrendered  the  prefer- 
ences so  received. 

Wherefore,  he  prays  that  said  chiini  may  he  disallowed  and 
expuni^etl  from  the  list  of  claims  against  the  estate  of  said 
bankrupt.  B.  S., 


Trustee. 


(i)   Bank.  Ord.  21,  par.  6. 


No.  67. 
Waiver  of  Notice  (i). 

The  District  Court  of  the  United  States 

For  the District  of Division. 

In  the  matter  of  F.  H.,  doing-  business  as  F.  H.  &  Son,  bank- 
rupt. 

No.  

In  Bankruptcy. 

The  D.  M.  Grocery  Company  hereby  waives  the  issuance 
and  service  of  notice  upon  it  as  to  the  petition  of  the  trustee 
heretofore  filed  herein  asking  that  its  claim  heretofore  al- 
lowed herein  be  disallowed  and  expunged  from  the  list  of 
claims  against  said  estate  and  consents  that  said  petition  of 

said  trustee  may  be  heard  on  the  day  of  ,  at  1 1 

o'clock  a.  m.  The  D.  M.  Grocery  Co. 

( I )  If  notice  is  not  waived,  formal  notice  should  be  given  by  mail  to 
creditor.     Bank.  Ord.  21,  par.  6. 


PROCEEDINGS  BEFORE  REFEREE.  953 

No.  68. 

Order  that  Certain  Creditors  Surrender   Preferences  Before 
Allowed  to  Prove  Claims. 

Order  that  certain  creditors  surrender  preferences  before 
allowed  to  prove  claims. 
The  District  Court  of  the  United  States 
For  the  District  of . 

In  the  matter  of 

F.  H., 
Bankrupt. 

This  cause  coming  on  for  hearing  at  an  adjourned  meet- 
ing of  creditors  held  pursuant  to  adjournment  on  the  

day  of  19 — ,  and  the  court  having  heard  all  the  evi- 
dence offered  upon  the  matter  of  the  objection  of  creditors 
to  the  claims  of  creditors  who  have  received  payments  upon 
their  claims  since  the  day  of  ,  19 — ,  which  mo- 
tion   of    creditors    was    filed    herein    on    the    day    of 

,    19 — ,    and    the   court   being   fully   advised,    does   find 

that  the  defendant  was  insolvent  on  the  day  of  


19 — ,  that  the  creditors  hereinafter  named  received  the  pay- 
ments hereinafter  named  upon  their  claims,   since   the  

day  of  19 — ,  and  since  the  defendant  became  insolvent 

and  within  four  months  preceding  the  date  of  the  assignment 
herein  and  the  filing  of  the  petition  in  bankruptcy  herein  by 
the  plaintiff. 

It  is  therefore  considered,  ordered  and  adjudged  by  the 
court  that  unless  the  creditors  hereinafter  named  pay  to  the 
trustee  herein  the  amounts  so  received  by  said  creditors  re- 
spectively   since    the  day    of  19 — ,    ruid    which 

amounts  are  set  opposite  their  names,  the  claims  of  cacli  nf 
said  creditors  be,  and  the  same  are  hereby  rejected  and  dis- 
allowed.    Said  payments  to  said  trustee  herein  shall  be  made 


954  BANKRUPTCY. 

by  said  creditors,  respectively,  on  or  before  the  day  of 

19—. 

D.  &  R,  $ 

L  .  T.  Co.,  $ 

A.  P.  &  S.  Co.,  $ 

A.  M., 
Referee  in  Bankruptcy. 

(i)  Taken  from  the  record  in  re  Hess  Spring  &  Axle  Co.  vs.  Eagle 
Carriage  Co.,  pending  in  the  District  Court  of  the  United  States  for  the 
Southern  District  of  Ohio. 

The  claims  of  creditors  who  have  received  preferences,  voidable  under 
Sec.  60,  subdivision  h,  or  to  whom  conveyances,  transfers,  assignments, 
or  incumbrances,  void  or  voidable  under  Sec.  67,  subdivision  e,  have  been 
made  or  given,  shall  not  be  allowed  unless  such  creditors  shall  surrender 
such  preferences. .  conveyances,  transfers,  assignments,  or  incumbrances. 
Sec.  59g  of  Bankruptcy  Act,  as  amended  by  act  of  Feb.  5,  1903. 


No.  69. 
Order  Disallowing  and  Expunging  List  of  Claims   (i). 

The  District  Court  of  the  United  States 
For  the District  of 

In  the  matter  of 

RH., 
Bankrupt. 

At ,  in  the District  of ,  on  the day  of 


19—. 

In  accordance  with  the  order  heretofore  made  and  upon 
the  evidence  submitted  to  the  court  upon  the  following-  claims 
against  the  estate  of  said  bankrupt,  and  it  appearing  that  said 
claimants  have  failed  to  make  repayments  as  heretofore  or- 
dered ; 

It  is  now  ordered  that  the  following  claims  herein  be  dis- 


PROCEEDINGS  BEFORE  REFEREE.  955 

allowed  and  expunged  from  the  list  of  claims  upon  the  trus- 
tee's record  in  said  case,  viz : 

N.   H.   Co.,  $ 

M.  Pub.  Co.,  $ 


C.  Bending  Wks.,  $- 


A.  M., 
Referee  in  Bankruptcy. 

(i)   Taken   from  the  record  in  re  Eagle   Carriage  Co.,  pending  in  the 
District  Court  of  the  United  States  for  the  Southern  District  of  Ohio. 


No.  70. 
Order  Reducing  Claim  (i). 

(Official  Form  No.  38.) 

In  the  District  Court  of  the  United  States  for  the  Dis- 
trict of  . 


In  the  matter  of 

In  Bankruptcy. 

Bankrupt. 


At ,  in  said  district,  on  the  day  of ,  A.  D. 

19—. 

Upon  the  evidence  submitted  to  this  court  upon  the  clami 
of against  said  estate  [and.  if  the  fact  he  so,  upon  hear- 
ing counsel  thereon],  it  is  ordered  that  the  amount  of  said 

claim  be  reduced  from  the  sum  of  ,  as  set  forth  in  the 

affidavit  in  proof  of  claim  filed  by  said  creditor  in  said  case, 

to  the  sum  of ,  and  that  the  latter-named  sum  be  entered 

upon  the  books  of  the  trustee  as  the  true  sum  upon  which  a 
dividend  shall  be  computed  [//  7vith  interest,  with  interest 
thereon  from  the day  of ,  A.  D.  19 — .] 


Referee  in  Bankruptcy. 


956 


BANKRUPTCY. 


(i)  B.  A.  1898.  sec.  S7k\  Gcii.  Orel.  21,  par.  6.  Loveland's  Bankruptcy, 
sec.  139. 

If  a  party  in  interest  objects  to  the  allowance  of  said  claim  he  must 
assume  the  burden  of  proof,  in  re  Sumner,  101  Fed.  Rep.  224,  4  Am. 
B.  R.  123,  2  N.  B.  N.  681.  but  see  in  re  Wooten.  118  Fed.  Rep.  670. 
Witnesses  may  be  examined  orally  or  by  deposition  and  the  hearing 
may  be  postponed  for  the  purpose  of  obtaining  evidence  in  relation  to 
the  claim ;  in  re  Sumner,  loi  Fed.  Rep.  224,  4  Am.  B.  R.  123,  2  N.  B.  N. 
681;  in  re  Dreeben,  loi  Fed.  Rep.  no,  4  Am.  B.  R.  146.  Where  a  re- 
spondent denied  the  alleged  indebtedness  to  a  petitioning  creditor  and 
evidence  is  offered  and  the  court  finds  the  allegations  of  the  petition  true 
and  makes  an  adjudication  the  same  question  cannot  be  tried  upon  the 
petitioning  creditor  making  proof  of  his  claim;  in  re  Ulfelder  Clothing 
Co.,  98  Fed.  Rep.  409,  3  Am.  B.  R.  425. 

The  allowance  or  disallowance  of  a  claim  is  largely  in  the  discretion 
of  the  referee  and  his  decision  on  the  question  of  fact  will  not  be  re- 
versed by  a  judge  unless  manifestly  contrary  to  the  weight  of  the  evi- 
dence; in  re  Rider,  96  Fed.  Rep.  811,  3  Am.  B.  R.  192.  3  N.  B.  N.  187. 

Where  no  trustee  has  been  appointed  the  bankrupt  may  move  for  a  re- 
examination and  expunction  of  a  claim  proved  and  allowed  against 
his  estate;  in  re  Ankeny.  100  Fed.  Rep.  614,  4  Am.  B.  R.  472.  Consult 
also   note  to   next   form  post 


No.  71. 

Order  Expunging  Claim  (i). 

(  Official  Form  No.  39). 

In  the  District  Court  of  the  United  States  for  the  Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


"  In  Bankruptcy. 


At  ,  in  said  district,  on  the  day  of  ,  A.  D. 

19—. 

Upon  the  evidence  submitted  to  the  court  upon  the  claim 
of against  said  estate  [and.  //  the  fact  be  so,  upon  hear- 
ing counsel  thereon],  it  is  ordered  that  said  claim  be  disal- 


PROCEEDINGS  BEFORE  REFEREE.  957 

lowed  and  expunged  from  the  list  of  claims  upon  the  trustee's 

recx)rd  in  said  case.  , 

Referee  in  Bankruptcy. 

(l)   B.  A.  1898,  sec.  57^'.     Gen.  Ord.  21,  par.  6. 

It  has  been  held  that  the  provisions  relating  to  the  examination  of 
claims  does  not  apply  to  claims  for  expenses  of  administration,  such  as 
charges  and  expenses  of  a  receiver.  In  re  Reliance  Storage  &  Ware- 
house Ca,  100  Fed.  Rep.  619,  4  Am.  B.  R.  49,  3  N.  B,  N.  328. 

The  burden  of  proof  is  upon  the  creditor  asking  the  re-e.xamination 
to  establish  the  facts  which  he  alleges.  In  re  Howard,  100  Fed.  Rep.  630, 
4  Ara  B.  R.  69. 

An  objection  to  a  petition  for  re-examination  on  the  ground  that  it 
lacks  particularity  should  be  raised  by  a  motion  to  make  more  definite 
and  certain.  In  re  Ankeny,  100  Fed.  Rep.  614,  4  Am.  B.  R.  472,  2  N.  B. 
N.  148. 

An  inequitable  claim  has  been  expunged.  In  re  Knox,  98  Fed.  Rep. 
585,  3  Am.  B.  R.  371.  See  also  in  re  Flick,  105  Fed.  Rep.  503.  5  Am.  B. 
R-  465,  3  N.  B.  N.  71.  So  also  a  claim  barred  by  the  statute  of  limita- 
tions.    In  re  Lipman,  94  Fed.  Rep.  353,  2  Am.  B.  R.  46. 


No.  72. 

Petition  and  Order  for  Sale  by  Auction  of  Real  Estate  (i). 

(Official  Form  No.  42.) 

In  the  District  Court  of  the  United  States  for  the  Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


Respectfully  represents  .  tmstec  of  the  estate  of  said 

bankrupt,  that  it  would  be  for  the  benefit  of  said  estate  that 
a  certain  portion  of  the  real  estate  of  said  bankrupt,  to  wit: 
[here  describe  it  and  its  estimated  value']  should  be  sold  by 


95S  BANKRUPTCY. 

auction,   in  lots  or  parcels,   antl  upon  terms  and  conditions 

as  follows: 

Wherefore  he  prays  that  he  may  be  authorized  to  make  sale 
by  auction  of  said  real  estate  as  aforesaid. 
Dated  this day  of ,  A.  D.  19 — . 


Trustee. 

The  foregoing  petition  having  been  duly  filed,  and  having 
come  on  for  a  hearing  before  me.  of  which  hearing  ten  days' 
notice  was  given  by  mail  to  creditors  of  said  bankrupt,  now, 
after    due    hearing,    no    adverse    interest    being    represented 

thereat   [or,  after  hearing in  favor  of  said  petition  and 

in  opposition  thereto],  it  is  ordered  that  the  said  trustee 

be  authorized  to  sell  the  portion  of  the  bankrupt's  real  estate 
specified  in  the  foregoing  petition  by  auction,  keeping  an 
accurate  account  of  each  lot  or  parcel  sold  and  the  price 
received  therefor  and  to  whom  sold ;  which  said  account  he 
shall  file  at  once  with  the  referee. 

Witness  my  hand  this day  of ,  A.  D.  19 — . 

Referee  in  Bankruptcy. 

(l)   B.  A.  1898,  sec.  49,  clause  i,  and  sec.  2,  clause  7;  Gen.  Ord.  18. 

The  court  may  order  a  sale  of  real  estate  either  subject  to  or  free  of 
liens  when  the  interest  of  the  general  creditors  would  be  advanced  by- 
such  a  sale.  In  re  Worland,  92  Fed.  Rep.  893,  i  Am.  B.  R.  450;  in  re 
Styer.  98  Fed.  Rep.  290,  3  Am.  B.  R.  924;  in  re  Shaeffer,  5  Am.  B.  R. 
248 ;  in  re  Sanborn,  3  Am.  B.  R.  54. 

A  sale  subject  to  encumbrances  includes  lien  for  municipal  claims,  and 
where  twelve  parcels  of  real  estate  sold  for  a  lump  sum  —  municipal 
lien  on  two,  cannot  be  paid  out  of  proceeds  of  sale.  In  re  Gerry,  7  Am. 
B.  R.  461. 

It  has  been  held  that  a  wife,  who  was  also  a  creditor  and  claimant  of 
an  interest  in  the  real  estate,  cannot  redeem  from  a  sale  by  the  trustee 
under  an  order  of  the  referee,  hi  re  Novak,  7  Am.  B.  R.  267.  The 
trustee  has  a  right  to  redeem  property  sold  under  a  decree  of  foreclosure. 
In  re  Novak,  7  Am.  B.  R.  27. 

Sums  to  be  paid  upon  secured  claims  or  other  claims  entitled  to  pri- 
ority or  payment  were  not  "  dividends  "  upon  which  the  trustee  or  referee 
may  receive  a  commission,    hi  re  Utt  (C.  C.  A.,  7  Cir.),  105  Fed.  Rep. 


PROCEEDINGS  BEFORE  REFEREE.  P59 

754,  s  Am.  B.  R.  387 ;  Ui  re  Fielding,  96  Fed.  Rep.  800,  3  Am.  B.  R.  135 ; 
in  re  Mammoth  Pine  Lumber  Co.,  116  Fed.  Rep.  731;  in  re  Epstein, 
109  Fed.  Rep.  878,  6  Am.  B.  R  191.  But  they  axe  now  under  sec.  9  of  the 
Act  of  February  5,  1903,  amending  sec.  400  of  Act  of  1898. 


No.  73. 

Petition  eind  Order  for  Redemption  of  Property  from  Lien  (i). 

(Official  Form  No.  43.) 

In  the  District  Court  of  the  United  States  for  the  Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


Respectfully    represents    ,    trustee    of    the    estate    of 

said  bankrupt,  that  a  certain  portion  of  said  bankrupt's  estate, 
to  wit :  \Jiere  describe  the  estate  or  property  and  its  estimated 
value]  is  subject  to  a  mortgage  \ describe  the  mortgage],  or  to 
a  conditional  contract  [describing  it],  or  to  a  lien  [describe  the 
origin  and  nature  of  the  lien],  [or,  if  the  property  be  personal 
property,  has  been  pledged  or  deposited  and  is  subject  to  a 
lien]  for  [describe  the  nature  of  the  lien],  and  that  it  would 
be  for  the  benefit  of  the  estate  that  said  property  should  be 
redeemed  and  discharged  from  the  lien  thereon.  Wherefore 
he  prays  that  he  may  be  empowered  to  pay  out  of  the  assets 

of  said  estate  in  his  hands  the  sum  of .  being  the  amount 

of  said  lien,  in  order  to  redeem  said  property  therefrom. 

Dated  this  day  of ,  A.  D.   19 — . 

> 
Trustee. 

The  foregoing  petition  having  been  duly  filed  and  having 
come  on  for  a  hearing  before  me,  of  which  hearing  ten  days' 


;)(;0  BANKRIPTCY. 

lunice  was  given  by  mail  to  crcilitors  of  said  bankrupt,  now, 
after  due  hearinj;-.  no  adverse  interest  beinj^  represented  there- 
at [or,  after  hearing in  favor  of  said  petition  and in 

ojiposition  thereto],  it  is  ordered  that  the  said  trustee  be  au- 
tiiorized   to   pay   out   of  the  assets  of  tlie  bankrupt's  estate 

si)ecified  in  the  foregoing  petition  the  sum  of ,  being  the 

amount  of  the  Hen,  in  order  to  redeem  the  property  therefrom. 
Witness  my  hand  this day  of ,  A.  D.  19 — . 


Referee  in  Bankruptcy. 
(i)    See  note  to  Form  No.  72. 


No.  74. 
Petition  to  Sell  Real  Estate  Free  from  Liens  (i). 

The  District  Court  of  the  United  States 

For  the District  of 

In  the  matter  of 

F.  H., 
Bankrupt. 

To  the  Honorable 

Judge  of  the  District  Court  of  the  United  States, 
For  the District  of  


The  plaintiff  C.  C,  respectfully  represents  to  the  court  that 

upon  the day  of ,  19 — ,  P.  R.  and  others  instituted 

a  proceeding.  No.  • in  this  court,  to  have  F.  H.  declared 

an  involuntary  bankrupt ;  that  on  the day  of ,  19 — , 

the  defendant,  F.  H.,  was  adjudicated  a  bankrupt  in  said 
cause;  that  on  the  day  of  ,  19 — ,  the  plain- 
tiff, C.  C.  was  elected  trustee  in  bankruptcy,  and  im- 
mediately accepted  the  trust  and  qualified. 

Plaintiff  further  represents  to  the  court  that  at  the  time  F. 


PROCEEDINGS  BEFORE  REFEREE.  961 

H.  was  adjudicated  a  bankrupt  he  was  possessed  of  the  fol- 
lowing real  estate^  situated  in  county,  ,  to  wit : 

\Follozc  zi'itli   drscrif^iio}i   of  real  estate.'] 

That  the  title  to  said  property  by  operation  of  law  is  now 
vested  in  this  plaintiff  as  trustee  in  bankruptcy. 

That  on  the day  of .  19 — ,  after  due  notice  to  all 

parties  interested,  this  plaintiff,  as  Trustee  in  Bankruptcy,  of 
F.  D.,  was  authorized  and  directed  to  bring  an  action  to  sell 
the  real  estate  of  said  F.  H.  free  from  all  liens  and  claims 
whatsoever;  that  after  the  appointment  and  qualification  of 
the  plaintiff  as  trustee  he  had  the  aforesaid  real  estate  ap- 
praised, and  that  the  appraisement  of  Lot  No.  ,  firstly 

described  above,  was  returned  at  $ ;  that  of  Lot  No. 

secondly   described   above,    was   returned   at   $ ;   that   of 

Lot  No.  .  thirdly  described  above,  was  returned  at  $ . 

Plaintiff  further  represents  to  the  court  tliat  the  U.  Savings 

Bank,  a  corporation  under  the  laws  of .  claims  to  hold  a 

mortgage  upon  all  the  aforesaid  lots ;  that  the  W.  G.   Bank, 

a  corporation  under  the  laws  of  ,   claims  to  hold  two 

mortgages  upon  Lot firstly  described  above;  that  O.  E.  H. 

claims  to  have  some  interest  in  said  Lot  No.  first  de- 
scribed above,  by  way  of  mortgage;  that  the  defendant  O.  E. 
H.,  wife  of  the  said  F.  H.,  claims  an  inchoate  right  of  dower 
in  said  premises. 

That  plaintiff  further  represents  that,  in  order  to  proi^erly 
administer  the  estate  of  the  bankrupt,  F.  H.,  it  is  necessary 
to  sell  the  above  described  real  estate  free  from  all  Hens  and 
other  claims,  and  to  marshal  liens ;  that  all  tlic  defendants  have 
consented  in  writing  that  this  proceeding  should  be  brought 
in  the  District  Court  of  the  United  States  for  the  Dis- 
trict of . 

Wherefore,  the  plaintiff  C.  C,  Trustee  in  Bankruptcy,  prays 
that  subpoenas  may  issue  to  F.  H.,  O.  E.  H.,  the  U.  Savings 
Bank  and  the  W.  G.  Bank  commanding  them  to  set  up  by  an- 
swer what  claim,   if  any,   each  has  in  said  premises  herein- 


0G2  BANKRUPTCY. 

before  described:  that  an  order  may  issue  to  the  j^laintiff  here- 
in as  Trustee  in  Bankruptcy  of  F.  11.,  to  sell  the  above  de- 
scribed premises  at  such  time  and  upon  such  terms  as  the 
court  may  direct  free  from  the  liens  and  claims  of  these  de- 
fendants, and  free  from  the  dower  interest  of  the  said  O.  E. 
H.;  and  that  the  funds  arising:  from  said  sale  be  paid  into 
court  for  further  order;  that  the  liens  of  the  defendants  be 
marshalled,  and  for  all  relief  that  may  be  necessary  and 
proper  in  the  premises.  C.  C, 

Trustee  in  Bankruptcy  of  F.  H. 

R.  X.  &  Y., 

Attorneys  for  Trustee. 

(AMdavit). 

(i)   Taken  from  the  record  in  re  Nicholas  Wolff,  pending  the  District 
Court  of  the  United  States  for  the  Southern  District  of  Ohio. 


No.  75. 

Decree  for  Sale  Free  from  Liens   (i). 

The  District  Court  of  the  United  States 

For  the District  of 

In  the  matter  of 

F.  H., 
Bankrupt. 

This  day  this  cause  came  on  to  be  heard  upon  the  petition 
of  plaintiff,  C.  C,  trustee,  and  the  answers  and  cross-peti- 
tions of  O.  E.  H.,  the  U.  Savings  Bank,  a  corporation  under 

the  laws  of  ,  the  W.  G.  Bank,  a  corporation  under  the 

laws  of ,  defendants,  and  the  court  finds  that  it  is  nec- 
essary for  the  proper  administration  of  the  trust  of  the  plain- 
tiff, C.  C,  Trustee  in  Bankruptcy  of  F.  H.,  that  the  real 
estate  described  in  his  netition  should  be  sold  at  public  sale 
free  from  the  claims  of  the  defendants  herein;  and  it  fur- 


PROCEEDINGS  BEFORE  REFEREE.  963 

ther  appearing  to  the  court  that  the  property  has  already  been 
appraised  by  appraisers  appointed  by  the  referee  it  is  ordered 
that  such  appraisement  be  considered  an  appraisement  for  the 
purposes  of  this  sale. 

It  is  therefore  ordered,  adjudged  and  decreed  that  an  or- 
der for  sale  of  the  various  four  parcels  of  real  estate  de- 
scribed in  the  petition,  issue  to  C.  C,  Trustee  in  Bankruptcy, 
authorizing  and  directing  him  to  sell  all  such  property  either 
separately  or  collectively  as  to  him  may  seem  for  the  best  in- 
terests of  the  estate,  as  upon  execution  of  property  sold  by 
the  marshal ;  that  he  advertise  and  sell  such  parcels  either  sep- 
arately or  collectively  on  the  premises  for  not  less  than  

of  their  respective  appraised  values;  that  he  may  sell  for  cash 
or  cash,  balance  in and years,  deferred  pay- 
ments to  be  secured  by  mortgage  on  the  premises  with  inter- 
est at  six  per  cent,  per  annum ;  and  for  good  cause  shown,  ad- 
vertisement in  a  German  newspaper  is  dispensed  with. 

The  trustee  is  further  ordered  to  make  due  return  of  the 
order  of  sale  issued  herein,  and  to  bring  the  proceeds  of  such 
sale  into  court  for  further  order  herein. 

And  on  motion  of  tlie  plaintiff,  and  for  good  cause  shown, 
the  trustee  is  authorized  to  employ  an  auctioneer  to  conduct 
the  sale  who  shall  receive  as  compensation  a  sum  not  to  ex- 
ceed    per  cent,  of  the  proceeds  of  the  sale,  and  he  may 

expend  the  sum  of  $ for  extra  advertising,  which  com- 
pensation and  sum  shall  l>e  taxed  as  ])art  of  the  costs  herein. 

It  is  furtlier  ordered  that  the  sale  of  said  premises  free  and 
clear  of  the  dower  interest  of  the  defendant  O.  E.  H.,  shall 
be  without  prejudice  to  her  right  to  have  the  value  of  said 
dower  interest  ascertained  upon  tlie  coming  in  of  the  reiK)rt  of 
any  sale  made  hereunder,  and  that  when  the  value  of  said 
dower  interest  is  ascertained,  that  the  same  be  paid  to  her  out 
of  the  proceeds  of  said  sale,  but  without  prejudice  tf>  the 
rights,  if  any,  of  the  defendants,  the  U.  Savings  I>ank  and 
the  \V.  G.   Bank,  under  their  mortgages  set  up  in  their  re- 


964  BANKRUPTCY. 

spective  answers  and  cross-petitions  Hied  herein,  in  the  value 
of  sail!  dower  interests. 

(l)  Taken  from  the  record  in  re  Nicholas  Wolff,  pending  in  the  Dis- 
trict Court  of  the  United  States   for  the  Southern  District  of  Ohio. 

A  court  of  bankruptcy  has  power  to  decree  a  sale  free  from  liens. 
Chauncey  Z's.  Dyke  Bros.    (C.  C.  A.)    119  Fed.  Rep.   i. 

It  is  in  the  province  of  the  referee  to  direct  the  manner  of  sale  free 
and  clear  of  incumbrances,  and  he  may  preserve  and  transfer  bona  fide 
liens  to  the  fund  arising  from  the  same.  Trust  Co.  vs.  Benbow,  3  Am. 
Bankr.  R.  9,  96  Fed.  514;  in  re  Cobb,  3  Am.  Bankr.  R.  129,  96  Fed.  821. 
in  re  Pittelkow,  i  Am.  Bankr.  R.  472,  92  Fed.  901  ;  in  re  Matthews,  6  Am. 
Bankr.  R.  96,  109  Fed.  603:  in  re  Kellogg.  7  Am.  Bankr.  R.  623,  113 
Fed.    120. 


No.  76. 

Final  Entry  of  Distribution  on  Sale  of  Real  Estate  Free  from 

Liens  (i). 

The  District  Court  of  the  United  States 

For  the District  of 

In  the  matter  of 

F.  H., 
Bankrupt. 

This  day  came  the  parties  hereto,  and  this  cause  having  been 
referred  to  A.  M.,  as  Special  Master  and  said  Special  Mas- 
ter having  heard  the  testimony  and  determined  the  ques- 
tions submitted  to  him  in  accordance  with  this  decree,  and 
the  parties  hereto  being  satisfied  with  said  determination  and 
desiring  to  avoid  the  additional  expense  of  a  rejwrt  by  said 
Special  Master,  by  consent  of  court,  a  report  of  the  said  Spec- 
ial Master  herein  is  hereby  waived. 

And  the  court  now  coming  on  to  distribute  the  proceeds  of 
the  sales  herein,  remaining  in  the  hands  of  C.  C,  trustee  here- 
in, amounting  to  the  sum  of  $ does  find,  and  the  parties 

hereto  consent  thereto,  as  follows,  viz : 

The  court  does  find  that  the  defendant,  the  W.  G.  Bank  has 


PROCEEDINGS  BEFORE  REFEREE.  965 

the  first  and  best   lien  upon  the   proceeds   arising  from   the 

sale  of   Lot   No.   and   the   defendant,   the  U.    Savings 

Bank  has  the  first  and  best  lien  upon  the  proceeds  arising 

from  the  sale  of  Lots  No. and  No. herein ;  that  the 

defendant  O.  E.  H..  wife  of  the  defendant  F.  H.,  is  not  en- 
titled to  any  dower  in  the  proceeds  arising  from  sales  of  any 
of  the  lots  herein. 

The  court  does  find  that  there  are  unpaid  street  assess- 
ments due  the  city  of upon  Lot  No.  amounting  to 

the  sum  of  $ which  should  be  paid  out  of  the  proceeds  of 

the  sale  of  said  Lot  No.  before  any  payment  is  made  to 

the  said  W.  G.  Bank. 

The  court  does  find  that  there  are  unpaid  street  assessments 

due  the  city  of upon  Lots  No. ,  and  No. herein 

amounting  to  the  sum  of  $ ,  which  should  be  paid  out  of 

the  proceeds  of  the  sales  of  said  lots,  before  any  payment  is 
made  to  the  said  U.  Savings  Bank. 

The  court  does  find  that  there  should  be  paid  by  the  parties 
hereto  as  compensation  for  the  services  of  the  Special  Mas- 
ter herein,   including  the  payment  of  stenographer's  services 

by  said  Special  Master,  and  also  the  sum  of  $ due  the 

clerk  of  this  court  for  entering  this  decree,  by  said  Special 

Master,  the  aggregate  sum  of  $ for  his  services  herein, 

and  which  sum  should  be  borne  by  the  parties  hereto  in  pro- 
portion to  their  respective  claims  herein,  to  wit :  $ there- 
of by  the  W.  G.  Bank,  and  $ by  the  U.  Savings  Bank. 

The  court  does  find  that  the  proceeds  of  the  sale  of  said  Lot 

No.  amounted  to  $ ,  from  which  after  deducting  the 

sum  of  $ the  pro])ortionate  part  of  costs  and  expenses  al- 
ready paid  herein,  there  is  left  the  sum  of  $ and  from 

which  after  deducting  the  sum  of  $ for  street  assessments 

and  $ for  Special  Master  herein,  there  is  left  the  sum  of 

$ ,  which  should  be  paid  over  and  distributed  to  the  de- 
fendants, the  W.  G.  liank  uix)n  the  notes  set  uj)  by  it  in  its 
answer  and  cross-petition  herein. 

The  court  docs  tin«l  that  the  proceeds  of  the  sale  of  Ixits  No. 


nOd  BANKRUPTCY. 

,  and  No. amounted  to  $ ,  from  which  after  de- 


duciing-  tlie  sum  of  $ ,  the  proportionate  part  of  costs  and 

expenses  already  paid  herein,  there  is  left  the  sum  of  $ 

and  from  which  after  deducting  the  sum  of  $ for  street 

assessments  and  $ for  the  Special  Master  herein,  there 

is  left  the  sum  of  $ .  which  should  be  paid  over  and  dis- 
tributed to  the  defendant,  the  U.  Savings  Bank,  upon  the  note 
set  up  by  it  in  its  answer  and  cross-petition  herein. 

It  is  therefore  considered,  ordered  and  adjudged  by  the 
court,  with  the  consent  of  parties  hereto,  that  the  said  sum 

of  $ in   the   hands   of  the   trustee   herein,    be,    and   the 

same  is  hereby  distributed  and  said  trustee  is  hereby  ordered 
and  directed  to  pay  the  same  as  follows ;  to  wit : 

First.  To  A.  M.,  for  his  services  as  Special  Master  herein, 

including  stenographer's  costs  and  $ to  the  clerk  of  this 

court,  the  sum  of  $ . 

Second.  To  J.  K.,  Treasurer  of  the  city  of in  full  of 

unpaid  street  assessments  on  the  lots  sold  herein,  said  sum  of 
$ and  $ amounting  in  all  to  $ . 

Third.  To  the  W.  G.  Bank  upon  the  notes  set  up  in  its  an- 
swer and  cross-petition  herein  the  sum  of  $ . 

Fourth.  To  the  U.  Savings  Bank  upon  the  note  set  up 
in  its  answer  and  cross-petition  herein  the  sum  of  $ . 

(i)  Taken  from  the  record  in  re  Nicholas  Wolff,  pending  in  the  Dis- 
trict Court  of  the  United  States  for  the  Southern  District  of  Ohio. 


PROCEEDINGS  BEFORE  REFEREE.  967 

No.  77. 

Petition  and  Order  for  Sale  Subject  to  Lien,     (i)- 

(Official   Form   No.   44.) 

In  the  District  Court  of  the  United  States  for  the  Dis- 
trict of  — — .      ■:■;'■  -:   •-•'  ■■■ '  ■ 

1 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


Respectfully  represents  ,  trustee  of  the  estate  of  said 

bankrupt,  that  a  certain  portion  of  said  bankrupt's  estate, 
to  wit  [here  describe  the  estate  or  property  and  its  estimated 
value']  is  subject  to  a  mortgage  [describe  mortgage'],  or  to  a 
conditional  contract  [describe  it'],  or  to  a  lien  [describe  the 
origin  and  nature  of  the  lien],  or  [//  the  property  be  personal 
property]  has  been  pledged  or  deposited  and  is  subject  to  a 
lien  for  [describe  the  nature  of  the  lien],  and  that  it  would  be 
for  the  benefit  of  the  said  estate  that  said  property  should  be 
6old,  subject  to  said  mortgage,  lien  or  other  incumbrance. 
Wherefore  he  prays  that  he  may  be  authorized  to  make  sale 
of  said  property,  subject  to  the  incumbrance  thereon. 

Dated  this day  of  — ■ — ,  A.  D.  190 — . 


Trustee. 
The  foregoing  petition  having  been  duly  filed  and  having 
come  on  for  hearing  before  me,  of  which  hearing  ten  days' 
notice  was  given  by  mail  to  creditors  of  said  bankrupt,  now. 
after  due  hearing,  no  adverse  interest  being  rcjiresented  there- 
at [or,  after  hearing in  favor  of  said  petition  and  

in  opposition  thereto],  it  is  ordered  that  the  said  trustee  be 
authorized  to  sell  the  portion  of  the  bankrupt's  estate  specified 
in  the  foregoing  petition,  by  ruiction  [  or.  at  private  sale],  keep- 


WS  BANKRUPTCY. 

ing  an  accurate  account  of  the  property  sold  and  the  price 
received  therefor  and  to  whom  sold;  which  said  account  he 
shall  tile  at  once  with  tlie  referee. 

Witness  my  hand  this day  of ,  A.  D.  19 — . 


Referee  in  Bankruptcy. 

(i)   See  note  to  Form  No.  12. 


No.  78. 

General  Notice  of  Petition  to  Sell  Real  Estate. 

The  District  Court  of  the  United  States 

For  the District  of 

In  the  matter  of  -^ 


In  Bankruptcy. 


A.  B., 
Bankrupt. 
To  the  Creditors  of  A.  B.,  Bankrupt: 

You  are  hereby  notified  that  on  Wednesday,  ,  at  2 

o'clock  p.  m.,  at  my  office,  southwest  corner  of  Third  and 

Walnut  streets,  ,  I  wil  hear  the  petition  hereto  annexed 

and  make  such  order  as  may  seem  proper  and  for  the  best 
interests  of  the  estate  of  bankrupt.  Your  attendance  at  said 
meeting  is  requested.  A.  M., 

Referee  in  Bankruptcy. 

Dated  at . 


PROCEEDINGS  BEFORE  REFEREE.  969 

No.  79. 

Trustee's  Petition  to  Sell  Portion  of  Bankrupt's  Estate,  Sub- 
ject to  Incumbrances   (i). 

The  District  Court  of  the  United  States 

For  the District  of 

In  the  matter  of 

F.  H., 
Bankrupt. 

Respectfully  represents  C.  C,  trustee  of  the  estate  of  saic! 
bankrupt,  that  a  certain  portion  of  said  bankrupt's  estate,  to 

wit :     Lot  No.  in  E.  J.  M.'s  first  subdivision  of  , 

is  subject  to  a  mortgage  to  the  C.  B.  Loan  &  Savings  Com- 
pany of ,  in  the  sum  of  $ and  is  also  subject  to  the 

dower  right  of  O.  E.  H.,  wife  of  bankrupt,  and  taxes  and 
assessments,  and  that  it  would  be  for  the  benefit  of  said  estate 
that  said  real  estate  should  be  sold,  subject  to  the  said  mort- 
gage and  dower. 

Wherefore  he  prays  that  he  may  be  authorized  to  make  sale 
of  said  real  estate  subject  to  the  incumbrances  thereon. 

Dated  this  day  of 19 — . 

C.  C. 
Trustee  in  Bankruptcy. 

(i)   Taken  from  the  record  in  re  Frederick  J.  Bradshaw.  pending  in  the 
District  Court  of  the  United  States  for  the  Southern  District  of  Ohio. 


No.  80. 

Order  Authorizing  Trustee  to  Sell  Portion  of  Bankrupt's  Es- 
tate, Subject  to  Incumbrances,     (i). 

The  District  Court  of  the  United  States 

For  the District  of 

In  the  matter  of 

F.  H.. 
Bankrupt. 

This  cause  coming  on   for  hearing  on  the  petition  of  the 
tinstee  to  sell  the  real  estate  of  hankrnnt.  subject  to  liens,  and 


970  BANKRUPTCY. 

said  petition  having  been  filed  on  the day  of ,  19 — , 

and  having  come  on  for  hearing  before  me  this  day,  of  which 

hearing  more  than  days  notice  was  given  by  mail  to 

creditors  of  said  bankrupt,  now,  after  due  hearing,  no  adverse 
interest  being  represented  thereat,  it  is  ordered  that  the  trus- 
tee herein  be  authorized  to  sell  the  portion  of  bankrupt's  es- 
tate referred  to  in  his  petition,  subject  to  the  liens,  etc.,  there- 
on, at  private  sale.    The  trustee  is  directed  to  advertise  on  the 

day  of ,  19 — ,  in  the  C Index,  for  bids  to  be 

sent  to  the  trustee  up  to o'clock  on  the day  of , 


19 — .    Said  trustee  is  directed  to  report  said  bids  at  a  hearing 

before  the  undersigned  referee  on  the day  of ,  19 — , 

at  which  time  an  adjourned  meeting  will  be  held  for  the  pur- 
pose of  accepting  or  rejecting  the  highest  and  best  bid  so 
received.  Said  bids  shall  be  for  cash,  on  confirmation  by  the 
court.  A.  M., 

Referee  in  Bankruptcy. 

"  (i)  Taken  from  the  record  in  re  Frederick  J.  Bradshaw,  pending  in  the 
District  Court  of  the  United  States  for  the  Southern  District  of  Ohio. 


No.  81. 

Notice  of  Trustee's  Sale  Subject  to  Liens. 

The  District  Court  of  the  United  States 
For  the District  of 

Division  No.  

In  re  Bankruptcy  of  F.  H. 

In  pursuance  of  an  order  to  me  directed,  I  will  receive  at 

my  office,  southwest  corner  of  Third  and  Walnut  streets, , 

up  to  2  o'clock  p.  m.,  on  ,  bids  for  the  purchase  of  the 

bankrupt's  real  estate,  known  as  No.  K.  avenue,  , 

and  being  Lot  in  E.  J.  M.'s  first  subdivision  of  , 

subject  to  a  mortgage  to  the  C.  B.  Loan  and  Savings  Com- 
pany of ,  in  the  sum  of  about ,  and  also  subject  to 

the  dower  right  of  O.  E.  H.,  wife  of  bankrupt,  and  to  taxes 


PROCEEDINGS  BEFORE  REFEREE. 


971 


and  assessments.  Terms  of  sale  to  be  cash  on  confirmation 
by  the  court.  All  bids  will  be  reported  by  me  at  an  ad- 
journed meeting  of  creditors  held  before  A.  M.,  Referee  in 
Bankruptcy,    southwest    corner    Third    and    Walnut    streets, 

^  on ,  at  2  o'clock  p.  m.,  for  the  action  of  said  referee. 

C.  C, 
Trustee  in  Bankruptcy. 


No.  82. 

Report  of  Trustee  of  Sale  Subject  to  Incumbrances  (i). 

The  District  Court  of  the  United  States 

For  the District  of 

In  the  matter  of 

F.  H.. 
Bankrupt. 
To  A.  M.,  Esq., 

Referee  in  Bankruptcy. 
Dear  Sir: 

The  undersigned  trustee  herein  begs  to  report  that  in  ac- 
cordance with  the  order  of  court,  he  advertised  for  bids  for 

the  purchase  of  the  bankrupt's  real  estate,  known  as  No.  

K.  avenue and  being  Lot  No. in  E.  J.  M.'s  first  sub- 
division of ,  subject  to  the  mortgage  of  the  C.  B.  Loan 

&  Savings  Company  of .  and  also  subject  to  the  dower 

right  of  O.  E.  IT.,  wife  of  bankru])!.  and  to  taxes  and  assess- 
ments.    Publication  of  notice  was  made  in  tbe  C.  I.  on  the 

(lay  of ,  19 — ,  and  copies  of  said  publication  were 

also  mailed  to  all  creditors,  proof  of  publication  of  notice  in 
the  C.  I.  is  hereto  attached  and  also  coi)y  of  notice  sent  to  all 
creditors. 

The  undersigned  trustee  reiK)rts  that  he  has  received  the  bid 

hereto  attached  of  O.  ^L  1 1.,  offering  to  pay  the  sum  of  $ 

for  said   real  estate,   subject   to  said  liens,   etc.      The  under- 


072  BANKRUPTCY. 

si|;iied  trustee  reiK)rts  that  said  bid  was  the  only  bid  re- 
ceived by  him  and  he  recommends  tlie  acceptance  of  said 
bid  and  asks  for  such  order  as  the  court  may  see  proper  to 
make  in  the  premises.  C.  C, 

Trustee  in  Bankruptcy. 
day  of .  19 — . 

(i)  Taken  from  the  record  in  re  Frederick  J.  Bradshaw,  pending  in  the 
District  Court  of  the  United  States  for  the  Southern  District  of  Ohio. 


No.  83. 
Petition  and  Order  for  Private  Sale.    (i). 

(Official  Form  No.  45.) 

In  the  District  Court  of  the  United  States  for  the  Dis- 
trict of  . 

1 


In  the  matter  of 


Bankrupt. 


!•  In  Bankruptcy. 


Respectfully  represents ,  duly  appointed  trustee  of  the 

estate  of  the  aforesaid  bankrupt. 

That  for  the  following  reasons,  to  wit : - 


it  is  desirable  and  for  the  best  interest  of.  the  estate  to  sell 
at  private  sale  a  certain  portion  of  the  said  estate,  to  wit : 


Wherefore  he  prays  that  he  may  be  authorized  to  sell  the 
said  property  at  private  sale. 

Dated  this day  of ,  A.  D.  19 — . 

» 
Trustee. 


PROCEEDINGS  BEFORE  REFEREE.  973 

The  foregoing  petition  having  been  duly  filed  and  having 
come  on  for  a  hearing  before  me.  of  which  hearing  ten  days' 
notice  was  given  by  mail  to  creditors  of  said  bankrupt,  now, 
after  due  hearing,  no  adverse  interest  being  represented  there- 
at [or,  after  hearing  in  favor  of  said  petition  and  

in  opposition  thereto],  it  is  ordered  that  the  said  trustee  be 
authorized  to  sell  the  portion  of  the  bankrupt's  estate  specified 
in  the  foregoing  petition,  at  private  sale,  keeping  an  accurate 
account  of  each  article  sold  and  the  price  received  therefor  and 
to  whom  sold;  which  said  account  he  shall  file  at  once  with  the 
referee. 

Witness  my  hand  this day  of ,  A.  D.  19 — . 


Referee  in  Bankruptcy. 

(1)   See    note    to    Form    No.   72. 


No.  84. 
Petition  and  Order  for  Sale  of  Perishable  Property   (i). 
(Ofticial  Form  No.  46.) 
In  the  District  Court  of  the  United  States  for  the  Dis- 
trict of  . 

1 


In  the  matter  of 


In  Bankruptcy. 


Bankrupt 


Respectfully  represents .  the  said  bankrupt  \or,  a  cred- 
itor, or,  the  receiver,  or,  the  trustee  of  the  said  bankrupt's 
estate]. 

That  a  part  of  the  said  estate,  to  wit : — 


now  in  ,  is  perishable,  and  that  there  will  l>e  loss  if  the 

same  is  not  sold  immediately. 


974  BANKRUPTCY. 

Wherefore  he  prays  the  court  to  order  that  the  same  be 
sold  immediately  as  aforesaid. 

Dated  this  day  of ,  A.  D.  189 — . 


The  foregoing-  i>etition  having  been  duly  filed  and  having 
come  on  for  a  hearing  before  me,  of  which  hearing  ten  days' 
notice  was  given  by  mail  to  the  creditors  of  the  said  bankrupt 
[or,  without  notice  to  the  creditors],  now,  after  due  hearing, 
no  adverse  interest  being  represented  thereat  [or,  after  hear- 
ing   in  favor  of  said  petition,  and in  opposition  there- 
to], I  hnd  that  the  facts  are  as  above  stated  and  that  the  same 
is  required  in  the  interest  of  the  estate,  and  it  is  therefore 
ordered  that  the  same  be  sold  forthwith  and  the  proceeds 
thereof  deposited  in  court. 

Witness  my  hand  this day  of ,  A.  D.  189 — . 


Referee  in  Bankruptcy. 

(i)  Gen.  Ord.  18,  par.  3. 

An  order  of  sale  ought  not  to  be  made  until  after  an  adjudication  of 
bankruptcy,  unless  the  property  is  of  such  a  nature  that  immediate  sale 
is  necessary  to  preserve  its  value.  In  re  Kelley  Dry  Goods  Co.,  102  Fed. 
Rep.  747,  4  Am.  B.  R.  528. 

In  re  Beutel's  Sons,  7  Am.  B.  R.  768,  ■  stock  of  hardware  was  held 
not  to  be  "  perishable  property." 


No.  85. 

Order  for  Sale  of  Uncollected  Accounts  (i). 

The  District  Court  of  the  United  States 

For  the District  of 

In  the  matter  of 

F.  H., 
Bankrupt. 

For  good  cause  shown,  and  in  pursuance  of  direction  of 
creditors  the  trustee  herein  is  hereby  ordered  and  directed  to 
advertise  for  bids  for  uncollected  accounts  remaining  in  the 
hands  of  the  trustee  herein  and  uncollected.     Said  advertise- 


PROCEEDINGS  BEFORE  REFEREE.  975 

ment  shall  give  ten  days'  notice  of  the  time  and  place  when 
the  trustee  will  receive  bids,  and  such  notice  shall  be  adver- 
tised once  in  the Enquirer  and  once  in  the  Trib- 
une. Said  bids  shall  be  for  cash,  upon  the  confirmation  of  bid 
by  the  court.  Said  trustee  is  directed  to  return  his  report  of 
bids  without  unnecessary  delay. 

(i)  Taken  from  the  record  in  re  Eagle  Carriage  Co.,  pending  in  the 
District  Court  of  the  United  States  for  the  Southern  District  of  Ohio. 


No.  86. 

Notice  of  Sale  of  Uncollected  Accounts  (i). 

The  District  Court  of  the  United  States 

For  the District  of 

In  the  matter  of 

F.  H., 
Bankrupt. 

In  pursuance  of  an  order  directed  to  me  on  the  matter  of 

the  bankruptcy  of  F.  H.,  No.  ,  in  the  District  Court  of 

the  United  States  for  the District  of ,  I  will  receive 

bids  for  the  purchase  of  all  the  uncollected  accounts  of  the 
said  F.  H.,  remaining  in  my  hands  as  trustee,  at  my  office 

Room Building ,  up  to  the day  of ,  19 — , 

at o'clock. 

Terms  of  sale,  cash  on  day  of  sale,  subject  to  coiifirmation 
by  the  court.  The  right  is  reserved  in  the  court  to  reject  any 
or  all  bids.  A  list  of  such  uncollected  accounts  can  be  seen  at 
my  office  on  application  to  the  undersigned.  C.  C, 

Trustee  in  Bankruptcy. 

day  of ,  19 — . 

(1)  Takon   from   the  record  in  re   EmkIo  ( 'iirrijij^o  Co.,  iM'iidiiij^  in  tiie 
District  Court  of  the  Unihid  Status  for  tliu  Soutlioni  Distric^t  of  Oliio. 


070  BANKRUPTCY. 

No.  87. 

Notice  of  Sale  of  Bank  Stock   (i). 

The  District  Court  of  the  United  States 

For  the District  of  — — 

J II  the  matter  of 

F.  H.. 
Bankrupt. 

Notice  is  hereby  o-jven  pursuant  to  an  order  made  in  the 

matter  of  the  bankruptcy  of  F.  H.,  No.  in  the  District 

Court  of  the  United  States  for  the District  of ,  we 

will  on  behalf  of  the  Trustee  in  Bankruptcy  of  said  F.  H.,  and 
of  all  others  concerned,  ofifer  at  public  sale  to  the  highest  and 

best  bidder  on  the day  of ,   19 — ,  at  o'clock, 

at  the  Stock  Exchange,  No.  street,  shares 

of  the  capital  stock  of  the  W.  G.  Bank  of ,  each  of  said 

shares  being  of  the  par  value  of  $ .     Terms  of  sale  casii 

on  confirmation  of  sale  by  the  court. 

I.  B.  &  Company. 

day  of 19 — . 

(l)   Taken  from  the  record  in  re  Nicholas  Wolff,  pending  in  the  Diii 
trict  Court  of  the  United  States  for  the  Southern  District  of  Ohio. 


No.  88. 

Report  of  Sale  of  Bank  Stock  (i). 

The  District  Court  of  the  United  States 

For  the District  of 

In  the  matter  of 

F.  H., 
Bankrupt. 
To  the  Referee  in  the  Said  Above  Cause: 

The  undersigned  auctioneers  herein,  beg  to  report  that  in 
pursuance  of  the  order  of  court  they  sold  on  the day  of 


PROCEEDINGS  BEFORE  REFEREE.  977 

,  19 — ,  at  the  Stock  Exchange  in shares  of  stock  of 

the  W.  C.  Bank,  each  share  of  the  par  vahie  of  $ to  C.  M., 

at  $ .  making-  a  total  for  said shares  of  $ .     We 

attach  hereto  copy  of  advertisement  and  bill  for  the  same.  The 

costs  of  said  sale  have  been  $ ,  for  advertising,  and  $ 

for  our  commission.     The  balance  amounting  to  $ will 

be  paid  over  to  C.  C,  trustee,  on  confirmation  of  said  sale. 
We  respectfully  ask  that  the  sale  be  confirmed. 

I.  B.  &  Company. 
(i)   Taken  from  the  record  in  re  Nicholas  Wolff,  pending  in  the  Dis- 
trict Court   of  the  United   States  for  the   Southern  District  of  Ohio 


No.  89. 
Report  of  Trustee's  Sale  of  Unmanufactured  Stock  (i). 

The  District  Court  of  the  United  States 

For  the District  of 

In  the  matter  of 

F.  H.. 
Bankrupt. 

Pursuant  to  an  order  to  me  directed  as  Trustee  in  Bank- 
ruptcy of  F.   H..  bankrupt.  No.  District  Court  of  the 

United  States,  District  of ,  I  will  on  the day 

of  ,    19 — ,    at  o'clock,   on   the   premises   on   

street,  ,  offer  at  \nxh\ic  sale  all  the  goods,  chattels  and  per- 
sonal property  of  said  bankrupt  [except  book  accounts  and 
cash  on  hand'],  consisting  of  unmanufactured  stock  used  in 

the  manufacture  of ,  as  per  inventory  on  file  with  A.  M.. 

Referee  in  Bankruptcy,  and  a  copy  of  which  can  be  seen  at  my 

office  No.  ,  street,  .     Terms  of  sale  to  be  cash  upon 

the  confirmation  by  the  court.  Said  property  to  be  sold  as  an 
entirety.    The  highest  and  best  bid  to  be  returned  to  said  court 

for  confirmation  or  other  action  on  the  ■ day  of  . 

ig — .  ^-  C., 

Trustee  in  l>;ml<ruptcy. 

(i)   Taken   from   the  record  in   re  Eagle  Carriage  Co..  pending  in  the 
District  Court  of  the  United  States   for  the  Southern  District  of  Ohio. 


978  BANKRUPTCY. 

No.  90. 

Notice  of  Petition  and  Sale  of  Chattels  (i). 

The  District  Court  of  the  United  States 

The District  of . 

Division. 

In  the  matter  of 

A.  B., 
In  Bankruptcy. 

This  day  the  trustee  filed  his  petition  for  authority  to  sell 
the  stock  of  goods  of  the  bankrupt  in  lots  at  public  auction  to 
the  highest  bidder  without  reserve ;  said  petition  will  come  on 
for  hearing  at  the  office  of  the  undersigned  1603  Union  Trust 

Building, ,  on -,  at o'clock  — m.,  and  if  not  then 

otherwise  ordered  said  sale  will  be  ordered  and  held ,  as 

advertised.  M.  W., 

Referee. 
Dated  at . 

(i)  The  above  form  of  notice  has  been  used  when  it  was  advisable  to 
save  time,  and  the  necessity  of  giving  a  second  notice  of  sale  for  ten 
days  after  sale  is  ordered. 


No.  91. 
Trustee's  Report  of  Exempted  Property  (i). 

(Official  Form  No.  47.) 

In  the  District  Court  of  the  United  States  for  the Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


At .  on  the day  of  — ■. — ,  19—. 

The  following  is  a  schedule  of  property  designated  and  set 


PROCEEDINGS  BEFORE  REFEREE. 


079 


apart  to  be  retained  by  the  bankrupt  aforesaid,  as  his  own 
property,  under  the  provisions  of  the  Acts  of  Congress  relating 
to  bankruptcy : 


General  head. 

Particular  description. 

Value. 

Military  uniform,  arms,  and 

Dolls. 

Cts. 

Property  exempted  by  state 

Trustee. 
(l)  B.  A.  1898,  sec.  47,  clause  11.     Loveland's  Bank   sees.  177,  et  seq. 


No.  92. 
Trustee's  Return  of  no  Assets. 

(Official  Form  No.  48.) 
In  the  District  Court  of  the  United  States  for  the  ^ —  Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


At ,  in  said  district,  on  the  day  of ,  A.  D. 

i&— . 

On  the  day  aforesaid,  before  me  comes  ,  of  .  in 

the  county  of ,  and  state  of ,  and  makes  oath  and 

says  that  he,  as  trustee  of  the  estate  and  effects  of  the  above- 
named  bankrupt,  neither  received  nor  paid  any  moneys  on  ac- 
count of  the  estate. 

Subscribed  and  sworn  to  l^efore  me  at  ,  this  day 

of ,  A.  D.  19—.  . 

Referee  in  Bankruptcy. 


980 


BANKRUPTCY. 


U 


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u 


PROCEEDINGS  BEFORE  REFEREE. 


981 


(l)   B.  A.  1898,  sec.  47,  clause  10.     Gen.  Ord.   17. 

Compensation  of  trustees:  Trustees  shall  receive  for  their  services, 
payable  after  they  are  rendered,  a  fee  of  five  dollars  deposited  with  the 
clerk  at  the  ti-me  the  petition  is  filed  in  each  case,  except  when  a  fee  is 
not  required  from  a  voluntary  bankrupt,  and  from  estates  which  they 
have  administered  such  commissions  on  all  moneys  disbursed  by  them  as 
may  be  allowed  by  the  courts,  not  to  exceed  six  per  centum  on  the  first  five 
hundred  dollars  or  less,  four  per  centum  on  moneys  in  excess  of  five 
hundred  dollars  and  less  than  fifteen  hundred  dollars,  two  per  centum  on 
moneys  in  excess  of  fifteen  hundred  dollars,  and  less  than  ten  thousand 
dollars,  and  one  per  centum  on  moneys  in  excess  of  ten  thousand  dollars. 
And  in  case  of  the  confirmation  of  a  composition  after  the  trustee  has  quali- 
fied the  court  may  allow  him.  as  compensation,  not  to  exceed  one-half  of  one 
per  centum  of  the  amount  to  be  paid  the  creditors  on  such  composition. 
Sec.  480  of  Bankruptcy  Act,  as  amended  by  act  of  Feb.  5,  1903. 


No.  94. 
Oath  to  Final  Account  of  Trustee. 

(Official  Form  No.  50.) 

In  the  District  Court  of  the  United  States  for  the 

trict  of  . 


Dis- 


In  the  matter  of 


Bankrupt. 


Tn  Bankruptcy. 


On  this  day  of  ,  A.  D.   19—.  before  me  comes 

,   of  .   in  the  county  of  ,  and  state  of  , 

and  makes  oath,  and  says  that  he  was,  on  the  day  oi 

,  A.  D.  19 ,  appointed  trustee  of  the  estate  and  effects 

of  the  above-named  l)ankrupt.  and  that  as  such  trustee  he  has 
conducted  the  settlement  of  the  said  estate.     That  the  account 

hereto   annexed,   containing  sheets  of  paper,    the   first 

sheet  whereof  is  marked  with  the  letter  \rcfcrcucr  may 

here  alw  be  made  to  any  prior  account  filed  by  said  trustee^, 


982  BANKRUPTCY. 

is  true,  aiid  such  account  contains  entries  of  every  sum  of 
money  received  by  said  trustee  on  account  of  the  estate  and 
effects  of  the  above-named  bankrupt,  and  that  the  payments 
purporting  in  such  account  to  have  been  made  by  said  trustee 
have  been  so  made  by  him.  And  he  asks  to  be  allowed  for 
said  payments  and  for  commissions  and  expenses  as  charged 

in  said  accounts.  , 

Trustee. 

Subscribed  and  sworn  to  before  me  at  ,  in  said  

district  of ,  this day  of ,  A.  D.  19 — . 


[^Official  character. 1 


No.  95. 
Order  Allowing  Account  and  Discharging  Trustee. 

(Official  Form  No.  ^i.) 

In  the  District  Court  of  the  United  States  for  the  — —  Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


The  foregoing  account  having  been  presented  for  allow- 
ance, and  having  been  examined  and  found  correct,  it  is  or- 
dered that  the  same  be  allowed,  and  that  the  said  trustee  be 

discharged  of  his  trust.  , 

Referee  in  Bankruptcy. 


PROCEEDINGS  BEFORE  REFEREE.  083 

No.  96. 

Notice  of  Filing  Account,  Declaration  of  Dividends,  etc. 

The  District  Court  of  the  United  States 
For  the District  of 

In  the  matter  of 

A.  B.,  r  In  Bankruptcy. 

Bankrupt. 
To  the  Creditors  of  the  Above  Named  Bankrupt: 

Notice  is  hereby  given  that  the  trustee  has  filed  his  final  ac-» 

count   showing-  $ balance  on   hand,   and  that  the  final 

meeting  of  the  creditors  of  said  bankrupt  will  be  held  at  the 

office  of  the  undersigned,  1603  Union  Taist  Building,  , 

on  the day  of ,  at  2  o'clock  p.  m.,  when  the  creditors 

may  object  to  the  confirmation  of  said  account,  transact  other 
business,  and  the  court  will  make  allowances  to  counsel  for 
bankrupt  and  trustee,  and  will  declare  a  dividend  to  the  credi- 
tors who  have  proved  their  claims  to  be  paid  by  the  trustee  five 
days  thereafter.  M.  W., 

•  Referee  in  Bankruptcy. 

Dated . 


No.  97. 

Notice. 

The  District  Court  of  the  United  States 
For  the District  of 

In  the  matter  of 

A.  B.,  ■  In  Bankruptcy. 

Bankrupt 
To  the  Creditors  of  the  Al)ove  Named  Banknipt : 

Notice  is  hereby  given  that  the  trustee  has  filed  his  final  ac- 
count showing  no  property  other  than  the  bankrupt's  exemp- 


984  BANKRUPTCY. 

tions,  and  that  the  final  meeting'  of  tlie  creditors  of  said  bank- 
rupt will  be  held  at  the  office  of  the  undersigned,  1603  Union 

Trust  Building. ,  on  the day  of at  2  o'clock  p. 

ni..  when  thq  creditors  may  object  to  the  confirmation  of  said 
account,  and  transact,  other  business. 

M.  W., 
Referee  in  Bankruptcy. 
Dated  at . 


No.  98. 

List  of  Claims  and  Dividends  to  be  Recorded  by  Referee 
and  by  him  Delivered  to  Trustee,     (i). 

(Official  Form  No.  40.) 

In  the  District  Court  of  the  United  States  for  the  Dis- 
trict of  , 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


At  ,  in  said  district,  on  the  day  of ,  A.  D. 

19—. 

A  list  of  debts  proved  and  claimed  under  the  bankruptcy  of 

,  with dividend  at  the  rate  of per  cent,  this  day 

declared  thereon  by ,  a  referee  in  bankruptcy. 


PROCEEDINGS  BEFORE  REFEREE. 


985 


No 


Creditors. 

[To  be  placed  alphabetically,  and 
the  names  of  all  the  parties  to  the 
proof  to  be  carefully  set  forth.] 


Sum  proved. 


Dividend. 


Dollars.      Cents. 


Dollars.  'Cents. 


Referee  in  Bankruptcy. 


(l)  B.  A-  1898,  sec  39,  clause  i. 


No.  99. 

Notice  of  Dividend  (1). 

(Official  Form  No.  41.) 
In  the  District  Court  of  the  United  States  for  the 

of . 


District 


In  the  matter  of 


Banknij)t. 


At ,  on  tlie 


In  Bankruptcy. 
—  (lay  of ,  A.  D.  18—. 


To 


986  BANKRUPTCY. 

Creditor  of ,  bankrupt. 

I  hereby  inform  you  that  you  may.  on  application  at  my 
office.  .  on  the day  of  .  or  on  any  day  there- 
after, between  the  hours  of  ,  receive  a  warrant  for  the 

dividend  due  to  you  out  of  the  above  estate.     If  you  can 

not  personally  attend,  the  warrant  will  be  delivered  to  your 
order  on  your  filling  up  and  signing  the  subjoined  letter. 

> 
Trustee. 
Creditor's  Letter  to  Trustee.       , 

To , 

Trustee  in  bankruptcy  of  the  estate  of ,  bankrupt : 

Please  deliver  to the  w^arrant  for  dividend  payable  out 

of  the  said  estate  to  me.  , 

Creditor. 

(i)  "The  first  dividend  shall  be  declared  within  thirty  days  after  the 
adjudication,  if  the  money  of  the  estate  in  excess  of  the  amount  necessary 
to  pay  the  debts  which  have  priority  and  such  claims  as  have  not  been,  but 
probably  will  be,  allowed  equals  five  per  centum  or  more  of  such  allowed 
claims.  Dividends,  subsequent  to  the  first  shall  be  declared  upon  like 
terms  as  the  first  and  as  often  as  the  amount  shall  equal  ten  per  centum  or 
more  and  upon  closing  the  estate.  Dividends  may  be  declared  oftener 
and  in  smaller  proportions  if  the  judge  shall  so  order ;  provided,  that  the 
first  dividend  shall  not  include  more  than  fifty  per  centum  of  the  money  of 
the  estate  in  excess  of  the  amount  necessary  to  pay  the  debts  which  have 
priority  and  such  claims  as  probably  will  be  allowed.  And  provided 
further,  that  the  final  dividend  shall  not  be  declared  within  three  months 
after  the  first  dividend  shall  be  declared."  Sec.  65b  of  the  Bankruptcy 
Act,  as  amended  by  act  of  Feb.  5.  1903. 


No.  100. 
Order  for  Costs  and  Confirming  Accounts   <i;. 
The  District  Court  of  the  United  States 

For  the District  of 

In  the  matter  of 

F.  H., 
Bankrupt. 

At ,  in  the District  of on  the day  of 

A.  D.  19—. 


PROCEEDINGS  BEFORE  REFEREE.  987 

This  cause  coming  on  for  hearing  after  due  notice  by  mail 
to  each  creditor ; 

It  is  ordered  that  the  following  sums  be  paid  as  costs,  com- 
missions and  fees  herein,  to  wit : 

C.  C,  Trustee's  Commissions,  $ 

A.  AI.,  Referee's  Commissions,  $ 

B.  R.,  Clerk's  Costs,  $ 


C.  L,  Publications,  etc.,  $- 

C.  L,  For  Discharge,  $- 


A.  M.,  Stationery,  $ 

T.  M.  S.,  Stenographer,  etc.,  $ 

G.  O.,  Services  in  Rejecting  Claims  $- 

Total  $ 

It  is  further  ordered  that  the  amended  account  of  the  trus- 
tee, filed  the day  of ,  19 — ,  and  the  amended  account 

of  the  receiver,  filed  the day  of 19 — ,  herein,  having 

been  examined  and  found  correct  are  each  hereby  allowed. 

A.  M., 
Referee  in  Bankruptcy. 

(i)  Taken  from  the  record  in  re  Eagle  Carriage  Co.,  pending  in  the 
District  Court  of  the  United  States  for  the  Southern  District  of  Ohio. 


No.  101. 
Order  for  Choice  of  New  Trustee  (i). 
(Official  Form  No.  55.) 
In  the  District  Court  of  the  United  States  for  the  Di 


In  the  matter  of 

irici  01  

In  Bankruptcy. 

Bankrupt. 

At ,  on  the  - 

dav  of , 

A.  D.  TO—. 
Whereas,  by  reason  of  the  removal  \or,  the  death,  nr,  res- 


988  BANKRUPTCY. 

igiiationj  of  ,  heretofore  appointed  trustee  of  the  estate 

of  said  bankrupt,  a  vacancy  exists  in  the  office  of  said  trustee. 

It  is  ordered  that  a  meeting  of  the  creditors  of  said  bank- 
rupt be  held  at  .  in  .  in  said  district,  on  the  

day  of ,  A.  D.  1 8 — .  for  the  choice  of  a  new  trustee  of 

said  estate. 

And  it  is  further  ordered  that  notice  be  given  to  said  cred- 
itors of  the  time,  place  and  purpose  of  said  meeting,  by  letter 
to  each,  to  be  deposited  in  the  mail  at  least  ten  days  before 

that  day.  . 

Referee  in  Bankruptcy. 

(i)   B.  A.  1898,  sec.  44  and  50c. 


No.  102. 
Notice  of  Final  Meeting  of  Creditors. 

The  District  Court  of  the  United  States 

For  the District  of 

No. 

In  re  Bankruptcy  of  A.  B. 

To  the  Creditors  of  A.  B.,  in  the  County  of and  District 

Aforesaid,  a  Bankrupt : 

Notice  is  hereby  given  that  on  Tuesday,  the  day  of 

,  at  3  o'clock  p.  m.,  there  will  be  a  final  meeting  of  the 

creditors  of  the  above  named  bankrupt  held  at  the  office  of  the 
undersigned  referee,  southwest  corner  of  Third  and  Walnut 

streets,  ,   for  the  purpose  of  passing  upon  the  accounts 

of  the  trustee,  declaring  a  dividend,  authorizing  the  sale  of 
uncollected  accounts  at  a  sum  to  be  fixed,  and  transacting  such 
other  business  as  may  properly  come  before  said  meeting,  and 
finally  closing  the  afifairs  of  the  estate  of  said  bankrupt. 
Your  presence  is  requested  at  said  meeting. 

A.  M.. 
Referee  in  Bankruptcy. 
Dated  at 


PROCEEDINGS  BEFORE  REFEREE. 

No.  103. 


989 


Record  of  Proceedings  Before  Referee  —  No  Trustee  and  no 

Assets    (i). 

In  the  District  Court  of  the  United  States 
For  the District  of 


Division. 


In  the  matter  of    ] 

A.  B., 
Bankrupt. 


No. 


j  In  Bankruptcy. 
Record  of  Proceed- 
ings Before  Referee. 


At 


in  said  District. 


Date. 


Order  of  reference,  petition  and  schedules  received 
from  clerk. 

Bankrui)t  directed  to  attend  before  referee  on 

at  m..  being  the  time  fixed  by  order  of 

reference. 


Ordered  that  first  meeting  of  creditors  be  held  on 
at  . 

Notice  of  first  meeting  of  creditors  publislied  

times    in    the    newspaper   designated    by    the 
court. 


Notice  of  first  meeting  of  creditors  mailed  to  each 
creditor  listed  in  schedules. 

Proof  of  publication  and  mailing  of  notice  of  fir>t 
meeting  filed. 


Date. 


BANKRUPTCY. 


Held  first  meeting  of  creditors ;  bankrupt  present 

and  examined  by  ;   schedule  disclosing 

no  assets  and  no  creditor  appearing,  ordered 
that  no  trustee  be  appointed  and  no  other 
meeting  of  tlie  creditors  be  called.    . 


Forwarded  record  of  proceedings  to  clerk. 
Expenses  incurred. 


$ 


cts. 


Date. 

List  of  Claims  Fil^d  with  Referee. 

Dollars. 

Cents. 

[Add  certificate  of  referee  No.  106.J 

( 1 )  Tlus  form  is  conveniently  user!  as  a  docket  containing  the  steps  of 
the  case.  With  it  should  be  bound  all  the  orders  m:;;le  by  the  referee  and 
copies  of  notices  as.  rxhibits,  the  whole  constituting  the  separate  record 
book  of  the  case,  as  required  by  Bank.  Act  1898,  sec.  421j. 

"When  the  same  is  transmitted  to  tlie  clerk  at,  the  conclusion  of  the  case 
(Bank.  Act  1898,  sec.  3da,  cl.  7)  the  form  of  certificate  No.  1216  may  be 
used. 


No.  104. 

Record  of  Proceedings  Before  Referee,  Claims  Proved,  Trustees 

Appointed,  Assets  Distributed. ^ 

[Proceed  as  in  Form  Xo.  10."}  to  "held  first  creditors'  meet- 
ing," etc.,  and  then  proceed  as  follows:] 


PROCEEDINGS  BEFORE  REFEREE. 


991 


Date. 


First  meeting  of  creditors  held  and 


appoint- 


ed trustee  by  creditors   or  referee,   creditors 
failing-  to  appoint,  and  bond  of  trustee  fixed  at 

$ notified  trustee  of appointment. 

Received  acceptance  of  trust  from  trustee. 

Bond  of  trustee  presented  and  approved. 


Appointed 


appraisers  to  appraise  real  and 


personal   property  of  bankrupt. 
Received  report  of  appraisers. 


Received    report    of   trustee   of    moneys    in   

hands,  of  no  assets. 
Prepared  dividend  sheets  showing per  cent. 

of  each  claim  allowed. 
Received  final  account  of  trustee. 
Examined  the  account  of . 


Entered  order  discharging  trustee. 
Forwarded  copy  of  proceedings  to  clerk. 


Date. 

Expenses  Incurred. 

Dollars. 

Cents 

, 

!)92 


BANKRUPTCY. 


Date. 

List  of  Claims  Filed  with  Referee. 

Dollars. 

Cents 

[.l(/(/  ctrtificait  of  reference  No.  106.] 
(See  note  to  No.  103. 


No.  105. 

Record  of  Proceedings  Before  Referee  on  Composition. ^ 

[Proceed  as  in  Form  No.  103  fo  "held  first  creditors'  meet- 
ivy,"'  etc.,  and  proceed  as  follows:] 

Date. 


appoint- 


First  meeting  of  creditors  held  and 

ed  trustee  by  referee,  creditors  failing  to  ap- 
point and  bond  of  trustee  fixed  at  $ . 

Notified  trustee  of  his  appointment. 

Received  acceptance  of  trust  from  trustee. 

Bond  of  trustee  presented  and  approved. 

Received  order  referring  petition  of  bankrupt  for 
composition  . 

Entered  order  fixing at for  meeting  of 


creditors  to  consider  composition . 

Mailed  notices  to  all  creditors,  mentioned  in  sched- 
ules, of  meeting  to  consider  composition. 

Meeting  of  creditors  to  consider  composition  held 
per  cent,  accepted  by  creditors. 


Made  report  to  court  of  proceedings  before  me  on 

petition  for  composition. 
Forwarded  record  of  proceedings  to  clerk. 


PROCEEDINGS  BEFORE  REFEREE. 


993 


Date. 

Date. 

Expenses  Incurred. 

Dollars. 

Cents. 

Date. 

List  of  Claims  Filed  with  Referee. 

Dollars. 

Cents. 

[Attach  certificate  Form  No.  106.] 

(i)    See  note  to  No.  10.'',. 

No.  106. 


Certificate  of  Referee  to  Record  of  Proceedings. 

In  the  District  Court  of  the  United  States 
For  the District  of 


Division. 


No. 


In  Bankruptcy. 


In  the  matter  of 
A.  B., 

I,  A.  M.,  one  of  the  referees  of  said  court  in  bankruptcy,  do 
hereby  certify  that  the  foregoing  is  the  true  and  complete 
record  of  the  proceedings  had  ])cfore  me  in  the  above  entitled 
matter,  which,  together  with  such  papers  as  are  on  file  before 
me,  I  herewith  transmit  to  the  court. 

Dated  at  the  day  of 190—. 

A.  M.. 
Referee  in  F.ankruptiy. 


99-i  BANKRUPTCY, 


COMPOSITION  WITH  CREDITORS. 
No.  107. 

Petition  for  Meeting  to   Consider  Composition   (i). 

(Official  lM)nn  No.  60.) 

In  the  District  Court  of  the  Ihiited  States  for  the  Dis 

trict  of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


To  the  Honorable  ,  Judge  of  the  District  Court  of  the 

United  States  for  the District  of : 

The   above-named   bankrupt   respectfully   represent   that   a 

composition  of  per  cent,  upon  all  unsecured  debts,  not 

entited  to  a  priority  in  satisfaction  of  debts  has 

been  proposed  by to  creditors,  as  provided  by  the 

Acts  of  Congress  relating  to  bankruptcy,  and  verily  be- 
lieve that  the  said  composition  will  be  accepted  by  a  majority  in 
number  and  in  value  of creditors  w^hose  claims  are  al- 
lowed. 

Wherefore,  they  pray  that  a  meeting  of creditors  may 

be  duly  called  to  act  upon  said  proposal  for  a  composition, 
according  to  the  provisions  of  said  acts  and  the  rules  of  court. 


Bankrupt. 

(i)   B.  A.  1898,  sec.  12;  Loveland's  Bank.,  sees.  245  and  245. 
The  offer  of  composition  should  be  made  to  all  the  creditors.     In   re 
Rider,  96  Fed.  Rep.  808,  3  Am.  B.  R.   178. 
It  is  not  necessary  to  call  a  special  meeting  of  the  creditors  to  receive 


COMPOSITIOX    WITH    CREDITORS.  995 

an  offer  of  composition.  The  rubmission  of  such  offer  may  be  made  to 
the  creditors  at  their  first  meeting  after  the  examination  of  the  bank- 
rupt.    In  re  Hilborn,  104  Fed.  Rep.  866,  4  Am.  B.  R.  741. 

Where  there  has  been  a  composition  it  will  not  be  set  aside  on  the 
ground  that  one  of  the  creditors  has  failed  to  get  notice  of  the  proceed- 
ings because  his  address  was  incoirectly  given  in  the  bankrupt's  schedule. 
In  re  Rudwick,  93  Fed.  Rep.  787,  2  Am.  B.  R.  114. 


No.  108. 

Order  for  Meeting  to  Consider  Composition. 

In  the  District  Court  of  the  United  States 

For  the District  of 

In  the  matter  of 


A.  B.,  [In  Bankruptcy. 

Bankrupt. 

On  reading  and  filing  the  verified  petition  of  A.  B..  the 
bankrupt  showing  that  he  verily  believes  that  a  composition 
u])on  all  unsecured  debts  not  entitled  to  a  priority  will  be 
accepted  by  a  majority  in  number  and  in  value  of  his  credi- 
tors whose  claims  are  allowed. 

It  is  ordered  that  a  meeting  of  the  creditors  of  said  A.  B., 

bankrupt,  be  held  at  before  A.   M.,    Esq.,   Referee  in 

Bankru])tcy,  for  the  purpose  of  considering  the  comjxisition 
proposed  to  be  offered  in  satisfaction  of  the  debts  due  from 
said  bankrupt  to  his  creditors  and  that  notice  of  the  time.  |)lace 
and  purpose  of  said  meeting  be  sent  by  said  above  named 
referee,  by  mail,  to  each  of  the  known  creditors  of  said  bank- 
rupt whose  name  and  address  appear  in  schedules  on  file  in 
this  matter  at  least  ten  days  prior  to  the  day  ap|v)inted  for  the 
holding  of  such  meeting. 

Witness  the  Honorable  G.  R.,  Judge  of  the  said  court,  and 

the  seal  thereof,  at ,  this day  of A.  D..  19CI — . 

B.  R.. 
Clerk  of  Said  Court. 


996  BANKRUPTCY. 

No.  109. 

Notice  to  Creditors  of  Meeting  to  Consider  Composition. 

Jii  the  District  Court  of  the  L'liited  States 

For  the District  of 

In  the  matter  of 


A.  B.,  [In  Bankruptcy. 

Bankrupt. 

Notice  to  creditors  to  consider  composition  offered  by  bank- 
rupt. 

Take  notice,  tliat  a  meeting  of  the  creditors  of  the  above 
named  bankrupt  will  be  held  at  Room   13.  third  floor,  Post- 

ofiice  Building,  city  of ,  before  the  undersigned  Referee 

in  Bankruptcy,  on  the day  of 190 —  at o'clock 

a.  m.,  for  the  purpose  of  considering  a  proposed  composition 
made  by  the  said  bankrupt  to  his  creditors  in  satisfaction  of 
the  unsecured  debts,  [not  entitled  to  priority]  owed  by  him 
to  each  of  said  creditors,  which  proposed  composition  is  to  pay 

per  cent.  A.  M., 

Referee  in  Bankruptcy. 

I  hereby  certify  that  I  have  on  this day  of A.  D., 

- — —  sent  by  mail  copies  of  the  above  notice  of  the  meeting  for 
composition  and  have  duly  published  the  same,  as  appears 
from  the  proof  of  publication  hereto  annexed.  A.  M., 

Referee. 


No.  110. 
Report  of  Referee  on  Composition. 

In  the  District  Court  of  the  United  States 

For  the District  of . 

In  the  matter  of 


A.  B.,  [Referee's  Reix)rt. 

•  Bankrupt. 

Pursuant  to  an  order  made  by  the  court  on  the day  of 

—  190 — ,  a  meeting  of  the  creditors  of  the  above  named 


COMPOSITION    WITH    CREDITORS.  997 

bankrupt  to  consider  a  composition  of  per  cent,  upon 

all  unsecured  debts  not  entitled  to  a  priority  in  satisfaction  of 

said  debts,  was  on  the day  of  ,  A.  D.  190 — ,  held 

before  me   at   Room    13,    Union   Trust   Building-  in  the  city 
of  ,  at  o'clock  in  the  forenoon  of  the  said  day. 

Proof  of  mailing  of  notice  to  each  of  the  creditors,  men- 
tioned in  the  bankrupt's  schedules,  of  the  time,  place,  and 
purpose  of  said  meeting,  is  hereto  annexed. 

That  the  said  above  named  bankrupt  was  present  at  the 
said  meeting  and  offered  himself  for  examination  by  any  of 
the  creditors  represented  at  said  meeting. 

That  an  offer  of  composition  with  his  said  creditors  was  ac- 
cepted by  a  majority  in  number  and  in  value  of  all  his  credi- 
tors whose  claims  have  been  allowed,  which  acceptance  is 
hereto  annexed  and  made  a  part  of  this  report. 

Proofs  of  claims  of  creditors  voting  for  said  composition 
were  presented  and  allowed  before  signing  of  said  resolution 
which  are  hereto  annexed. 

That  the  following  are  the  names  of  those  creditors  who 
have  presented  claims  against  the  said  bankrupt's  estate  and 
were  duly  allowed,  but  who  did  not  consent  to.  or  sign  said 
composition.  [Set  out  list  of  names  of  such  creditors  and 
amount  of  claims  proved.] 

No.  111. 
Application  for  Confirmation  of  Composition  (i). 

(  Official  Form  No.  61. ) 
In  the  District  Court  of  the  United  States  for  the  Dis- 
trict of  . 


In  the  matter  of 


\  In  P>ankruptcy. 


Bankrupt. 


To   the   Ilonorahle .  Judge  of  the   District   Court   of  the 

United  States  for  tiic  -—  District  of  . 


098  BANKRUPTCY. 

At  .  in  said  district .  on  the  day  of  ,  A.  D. 

189 — .    now    comes   ,    the   above    named    bankrnpt,    and 

respectfully  represents  to  the  court  that,  after  he  had  been 
examined  in  open  court  \or,  at  a  meeting  of  his  creditors]  and 
had  tiled  in  court  a  schedule  of  his  property  and  a  list  of  his 
creditors,  as  required  l)y  law,  he  offered  terms  of  composition 
to  his  creditors,  which  terms  have  been  accepted  in  writing  by  a 
majority  in  number  of  all  creditors  wdiose  claims  have  been 
allowed,  which  number  represents  a  majority  in  amount  of 
such  claims ;  that  the  consideration  to  be  paid  by  the  bank- 
rupt to  his  creditors,  the  money  necessary  to  pay  all  debts 
which  have  priority,  and  the  costs  of  the  proceedings,  amount- 
ing in  all  to  the  sum  of dollars,  has  been  deposited,  sub- 
ject to  the  order  of  the  judge,  in  the National  Bank,  of 

,  a  designated  depository  of  money  in  bankruptcy  cases. 

Wherefore,  the  said  respectfully  asks  that  the  said 

composition  may  be  confirmed  by  the  court.  , 

Bankrupt. 

(i)  B.  A.  1898,  sec.  12  and  sec.  2,  clause  9.     Loveland's  Bank.,  sec.  246. 

The  application  for  a  confirmation  must  be  made  to  the  judge  and  the 
acceptance  of  the  compromise  offered  by  the  creditors  is  not  conclusive 
but  may  be  disallowed  by  the  court  under  sec.  27  of  the  Bankrupt  Act. 
In  re  Heyman,   108  Fed.  Rep.  207. 

A  composition  will  be  confirmed  when  it  appears  to  the  court  that  the 
composition  was  fair  and  for  the  best  interests  of  the  creditors.  In  re 
Wilson,  107  Fed.  Rep.  83,  5  Am.  B.  R.  849;  City  Nat.  Bank  vs.  Doo- 
little   (C.  C.  A.,  5th  Cir.),  107  Fed.  Rep.  236,  5  Am.  B.  R.  727. 

But  where  it  is  not  for  the  best  interests  of  the  creditors  the  court 
will  refuse  to  confirm  and  the  decision  of  the  trial  judge  will  not  be 
disturbed  by  an  Appellate  Court  unless  grossly  biased.  Adler  vs.  Jones 
(C.  C.  A.,  6th  Cir.),  6  Am.  B.  R.  245,  109  Fed.  Rep.  967. 

As  to  the  duty  of  the  referee  and  his  authority  arising  out  of  appli- 
cations for  composition,  see  in  re  Hilborn,  104  Fed.  Rep.  866,  4  Am.  B. 
R  741. 

The  specifications  in  opposition  to  an  ..pplic  tion  for  confirmation  of 
a  composition  should  be  similar  to  those  required  in  opposition  to  a  dis- 
charge. City  Nat.  Bank  vs.  Doolittle  (C.  C.  A.,  5th  Cir.)  107  Fed.  Rep. 
236,  5  Am.  B.  R.  736. 


COMPOSITION   WITH    CREDITORS.  999 

No.  112. 

Order  for  Hearing  on  Petition  to  Confirm  Composition. 

In  the  District  Court  of  the  United  States 

For  the District  of . 

In  the  matter  of    i 

A.  B.,  [  In  Bankruptcy. 

Bankrupt.  J 

At  ,  in  said  district,  on  the  day  of  A.  D., 

on  reading  and  filing  the  appHcation  of  the  above  named 

bankrupt  for  confirmation  of  a  composition  offered,  and  it  ap- 
pearing satisfactorily  to  the  court,  from  the  report  of  A.  AI., 
Esq.,  referee,  of  all  proceedings  herein,  that  a  majority  in 
number  and  in  value  of  his  creditors  whose  claims  have  been 
allowed  and  whose  claims  were  proved  by  proofs  of  claim  pre- 
sented to  said  referee,  and  which  are  presented  to  the  court 
with  said  report,  did,  at  said  meeting  pass  and  vote  [as  ap- 
pears by  the  said  report  of  the  proceedings  of  said  meeting] 
in  favor  of  a  composition,  which  is  set  forth  at  length  in 
said  proceedings,  resolving  that  the  composition  proposed  by 
said  bankrupt  at  said  meeting  shall  be  accepted  in  satisfaction 
of  the  unsecured  debts  due  from  said  bankrupt  to  his  credi- 
tors ;  now  therefore  on  motion  of  R.  X.,  Esq.,  attorney  for 
said  bankrupt. 

It  is  ordered  that  a  hearing  in  the  matter  of  composition 
by  said  bankrupt  be  had  before  this  court  at  the  United  States 

Court  Rooms,  Postoffice  Building,  in  the  city  of .  on  the 

day  of  A.  D.,  at   lo  o'clock  a.  m.,   f(^r  the 

purpose  of  said  court  inquiring,  upon  hearing  whether  the 
said  composition  so  proposed  by  said  bankrupts  lias  l)ccn 
passed  in  the  manner  directed  by  the  Act  of  Congress  relating 
to  bankrtiptcy,  approved  July  i,  1898,  and  has  been  accepted 
by  the  signatures  required  by  said  act  and  whether  it  is  for 
the  best  interest  of  the  creditors:  that  n  notice  of  the  lime, 
place  and  purpose  of  said  hearing  be  sent  by  the  clerk  of 


1000  BANKRUPTCY. 

this  court,  by  mail,  to  each  of  the  creditors  to  their  respective 
addresses  as  they  appear  in  the  Hst  of  creditors  of  the  bankrupt 
or  as  afterwards  filed  with  the  papers  in  the  case  by  tiie 
creditors  ( i )  at  least  ten  days  prior  to  the  said  day  apjiointed 
herein  for  such  hearing. 

(i)   See  Bank.  Act  i8y8,  sec.  58. 


No.  113. 

Order  Confirming  Composition   (i). 

(Official  Form  No.  62.) 

In  the  District  Court  of  the  United  States  for  the  Dis- 
trict of  . 


In  the  matter  of 


Bankrujyt. 


1   In  Bankru])tcy. 


An  application  for  the  confirmation  of  the  composition  of- 
fered by  the  bankrupt  having  been  filed  in  court,  and  it  appear- 
ing that  the  composition  has  been  accepted  by  a  majority  in 
number  of  creditors  whose  claims  have  been  allowed  and  of 
such  allowed  claims ;  and  the  consideration  and  the  money 
required  by  law  to  be  deposited  having  been  deposited  as  or- 
dered in  such  place  as  was  designated  by  the  judge  of  said 
court,  and  subject  to  his  order;  and  it  also  appearing  that 
it  is  for  the  best  interests  of  the  creditors;  and  that  the  bank- 
rupt has  not  been  guilty  of  any  of  the  acts  or  failed  to  perform 
any  of  the  duties  which  would  be  a  bar  to  his  discharge,  and 
that  the  offer  and  its  acceptance  are  in  good  faith  and  have 
not  been  made  or  procured  by  any  means,  promises  or  acts 
contrary  to  the  Acts  of  Congress  relating  to  bankruptcy :  It 
is  therefore  hereby  ordered  that  the  said  composition  be  and  it 
hereby  is  confirmed. 


COMPOSITION    WITH    CREDITORS.  1001 

Witness  the  Honorable ,  judge  of  said  court,  and  the 

seal  thereof,  this day  of A.  D.   19 — . 

[Seal  of  the  court.]  , 

Clerk. 

(i)  B.  A.  1898,  sec.  2,  clause  9  and  sec.  12;  Gen.  Ord.  32.  Loveland's 
Bank.,  sec.  249. 

See  note  to  last  form  No.   1221. 

This  order  will  not  be  entered  until  costs  have  been  provided  for  by 
bankrupt  or  creditors,     hi   re  Harris,  9  Am.  B.  R.  20. 

It  has  been  held  that  an  appeal  will  lie  to  an  order  refusing  to  confirm 
a  composition.  U.  S.  vs.  Hammond,  104  Fed.  Rep.  862,  4  Am.  B.  R.  736- 
But  see  Ross  vs.  Saunders  (C.  C.  A.,  ist  Cir.).  105  Fed.  Rep.  915,  5  Am. 
B.  R.  350. 


No.  114. 
Order  of  Distribution  on  Composition. 

(Official  Form  No.  63.) 

United   States  of  .\nierica: 

In  the  District  Court  of  the  United  States  for  the  Dis- 
trict of  . 


In  the  matter  of 


In  Bankruptcy. 


Bankrupt 


The  compcution  offered  by  the  above  named  bankruf)t  in 
this  case  h'»ving  been  duly  confirmed  by  the  jud.i^e  of  said 
court,  it  is  hereby  ordered  and  decreed  that  the  distribution 
of  the  d^.-r)osit  shall  be  made  by  the  clerk  of  the  court  as  follows, 
to  wit:  /•"/>.?/.  Ti)  pay  the  several  claims  wiiich  have  priority. 
Second.  To  \y.\y  the  costs  of  proceed inij^s.  Third.  To  jiay, 
according  to  the  terms  of  the  composition,  the  several  claims  of 
general  creditors  which  have  been  allowed  and  .appear  npon 
a  list  of  allowed  claims  on  the  files  in  this  ca.se,  which  list  is 
made  a  part  of  this  order. 


1002  BANKRUPTCY. 

Witness  the  Hon.  ,  judge  of  said  court,  and  the  seal 

thereof,  this day  of ,  A.  D.  190 — . 

[Seal  of  the  court.']  » 

Clerk. 


PROCEEDINGS   BEFORE   THE   JUDGE.  1003 


PROCEEDINGS    BEFORE   JUDGE   SUBSEQUENT    TO 
ADJUDICATION. 

No.  115. 

Motion    for    Rule    to    Show    Cause    Against    Bankrupt    for 

Contempt. 

[Caption.] 

Now  come  the  undersigned  creditors  herein,  and  move  the 
court  that  a  rule  issue  herein  directing  A.  B.,  the  bankrupt, 

to  appear  in  this  court  at County  of ,  on  the 

(Jay  of  19 — ,  at  o'clock  a.   m.,   and  show  cause 

why  an  atachment  for  contempt  should  not  issue  against  him 
for  disobedience  of  the  order  of  A.  M.,  referee  herein,  a  copy 
of  which  order  is  as  follows: 

first.  That  the  said  bankrupt  A.  B.,  within  twenty  days 
from  and  after  the  service  of  a  copy  of  this  order  upon  him. 
pay  over  to  B.  M.,  Esq.,  trustee,  the  sum  of  $ and  de- 
liver to  said  trustee  United  States  three  per  cent,  coupon  bonds. 
face  value  of  $ ,  or  $ in  money. 

Second.  That  in  the  event  of  the^  said  bankrupt  A.  B..  fail- 
ing or  neglecting  to  obey  this  order  to  pay  to  the  said  trustee 
the  above  amounts,  and  deliver  said  bonds  or  money,  the  said 
B.  M.,  Esq.,  as  such  trustee  is  hereby  ordered  and  directed 
to  institute  proceedings  against  the  above  named  A.  B.  in 
accordance  with  the  provisions  of  Sections  29  of  the  Bankrupt- 
cy Act  of  1898. 

And  it  is  further  ordered  that  a  copy  of  this  order  be  served 
personally  upon  the  said  A.  B..  the  said  bankrupt,  and  by  mail 
upon  R.  X.,  Esq..  attorney  for  the  bankrupt,  and  nn  W.  M.. 
Esq..  said  trustee.  E.  E., 

G.  TT;. 
By  V.  S:  y... their  Attorneys..., 


l()()^  BANKRUPTCY, 

No.  116. 

Affidavit  of  Trustee  that  Bankrupt  Has  Not  Obeyed  Order  of 

Referee. 

[Caption.] 

B.  M.,  being  first  duly  sworn  says  on  oath  that  he  is  the  duly 
appointed  trustee  herein,  and  that  the  said  bankrupt  has  not 
in  any  way  complied  with  the  order  of  the  referee  herein  here- 
tofore made,  requiring  said  bankrupt  to  pay  to  the  trustee  the 

sum  of  $ and  United   States  Government  bonds, 

three  per  cent,  face  value  of  $ .  that  he  has  not  paid  said 

sum  or  any  part  thereof  to  the  said  trustee. 

Affiant  further  says  not. 

B.  M., 

Sworn  to  and  subscribed  before  me  this day  of 

19—.  T.  H., 

[Seal] 

Notary  Public, 
County, . 


No.  117. 
Rule  to   Show  Cause  Against  Bankrupt   for   Contempt. 

[Caption.] 

On  motion  of  creditors  herein,  a  rule  is  allowed  to  issue 
herein  directing  A.  B.,   the  bankrupt,  to  appear  before  this 

court  at  ,  County,  ,  on  the day  of 

19 — ,  at o'clock,  a.  m.,  and  show  cause  why  an  attachment 

for  contempt  should  not  issue  against  him  for  disobedience  of 
the  order  of  A.  M.,  refere  herein,  and  which  order  reads  as  fol- 
lows: 

First.  That  the  said  bankrupt  A.  B.,  within  twenty  days 
from  and  after  the  service  of  a  copy  of  this  order  upon  him 

pay  over  to  B.  M.,  Esq..  trustee,  the  sum  of  $ and  deliver 

to  said  trustee  United  States  three  per  cent,  coupon  bonds,  face 
value  of  $ ,  or  $ in  money. 


PROCEEDINGS    BEFORE   THE   JUDGE.  1005 

Second.  That  in  tlie  event  of  said  bankrupt  A.  B.,  failing 
or  neglecting  to  obey  this  order  to  pay  the  said  trustee  the 
above  amounts,  and  deliver  said  bonds  or  money,  the  said  B. 
M..  Esq..  as  such  trustee,  is  hereby  ordered  and  directed  to 
institute  proceedings  against  the  above  named  A.  B..  in  accord- 
ance with  the  provisions  of  Section  29  of  the  bankruptcy  act 
of  1898. 

Third.  And  it  is  further  ordered  that  a  copy  of  this  order 
be  served  personally  upon  the  said  A.  B.,  the  said  bankrupt, 
and  by  mail  upon  R  X.,  Esq.,  attorney  for  the  bankrupt,  and 
on  B.  M.,  Esq.,  said  trustee. 
The  United  States  of  America 

District  of ^  ss. 

Division. 

I,  B.  R.,  clerk  of  the  District  Court  of  the  United  States  of 
America,  within  and  for  the  division  and  district  aforesaid, 
do  herel)v  certify  that  the  foregoing  entry  is  truly  taken  and 
correctly  copied  from  the  journal  of  said  court. 

In  testimony  whereof.  I  have  hereunto  set  my  hand 
and  affixed  the  seal  of  said  court  at  the  city  of 
,  this day  of A.  D.,  19—. 

[Seal.] 

B.  R.,  Clerk. 


No.  118. 
Answer  of  Bankrupt  to  Rule  to  Show  Cause  for  Contempt. 

[Caption.] 

Now  comes  A.  B.,  and  in  obedience  to  the  rule  issued  by 
this  court,  says  that  the  attacliment  for  contempt  ought  not  to 
issue  against  him  for  disobedience  of  the  order  of  A.  M.. 
referee,  for  the  following  reasons : 

Fir.Kt.  He  says  that  he  can  not  comply  with  the  order  of  this 
court,  because  he  has  not  the  bonds  ordered  turned  over  or 
sum  of  monev  ordered  bv  said  A.  M.  to  be  paid  to  him. 


■[()0f,  BANKRUPTCY. 

Si\-o)iJ.  'I'liat  said  order  of  said  referee  is  not  a  lawful  or- 
der within  the  conteniplatitMi  of  the  bankruptcy  act,  or  such 
an  order,  the  disobedience  of  which  would  be  punishable  by 
attachment  for  contempt,  and  said  order  is  not  an  order  of 
this  court. 

Third.  Said  order  is  in  effect  a  judgment  directing  the  pay- 
ment of  money,  and  is  not  enforceable  by  proceedings  in  con- 
tempt. 

Fourth.  Section  29  of  the  bankruptcy  act  provides  that  such 
offenses,  as  those  charged  by  the  referee  in  his  finding,  shall 
be  punishable  only  in  the  manner  prescribed  therein,  to 
wit,  by  information  or  indictment. 

Wherefore,  said  A.  B.  prays  the  court  that  said  rule  may 
be  dismissed,  and  that  he  may  be  discharged. 

X.  &  X., 
Attorneys  for  Bankrupt. 

State  of , 

County  ss. 


A.  B.,  being  first  duly  sworn,  says  that  the  allegations  con- 
tained in  his  foregoing  answer  are  true.  A.  B., 

Sworn  to  and  subscribed  before  me  this  day 

of A.  D.,  19—.  T.  H., 

Fees cents.  Notary  Public, 


[Seal.] 


County, 


No.  119. 
Order  to  Take  Additional  Evidence  on  Rule  to  Show  Cause. 

[Caption.] 

This  cause  coming  on  to  be  heard  on  the  rule  issued  on  the 
bankrupt  and  his  answer,  and  on  the  findings  and  order  of 
the  referee  filed  herein,  it  appearing  to  the  court  that  on  this 
hearing  the  said  bankrupt  desires  to  offer  additional  testimony 
of  F.  H.,  O.  H.  and  F.  K:,  it  is  ordered  that  the  referee  take 


PROCEEDINGS   BEFORE  THE   JUDGE.  lOOl 

said  additional  testimony,  together  with  such  evidence  as  the 
creditors  of  said  bankrupt  may  offer  in  rebuttal,  and  that  the 
referee  report  said  evidence,  together  with  whatever,  if  any, 
modification  he  may  decide  ought  to  be  made  of  his  former 
report  and  order  [filed  herein']  upon  consideration  of  the  whole 
evidence  taken  before  him  in  this  matter.  It  is  ordered  that 
this  entry  be  made  as  of  the day  of ,  19 — . 


No.  120. 
Order  Finding  that  Bankrupt  has  Concealed  Assets  (i). 

[Caption.] 

This  cause  coming  on  to  be  heard  upon  the  motion  filed 

herein  on  the  day  of  19—,  for  an  order  of  the 

court  requiring  the  said  bankrupt,  A.  B.,  to  show  cause  why 
he  should  not  be  attached  for  contempt  for  disobedience  of 
the  order  of  A.  M.,  Esq.,  the  referee  herein,  and  upon  the 
answer  of  said  A.  B.,  thereto,  and  upon  the  evidence,  and  was 
argued  by  counsel  representing  creditors  of  said  bankr  ipt  and 
by  counsel  representing  said  bankrui)t ;  and  on  consideration 
whereof  the  court  finds  upon  the  evidence  that  said  bankrupt 

does  conceal,  and  has  in  his  possession  the  sum  of  $ in 

money,    and   the   further    sum   of  $ face   value    United 

States  bonds  for  money  in  said  amount,  all  of  which  he  re- 
fuses to  deliver  to  said  B.  M.,  trustee  appointed  herein,  in 
accordance  with  the  order  of  said  referee  to  that  effect,  and 
which  order  has  been  served  upon  said  l)ankru])t  more  than 

twenty  (20)  days  before  said  day  of  ,  19 — ,  that 

the  said  sums  constitute  property  belonging  to  the  estate  of 
said  bankrui)t.  and  the  court  doth  to  said  extent  confirm  -said 
finding  and  order  of  said   referee,   and  doth   ajiprovc  of  the 

referee's  order  made  on  said  A.  B..  on  tlie day  of , 

ig — ;  and  the  court  does  further  find  that  said  A.  B.  has  not 
obeyed  the  said  order  of  the   referee  to  the  extent  of  the 


1008  BANKRUPTCY. 

amounts  licro  fouinl  to  he  in  his  possessioti.  and  that  he  is 
therehy  j^uihy  of  contempt. 

It  is  therefore  ordered  that  said  A.  B.,  on  or  before  the 

day  of  .    19 — .   pay   to   said   B.    M.,   trustee,   the 

sum  of  $ .  and  also  dehver  to  him  United  States  bonds 

face  value  of  $ .  or  in  Heu  thereof  money  in  the  sum  of 

$ in  money,  and  that  he  appear  for  further  orders  and 

proceedings  herein  in  this  court  at  o'clock  a.  m.,  on  the 

day  of ,  19 — . 

It  is  ordered  that  for  his  appearance  in  court  on  the 

day  of  ,  19 — ,  at  o'clock  a.  m..  to  abide  the  fur- 
ther orders  of  this  court  in  these  proceedings,  said  A,  B.  exe- 
cute bond  in  the  sum  of  $ in  the  form,  and  with  good 

and  sufficient  surety,  as  provided  by  law,  to  be  approved  of 
by  the  clerk  of  this  court,  and  in  default  thereof  he  be  com- 
mitted to  the  custody  of  the  marshal,  and  by  him  committed 
to  the County  Jail. 

And  said  bankrupt  by  his  attorney  objects  to  said  finding 
of  said  court  and  gives  notice  of  his  intention  to  appeal  there- 
from. 

(i)   This  order  must  be  made  by  the  judge  and  not  by  the  referee. 


No.  121. 

Order  Com,mitting  Bankrupt  for  Contempt  in  Not  Obeying 
Order  to  Pay  Over  Assets  (i). 

[Caption.] 

Now  comes  the  said  A.  B.,  in  accordance  with  his  under- 
taking heretofore  made  in  compliance  with  the  order  hereto- 
fore made  on  the  day  of  ,  19 — ,  and  it  appearing 

from  the  report  of  B.  M..  trustee,  and  frotn  the  evidence, 
that  said  A.  B.  has  wholly  refused  and  neglected  to  per- 
form and  comply  with  the  order  of  court  made  the day 

of ,  19 —  and  has  wholly  failed  to  pay  and  deliver  said 

moneys  and  bonds  or  any  of  them  to  said  trustee,  the  court 


PROCEEDINGS    BEFORE   THE   JUDGE.  1009 

do  find  that  he  has  been  and  is  guilty  of  contempt.  It  is 
thereupon  ordered  and  adjudged  that  he,  said  A.  B.,  be  con- 
fined in  the  county  jail  of  the  county  of ,  State  of , 

until  he  comply  with  said  order  and  make  said  payment  and 

deliveries  as  directed  in  said  order  of  the dav  of  

19 — .  and  that  a  warrant  issue  for  such  commitment, 
(i)   This  order  must  be  made  by  the  judge  and  not  by  the  referee. 


Report  of 
Referee. 


No.  122. 
Order  of  Referee  Recommending  Commitment  for  Contempt. 

In  the  District  Court  of  the  United  States 

For  the District  of .         In  Bankruptcy. 

In  the  matter  of 
A.  B.  Co..  et  al. 
vs. 
E.  B.. 
Bankrupt.  J 

I.  J.  S..  one  of  the  referees  in  bankruptcy  of  this  court,  dn 

respectfully  report  that  on  the  day  of  .  I  entered 

an  order  requiring  F.  B.,  to  pay  to  E.  M..  Trustee  in  Bank- 
ruptcy in  this  cause,  on  or  before  9  -.30  o'clock  a.  m., .  the 

sum  of  $ which  came  to  his  hands  as  bailee  or  agent  of  the 

bankrupt,   E.   B.,   which   sum   said   F.   B.  has  not  accounted 
for. 

At  che  time  of  the  entry  of  said  order  said  F.  B.,  was  before 
me  in  person  and  l)y  counsel,  R.  X.,  Esq.  A  copy  of  said  or- 
der is  filed  herewith  and  made  part  hereof,  marked  No.  i . 

I  further  certify  that  said  F.  B.  has  failed  to  comply  with 
said  order  in  whole  or  in  part. 

I  therefore  find  that  said  F.  B.  is  in  contempt  of  court,  and 
therefore  recommend  that  he  be  punished  for  contemi)t  and 
committed  to  ])ris<)n  until  he  shall  have  paid  to  the  said  trustee 
the  saifl  sum  of  $ . 

All  of  which  is  respectfully  submitted.  J.  S., 

Referee  in  Bankruptcy. 


1010  BANKRUPTCY. 


No.  123. 


Order  Committing  Agent  of  Bankrupt  for  Contempt  in  Not 

Obeying   Order  of  Referee  to  Pay  Over 

Assets  of  Bankrupt. 

In  the  District  Court  of  the  United  States 
For  the District  of . 

[Captioii.] 

This  cause  coming  on  to  be  heard  on  the  petition  of  W.  T. 
for  a  review  of  the  order  of  court  entered  herein  by  J.  S.,  one 
of  the  referees  of  this  court,  requiring  W.  T.  to  pay  over  to 
E.  I\L,  Trustee  in  Bankruptcy  of  the  bankrupt  herein,  and  the 
certification  of  said  referee  as  to  the  disobedience  of  said  W. 
T.  of  said  order  and  the  recommendation  of  said  referee  that 
said  W.  T.  be  punished  for  his  contempt  of  the  order  of  this 
court,  and  the  court  being  fully  advised,  it  is  hereby  ordered 
that  the  said  W.  T.,  be  committed  for  contempt  of  court  as 

charged  and  confined  in  the  jail  of County  until  further 

order  of  this  court. 


No.  124. 
Commitment  for  Contempt. 

In  the  District  Court  of  the  United  States 

For  the District  of . 

Division. 

In  re 
A.  B., 
Bankrupt. 

The  defendant  A.  B., having  been  adjudged  guilty  for 

contempt  of  court  in  failing  to  pay  and  deliver  moneys  and 

bonds  or  any  of  them  to  the  trustee  herein 

Thereupon  the  court  pronounced  the  following  sentence,  to 
wit :     That  the  said  A.  B.  be  imprisoned  in  the  jail  of ■ 


No. 

In  Bankruptcy. 


PROCEEDINGS   BEFORE   THE   JUDGE.  1011 

County,   State  of  until   he   comply   with  the  order  of 

the  day  of  ,    19 — ,  and  make  said  payments  and 

deliveries  as  directed  in  said  order. 

This,  therefore,  is  to  commend  the  marshal  of  said  district 
to  take  the  body  of  the  said  A.  B.  and  commit  the  same  to  the 
said  jail  of  County,  pursuant  to  the  above  sen- 
tence. 

Witness,  the  Honorable  G,  R.,  Judge  of  the  District 

Court  of  the  United  States,  this  day  of 

,  A.  D.,  19 — ,  and  in  the year  of  the 

Independence  of  the  United  States  of  America. 
[Seal.]  B.  R.. 

Clerk  of  the  District  Court  of  the  United 
States District  of . 


No.  125. 

Order  Purging  A.  B.  of  Contempt  and  Directing  H'*'-  Release 

from  Jail  (i). 

[Caption.] 

It  appearing  that  the  order  herein  made  against  the  bank- 
rupt A.  B.,  and  after  failure  to  comply  therewith  is  impris- 
oned in  the  jail  of  County,  in  the  State  of  ,  has 

now  been  complied  with,  it  is  hereby  ordered  that  said  A. 
B.  is  purged  of  contempt  for  his  disobedience  to  the  order  of 
court. 

It  is  ordered  that  said  A.  B.,  upon  payment  of  costs  taxed 
at  $ ,  be  now  released  and  discharged  from  said  impris- 
onment,   and   the    marshal    is    hereby   ordered    to    deliver   a 

copy  of  this  order  to  the  slicrifF  of County,  in  the  State 

of ,  who  is  hereby  directed  upon  receipt  thereof  to  release 

the  said  A.  B.  from  his  custody. 

(l)  This  order  must  be  made  by  the  judge  and  not  by  llic  referee. 


KITJ  BANKKrPTCY. 

No.  126. 

Rule  to  Show  Cause  Why  Assignee  for  Creditors  Should  Not 
Pay  Over  Funds  to  Trustee  in  Bankruptcy  (i). 

[Caption.} 

Tlie  President  of  the  United  States  of  America  to  L.  C,  as- 
signee for  the  benefit  of  the  creditors  of  A.  B. : 

Yon  are  herein'  cited  and  admonished  to  be  and  appear  be- 
fore the  District  Court  of  the  United  States  within  and  for 

the District  of on  the day  of A.  D., 

at  lo  o'clock  a.  m.,  to  show  cause,  if  any  you  know  or  have, 
why  you  should  not  pay  over  and  deliver  to  J.  R.,  Trustee  in 
Bankruptcy,  the  funds  and  assets  of  the  estate  of  the  said  A. 
B.  now  in  your  possession  or  under  your  control.  It  is 
hereby  ordered  that  the  marshal  of  this  district  make  legal 
ser\ice  and  return  of  this  rule  on  or  before  the  appearance 
day  above  named. 

Witness,  the  Honorable  C.  R.,  United  States  District   .Judge 

for  th( District  of ,  this day  of ,  A.  D.,  19—, 

and  in  the  year  of  the  independence  of  the  United  States 

of  America. 

B.  R. 

Clerk  of  the  District  Court  of  the  TTnited  States  for  the  

District  of  . 

(1 )  This  form  can  be  used  for  the  purpose  of  compelling  tlie  bankrupt 
or  agent  to  pay  over  money.     See  Mueller  vs.  Nugent,  184  U.  S.  1. 


No.  127. 

Order  that  the  Assignee  for  the  Benefit  of  Credit<M-s  Pay  Over 

Funds  to  the  Trustee  in  Bankruptcy.^ 

[C-aptioti.] 

This  cause  came  on  to  Ix-  heard  upon  rn\v  to  show  cause,  etc., 
and  was  argued  by  counsel. 

On  consideration  whereof  it  is  hereby  ordered  that  L.  C, 
assignee    tor   the    ht^icfit   of   the   creditors   of   A.    B.,    forthwith 


PROCEEDINGS   BEFORE   THE   JUDGE.  1013 

pay  over  and  deliver  to  J.    R,,   Trustee  in   Bankruptcy  of 
the  estate  of  said  A.   B.,  all  funds  and  assets  of  every  de- 
scription belonging  to  the  estate  of  said  A.  B.  now  in  his  pos- 
session or  subject  to  his  control, 
(i)   See  note  to  No.  126. 


No.  128. 

Order  for  Assignee  for  Creditors  to  Account. 

In  the  District  Court  of  the  United  States 

For  the District  of . 

A.  B.,  ct  al.     1 

vs.  !  Bankrupt. 

C.  D.  &  Co.,        J 

At ,  in  said  district,  on  the day  of    .  A.  D., 

19 — ,  before  J.  B..  Referee  in  Bankruptcy. 

Notice  having  been  given,  and  no  adverse  interest  appearing, 
it  is  hereby  ordered  that  L.  C,  assignee  for  the  benefit  of  the 
creditors  of  C.  D.  &  Co.,  file  with  J.  B.,  one  of  the  referees  of 
this  court  in  bankruptcy,  at  his  office.  Rooms  1 001-1005,  Co- 
lumbia Building, ,  on  or  before ,  at  9 130  o'clock  a.m., 

a  detailed  and  itemized  statement  showing  all  the  receipts  and 
disbursements  made  by  him  of  money  and  other  assets  be- 
longing to  the  estates  of  C.  D.  &  Co..  together  with  all 
vouchers  that  he  may  have  for  any  disbursements. 

It  is  further  ordered  that  said  L.  C.  be  and  appear  before 

the  referee  aforesaid  in  person  on ,  at  9 :30  o'clock  a.  m., 

for  the  purpose  of  making  settlement  of  his  accounts  as  as- 
signee of  the  parties  aforesaid. 

Witness  the  Honorable  G.  R.,  Judge  of  said  court. 

and  the  seal  thereof,  at  ■ ,  in  said  district,  on 

the day  of ,  A.  D., . 

[Seal] 

B.  R., 
Clerk  of  Said  Court. 


101-4  BANKRUPTCY. 

No.  129. 

Response  of  an  Assignee  for  Benefit  of  Creditors  to  a  Rule  to 
Pay  Over  Money,     (i). 

In  the  District  Court  of  the  United  States 
For  the District  of . 


In  the  matter  of 
A.  B.  &  Co.,  ct  al., 

vs. 
C.  D.  &  Co..  D.  G.  and  C.  D. 


Bankrupts. 


L.  C.  for  response  to  the  order  herein  to  show  cause  why 
he  shall  not  pay  the  Receiver  in  Bankruptcy  herein  the  sum 

of  $ shown  in  his  report  as  having-  been  paid  Messrs.  M. 

A.,  D.  A.  &  J.  G.,  and  $ to  Z.  P.  Esq.,  says  that  said  sums 

were  paid  them  respectively  for  services  rendered  him  as  his 
counsel  whilst  acting  as  assignee  before  any  proceedings  here- 
in, as  already  appears  in  his  report  herein.  He  says  further 
that  he  has  no  money  or  property  or  means  of  any  kind  with 
which  to  pay  said  money  or  any  part  thereof. 

He  respectfully  submits  to  the  court  that  he  ought  not  to  be 
compelled  to  pay  said  money  herein. 

This  respondent  says  further  that  long  before  the  petition 
in  this  proceeding  was  filed  and  before  he  had  any  knowledge, 
information  or  intimation  that  it  was  intended  to  be  filed,  and 
relying  upon  it  that  he  would  be  permitted  to  wind  up  his 
trust  under  the  deed  of  assignment  for  the  bankrupts  shown 
in  the  record  in  this  action  or  proceeding,  he  filed  his  petition 
and  brought  action  in  the  State  court  as  appears  in  this  record, 
which  is  still  pending,  and  he  is  still  subject  to  the  jurisdiction 
and  orders  of  said  State  court  requiring  him  to  settle  his  ac- 
counts there  and  to  be  responsible  there  for  all  his  acts  and 
doings  under  said  deed  of  assignment. 

He  submits  to  this  honorable  court  that  this  response  be  held 
sufficient  and  that  the  "show  cause"  order  herein  should  be  an- 


PROCEEDINGS   BEFORE  THE   JUDGE.  1015 

nulled  or  suspended  until  he  is  relieved  from  his  present  em- 
barrassing position.  L.  C, 

Subscribed  and  sworn  to  before  me  by  L.  C,  June  . 

My  commission  expires .  A.  S., 

Notary  Public, County, 


(1)  Takeu  from  the  record  in  Louisville  Trust  Co.  ^•*•.  Comiiiger,  184  U. 
S.  18. 

As  to  the  right  of  attorneys  for  assigdee  iu  state  court  to  pay  for 
ger\-ices  rendered  prior  to  bankruptcy,  see  Randolph  m.  Scrugge,  trustee, 
190  U.  S.  533;  10  Am.  B.  R.  1. 


No.  130. 

Petition  by  a  Trustee  to  Review  an  Order  Allowing  a 
Claim    (i). 

In  the  District  Court  of  the  United  States 

For  the District  of . 

In  the  matter  of  the  estate  of 


A.  B.,  I  In  Bankruptcy. 

Bankrupt.  J 

The  petition  of  N.  J.  M.,  trustee  of  A.  B.,  bankrtipt,  of  the 
village  of ,  resi>ectfully  represents : 

First.  That  heretofore,  to  wit.  on  the day  of ,  the 

said  A.  B.,  who  before  that  time  had  been  engaged  in  busi- 
ness at  ,  was  duly  adjudged  a  bankrupt  by  an  order  of 

this  court,  and  that  afterwards  your  petitioner  was  chosen  and 
elected  trustee  in  the  estate  of  A.  B,  and  is  now  and  has  for 
some  time  past  been  acting  as  such  trustee. 

Second.  That  heretofore,  to  wit,  on  the day  of . 

the  S.  T.  Company,  of  ,  a  corporation  organized  under 

the  laws  of  the  State  of and  carrying  on  business  under 

the  laws  of  the  State  of at ,  aforesaid,  filed  its  claim 

against  said  estate  for dollars  and  cents  as  a  pre- 
ferred claim  against  said  estate  for  the  amount  claimed  to  be 
due  under  and  by  virtue  of  a  certain  chattel  mortgage  made 


1016  BANKRUPTCY. 

and  executed  by  the  said  A.  B.  to  said  The  S.  T.  Company, 

on  the day  of ,  and  which  said  chattel  mortgage  it 

was  claimed  hy  said.  The  S.  T.  Company,  was  a  lien  upon  the 
stock  of  goods,  wares  and  merchandise  received  l)y  the  said 
tnistee  and  by  him  converted  into  cash. 

Third .  That  said.  The  S.  T.  Company,  petitioned  A.  M., 
Esq.,  referee,  in  matter  of  said  estate,  that  said  chum  be  al- 
lowed as  a  preferred  claim  and  that  the  said  trustee  should 
be  ordered  by  the  court  to  pay  the  same  out  of  the  assets  of 
said  estate  in  preference  to  other  claims  as  a  first  lien  thereon, 

and  that  your  petitioner  as  trustee  as  aforesaid,  on  the day 

of  ,  filed  his  objections  to  the  allowance  of  said  claim, 

and  afterwards  the  said  matter  came  on  to  be  heard  before 
A.  M.,  Esq.,  referee  in  said  estate,  and  testimony  was  taken 
thereon  before  the  said  referee  and  by  deposition  and  the  mat- 
ter submitted  to  him,  and  afterwards,   on,  to  wit,  the  

day  of ,  the  said  referee  made  an  order  allowing  the  said 

claim  of  said  The  S.  T.  Company,  against  the  estate  of  said 

A.  B.  to  the  amount  of dollars  and cents,  together 

with  costs  amounting  to dollars  and cents  as  a  pre- 
ferred claim  against  the  said  estate,  and  ordering  and  requiring 
your  petitioner  as  such  trustee  to  pay  said  amount  to  said  The 
S.  T.  Company,  out  of  the  moneys  in  his  hands  belonging  to 
said  estate. 

Fourth.  That  your  petitioner  claims  that  the  said  chattel 
mortgage  upon  which  said  claim  is  based  is  void,  and  that  said, 
The  S.  T.  Company,  is  not  entitled  to  enforce  the  same  against 
the  property  purported  to  be  covered  thereby,  and  against  the 
assets  of  said  estate,  and  that  such  mortgage  is  illegal,  fraudu- 
lent and  void  for  the  specific  reasons  set  forth  in  his  ob- 
jections filed  with  said  referee  to  the  claim  of  said,  The  S. 
T.  Company,  to  which  he  hereby  makes  reference. 

Fifth.  Your  petitioner,  therefore,  avers  that  the  ruling  and 
decision  of  the  said  referee  allowing  said  claim  was  error,  and 
that  no  order  should  have  been  made  by  said  referee  allowing 


PROCEEDINGS   BEFORE   THE   JUDGE.  1017 

said  claim,  and  said  referee  should  have  made  an  order  disal- 
lowing said  claim,  and  holding  said  chattel  mortgage  void  for 
the  reasons  set  forth  in  the  petitioner's  objection  thereto. 

Sixth.  That  your  petitioner  desires  a  review  by  the  Judge  of 
4his  court  of  the  order  made  by  said  referee,  and  filed  this 
petition  therefor;  and  he  therefore  prays  that  the  error  com- 
plained of  and  the  questions  of  law  and  fact  raised  before  the 
said  referee  and  decided  by  him  may  be  certified  by  the  said 
referee  to  the  Hon.  G.  R.,  District  Judge ;  that  he  may  review 
the  order  heretofore  made  and  make  and  enter  an  order  or  di- 
rect the  referee  to  make  and  enter  an  order  holding  and  decid- 
ing the  said  chattel  motgage  to  be  illegal,  fraudulent  and  void 
and  that  the  same  constituted  no  lien  upon  the  property  of  said 
A.  B.  purporting  to  be  covered  thereby,  and  no  lien  against 
the  assets  in  said  estate  in  the  hands  of  your  petitioner,  and 
disallowing  said  claim  of  said  The  S.  T.  Company. 

And  yo'.ir  petitioner  ever  prays.  J.  M.. 

R.  X.,  Trustee. 

Attorney  for  Petitioner. 

United  States  of  America.  District  of .   Division, 

County  of  ,  ss. : 

T.  J.  M..  the  petitioner  mentioned  and  described  in  the 
foregoing  petition,  do  hereby  make  a  solemn  oath  that  the 
statements  therein  are  true  according  to  the  best  of  my  knowl- 
edge, information  and  belief.  J.  M., 

Petitioner. 

Subscribed  and  sworn  to  before  me  this day  of , 

A.  D., .  J.  N., 

Notary  Public,  County, . 


(l)  The  action  of  the  referee  is  always  subject  to  review  by  the  judRc  of 
the  court  of  bankruptcy.  Gen.  Ord.  27,  B.  A.  1898,  sec.  38a.  In  any 
proceeding  before  a  referee,  a  party  dissatisfied  with  any  order  of  the 
referee  made  in  the  course  of  such  proceeding,  may  take  the  opinion 
of  the  judge  in  respect  to  such  matter.  The  practice  is  provided  for  by 
General  Order  27,  and  should  be  followed.  In  re  Scott,  99  Fed.  Rep. 
404    s  Am.  R.  R.  (^2S,  2  N.  B.  N.  440. 


;i01S  BANKRUPTCY. 

After  the  referee  has  made  the  order  sought  to  be  reviewed  (in  re 
Russell.  105  Fed.  Rep.  501.  5  Am.  B.  R.  5^6;  in  re  Scott,  99  Fed.  Rep. 
404.  3  Am.  B.  R.  625.  2  N.  B.  N.  440;  in  re  Schiller,  96  Fed.  Rep.  400, 
2  Am.  B.  R.  704:  in  re  Smith,  93  Fed.  Rep.  791)  and  not  before  (in  re 
Smith  93  Fed.  Rep.  791),  the  party  dissatisfied  must  file  with  the  referee 
a  petition  that  the  order  be  reviewed  by  the  judge  in  which  must  b« 
set  out  the  error  complained  of.  In  re  Russell,  105  Fed.  Rep.  501,  5 
Am.  B.  R.  566;  in  re  Scott,  99  Fed.  Rep.  404,  3  Am.  B.  R,  625,  2  N.  B. 
N.  440;  in  re  Schiller,  96  Fed.  Rep.  400,  2  Am.  B.  R.  704;  in  re  Smith, 
93  Fed.  Rep.  791. 

The  limitation  of  ten  days  in  which  appeals  must  be  taken  to  the 
Circuit  Court  of  Appeals  from  the  District  Court  has  no  application,  but 
the  petition  for  review  must  be  filed  within  a  reasonable  time,  which 
may  be  fixed  by  the  local  rule  of  court.  (As  to  such  petitions  to  C.  C. 
A.  which  appear  to  be  analagous  see  in  re  N.  Y.  Economical  Printing 
Co.  (C.  C  A.,  2nd  Cir.),  106  Fed.  Rep.  839,  5  Am.  B.  R.  697,  3  N.  B. 
N.  539). 

The  district  judge  may  refuse  to  act  without  such  petition  and  should 
not  consider  exceptions  not  therein  contained.  In  re  Russell,  105  Fed. 
Rep.  501,  5  Am.  B.  R.  566;  in  re  Scott,  99  Fed.  Rep.  404,  3  Am.  B.  R. 
625,  2  N.  B.  N.  440;  in  re  Schiller,  96  Fed.  Rep.  400,  2  Am.  B.  R.  704; 
in  re  Smith,  93  Fed.  Rep.  791.  The  referee  must  forthwith  certify  to  the 
judge  the  question  presented,  a  summary  of  the  evidence  relating  thereto, 
and  the  finding  and  order  of  the  referee  thereon.  Gen.  Ord.  27.  The 
certificate  will  be  signed  by  the  referee  and  transmitted  by  him  to  the 
judge.     B.  A.   1898,  sec.  39a,  clauses  5  and  9. 

The  "  summary  of  the  evidence "  mentioned  in  the  order  may  be  the 
evidence  taken  stenographically,  or  the  substance  thereof  as  agreed  upon 
by  the  parties.  B.  A.  1898,  sec.  390,  clauses  S  and  9.  A  summary  and 
not  the  complete  evidence  should  be  certified  wherever  the  rules  of  jus- 
tice will  permit  Cunningham  vs.  German  Nat.  Bank  (C.  C.  A.,  6th  Cir.), 
103  Fed.  Rep.  932.  Where  this  is  done  the  district  court  may  require 
the  original  evidence  or  parts  thereof  certified  to  it.  Cunningham  vs. 
German   Nat.  Bank   (C.  C.  A.,  6th  Cir.),  103  Fed.  Rep.  932. 

If  the  question  be  improperly  certified  the  court  may  refuse  to  give 
an  opinion.  In  re  Smith,  93  Fed.  Rep.  791.  If  the  judge  is  not  satis- 
fied with  the  evidence  certified  hy  the  referee  he  may  allow  further 
evidence  to  be  taken  before  him.  In  re  Stotts,  93  Fed.  Rep.  438,  i  Am.  B. 
R.  641,  or  refer  the  cause  to  the  referee  for  further  proofs.  He  will 
not  set  aside  the  findings  of  fact  of  a  referee  unless  the  same  are  man- 
ifestly contrary  to  the  weight  of  the  evidence.  In  re  Covington,  6  Am. 
B.  R.  374.  But  when  a  referee  finds  that  a  bankrupt  has  property  in  his 
possession  or  control  which  he  conceals  from  the  trustee,  and  such  find- 
ing is  made  the  basis  of  an  order  of  delivery,  which  is  enforceable  by  im- 
prisonment for  contempt  in  disobeying  it,  then  the  judge  in  reviewing 
the  finding  must  be  satisfied  that  the  evidence  establishes  the  fact  beyond 


PROCEEDINGS    BEFORE    THE    JUDGE.  1019 

a  reasonable  doubt.     In  re  Mayer,  98  Fed.  Rep.  839,  3  Am.  B.  R.  533; 
in  re  McCormick,  97  Fed.  Rep.  566,  3  Am.  B.  R.  340,  2  N.  B.  N.  104. 

The  judge  will  probably  hear  arguments  of  counsel  on  the  point,  and 
will  give  his  opinion  on  the  point.  If  the  order  of  the  referee  is  modified 
or  reversed  he  may  direct  the  proper  order  to  be  entered  on  the  journal  of 
the  court. 


No.  131. 

Petition  by  an  Assignee  to  Review  an  Order  of  a  Referee  on  a 
Rule  to  Pay  Over  Money  to  Receiver  in  Bankruptcy  (i). 

In  the  District  Court  of  the  United  States 
For  the District  of . 


In  the  matter  of 
A.  B.  «&  Co..  &c.. 

I'S. 

C.  D.  &  Co..  D.  G.  and  C.  D. 
Bankrupts. 


In  Bankruptcy. 


Respectfully  represents  the  petitioner,  L.  C,  that  during 
the  course  of  the  proceedings  herein,  before  J.  B.,  one  of  the 
Referees  in  Bankruptcy  of  this  court,  a  rule  was  issued  against 
the  petitioner  to  show  cause  why  he  should  not  be  compelled  to 

pay  to  the  receiver  the  sum  of  $ ;  also  another  rule  was 

issued  against  the  petitioner  to  show  cause  why  he  should  not 

pay  the  further  sum  of  $ by  him  paid  to  M.  A.,  D.  A.  & 

J.  G.,  for  services  as  counsel  for  him  in  his  capacity  as  assignee 
under  the  general  assignment  under  the  State  law:  tliat  your 
petitioner  filed  responses  to  both  of  said  rules  which  re- 
sponses having  come  on  to  be  heard  were  adjudged  by  the 
said  referee  insufficient  and  said  rules  were  made  absolute. 
Your  petitioner  shows  tliat  said  referee  erred  to  his  j)rciu(lire 
in  issuing  both  of  said  rules,  also  in  adjudging  both  of  said 
responses  insufficient,  also  in  making  lx)th  of  said  nilc^  ■,\h<^i^- 
lute. 

Wherefore,  your  petitioner  prays  that  the  orders  of  said 


1  ()•_*()  HANKKII'l'in. 

referet>  altovc  set  forth    may    li(>    tcvicwc*!   hy    tlic  Honorable 
Judge  of  this  court.  1^.  (1., 

Ky  his  (Counsel,  X.  .t  X. 
[  ]\  rlncalioii.] 

( 1 )  As  t<»  i)owor  of  court  to  r»>vicw  orders  of  ri'ferees  and  tlie  practice  in 
such  causes,  sco  Cfcii.  Ord.  27;   Mueller  r.s.  Nuf^cnt,  184  U.  S.  1;   Cluiiiiiiif?- 
liam  t'N.  Biuik,  103  Fed.  Rej).  1).''2;  C^mrier  Journal  Job  Printing  Co.  vn. 
Brewing  Co.,  101  Fed.  Rep.  (>J)!);   Lovelaiid  Bank.,  sec.  33a. 
See  also  note  to  No.  130. 


No.  132. 
Petition  to  Review  Order  of  Referee  Disallowing  Claim  (i). 

[Caption.^ 
To  the  Honorable  A.  C.  Judge  of  the  District  Court  of  the 
United  States  for  the District  of . 

The  Petition  of  The  D,  M.  Grocery  Company,  a  corporation 

under  the  laws  of ,  one  of  the  creditors  of  said  bankrupt, 

res])ectfully  represents  that  on  the  day  of  1901, 

manifest  error  to  the  prejudice  of  complainant,  was  made  by 
the  referee  in  said  matter  in  a  finding  and  order  disallowing 
and  expunging  the  claim  of  said  corporation  against  said  bank- 
rupt from  the  list  of  allowed  claims  upon  the  trustee's  record 
in  said  case ;  and  in  ordering  said  corporation  to  pay  as  pref- 
erences received  from  said  bankrupt  the  sum  of  $ .     The 

errors  complained  of  are : 

First.  That  the  evidence  adduced  before  said  referee  and 
set  out  in  the  agreed  statement  herewith  submitted,  shows  that 
no  preference  in  excess  of  subsequent  credits  given,  were  re- 
ceived by  said  corporation. 

Second.  Said  referee  erred  in  the  method  adopted  for  calcu- 
lating preferences  claimed  to  be  within  four  months  of  bank- 
ruptcy in  said  case. 

Third.  Said  referee  erred  in  finding  from  the  evidence  that 
the  dates  of  payment  on  the  open  account  of  said  bankrupt 
with  said  corporation,  were  those  dates  shown  by  the  books 


PROCEEDINGS   BEFORE   THE   JUDGE.  1021 

of  the   bankers   of   said   bankrupt.    Messrs.    R.,    B.    &   Com- 
pany. 

Fourth.  Said  referee  erred  in  finding-  that  any  payments 
made  to  said  corporation  by  said  bankrupt  were  preferences  for 
any  amount. 

Fifth.   Said  referee  erred   in   ordering  said   corporation  to 

pay  the  sum  of  $ .  or  any  sum  at  all,  within  five  days  from 

said  date. 

Sixth.  Said  referee  erred  in  his  conclusions  of  law  from 
the  evidence  offered  at  said  hearing. 

Wherefore  the  D.  M.  Grocery  Company  prays  that  it  may 
be  decreed  by  the  court  to  have  its  claim  against  the  said  bank- 
rupt estate  allowed  for  the  full  amount  thereof,  and  that  it  be 
restored  to  all  things  lost  by  reason  of  the  finding  and  order  of 
the  referee  in  said  matter. 

The  D.  M.  Grocery  Company. 
'  By  R.  X., 
Its  Attorney. 

[Verification.] 

(i)  See  note  to  No.  130. 


No.  133. 

Petition  to  Review  Order  of  Referee  to  Pay  to  Trustee  Money 

of  Bankrupt    (i). 

The  District  Court  of  the  United  States  for  the District 

of .     In  Bankruptcy. 

In  re 
A.  B.  &  Co.  et  al. 

vs. 
E.  T. 

Comes  W.  T.,  by  counsel,  and  files  herewith  his  petition  for 

review  of  the  order  of  the  referee  entered  herein  on .  and 

says  that  said  referee  erred  in  ordering  and  adjudging  as  in- 
sufficient his  response  to  the  rule  filed  lierein  on  ;  that 

said  referee  erred  in  adjudging  that  there  came  to  the  hands 


Petition  for  Review. 


1022  BANKRUPTCY. 

of  Scoid  W.  T.  as  the  agent  of  the  bankrupt,  on ,  the  sum 

of  $ ,  being  the  net  proceeds  reahzcd  from  the  mortgage 

executed  by  the  bankrupt  upon  his  house  and  lot  in  the  City  of 

;  that  said  referee  erred  in  adjudging  that  there  came  to 

the  hands  of  said  \\' .  T.,  as  the  agent  of  the  bankrupt  on , 


the  further  sum  of  $ ,  being  the  net  proceeds  from  the  sale 

of  the  merchandise  sold  to  H.  S. ;  that  said  referee  erred  in  ad- 
judging that  said  sums  are  the  property  of  the  bankrupt  E.  T., 
and  belong  to  E.  M.,  trustee  in  bankruptcy  herein  of  said  es- 
tate; that  said  referee  erred  in  ordering  that  said  rule  be  made 
absolute  to  the  amount  of  said  two  sums  aggregating  the  sum 

of  $ ;  that  said  referee  erred  in  ordering  and  requiring  said 

W.  T.  to  pay  to  E.  M.,  trustee  in  bankruptcy  in  this  cause  on 

or  before  9 130  o'clock  on  ,  the  said  aggregate  sum  of 

$ ,  and  said  referee  erred  in  entering  said  order  on ,  a 

copy  of  which  is  filed  herewith,  that  said  order  is  erroneous 
and  void,  and  said  referee  had  no  jurisdiction  to  enter  same. 
Wherefore,  said  W.  T.  prays  that  said  order  entered  herein 

by  the  referee  on  ,  be  reviewed  by  the  Honorable  Judge 

of  the  District  Court  of  the  United  States  for  the Dis- 
trict of ,  and  that  said  order  be  adjudged  erroneous  and 

void. 

X.  &  X., 
Attorneys  for  W.  T. 

(i)   Taken  from  the  record  in  Mueller  vs.  Nugent,  184   U.  S.  I. 
See  note  to  No.  130. 


No.  134. 
Petition  for  Review  Order  on  Claims   (i). 

[Caption.'\ 

And  now  comes  the  L.  Trust  Company,  trustee  in  bankrupt- 
cy, of  the  bankrupts  in  the  above  styled  proceeding,  by  R.  Y., 
Esq.,  of  counsel,  and  respectfully  represents  to  the  court  that 
said  trustee  and  the  lawful  creditors  of  the  estate  of  said  bank- 
rupts whom  said  trustee  represents,  are  aggrieved  by  the  find- 


PROCEEDINGS   BEFORE   THE   JUDGE.  1023 

ing  of  the  Hon.  A.  M.,  referee  herein,  with  reference  to  the 
following  matters,  to  wit : 

That  the  referee  in  his  finding  and  decision,  upon  the  excep- 
tions of  said  trustee  and  of  the  creditors  to  the  claim  of  D.  L. 
&  Son,  erred  to  the  prejudice  of  these  petitioners,  the  said  trus- 
tee and  the  lawful  creditors  of  said  bankrupts. 

First.  In  not  finding  that  the  sum  of  $ had  been  paid  to 

said  D.  L.  &  Son  on  their  claim  filed  here,  by  E.  F.  &  Co.,  en- 
dorsers of  two  $ notes  included  in  and  part  of  said  claim 

of  D.  L.  &  Son. 

Second.  In  not  finding  that  said  claim  of  D.  L.  &  Son  had 
been  paid  in  full,  as  a  preferential  payment,  out  of  the  proceeds 
of  the  fraudulent  sale  of  the  remainder  of  the  stock,  fixtures, 
etc.,  of  the  bankrupt  firm,  to  E.  F.  of  said  firm  of  E.  F.  &  Co., 
as  provided  for  in  the  written  agreement  between  the  three 
members  of  the  bankrupt  firm,  read  in  evidence,  and  in  finding 
that  said  preferential  payment  was  only  one-half  of  said  claim 
of  D.  L.  &  Son,  when  in  fact  said  claim  was  paid  in  full. 

Third.  In  finding  that  only  one-half  of  the  claim  of  E.  F. 
&  Co.  was  paid  as  a  preferential  payment  out  of  the  profits  of 
said  fraudulent  sale  to  E.  F..  when  in  fact  said  claim  was  paid 
in  full  as  shown  conclusively  by  the  evidence  in  said  proceed- 
ing. 

Fourth.  Because  said  referee  erred  in  not  disallowing  each 
of  said  claims  of  D.  L.  &  Son  and  E.  F.  &  Co. 

Wherefore  said  petitioners  pray  this  honorable  court  to  re- 
view the  findings  of  the  said  receiver  with  reference  to  the 
matters  hereinbefore  set  forth,  and  that  the  referee  herein 
certify  the  said  questions  to  the  court  for  that  purpose  and  that 
he  send  up  with  said  certificate  all  of  the  testimony  taken  on 
said  issues  of  said  bankrupts'  estate,  etc. 

The  L.  Trust  Company, 
Trustee  in  Bankruptcy. 
R.  Y.. 

Attorney, 
(i)  Sec  note  to  No.  i:}(). 


1024  BANKRUPTCY. 

No.  135. 

Petition  to   Review   Order  Relative  to   Exemptions   (l). 

[Caption.  1 

Now  comes  E.  B.  and  petitions  to  the  Honorable  A.  M., 
Referee,   for  any  order  certifying  to  the  Honorable   G.   R., 

Judge  of  the  District  Court  of  the  United  States  for  the 

District  of ,  for  review  of  all  matters  pertaining  in  and 

to  the  order  entered  herein  on  the  day  of ,  A.  D. 

,  relating  to  and  finding  againrt  the  claims  of  said  E.  B., 

as  widow  of  said  A.  B..  bankrupt,  and  respectfully  represents 
that  the  errors  complained  of  are  as  follows : 

The  court  erred  in  not  making  an  order,  under  Section  8  of 
the  Bankruptcy  Act : 

First.  That  the  trustee  paid  to  said  E.  B.  the  exemptions 
heretofore  demanded  by  her  husband  during  his  lifetime. 

Second.  That  the  trustee  permit  her  to  remain  in  her  hus- 
band's mansion  house  and  in  possession  of  his  household  prop- 
erty for  a  period  of  one  year,  unless  dower  is  sooner  assigned 
her  in  said  mansion  house. 

Third.  That  the  trustee  pay  to  her  from  the  assets  of  said 
estate  the  allowance  provided  for  her  under  Sections  6040  and 

6041  of  the  Revised  Statutes  of ,  and  heretofore  fixed  by 

the  Probate  Court  of County,  ,  at  $ . 

Fourth.  That  said  trustee  permit  her  to  retain  as  exempt 
such  part  of  the  assets  of  said  estate  as  are  exempt  under  Sec- 
tion 6038  of  the  Revised  Statutes  of . 

Fifth.  That  said  trustee  allow  and  pay  to  her  such  other  ex- 
emptions as  she  is  entitled  to  receive  under  the  Revised  Statutes 

of .  E.  B., 

By  R.  Y.,  her  Attorney, 
''i)   See  note  to  No.  ]H'>. 


PROCEEDINGS  BEFORE  THE  JUDGE.  1025 

No.  136. 
Certificate  by  Referee  to  Judge  (i). 

(Official  Form  No.  56.) 

In  the  District  Court  of  the  United  States  for  the  Dis- 
trict of  . 


In  the  matter  of 

In  Bankruptcy. 
Bankrupt.    I 


I,  ,  one  of  the  referees  of  said  court  in  bankruptcy, 

do  hereby  certify  that  in  the  course  of  the  proceedings  in 
said  cause  before  me  the  following  question  arose  pertinent  to 
the  said  proceedings :  [Here  state  the  question,  a  summary  of 
the  evidence  relating  thereto,  and  the  finding  and  order  of 
the  referee  thereon.l 

And  the  said  question  is  certified  to  the  judge  for  his  opinion 
thereon. 

Dated  at ,  the day  of ,  A.  D.  18 — . 


Referee  in  Bankruptcy. 

(i)    See  note  to  No.  130. 


No.  137. 
Certificate  of  Referee  to  Judge  (i). 

At  .  in  said  district,  (  n  the  day  of  ^,  A.  D. 

— ,  before  A.  M..  Referee  in  Bankruptcy. 


I.  A.  M..  one  of  the  referees  of  said  court  in  bankruptcy, 
do  hereby  certify  that  in  the  co'^rse  of  the  proceedings  in  said 
cause  before  me  the  following  question  arose  pertinent  to  said 
proceedings : 

The  Third  Natinnnl  Rank,  of .  filed  a  claim  evidenced 


l()il()  BANKRUPTCY. 

by  one  promissory  note  for  $ and  also  another  promissory 

note  for  $ ,  and  asserted  a  claim  to  be  snbrog-ated  to  the 

rights  of  the  mortgagees  under  three  mortgages,  to  wit,  one 
dated  April  15th,  1892,  another  dated  February  19th,  1894, 
and  another  dated  January  12th,  1897.  Prior  to  the  execution 
of  any  of  said  mortgages  the  bankrupt  had  also  executed  to  the 

S.  Trust  Company  a  mortgage  to  secure  an  issue  of  $ 

of  bonds,  of  which  $ were  negotiated  and  have  ever  since 

remained  outstanding.  Under  the  provisions  of  the  charter  of 
the  bankrupt  I  find  that  said  bankrupt  was  limited  in  its  power 

to  execute  a  mortgage  to  the  extent  of  $ .     I  also  find  that 

the  Third  National  Bank,  through  its  managing  officer,  E.  C, 
cashier  before  making  any  of  said  loans  had  knowledge  of 
the  existence  of  said  mortgage  to  the  S.  Trust  Company, 
though  it  is  testified  by  E.  C,  and  not  denied,  that  about  the 
time  the  Third  National  Bank  made  its  loans  he  was  informed 

that  the  said  mortgage  to  the  S.  Trust  Company  was  for  $ . 

As  a  matter  of  law  I  find  that  the  information  which  said  E. 
C.  had  of  the  existence  of  said  mortgage  was  sufficient  to 
put  him  upon  inquiry  as  to  the  amount  thereof. 

I  further  find  that  the  notes  of  $ and  $ filed  by 

said  Third  National  Bank  are  renewals  of  various  loans  made 
by  said  Third  National  Bank  to  the  bankrupt,  beginning  April 
1 6th,  1892. 

The  mortgage  to  the  S.  Trust  Company  outstanding  amount- 
ed to  $49,000,  and  I  have  allowed  a  lien  to  the  Third  National 
Bank  by  way  of  subrogation  to  the  rights  of  the  mortgagees  in 
the  three  mortgages  dated  April   15th,   1892,   February  19th, 

1894,  and  January  12th,  1897,  to  the  extent  of  $ ,  making 

together  the  sum  of  $ ,  the  limit  prescribed  by  the  charter 

of  the   bankrupt.      The  balance   of   the   claim   of  the  Third 

National  Bank,  to  wit,  $ ,   I  have  allowed  as  a  general 

claim. 

The  Third  National  Bank  has  filed  a  petition  for  review  of 
the  foregoing  ruling. 


PROCEEDINGS   BEFORE   THE  JUDGE.  1027 

And  the  said  question  is  certified  to  the  Judge  for  his  opinion 
thereon. 

Dated  at the day  of ,  A.  D. . 

A.  M., 
Referee  in  Bankruptcy. 
I  herewith  transmit  the  testimony  pertaining  to  the  claim 
of  said  Third  National  Bank;  also  the  proof  of  claim  of  said 
bank  with  the  mortgages  relied  on  by  it  attached  thereto,  and 
also  a  memorandum  of  the  reasons  for  my  finding. 

A.  M., 
Referee. 

(l)   See  note  to  No.  l.m 


No.  138. 
Certificate  of  Referee  to  Judge  on  Allowance  of  Claim  (i). 

[Caption.l 

I,  A.  M.,  one  of  the  referees  of  said  court  in  bankruptcy,  do 
hereby  certify  that  in  the  course  of  the  proceedings  in  said 
cause  before  me  the  question  came  up  as  to  the  allowance 
of  the  claim  of  the  S.  Trust  Company,  a  corporation  organized 

under  the  laws  of  the  state  of as  a  preferred  claim  against 

said  estate,  which  said  claim  has  been  allowed,  and  that  on  ac- 
count of  the  allowance  thereof  a  petition  to  the  court  has  been 
made  on  behalf  of  the  trustee  asking  for  a  review  of  the 
order  of  said  allowance  and  the  question  of  the  allowance  of 
said  claim  is  certified  to  the  Judge  for  his  opinion  thereon. 

I  return  herewith  as  the  record  the  following  items : 

First.  Proof  of  claim  of  S.  Trust  Company  filed . 

Second.  Objections  as  to  the  allowance  of  said  claim  made 
on  behalf  of  the  trustee,  filed . 

Third.   A    further   itemized   statement   of   said   claim,    filed 


Fourth.    I)ei)Ositions   taken    in    favor   of   said    claim,     filed 


Fifth.  Depositions  of  K.  F.  in  l^ehalf  of  said  claim. 


•|()28  BANKRUPTCY. 

Sixth.  TestiiiKMiy  intntcluced  on  the  i)art  of  the  estate  in  said 
claim. 

1  also  rciuni  herewith  an  order  made  in  respect  to  said 
claim  and  the  petition  for  a  review  of  said  order,  all  being 
made  a  part  thereof. 

Dated  at the day  of . 

A.  M.. 
Referee. 
( I )   See  note  to  No.  130. 


No.  139. 
Certificate  of  Referee  to  Judge  on  Denying  Lien  on  Realty  (i). 

[Caption.] 

I.  A.  M.,  one  of  the  Referees  in  Bankruptcy  of  said  court, 
do  hereby  certify  that  in  the  course  of  the  proceedings  in 
said  cause  before  me  the  following  question  arose  pertinent  to 
said  proceedings : 

The  First  National  Bank  of  filed  a  note  for  $ 

claiming  a  lien  upon  the  plant  and  realty  of  the  bankrupt  by 
way  of  subrogation  to  the  rights  of  A.  S.,  under  two  mort- 
gages, dated  April  15th,  1892,  and  February  19th,  1894,  exe- 
cuted by  the  bankrupt  to  said  A.  S.,  and  others. 

I  found  that  said  bank  is  not  entitled  to  the  lien  claimed,  and 
a  petition  for  review  has  this  day  been  filed.  In  the  order 
complained  of  I  also  passed  upon  claims  of  E.  F.  and  Third 
National  Bank.  A  petition  for  review  has  heretofore  been  filed 
by  the  Third  National  Bank,  and  the  mortgages  in  question 
have  been  sent  to  the  court  with  my  reasons  for  the  whole 
order. 

And  the  said  question  raised  by  the  First  National  Bank  is 
also  certified  to  the  Judge  for  his  opinion  thereon. 

Dated  at ,  the day  of ,  A.  D. . 

A.  M., 
Referee  in  Bankruptcy. 

(:)  See  note  to  No.  130. 


PROCEEDINGS  BEFORE  THE  JUDGE.  1029 

No.  140. 

Certificate  of  Referee  on  Finding  Creditor  Held  a 

Preference  (i). 

ICaptio)!.] 

1,  A.  M.,  one  of  the  referees  of  said  court  in  bankruptcy, 
do  hereby  certify  that  in  the  course  of  the  proceedings  in  said 
cause,  before  me  the  following  questions  arose  pertinent  to 
the  said  proceedings : 

E.  F.  &  Co.  filed  before  me  proof  of  debt  for  $ .  and 

also  another  claim  verified  by  the  assignee  of  E.  F.  &  Co.  for 
$ . 

D.  L.  &  Son  filed  a  claim  for  $ ,  and  another  claim  for 

.$ ,  which  includes  and  is  a  duplication  of  said  claim  of 


The  trustee,  R.  B..  and  S.  G.,  filed  exceptions  to  said  claims, 
averring  that  the  holders  thereof  had  received  preferences. 

I  found  that  E.  F.  &  Co.  and  D.  L.  &  Son  had  received 
preferences  to  the  amount  of  fifty  per  cent,  of  their  claims  and 
ordered  that  they  elect  whether  or  not  they  will  surrender  the 
preferences  received  by  them  or  have  the  claims  filed  as  afore- 
said disallowed.  To  that  order  and  finding  said  E.  F.  &  Co. 
and  D.  L.  &  Son  have  filed  petitions  for  review,  and  the  trus- 
tee also  filed  a  petition  for  review. 

Said  claims,  also  the  exceptions  aforesaid,  also  the  order  and 
finding  thereon,  also  said  three  petitions  for  review,  are  all 
filed  herewith  and  made  part  hereof,  marked  exhibits  i,  2,  3, 
4,  5,  6,  7,  8  and  9. 

A  summary  of  the  evidence  taken  before  me  and  relating 
to  the  question  involved  is  also  attached  liereto  and  marked  ex- 
hibit "Summary  of  I^widence."  An  opinion  giving  my  reasons 
for  the  finding  and  order  aforesaid  is  also  made  part  of  this 
certificate,  marked  exhibit  "Opinion  of  Referee." 

.And  the  said  f|uestions  are  certified  to  the  Judge  for  his 
opinion  thereon. 

Dated  at .  this day  of .  .\.  D. . 

.\.  M.,    Referee  in  P>aiikrni)tcy. 

(i)   See  note  to  No.  lAO. 


1030  BANKRUPTCY. 

No.  141. 
Motion  to  Correct  Journal  Entry. 

Now  comes  the  C.  D.  Company,  a  creditor  of  said  bankrupt, 
and  respectfully  represents  that  in  the  matter  heard  by  the 
court  on  the  14th  day  of  February,  1902,  on  certification  from 
the  referee  disallowing  and  expunging  the  claim  of  said  credi- 
tor, the  written  finding  and  order  of  the  court  in  said  proceed- 
ings was  filed  in  said  court  and  made  part  of  its  records  on  the 
6th  day  of  March,  1902,  at  8  o'clock  a.  m. ;  that  a  journal  entry 
thereof  was  filed  by  said  referee  in  said  court  on  the  28th  day 
of  March,  1902,  and  by  the  clerk  was  made  part  of  the  records 
as  of  said  date,  to  wit;  March  28,  1902. 

Wherefore,  said  creditor  prays  the  court  for  an  order  cor- 
recting the  record  in  said  matter,  and  directing  the  clerk  to 
make  the  record  of  said  entry  as  of  the  date  March  6th  in- 
stead of  the  date  March  28th,  1902. 

The  C.  D,  Company, 
By  R.  Y.,  Its  Attorney 


No.  142. 

Order  Confirming  Order  of  Referee. 

In  the  District  Court  of  the  United  States 

For  the District  of . 

A.  B., 

vs. 
C.  D.  &  Co., 

This  cause  coming  on  to  be  heard  on  the  petition  of  L.  C,  for 
review  of  the  order  of  court  entered  herein  by  J.  B.,  one  of  thi 
referees  of  this  court,  requiring  L.  C.  to  pay  over  to  the  E.  F. 
Trust  Company,  Trustee  in  Bankruptcy  herein,  the  sums  of 

$ and  $ and  the  court  being  fully  advised,  delivered 

a  written  opinion  which  was  filed  herein,  and  on day  of 

,  and  in  pursuance  of  said  written  opinion,  it  is  consid- 
ered ordered  and  decreed  by  the  court  that  said  order  of  the 


PROCEEDINGS   BEFORE   THE    JUDGE.  1031 

referee  is  hereby  confirmed  and  the  petition  for  review  filed  by 

said  L.  C.  on  the day  of is  dismissed  and  it  is  for 

this  adjudged,  ordered  and  decreed  by  the  court  that  said  L.  C. 
pay  to  said  E.  F.  Trust  Company,  trustee,  the  said  sums  of 
$ and  $ on  or  before day  of . 


No.  143. 
Order  Reversing  Order  of  Referee  Disallowing  Claire 

In  the  District  Court  of  the  United  States 

For  the District  of . 

In  the  matter  of  F.  H., 


doing  business  as  F. 
H.  &  Son,  Bankrupt. 
Division, 


No. 


"  In  Bankruptcy. 


This  day  this  cause  came  on  for  hearing  on  the  petition  of 
The  D.  M.  Grocery  Company  for  review  of  the  decision  of 
the  Referee  in  Bankruptcy  disallowing  and  expunging  the 
claim  of  said  The  D.  M.  Grocery  Company,  the  certificate  of 
the  referee  as  to  the  questions  presented  and  summary  of  the 
evidence  relating  thereto,  and  the  finding  and  order  of  the 
referee  thereon,  was  argued  by  counsel  and  submitted  to  the 
court  and  on  consideration  thereof  the  court  find  that  the  de- 
cision of  the  referee  in  refusing  to  allow  and  in  expunging 
the  claim  of  said  The  D.  M.  Grocery  Company  was  erroneous, 
and  claim  of  said  The  D.  M.  Grocery  Company,  should  have 
been  allowed,  as  proved  by  it,  as  a  valid  claim  in  the  sum  of 

dollars.     It  is,  therefore,  ordered,  adjudged  and  decreed 

that  the  action  of  the  Referee  in  Bankruptcy  in  disallowing  said 
claim  be  and  the  same  is  hereby  reversed  and  this  proceeding 
is  hereby  remanded  with  directions  to  the  referee  to  allow  the 

claim  of  said  The  D.  M.  Grocery  Company,  in  the  sum  of 

($ )  dollars,  to  which  finding,  order,  judgment  and  decree, 

B.  F.,  Trustee  in  Bankruptcy  of  F.  H.,  doing  business  as  F.  H. 


1032'  BANKRUPTCY. 

&  Son.  at  the  time  excepted,  and  gave  notice  of  his  intention  to 

appeal  this  matter  to  the  Circuit  Court  of  Appeals  for  the 

Circuit. 


No.  144. 

Decree  Confirming  Order  of  Referee  with  Reference  to 
Election  of  Trustee 

[Captioti 

This  matter  came  on  to  be  heard  upon  the  petition  to  review 
the  findings  and  decision  of  the  referee  in  the  matter  of  the 
election  of  a  trustee ;  upon  consideration  whereof,  the  court  ap- 
proves and  confirms  the  fijidings  of  the  referee  in  said  behalf. 


No.  145. 

Order  Marshalling  Liens. 

[Caption.^ 

This  day  this  cause  coming  on  to  be  heard  upon  the  petitions 
for  review  filed  herein  by  the  Third  National  Bank,  the  First 
National  Bank  and  E.  F.,  asking  a  review  of  the  orders  of  the 
referee  herein,  upon  the  allowance  of  their  respective  claims 
as  preferred,  and  counsel  for  said  parties  having  been  heard, 
and  the  court  being  sufficiently  advised,  it  is  therefore  ordered 
and  adjudged  that  the  finding  of  the  referee  herein  be,  and 
the  same  is  hereby  disapproved  in  so  far  as  same  denied  to  E. 
F.,  a  lien  upon  the  property  of  the  bankrupt  for  her  said  debt, 
and  it  is  now  ordered  and  adjudged  that  said  E.  F.  has  a  prior 
lien  for  $ with  interest  thereon  from  the  date  of  adjudi- 
cation herein  until  paid  upon  the  property  of  the  bankrupt  de- 
scribed in  the  mortgage  of  March  9th,  1892,  superior  to  the 
Third  National  Bank,  but  inferior  to  the  claim  of  the  Colum- 
bia Finance  &  Trust  Company,  trustee,  for  the  first  mortgage 
bondholders. 

It  is  also  ordered  and  adjudged  that  the  finding  of  the  referee 
upon  the  claim  of  the  Third  National  Bank  is  erroneous,  and 


PEOCEEDINGS    BEFOKE    THE    JUDGE.  1033 

is  set  aside  to  the  extent  that  it  gave  the  Third  National  Bank  a 
lien  under  and  by  virtue  of  the  mortgages  of  April  15th.  1892, 
February  19th,  1894,  and  January  12th,  1897,  for  the  sum  of 

($ )  dollars  and  it  is  now  ordered  and  adjudged  that 

said  Third  National  Bank  is  entitled  to  and  has  a  lien  under 
and  by  virtue  of  the  mortgage  of  April  15th,  1892,  upon  the 
property  therein  described,  for  the  sum  of ($ )  dol- 
lars with  interest  thereon  from  the  day  of  ,  until 

paid,  inferior  only  to  that  of  the  R.  Trust  Company,  trustee, 
and  E.  F.,  and  that  the  balance  of  the  claim  of  the  Third  Na- 
tional Bank  against  said  bankrupt,  to  wit,  ($- )  dol- 
lars is  hereby  allowed  as  a  general  or  unsecured  claim  only 
against  said  estate. 

The  foregoing  amounts  thus  allowed  priority  to  E.  F.  and 

the  Third  National  Bank,   together  with  the  ($ ) 

dollars  first  mortgage  debt  to  the  R.  Trust  Company,  trustee, 
will  make  up  ($ )  dollars  and  leave  nothing  to  sat- 
isfy any  preference,  which  might  otherwise  be  available  to 
the  First  National  Bank,  and  it  is  adjudged  that  the  claim  of 
said  First  National  Bank,  against  said  bankrupt's  estate  be  and 

the  same  is  allowed   for  the  sum  of  dollars  and  

cents   ($ )   as  a  general  claim  against  the  estate  of  the 

bankrupt,  and  that  said  First  National  Bank  has  no  lien  to 
secure  its  said  debt. 

It  is  also  ordered  and  adjudged  by  the  court  that  the  find- 
ing of  the  referee  herein  upon  the  limit  of  mortgaged  indebted- 
ness that  could  be  incurred  by  said  bankrupt,  placing  said  limit 

at ($ )  dollars,  and  that  all  mortgages  issued  above 

this  limit  of ($ )  dollars,  were  and  are  under  the  law 

of ,  void,  be  and  the  same  is  now  confirmed,  and  it  is  ad- 
judged that  all  said  mortgages  in  excess  of ($ )  dol- 
lars, executed  by  said  1)ankrupt  were  and  are  under  said  law  of 
,  void  and  of  no  effect. 


IQ-^^  BANKRUPTCY. 

No.  146. 

Decree  on  Petition  to  Review   Order  Relative   to  Widow's 

Exemptions. 

[Caption.] 

On  this day  of ,  A.  D.  ,  this  cause  came  on 

I  to  be  heard  on  the  petition  of  E.  B.,  widow  of  the  bankrupt  for 

review  of  an  order  heretofore  made  on  the day  of , 

A.  D.  ,  by  A.   M.,   referee,  on  her  petition  before  said 

referee  for  the  allowance  of  certain  exemptions  under  the  laws 

of  the  state  of ,  and  due  notice  of  said  hearing  having  been 

given  to  all  parties  in  interest,  the  court  finds  that  said  peti- 
tioner, E.  B.,  widow  of  said  bankrupt,  is  entitled  to  special  ex- 
emptions of  household  goods  and  furniture,  under  section  6038 

of  the  Revised  Statutes  of and  that  she  is  entitled  to  the 

allowances  mentioned  under  section  Nos.  6040  and  6041  of  the 
Revised  Statutes  of ,  and  is  entitled  to  remain  in  the  man- 
sion house  of  her  husband  for  the  period  of  one  year,  unless 
dower  is  sooner  assigned  her  therein. 

It  is  therefore  ordered : 

First.  That  the  trustee  permit  the  widow,  E.  B.,  to  remain 
in  the  mansion  house  for  the  period  of  one  year,  unless  dower 
is  sooner  assigned  to  her  therein. 

Second.  That  the  trustee  pay  to  her  the  allowances  made  to 
her  under  sections  6040  and  6041  of  the  Revised  Statutes  of 

,  to  wit:     The  sum  of  $ ,  provided  there  shall  be  so 

much  in  his  hands  after  paying  costs  and  any  mortgage  to 
which  the  widow  was  a  party,  out  of  funds  arising  from  the 
sale  of  mortgaged  premises,  or  any  property  belonging  to  said 
estate. 

Third.  That  the  trustee  permit  her  to  retain  such  parts  of  the 
assets  of  said  estate  as  are  mentioned  in  Section  6038  of  the 
Revised  Statutes  of . 

Fourth.  That  nothing  be  paid  or  turned  over  to  H.  S.,  execu- 
tor of  the  estate  of  A.  B.,  on  account  of  exemptions  claimed  by 
said  A.  B.  in  the  proceedings  in  benkruptcy. 


PROCEEDINGS   BEFORE   THE   JUDGE.  1035 

It  is  further  ordered  that  the  decision  and  order  of  A.  M., 
referee,  be  and  is  so  far  overruled  to  the  extent  that  it  is 
inconsistent  with  the  above  findings  of  the  court. 


No.  147. 

Ancillary  Order  to  Pay  Funds  of  Bankrupt  to  a  Trustee  Ap- 
pointed by  Another  District  Court   (i). 

[Captioji.l 

Whereas,  it  appears  that  SoHs  V.  Peiser.  trading  as  Peiser  & 
Co.,  was  adjudicated  a  bankrupt  by  the  District  Court  of  the 
United  States  for  the  Southern  District  of  New  York  on  the 
9th  day  of  November,  1901,  and  that  Theodore  M.  Taft,  of 
New  York,  was  duly  appointed  receiver  of  said  bankrupt; 
and 

Whereas,  said  Theodore  M.  Taft  has  presented  a  petition  to 
this  court  asking  for  its  assistance  in  enforcing  the  orders  of 
the  District  Court  of  the  United  States  for  the  Southern  Dis- 
trict of  New  York  in  proceedings  ancillary  to  the  said  bankrupt- 
cy, and  in  aid  thereof: 

Now  therefore,  this  2d  day  of  April,  A.  D.  1902,  on  hearing 
of  the  said  petition,  and  the  answer  of  the  Union  Trust  Com- 
pany of  Philadelphia  and  W.  J.  Clark,  its  Treasurer,  as  filed 
thereto,  it  is 

Ordered  and  decreed  that  the  Union  Trust  Company  of 
Philadelphia  do  pay  over,  within  ten  days  from  the  date  hereof, 
to  said  Theodore  M.  Taft,  receiver  of  Solis  V.  Peiser,  trading 
as  Peiser  &  Co.,  the  above  bankrupt,  the  sum  of  $350.93,  being 
the  amount  on  deposit  with  said  the  Union  Trust  Company  to 
the  credit  of  said  Peiser  &  Co.  on  November  9,  1901,  the  date 
of  the  said  adjudication  in  bankru])tcy.  together  with  any  in- 
terest on  said  deposit  as  the  same  is  allowed  by  the  said  trust 
com])any  from  said  date,  or  show  cause  why  said  payment 
should  not  be  made. 


10:U>  '  BANKRUPTCY. 

(i)  This  order  was  entered  in  the  District  Conrt  of  the  United  States 
for  the  Eastern  District  of  Pennsylvania  and  is  taken  from  in  re  Peiser,  115 
Fed.  Rep.  198. 


No.  148. 

Order  on  Rule  to  Show   Cause  Against   Bankrupt  to   Pay 
Money   to   Trustee,   Insanity   of   Bankrupt. 

District  Court  of  the  United  States, 
District  of  . 


A.  B.  Co.  &c., 
vs. 
E.  B. 


In  Bankruptcy. 


This  case  has  been  heard  upon  the  question  of  the  adoption 
of  the  referee's  recommendation  to  require  the  bankrupt  E.  B. 

to  pay  to  the  trustee  herein  the  sum  $ ,  money  reaHzed  from 

the  sale  of  the  stock  of  merchandise  and  from  the  mortgage 
described  in  the  papers,  or  to  punish  him  for  contempt  in  case 
he  fails  to  so  pay,  the  response  of  said  bankrupt  filed  thereto 
and  the  suggestion  filed  by  counsel  as  to  the  insanity  of  said 
bankrupt,  evidence  having  been  heard  by  the  court  as  to  the 
present  condition  of  mind  of  said  E.  B.,  and  the  court  being  ful- 
ly advised,  delivered  a  written  opinion  herein,  which  is  ordered 
to  be  filed,  and  pursuant  to  which  it  is  considered  by  the  court 
that  the  said  E.  B.  is  not  now  in  such  condition  of  mind  as  to 
make  him  properly  subject  to  an  order  punishing  him  for  con- 
tempt. It  is  therefore  ordered  that  said  E.  B.  be  permitted  to 
go  hence  without  day,  but  the  trustee  of  said  E.  B.,  in  bankrupt- 
cy has  leave  again  to  bring  the  subject  to  the  attention  of  the 
Referee  in  Bankruptcy,  should  development  or  change  of  condi- 
tion in  said  E.  B.'s  mind  make  it  in  his  judgment  proper. 


/ 


PROCEEDINGS   BEFORE  THE  JUDGE.  1037 

No.  149. 

Bill  in  Equity  to  Recover  a  Preference  and  for  an  Injunc- 
tion (i). 

The  District  Court  of  the  United  Stat  J  s  for  the  Dis- 
trict of . 

W.  H.,  Trustee  in  Bankruptcy  of 
A.   B.  and  C.  D.,  late  part- 
ners as  A.  B.  &  Co. 
vs. 
E.  F. 
To  the  Honorable  G.  R.,  Judge  of  the  District  Court  of  the 

United  States  in  and  for  the District  of . 

W.  H.,  trustee  in  bankruptcy  of  A.  B.  and  C.  D.,  co-part- 
ners as  A.  B.  &  Co.,  brings  this  his  bill  of  complaint  against 

E.  F.  of ,  a  citizen  of  the  state  of ,  residing  at 

in  said  state. 

Your  orator  complains  and  says  that  the  said  A.  B.  and 

C.  D..  co-partners,  doing  business  at ,  in  the  state  of , 

under  the  style  of  A.  B.  &  Co.,  were  by  the  District  Court 
of  the  United  States  in  and  for  the district  of ,  ad- 
judged bankrupts  on  the  day  of  ,   19 — ,  and  that 

this  plaintiff  was  duly  appointed  trustee  in  bankruptcy  of  the 
said  A.  B.  and  C.  D.,  co-partners  as  A.  B.  &  Co.,  by  the  said 

District  Court  on  the  day  of  ,   19 — ,  and  that  he 

duly  qualified  and  entered  upon  the  performance  of  his  duties 
as  such  trustee  and  is  still  acting  as  such  trustee. 

Your  orator  further  says  that  he  is  informed  and  believes 

that  on  or  about  the  day  of ,  19—.  said  A.  B.  and 

C.  D.,  well  knowing  at  the  time  that  said  firm  was  insolvent 
and  unable  to  pay  its  creditors  in  full  and  with  intent  to  pre- 
fer the  defendant  E.  F.  as  a  creditor  of  the  said  firm  of  A.  B. 
&  Co.,  and  with  the  further  intent  to  defraud  the  other  credi- 
tors of  said  firm  and  in  violation  of  an  Act  of  Congress  to 
establish  a  uniform  system  of  bankruptcy  in  the  United  States, 
did  withdraw  from  the  funds  of  said  firm  the  sum  of  $ 


10:18  BANKRUPTCY. 

and  elid  transfer  and  pay  the  same  to  the  said  E.  F.  on  the  day 
aforesaid,  and  that  he,  the  said  E.  F.,  at  that  time  had  reason 
to  beheve  and  to  know  that  said  firm  was  insolvent  and  that 
said  payment  to  him  was  for  the  purpose  of  preferring  him  as 
a  creditor  of  said  firm. 

Your  orator  further  complains  and  says  that  he  is  informed 
and  believes  that  said  E.  F.  is  insolvent  and  has  no  money 
or  property  in  his  own  right  and  that  unless  restrained  from 
so  doing,  will  dispose  of  said  funds  and  will  be  unable  to  pay 
over  the  same  to  this  plaintiff  and  that  said  funds  will  be  lost 
to  the  estate  of  the  said  bankrupts. 

Wherefore  your  orator  prays  the  court  to  now  grant  a 
preliminary  injunction  restraining  and  enjoining  the  said  E. 
F.  from  transferring,  paying  over  or  in  any  way  disposing  of 

all  or  any  part  of  said  $ until  further  order  of  this  court, 

and  that  he  may  be  decreed  to  hold  said  funds  in  trust  for  and 
may  be  required  to  account  for  and  pay  over  the  same  to  this 
plaintiff,  and  for  such  other  and  further  relief  as  may  be 
just  and  proper  in  the  premises. 

May  it  please  your  honors  to  grant  unto  this  plaintiff  a 
writ  of  subpoena  to  be  directed  to  the  said  E.  F.,  thereby 
commanding  him  at  a  certain  time  and  under  a  certain  penalty 
personally  to  appear  before  this  honorable  court  and  then  and 
there  full  true,  direct  and  perfect  answer  make  [but  not  under 
oath']  to  all  and  singular  the  premises  and  further  to  stand  to 
and  perform  and  abide  such  further  order,  direction  and  decree 
therein  as  to  this  honorable  court  shall  seem  meet. 

W.  H., 
Trustee  in  Bankruptcy. 

X.  &  X., 

Attorneys  for  Plaintiff. 

[Veritication.l 

(i)  The  District  Court  is  given  concurrent  jurisdiction  with  any  State 
Court  for  the  purpose  of  recovering  property  by  the  trustee  under  Sec 
6o&  and  Sec.  67^  of  the  Bankrupt  Act  of  1898.  Act  of  Feb.  3,  1903,  Sec.  8, 
amending  Sec.  23  of  the  Bankrupt  Act  of  1898. 


PROCEEDINGS  BEFORE  THE  JUDGE.  ^939 

The  suit  in  this  class  of  cases  must  be  plenary.  Louisville  Trust  Co.  vs. 
Comingor,  184  U.  S.  18;  Marshall  vs.  Knox,  16  Wall.  556.  It  may  be 
either  a  suit  at  law  or  in  equity,  as  the  case  may  require. 


No.  150. 
Petition  for  Removal  of  Trustee  (i). 

(Official  Form  No.   52.) 

In  the  District  Court  of  the  United  States  for  the Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


To  the  Honorable 


ludire  of  the  District  Court  for  the District  of 


The  petition  of ,  one  of  the  creditors  of  said  bankrupt, 

respectfully  represents  that  it  is  for  the  interest  of  the  estate  of 

said  bankrupt  that  ,  heretofore  appointed  trustee  of  said 

bankrupt's  estate,  should  be  removed  from  his  trust,  for  the 
causes  following-,  to  wit :  [here  set  forth  the  particular  cause 
or  causes  for  which  such  removal  is  requested.^ 

Wherefore pray  that  notice  may  be  served  upon  said 

,  trustee  as  aforesaid,  to  show  cause,  at  such  time  as  may/ 

be  fixed  by  the  court,  why  an  order  should  not  be  made  re- 
moving him  from  said  trust. 

(l)   Gen.  Order  13.     Loveland's  Bank.,  sec.  145. 


ItUO 


BANKRIPTCY. 


No.   151. 

Notice  of  Petition  for  Removal  of  Trustee  (i). 

(Official  Form  No.  53.) 
In  the  District  Court  of  the  United  States  for  the  — 

trict  of  . 


Dis- 


In  the  matter  of 


Bankrupt. 


At 


-,  on  the 


To 


In  Bankruptcy. 


day  of ,  A.  D.  19 — . 


Truste  of  the  estate  of ,  bankrupt: 

You  are  hereby  notified  to  appear  before  this  court,  at , 

on  the day  of ,  A.  D.  18 — ,  at o'clock 

m.,  to  show  cause  (if  any  you  have)  why  you  should  not  be 
removed  from  your  trust  as  trustee  as  aforesaid,  according  to 

the  prayer  of  the  petition  of ,  one  of  the  creditors  of  said 

bankrupt,  filed  in  this  court  on  the day  of ,  A.  D. 

19 — ,  in  which  it  is  alleged  [here  insert  the  allegation  of  the 
petition^ .  , 


Clerk. 


(l)   Gen.  Order  13.     Loveland's  Bank.,  sec.  145. 


No.  152. 
Order  for  Removal  of  Trustee  (i). 

(Official  Form  No.  54.) 
In  the  District  Court  of  the  United  States  for  the 

trict  of  . 


Dis- 


In  the  matter  of 


Bankrupt. 


Whereas, 


-,of 


In  Bankruptcy. 
,  did,  on  the 


day  of 


-,  A.  D. 


PROCEEDINGS   BEFORE   THE   JUDGE.  1041 

19 — ,  present  his  petition  to  this  court,  praying  that,  for  rea- 
sons therein  set  forth.  .  the  trustee  of  the  estate  of  said 

■■■      .  bankrupt,  might  be  removed : 

Now.  therefore,  upon  reading  the  said  petition  of  the  said 
and  the  evidence  submitted  therewith,  and  upon  hear- 


ing counsel  on  behalf  of  said  petitioner  and  counsel  for  the 
trustee,  and  upon  the  evidence  submitted  on  behalf  of  said 
trustee. 

It  is  ordered  that  the  said  be  removed  from  the  trust 

as  trustee  of  the  estate  of  said  bankrupt,  and  the  costs  of  the 

said  petitioner  incidental  to  said  petition  be  paid  by  said , 

trustee  [or,  out  of  the  estate  of  the  said .  subject  to  prior 

charges]. 

Witness  the  Honorable  .  judge  of  the  said  court,  and 

the  seal  thereof,  at ,  in  said  district,  on  the dav  of 

,  A.  D.  19—.  , ' 

\Seal  of  the  court.']  Clerk. 

(l)  Gen.  Ordtr  13.     Loveland's  Bank.,  sec.  145. 


No.  153. 
Bankrupt's  Petition  for  Discharge.    (i)» 
(Official  Form  No.  57.) 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


To  the  Honorable 


Judge  of  the  District  Court  of  the  United  States   for  the 

District  of : 

.  of  .  in  the  county  of  ,  and  state  of  . 


in  said  district,  respectfully  represents  that  on  the  day 

of .  last  past,  he  was  duly  adjudged  bankrupt  under  the 


1042  BANKRUPTCY. 

Acts  of  Congress  relating  to  bankrnplcy ;  that  he  has  duly  sur- 
rendered all  his  property  and  rights  of  proi>erty,  and  has  fully 
complied  with  all  the  requirements  of  said  acts  and  of  the  or- 
ders of  the  court  touching  his  bankruptcy. 

Wherefore  he  prays  that  he  may  be  decreed  by  the  court  to 
have  a  full  discharge  from  all  debts  provable  against  his  estate 
under  said  bankrupt  acts,  except  such  debts  as  are  excepted 
by  law  from  such  discharge. 

Dated  this day  of ,  A.  D.  19 — . 


Bankrupt. 

ORDER  OF  NOTICE  THEREON, 

District  of ,  ss. 

On  this  day  of  ,  A.  D.    19 — ,  on  reading  the 

foregoing  petition,  it  is 

Ordered  by  the  court  that  a  hearing  be  had  upon  the  same 

on  the  day  of ,  A.  D.   19 — ,  before  said  court,  at 

,  in  said  district,  at o'clock  in  the noon ;  and  that 

notice  thereof  be  published  in ,  a  nev^spaper  printed  in  said 

district,  and  that  all  known  creditors  and  other  persons  in 
interest  may  appear  at  the  said  time  and  place  and  show 
cause,  if  any  they  have,  why  the  prayer  of  the  said  petitioner 
should  not  be  granted. 

And  it  is  further  ordered  by  the  court  that  the  clerk  shall 
send  by  mail  to  all  known  creditors  copies  of  said  petition 
and  this  order,  addressed  to  them  at  their  places  of  residence  as 
stated. 

Witness  the  Honorable  ,  judge  of  the  said  court,  and 

the  seal  thereof,  at in  said  district,  on  the day  of 

.   A.    D.    19—.  , 

[Seal  of  the  court.']  Clerk. 

hereby  depose,  on  oath,  that  the  foregoing  order  was 

published  in  the on  the  following days,  viz. : 

On  the day  of ,  and  on  the day  of ,  in 

the  year  19 — . 
District  of  .  ■ 


PROCEEDINGS   BEFORE  THE  JUDGE.  1048 


,    19—. 

Personally  appeared ,  and  made  oath  that  the  foregoing 

statement  by  him  subscribed  is  true. 

Before  me,  , 

[Official  character. '\ 

I  hereby  certify  that  I  have  on  this  day  of ,  A. 

D.   19 — ,  sent  by  mail  copies  of  the  above  order,  as  therein 

directed.  , 

Clerk. 

(i)  As  to  who  may  file  a  petition  for  discharge,  when  and  where  the  pe- 
tition is  filed  see  Loveland's  Bank.,  sees.  273  and  274.  B.  A.  1898,  sec.  14 
Gen.  Ord.  31. 

The  discharge  should  be  allowed  unless  it  is  opposed  by  creditors  and  a 
case  made  out  under  one  of  the  grounds  specified  in  the  statute.  Strause 
vs.  Hooper,  105  Fed.  Rep.  590,  5  Am.  B.  R.  225 ;  in  re  Holman,  92  Fed. 
Rep.  512,  I  Am.  B.  R.  600;  in  re  Thomas,  92  Fed.  Rep.  912,  i  Am.  B.  R. 
515;  in  re  Frank,  6  Am.  B.  R.  156. 

Where  a  petition  for  a  discharge  has  been  refused  upon  the  merits  a 
second  petition  will  not  be  entertained  in  the  same  proceeding.  In  rt 
Royal,  7  Am.  B.  R.  636.  A  new  petition  may  be  filed  in  a  second  bank- 
ruptcy proceeding  the  effect  of  which  may  be  limited.  In  re  Claff,  7  Am. 
B.  R.  128. 


No.  154. 

Notice  to  Attorney  for  Bankrupt  with  Reference  to  Discharge. 

R.  X.  Esq., 
Attorney  at  Law. 

Dear    Sir: — In    the    matter    of    A.     B.,     No.     in 

bankruptcy,  the  petition  for  discharge  and  check  for  $ ,  ad- 
vanced fees  received.  Enclosed  herewith  you  will  find  receipt 
for  said  fees,  and  also  notice  for  insertion  in  the  newspaper  des- 
ignated. Please  see  that  the  notice  is  promptly  inserted  in  the 
said  newspaper,  and  tliat  proof  thereof,  with  payment  receij)ted, 
and  the  final  oath  are  filed  with  the  clerk  before  the  return  day. 
Neither  the  bankrupt  nor  his  attorney  need  be  present  on  the 
return  day.  The  creditors  are  allowed  ten  days  beyond  return 
flay  in  which  to  file  sj^ecifications.     If  no  appearance  in  opposi- 


1(M4  BANKRUPTCY. 

tion  to  discharge  has  been  entered  before  return  day  or  specifi- 
cations filed  within  the  ten  days,  the  decree  of  discharge  will  be 
made,  and  certificate  thereof  mailed  you.  Please  acknowledge 
receipt  of  notice  for  publication. 

Yours  Respectfully, 

B.  R., 
Clerk. 


No.  155. 

Notice  of  Application  for  Discharge  in  Bankruptcy. 

The  District  Court  of  the  United  States 

For  the District  of . 

Division. 

No. . 


In  the  matter  of  A.  B., 
Bankrupt. 

Notice  is  hereby  given  that  A.  B.,  having  on  the  day 

of been  duly  adjudged  a  bankrupt  in  the  above  entitled 

cause,  has  filed  his  petition  for  a  discharge  as  a  bankrupt,  and 

the  same  will  be  heard  by  said  court  on  the day  of , 

at  lo  o'clock  in  the  forenoon,  at  the  United  States  Court  room 

in ,  at  which  time  and  place  all  creditors  and  other  persons 

in  interest  may  appear  and  show  cause,  if  any  they  have,  why 
the  prayer  of  said  petition  should  not  be  granted. 

B.  R., 
Clerk  of  Said  Court. 


PROCEEDINGS   BEFORE   THE   JUDGE.  1045 

No.  156. 
Proof  of  Publication. 

The  District  Court  of  the  United  States 

For  The District  of 

Division. 

In  the  matter  of 
A.  B., 
Bankrupt. 
State  of  — 


In  Bankruptcy. 


Ceunty  of ,  ss  : 

T.  G.,  of  said  city  of ,  County  of ,  State  of , 

being  first  duly  sworn,  deposes  and  says  that  he  is  the  principal 

clerk  in  the  office  of  the  Times  Co.,  ])ublishers  of  the 

Times,  a  daily  newspaper  in  the  said  city,  that  a  notice  to  credi- 
tors in  the  above  entitled  bankruptcy  matter,  of  which  the  an- 
nexed printed  slip  taken  from  the  said  newspaper  is  a  copy,  was 

inserted  and  published  therein  on  the  and  days  of 

,  A.  D. .  T  .G., 

Subscribed  and  sworn  to  before  me  this day  of 

A.  D.  .  F.  C, 

Notary  Public. 

[Seal.]  County,  . 


No.  157. 

Specification    of    Grounds    of    Opposition    to    Bankrupt's 

Discharge  (i). 

(Official  Form  No.  58.) 
In  the  District  Court  of  the  United  States  for  the  Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


-,  of ,  in  the  countv  of ,  and  state  of ,  a 


1046  BANKRUPTCY. 

party  interested  in  the  estate  of  said .  bankrupt,  do  hereby 

oppose  the  granting  to  him  of  a  discharge  from  his  debts, 
and  for  the  grounds  of  such  opposition  do  file  the  following 
specification:  [Here  specify  the  grounds  of  opposition].  (2) 

> 
Creditor. 

(i)  Where  creditors  object  to  a  bankrupt's  discharge  it  is  incumbent  on 
them  to  enter  their  appearance  and  file  specifications  as  to  the 
grounds  of  opposition.  Gen.  Ord.  32.  Lovcland's  Bank.  sees.  276  to  281. 
In  re  Hixon,  93  Fed.  Rep.  440.  i  Am.  B.  R.  610. 

The  specification  should  be  filed  with  the  clerk  and  not  with  the  judge. 
In  re  Sykes,  6  Am.  B.  R.  264. 

The  specifications  of  objection  to  the  discharge  of  the  bankrupt  must  be 
filed  within  the  time  prescribed  by  Gen.  Ord.  32,  and  by  leave  of  court  for 
cause  shown,  or  they  will  be  dismissed.  In  re  Albrecht,  104  Fed.  Rep. 
974;  in  re  Clothier,  108  Fed.  199.  6  Am.  B.  R.  203. 

The  court  may  require  a  positive  verification  of  the  specification  of  ob- 
jection to  the  bankrupt's  discharge.  In  re  Brown  (C.  C.  A.  5th  Cir.)  7 
Am.  B.  R.  252,  112  Fed.  Rep.  49. 

The  specification  of  objections  are  in  the  nature  of  a  pleading.  In  re 
Hirsch,  96  Fdd.  Rep.  468,  2  Am.  B.  R.  715.  It  must  in  order  to  prevent  a 
discharge  set  forth  one  of  the  statutory  grounds.  Strause  w.  Hooper, 
105  Fed.  Rep.  590,  5  Am.  B.  R.  225 ;  'in  re  Holman,  92  Fed.  Rep.  512,  I 
Am.  B.  R.  600;  in  re  Thomas,  92  Fed.  Rep.  912,  i  Am.  B.  R.  515;  in  re 
Frank,  6  Am.  B.  R.  156.  The  allegations  must  be  distinct,  specific  and 
definite,  so  as  to  advise  the  bankrupt  of  the  acts  charged  which  bring 
him  within  the  inhibition  of  the  Act  so  far  as  they  relate  to  his  discharge. 
In  re  Hirsch,  96  Fed.  Rep.  468,  2  Am.  B.  R.  715;  in  re  Hixon,  93  Fed. 
Rep.  440,  I  Am.  B.  R.  613 ;  in  re  Holman,  92  Fed.  Rep.  512,  i  Am.  B.  R. 
600 ;  in  re  Quackenbush,  102  Fed.  Rep.  282,  4  Am.  B.  R.  274 ;  in  re  Kaiser, 
99  Fed.  Rep.  689,  3  Am.  B.  R.  767. 

The  sufficiency  of  a  specification  in  opposition  to  a  discharge  may  b« 
attacked  before  a  referee  to  whom  the  issue  is  referred.  In  re  Quacken- 
bush, 102  Fed.  Rep.  282,  4  Am.  B.  R.  274.  As  to  the  manner  of  making 
attack,  see  in  re  Crispt,  9  Am.  B.   R.  i. 

The  allegations  of  the  specification  must  be  proved.  In  re  Logan,  102 
Fed.  Rep.  876,  4  Am.  B.  R.  525.    In  re  Crispt.  9  Am.  B.  R.  i. 

A  finding  by  a  referee  on  the  hearing  of  a  petition  for  discharge  in 
bankruptcy  will  not  be  reversed  except  ttpon  clear  and  convincing  proof 
of  error.  In  re  Covington,  6  Am.  B.  R.  373. 

The  referee  has  been  allowed  additional  fees  for  hearing  a  petition 
on  discharge.    In  re  Grossman,  6  Am.  B.  R.  510. 

Amendments  to  the  specifications  of  creditors  may  be  allowed  on  appli- 
cation to  the  judge  and  not  to  the  referee.    The  allowance  rests  in  the  dis- 


PROCEEDINGS  BEFORE  THE  JUDGE.  1047 

cretion  of  the  judge.  In  re  Kaiser,  99  Fed.  Rep.  689,  3  Am.  B.  R.  770 j 
in  re  Wolfensohn,  5  Am.  B.  R.  60;  in  re  Mudd,  105  Fed.  Rep.  348. 

The  act  of  February  5,  1903,  adds  new  grounds  of  opposition  to  grant- 
ing discharge  to  the  grounds  named  in  the  act  of  1898  by  amending  Sec. 
14b  to  read  as  follows : 

"  b.  The  judge  shall  hear  the  application  for  a  discharge,  and  such 
proofs  and  pleas  as  may  be  made  in  opposition  thereto  by  parties  in 
interest,  at  such  time  as  will  give  parties  in  interest  a  reasonable  oppor- 
tunity to  be  fully  heard,  and  investigate  the  merits  of  the  application  and 
discharge  the  applicant  unless  he  has  (i)  committed  an  offense  punishable 
by  imprisonment  as  herein  provided ;  or  (2)  with  intent  to  conceal  his 
financial  condition,  destroyed,  concealed,  or  failed  to  keep  books  of  account 
or  records  from  which  such  condition  might  be  ascertained ;  or  (3)  ob- 
tained property  on  credit  from  any  person  upon  a  materially  false  state- 
ment in  writing  made  to  such  person  for  the  purpose  of  obtaining  such 
property  on  credit;  or  (4)  at  any  time  subsequent  to  the  first  day  of  the 
four  months  immediately  preceding  the  filing  of  the  petition  transferred, 
removed,  destroyed,  or  concealed,  or  permitted  to  be  removed,  destroyed, 
or  concealed  any  of  his  property  with  intent  to  hinder,  delay,  or  defraud 
his  creditors;  or  (5)  in  voluntary  proceedings  been  granted  a  discharge  in 
bankruptcy  within  six  years ;  or  (6)  in  the  course  of  the  proceedings  in 
bankruptcy  refused  to  obey  any  lawful  order  of  or  to  answer  any  material 
question  approved  by  the  court." 


No.  158. 

Specifications  of  Grounds  of  Opposition  to  Discharge  (i). 

The  District  Court  of  the  United  States 
For  the District  of . 


In  the  matter  of  the  Bankruptcy  of 
A.  B., 
Bankrupt. 

Now  comes  E.  F.,  G.  H.  and  J.  K..  creditors  of  the  said 
bankrupt  and  object  to  the  discharge  of  said  bankrupt  for  the 
following  reasons : 

First.  That  while  a  bankrupt  he  concealed  from  the  trustee 

the  sum  of  $ ,  being  i)roperty  belonging  to  his  estate  in 

bankruptcy,  and  he  concealed  the  further  sum  of  $ from 

the  trustee,   being  property  belonging   to   his   said   estate  in 
bankruptcy. 

Second.  That  under  oath  he  stated  in  the  schedules  attached 


1048  BANKRUPTCY. 

to  his  petition  in  bankruptcy  that  he  had  no  assets,  whereas, 
and  in  fact,  the  assets  consisted  of  $ ,  at  least. 

Third.  That   while  under  examination   under  oath  before 

the  referee,  he  falsely  stated  and  testified  that  said  $ did 

not  belong;  to  him,  but  was  the  property  of  his  wife,  consisting" 
of  a  loan  to  her  by  her  brother  i\.  G.,  whereas,  and  in  fact  said 
$ was  and  constituted  his  property. 

Fourth.  That  while  under  examination  under  oath  before  the 
referee  herein,  he  made  numerous  statements,  too  numerous  to 
be  embodied  in  these  specifications,  but  are  more  fully  set  forth 
in  the  transcript  of  the  evidence  in  this  court  by  the  trustee  in 
his  report,  such  statements  were  knowingly  false  when  made. 

Y.  &  Y., 
Attorneys  for  Creditors. 

(i)    See  note  to  No.  157. 


No.  159. 

Order  Referring  Petition  for  Discharge  to  Referee   (i). 

The  petition  of  said  bankrupt  praying  that  he  may  be  dis- 
charged from  all  his  debts  pursuant  to  the  acts  of  Congress 
relating  to  bankruptcy  coming  on  for  hearing  on  this  day  pur- 
suant to  orders  herein  the  26th  day  of  January,  1901,  now  in 
accordance  with  Section  3,  No.  XII,  General  Orders  in  Bank- 
ruptcy and  no  objections  or  specifications  having  been  filed  in 
opposition  thereto,  the  matter  of  said  petition  is  hereby  referred 
to  A.  M.,  one  of  the  referees  in  bankruptcy  of  this  court,  at 

the  city  of ,  to  ascertain  and  report  to  the  court  the  facts 

relating  to  said  petition,  and  the  rights  of  said  petitioner  to  a 
discharge  under  the  provision  of  said  act. 

Witness  the  Honorable  G.  R..  Judge  of  said  court, 

and  the  seal  thereof,  at ,  in  said  district,  this 

day  of .  A.  D.. . 

B.  R., 
Clerk  of  Said  Court. 


PROCEEDINGS  BEFORE  THE  JUDGE.  1049 

(l)  A  reference  may  be  made  to  referee  after  specifications  have  been 
filed  to  report,  but  the  judge  must  make  the  order  of  discharge.  Bank.  Act 
of  1898.  sec.  14/. 

For  proceedings  for  discharge  sec  Lovcland  on  Bankruptcy,  chap.  26. 


No.  160. 

Order  Referring  Specifications  in  Opposition  to  Discharge  to 

Referee. 

[Caption.^ 

At  the  city  of ,  in  said  district,  tliis day  of 

190 — , District  of ,  ss. 

And  now,  to  wit.  this day  of 190 —  the  specifica- 
tions of  objection  to  the  discharge  of  said  bankrupt  filed  by  E. 

F.,  of ,  a  party  interested,  are  referred  to  A.  M.,  referee 

in  bankruptcy,  at  as  a  Special  Master,  to  take  the  testi- 
mony and  make  report  thereof  to  the  court,  and  of  his  findings 
of  fact  together  with  his  recommendation  in  favor  of,  or 
against,  said  discharge;  said  referee  to  be  entitled  to  receive 
for  his  services  five  dollars  ($5.00)  for  each  day  actually  spent 
in  hearing  such  reference  and  preparing  his  report ;  such  sum  to 
be  chargeable  in  the  first  instance  to  the  party  opposing  the 
discharge;  and  indemnity  may  be  demanded  by  the  referee  be- 
fore proceeding  with  the  hearing. 

No.  161. 

Referee's  Report  on  Petition  for  Discharge. 

To  the  Honorable  G.  R..  Judge  of  the  District  Court  of  the 

United  States  for  the District  of : 

In  accordance  with  an  order  of  your  honorable  court  where- 
by I  was  directed  to  ascertain  and  report  to  the  court  the  facts 
relating  to  the  petition  of  the  said  bankrupt  for  his  discharge 
and  the  right  of  said  petitioner  for  a  discharge  under  the  pro- 
visions of  the  bankrupt  act.  I  do  hereby  report  that  said  bank- 


1050'  BANKRUPTCY. 

nipt's  i)etition  to  be  adjiulicatctl  bankrupt  was  lilcd  on  the 

day  of ,  and  that  he  was  at  the  time  of  filing  such  petition 

a  resident  of .  in  the  County  of .  in  said  district. 

.\nd  I  do  further  report  that  said  bankrupt  has  in  all  things 
conformed  to  the  requirements  of  said  act  and  that  so  far 
as  the  papers  on  file  with  me  and  the  ])roceedings  had  before 
me  show,  he  has  committed  none  of  the  offenses  and  done 
none  of  the  acts  prohibited  in  subdivision  B.  section  14  of 
said  act  and  that  in  my  opinion  he  is  entitled  to  his  dis- 
charge. 

And  I  dO'  further  report  that  there  are  assets  in  said  bank- 
rupt's estate  and  that  a  trustee  has  been  appointed,  that  the  es- 
tate is  unsettled  and  that  my  disbursements  have  been  provided 
for. 

Dated  this day  of .  A.  M., 

Referee. 


No. 


In  Bankruptcy. 


No.  162. 

Final   Oath  of  Bankrupt. 

In  the  District  Court  of  the  United  States, 

For  the District  of . 

In  the  matter  of 

A.  B., 
Bankrupt. 
District  of ,  ss  : 

I,  A.  B.,  of ,  in  the  county  of ,  and  State  of , 

the  bankrupt  above  named,  upon  my  oath,  do  hereby  declare 
that,  on  petition  filed  by  [or  against]  me,  I  was  duly  adjudged 

a  bankrupt  by  the  decree  of  the  court  made  on  the day 

of A.  D.  190 — ,  under  and  by  virtue  of  an  act  of  Con- 
gress entitled  "An  Act  to  Establish  a  Uniform  System  of 
Bankruptcy  Throughout  the  United  States,"  approved  the  first 
day  of  July,  1898 ;  that  I  have  not  knowingly  and  fraudulently, 
concealed,  while  a  bankrupt,  and  am  not  now  concealing  from 
trustee,  any  of  the  property  belonging  to  my  estate  in  bank- 


PROCEEDINGS   BEFORE   THE   JUDGE.  1051 

ruptcy;  that  I  have  not  knowingly  and  fraudulently  made  a 
false  oath  or  account  in.  or  in  relation  to,  any  proceeding  in 
bankruptcy;  that  I  have  not  knowingly  and  fraudulently  pre- 
sented under  oath  any  false  claim  for  proof  against  any  estate 
in  bankruptcy,  or  used  any  such  claim  in  composition,  either 
personally  or  by  agent,  proxy  or  attorney ;  and  that  I  have  not 
knowingly  or  fraudulently  extorted,  or  attempted  to  extort  any 
money  or  property  from  any  person  as  a  consideration  for  act- 
ing, or  for  forbearing  to  act  in  bankruptcy  proceedings ;  that  I 
have  not  committed  any  of  the  offenses  punishable  by  imprison- 
ment, as  provided  in  said  act,  nor  have  I,  with  fraudulent  intent 
to  conceal  my  true  financial  condition  and  in  contemplation  of 
my  bankruptcy,  destroyed,  concealed,  or  failed  to  keep  books 
of  account  or  record  from  which  my  true  condition  might  be 
ascertained ;  nor  have  I  done,  suffered,  or  procured  to  be  done, 
or  been  privy  to  any  act,  matter  or  thing  specified  in  the  said 
act  of  Congress  as  a  ground  of  withholding  my  final  discharge 
thereunder,  or  as  invalidating  such  discharge  if  granted. 

Subscribed  and  sworn  to  before  me  this  day 

of A.  D.   190 — ,  at  in  said  district. 

A.  B. 

B.  R., 
Clerk  of  Said  Court, 

<l)  Oaths  required  by  the  Act,  except  upon  hearings  in  court,  may  be 
administered  by  referees  and  by  officers  authorized  to  administer  oaths 
in  proceedings  before  the  courts  of  the  United  States,  or  under  the  laws 
of  the  state  where  the  same  are  to  be  taken.  Bankrupt.  Act  of  1898,  chap. 
4,  sec.  20. 

This  oath  should  not  be  administered  by  an  officer  who  is  the  attorney 
for  the  bankrupt. 

Bank.  Act  of  1898.  Sec.  14  B  (i)  and  (2).  Sec.  29  B  (l),  (2),  (3), 
and  (5). 


1052  BANKRUPTCY. 

No.  163. 

Clerk's  Memoranda  of  Bankrupt's  Petition  for  Discharge. 

In  the  District  Court  of  tlie  L'nited  States, 

For  the District  of . 

In  the  matter  of 

No. 


In  Bankruptcy. 


A.  B.. 
Bankrupt. 

Residence  of  bankrupt . 

Name  and  address  of  attorney . 

Petition  for  adjudication — date  of  fiHng- . 

V^oluntary  or  involuntary . 

Adjudication — date  of . 

Examination  of  bankrupt — referee's  certificate  of  |  Rule  i6 

(b)]  . 

Certified  list  of  creditors  who  have  proved  their  claims  [Rule 
i6  (b)]  . 

Final  oath  [Sec.  14  (b)  (i)  and  (2)  ;  Sec.  29  (i)  (2)  (3) 
(4)  and  (5)] . 

Fees  of  clerk  on  petition  for  discharge  [Filing-  fees — Rule  20 
(3)  and  (5)] 

Application  for  discharge  [Sec.  14  (a)  ;  Rule  14  (a)  and  (c) 
and  Form  57]  . 

Hearing  thereon  [Rule  12  (3)  G.  O.] — date  of . 

Notice  by  clerk  to  creditors  [Sec.  58  (a)  (2)  and  (b)  and 
(c)  Form  57] — date . 


(i)    Names  on  schedules  [Sec.  58  (a)]  . 

(2)   Names  on  proofs  of  claims  [Sec.  58  (a)]  . 

Newspaper  designated  [Sec.  28  (a);  Sec.  58   (b)] — name 
of . 

Publication — [See  General  Provisions,  Rule  37  G.  O.]  . 

Proof  of  publication — [N.  B. — Correct  name;  printed  notice 
attached  ;  proof  sworn  to  ;  bill  receipted.] 

Date  of  last  publication  [10  days  before  hearing] . 

Specifications  against  discharge — date  for  filing  [10  days 
from  hearing]  . 


PROCEEDINGS   BEFORE  THE   JUDGE.  1053 

Appearance  in  opposition  to  discharge  [Rule  32  G.  O.] — 
date  of . 


Disposition  of  same  [Rule  12  (3)  G.  O.]  . 

Specifications  of  objection  to  discharge  [Rule  32  G.  O.- 

See  Form  58.]  . 

Disposition  of  same  [Rule  12  (3)  G.  O.] . 

Referee's  fees — if  paid  [Rule  20]  — ■^. 
Memoranda : . 


No.  164. 
Discharge  of  Bankrupt    (i). 

(Official  Form  \o.  59.) 

District  Court  of  the  United  States, District  of . 

Whereas,  ,  of ,  in  said  district,  has  been  duly  ad- 
judged a  bankrupt  under  the  Acts  of  Congress  relating  to 
bankruptcy,  and  appears  to  have  conformed  to  all  the  require- 
ments of  law  in  that  behalf,  it  is  therefore  ordered  by  this 

court  that  said  be  discharged  from  all  debts  and  claims 

which  are  made  provable  by  said  acts  against  his  estate,  and 

which  existed  on  the day  of ,  A.  D.  19 — ,  on  which 

day  the  petition  for  adjudication  was  filed  him ;  except- 
ing such  debts  as  are  by  law  excepted  from  the  operation  of  a 
discharge  in  bankruptcy. 

Witness  the  Honorable  ,  judge  of  said  district  court, 

and  the  seal  thereof  this day  of ,  A.  D.  19 — . 

[Seal  of  the  court. '\  , 

Clerk. 

(i  )  The  effect  of  a  discharj^e  is  not  determined  by  the  court  granting  it 
but  by  subsequent  proceedings  in  which  the  discharge  is  pleaded  as  a  de- 
fense to  an  action  for  debt.  See  in  re  Marshall  Paper  Co.  (C.  C.  A.  ist 
Cir.)  102  Fed.  Rep.  872,  4  .\m.  B.  R.  468;  in  re  Black,  97  Fed.  Rep.  4Q3,  4 
Am.  B.  R.  471   (note). 

Debts  not  affected  by  a  discharge  —  a.  \  discharge  in  bankruptcy  shall 
release  a  bankrupt  from  all  of  his  provable  debts,  except  such  as  (i)  are 
due  as   a  tax   levied  by   the   United   States,  the   state,   county,   district,  or 


1(^)54  BANKRUPTCY. 

municipality  in  which  he  resides;  (2)  are  liabilities  for  obtaining  property 
by  false  pretenses  or  false  representations,  or  for  willful  and  malicious 
injuries  to  the  person  or  property  of  another,  or  for  alimony  due  or  to 
become  due,  or  for  maintenance  or  support  of  wife  or  child,  or  for  seduction 
of  an  unmarried  female,  or  for  criminal  conversation ;  (3)  have  not  been 
duly  scheduled  in  time  for  proof  and  allowance,  with  the  name  of  the 
creditor  if  known  to  the  bankrupt,  unless  such  creditor  had  notice  or 
actual  knowledge  of  the  proceedings  in  bankruptcy;  or  (4)  were  created 
by  his  fraud,  embezzlement,  misappropriation,  or  defalcation  while  acting 
as  an  officer  or  in  any  fiduciary  capacity."  [Sec.  17,  as  amended  by  act 
of  Feb.  5,  1903.] 


PROCEEDINGS   BEFORE  THE   JUDGE.  1055 

No.  165. 
Deed  from  Trustee  to  Purchaser. 

Know  All  :\Ien  by  These  Presents:  That  whereas,  on  the 

day  of  19 — ,  A.  B.  was  duly  adjudged  bankrupt  by 

the  District  Court  of  the  United  States  for  the  District  of 

^  and  the  said  A.  ^l.  was  duly  appointed  and  qualified  as 

trustee  of  the  estate  of  the  said  A.  B.  in  bankruptcy,  and  is  now- 
acting  as  said  trustee,  and  on  the  day  of  ,  19 — ,  said 

trustee  filed  a  certain   petition   in  said   District    Coud-t   of   the 

United  States  for  the District  of ,  praying  among  other 

things,  for  an  order  of  sale  of  certain  real  estate  therein  men- 
tioned and  hereinafter  described. 

And  Whereas,  proceedings  were  had  on  said  petition  in  accord- 
ance with  the  bankruptcy  laws  of  the  United  States  in  such  case 
made  and  provided,  ancl  the  petition  coming  on  for  hearing  on 

the  day  of  ,  19 — ,  of  which  hearing  ten  days'  notice 

had  been  given  by  mail  to  creditors  of  said  bankrupt,  it  was  or- 
dered that  the  said  trustee  be  authorized  to  sell  the  portion  of 
the  bankrupt's  estate  specified  in  his  petition  and  hereinafter 
descril>efl,  bv  auction  (or  at  private  sale,  or  as  may  he),  keeping 
an  accurate'  account  of  the  property  sold  and  the  price  received 
therefor,  and  to  whom  sold,  and  on  the  same  day  in  pursuance 
of  said  order  and  judgment,  an  order  of  sale  of  said  real  estate 
therein  described,  was  issued  out  of  said  court  under  the  seal 
thereof  to  said  A.  M.,  trustee  of  the  estate  of  A.  B.  in  bankruptcy, 
as  aforesaid,  directed,  commanding  him  to  execute  the  said  order, 
and  of  the  same,  together  with  his  proceedings  thereon,  to  make 
due  return  to  said  court. 

And  Whereas,  said  A.  ^NI.,  trustee  of  the  estate  of  A.  B.,  in 
bankruptcy,  having  caused  said  premises  to  be  appraised,  and  the 
report  of  said  appraisement  to  be  filed  with  S.  T.,  the  referee, 

and  having  on  the day  of ,  19 — ,  returned  said  order  of 

sale  to  said  court  as  commandt^l  with  the  proceedings  thereon, 
stating  in  substance  that  in  obedience  to  said  order  he  duly  ad- 
vertised   the    real    estate    therein    described    for   sale    for   

con.secutive  weeks  before  the  day  of  sale  in  the  "Gazette,"  a 

newspaper    printed    and    of    general    circulation    in    said    

County.  State  of ,  stating  in  said  notice  the  time,  place,  and 

terms  of  said  sale,  and  on  the day  of ,  19—,  he  attended 

at  the  phicc  named  for  the  sale,  and  at  the  hour  of  —  o'clock  — 
M.,  he  offered  said  real  estate   (hereinafter  described)   for  sale, 

when  G.   II..  bid  to  pay  for  the  same  the  sum  of  ($ ) 

dollars,  which,  being  the  highest  and  best  bid  that  was  offered. 
ant]    hciiig   nion-   than   sevi-nty-five   percnitnin   of   the   appi-aised 


lOoC)  HANKlU'l'Tt  Y. 

value  ol'  said  ])rt'iiiis(.'s,  iir  IIk'Ii  and  tlicri'  si)ld  tlic  same  to  said 
G.  S.  for  that  sum.^ 

And  whi'reas.  on  the  day  of  ,  19 — ,  the  said  court 

having  oxaminod  the  proceeding's  of  the  said  sale,  aforesaid, 
under  said  order  of  sale,  and  it  appearing  to  the  court  that 
said  sale  was  in  all  respects  legally  made,  ordered  that  the  same 
be  approved  and  contii-med,  and  that  said  A.  M.,  trustee,  as 
aforesaid,  should  execute  and  deliver  a  proper  deed  to  the  pur- 
chaser, of  the  real  estate  so  sold. 

All  of  which  will  more  fully  appear  by  the  records  of  said 
court,  to  which  reference  is  here  made. 

Now,  therefore,  I,  the  said  A.  M.,  trustee  of  the  estate  of  A.  B., 
in  bankruptcy,  aforesaid,  by  virtue  of  said  order  of  sale,  sale,  and 
confirmation,  and  of  the  statute  in  such  cases  made  and  pro- 
vided, and  of  the  powers  vested  in  me  and  for  and  in  considera- 
tion of  the  premises,  and  the  sum  of dollars  ($ )  paid,  or 

secured  to  be  paid  to  me  by  said  G,  H.,  the  receipt  whereof  is 
hereby  acknowledged,  do  hereby  grant,  bargain,  sell,  and  con- 
vey to  the  said  G.  H.,  his  heirs  and  assigns  forever,  the  follow- 
ing real  estate,  situated  in  the  county  of  ,  in  the  state  of 

,  and  in  the  and  bounded  and  described  as  follows: 

[TTere  set  forth  the  description  by  metes  and  hounds.] 

To  have  and  to  hold  said  premises,  with  all  the  privileges  and 
appurtenances  thereto  belonging,  to  the  said  G.  11.,  his  heirs 
and  assigns  forever,  as  fully  and  completely  as  the  said  A.  M. 
as  such  trustee  in  bankruptcy,  by  virtue  of  said  order  of  sale, 
sale,  and  confirmation,  and  of  the  statute  made  and  provided 
for  such  cases,  might  or  should  sell  and  convey  the  same. 

In  witness  whereof,  the  said  A.  M.,  as  such  trustee,  has  here- 
unto set  his  hand,  this day  of ,  A.  I).,  19 — . 

Signed  and  acknowledged  in  presence  cf : 
R.  S. 
G.  T.  A.  M., 

Trustee  of  the  Epfate  of  A.  B.,  in  Bankruptcy. 


APPELLATE  PROCEEDINGS.  1057 

The  state  of /  ^^ 

County  of ) " 

Be  it  remembered,  that  on  this day  of ,  19 — ,  before 

me.  the  subscriber,  a  notary  public,  in  and  for  said  county, 
personally  came  the  above  named  A.  M.,  as  trustee  of  the  estate 
of  A.  B.,  in  bankruptcy,  the  grantor,  in  the  forgoing  deed,  and 
acknowledged  the  signing  of  the  same  to  be  his  voluntary  act 
and  deed  as  such  trustee  for  the  uses  and  purposes  therein  men- 
tioned. 

In  testimony  whereof,  I  have  hereunto  subscribed  my  name 
and  affixed  my  official  seal  on  the  day  and  year  last  aforesaid. 

[Seal.]  J.  R., 

Notars'  Public  in  and  for  the  County  of  ,  State  of 


(1 )  In  case  of  a  private  sale  omit  this  paraprraph  and  state  the  terms  and 
conditions  of  the  order  of  sale  actually  conii)lied  witli  and  proceed  witli 
tlic  form  as  given. 


APPELLATE   PROCEEDINGS. 

No.  166. 

Petition  for  Appeal  in  Bankruptcy  (i). 

The  District  Court  of  the  United  States  for  tlie District 

of . 

In  the  Matter  of  L.  W.  doing  business  as  L.  |  No. 


\V.  &  Son,   Bankrupt.  J  In   Bankruptcy. 

Petition  on  appeal  of  B.  Y.,  trustee  in  bankruptcy,  of  L. 
W'.,  doing  business  as  L.  W.  &  Son.  Bankrupt. 

The  above  named  B.  Y.,  trustee  in  bankruptcy,  consider- 
ing himself  aggrieved  l)y  tlie  judgment  made  and  entered  on 

the    day   of  ,    in    the    above   entitled    cause,    does 

hereby  appeal  from  such  judgment  to  the  United  States  Cir- 
cuit* Court  of  Ai)pcals  for  the  Circuit,   for  tlie  reasons 

sj)ecified  in  the  assignment  of  errors,  which  is  filed  herewith, 
and  he  prays  that  this  appeal  may  be  allowed,  and  that  a  tran- 
script of  the  record,  i)roceedings  and  papers  u])on  whicli  said 


1058  APPKI.LATK    I'KOCKKDINGS. 

judi^nicnl  was  nuule.  duly  aulhcnticaicd.  may  be  sent  to  the 

United  Slates  Circuit  Court  oi  Appeals  for  the District. 

R.  S. 
Attorney  for  B.  Y.,  Trustee  in  Bankruptcy. 

The  foregoing-  claim  of  appeal  is  allowed. 

A.  C. 
District  Judge. 

(i)  An  appeal  lies  from  a  court  of  bankruptcy  to  the  Circuit  Court  of 
Appeals  in  three  classes  of  cases  specified  in  sec.  25  of  the  Bankruptcy 
Act  of  1898  and  in  no  other  cases. 

The  petition  for  appeal  and  the  allowance  must  be  made  within  ten 
days  after  the  entry  of  the  judgment  appealed  from.  Norcross  vs.  Nave 
&  McCord  Merc.  Co.,  loi  Fed.  Rep.  796,  4  Am.  B.  R.  317. 


No.  167. 

Order  Granting  Appeal  in  Bankruptcy,  Severing  Co-defend- 
ants   and    Allowing    Supersedeas. 

The  District  Court'  of  the  United  States  for  the  Dis- 
trict of . 

A.    B..    et  al.,    Petitioners 

vs. 
C.  D.,  ct  al.,  Respondents. 

The  defendant,  D.  G,,  having  heretofore  filed  herein  his 
petition  for  appeal  and  assignment  of  errors,  and  having 
given  notice  to  E.  F.  and  G.  H.,  and  they  failing  to  appear, 
said  api)€al  is  allowed  to  petitioner,  and  said  E.  F.  and  G.  H. 
may  be  made  appellees. 

Said  appeal  is  to  operate  as  a  supersedeas  of  the  decree 

of ,  but  not  to  affect  the  injunction  granted ,  upon 

the  execution  of  a  bond  in  the  penalty  of  $ . 

The  United  States  Fidelity  and  Guaranty  Company  of 
Baltimore,  Maryland,  is  accepted  on  said  bond  as  surety,  and 
said  bond  is  now  approved. 


APPEALS    FROM     DISTRICT    COURT.  1059 

No.  168. 
Order  Allowing  Cross  Appeal. 

[Caption   in   Trial  Court.'] 

This  day  came  the  complainant  herein  by  its  counsel,  and 
presented  the  petition  for  a  cross-appeal  and  an  assignment 
of  errors  accompanying  the  same,  which  petition  upon  con- 
sideration of  the  court  is  here])y  allowed  and  the  court  al- 
lows a  cross-appeal  to  the  United  States  Court  of  Appeals  for 

the Circuit  upon  the  fiHng  of  a  bond  in  the  sum  of  five 

hundred  dollars  ($500.00)  with  good  and  sufficient  security 
to  be  approved  by  the  court. 


No.  169. 
Bond  on  Appeal  in  Bankruptcy  (1). 

Know  all  men  by  these  presents,  that  we,  A.  B.,  as  prin- 
cipal, and   S.  R.  and  L.  P.,  as  sureties,  are  held  and  firmly 

bound  unto  C.  D.  in  the  full  and  just  sum  of ($ ) 

dollars,  to  be  paid  to  the  said  C.  D.,  his  certain  attorneys, 
exegutors,  administrators  or  assigns :  to  which  payment,  well 
and  truly  to  be  made,  we  bind  ourselves,  our  heirs,  executors 
and  administrators,  jointly  and  severally,  by  these  presents. 

Sealed  with  our  seals  and  dated  this day  of in  the 

year  of  our  Lord  one  thousand  nine  hundred  and . 

Whereas  lately  at  a  Circuit  Court  of  the  United  8tates 
for  the  District  of  in  a  suit  de- 
pending in  said  court,  between  A.  B.,  plaintiff,  and  C.  D., 
defendant,  a  decree  was  rendered  against  the  said  A.  B.,  and 
the  said  A.  B.  having  obtained  an  appeal  and  filed  a  copy 
thereof  in  the  clerk's  office  of  the  said  court  to  reverse  the 
decree  in  the  aforesaid  suit,  and  a  citation  directed  to  the  said 
C.  D.,  citing  and  admonishing  him  to  be  and  appear  at  a  ses- 
sion of  the  United  States  Circuit  Court  of  Appeals  for  the 

Circuit,  to  be  holden  at  the  city  of ,  in  said  circuit, 

on  the  day  of next. 

Now,  the  condition  of  the  above  obligation  is  such,  that  if 
the  said  A.  B.  shall  prosecute  his  appeal  to  effect,  and  answer 


1060  AlM'Kl.LATK    PKOfKKlMNGS. 

all  (.l.images  and  costs  if  he  fail  to  make  his  plea  good,  then 
the  alxne  ohliq-ation  to  l^e  void;  else  to  remain  in  full  force 
and    \irtiic. 

Sealed  and  delivered  in  |)resence  of 

L.  S.  A.  B.  [Seal.] 

G.  S.  S.  R.  [Seal.] 

L.  P.  [Seal.] 
Approved  hy 
H.  S.. 

U.  S.  Circuit  Judge. 

(l)  The  bond  on  appeal  from  a  Circuit  or  District  Court  to  a  Circuit 
Court  of  Appeals  may  be  allowed  by  the  circuit  or  district  judge.  R.  S. 
sec.  999. 

An  appeal  to  operate  as  a  supersedeas  must  be  filed  in  accordance  with 
R.  S.  sec.  1007.  Adams  vs.  Law,  16  How.  148;  Kitchen  vs.  Randolph, 
93  U.  S.  86. 

A  trustee  in  bankruptcy  is  not  required  to  give  bond  on  appeal.  Sec.  25c 
of  the  bankruptcy  law  of  1898,  30  Stat,  at  L.  544. 


No.  170. 
Citation  on  Appeal  in  Bankruptcy. 

The  United  States  Circuit  Court  of  Appeals,  for  the Dis- 
trict. 

The  United  States  of  Ainerica.  Judicial  Circuit,  ss. 

To  The  D.  M.  Grocery  Company  —  Greeting : 

You  are  hereby  cited  and  admonished  to  be  and  appear  at 
a  session  of  the  United  States  Circuit  Court  of  Appeals  for 

the circuit,  to  be  holden  at  the  city  of  Cincinnati,  in  said 

district,  on  the day  of next,  pursuant  to  a  petition 

on  appeal  and  assignment  of  error  filed  in  the  clerk's  office 
of  the  District  Court  of  the  United  States  for  the  dis- 
trict of  ,  division,  in  the  matter  of  F.   H.,  doing 

business  as   F.   H.  &  Son,   to  show  cause,    if  any  there  be, 


APPEALS    FROM     DISTRICT    COURT.  10(il 

why  the  judgment  rendered  in  said  cause  reversing  the  find- 
ing and  order  of  the  referee  in  bankruptcy  disallowing  and  ex- 
punging the  claim  of  The  D.  M.  Grocery  Company  and  or- 
dering the  allowance  of  said  claim,   as  proved  by  it,  before 

said  referee,  in  the  sum  of  $ ,  as  in  said  petition  of  appeal 

mentioned,  should  not  be  corrected,  and  why  speedy  justice 
should  not  be  done  to  the  parties  in  that  behalf. 

Witness  the  Hon.  A.  C,  Judge  of  said  District  Court,  this 
day  of in  the  year  of  our  Lord ,  and  of  the  in- 
dependence of  the  United  States  of  America  the  one  hundred 

and  .  A.  C. 

United  States  District  Judge. 


No.  171. 
Assignment  of  Errors  to  an  Adjudication  of  Bankruptcy. 

District  Court  of  the  United  States,  District  of . 

In  the  matter  of  A.  B.  and  C.  B. 
In  Bankruptcy. 

No. . 

And  now  on  this  the day  of .  came  A.  B.  and  C. 

B.  by  R.  X.  Esq.  and  T.  B.,  their  attorneys,  and  say  that  the 
judgment  in  said  cause  adjudicating  diem  involuntary  bank- 
ru])ts  is  erroneous  and  against  their  just  right,  and  they  assign 
the  judgment  of  said  District  Court  adjudicating  them  bank- 
rupts individually  and  as  partners  as  manifest  error. 

Wherefore  the  said  A.  B.  and  C.  B.  i)ray  that  the  said  judg- 
ment may  be  reversed  and  said  petition  in  involuntary  bank- 
ruptcy against  them  be  dismissed.  R.  X. 

T.  B. 
Attorneys  for  A.  B.  and  C.  B. 


1UI)2  Ari'El.LATE    rKOCEEDlNGS, 

No.  172. 
Assignment  of  Errors  to  an  Adjudication  of  Bankruptcy. 

The  District  Court  of  the  United  States,  for  the District 


ot 


A.  B.  &  Co..  ct  al. 
vs. 

C  D.  cS:  Co., 

Your  petitioner  assigns  the  following  as  the  errors  upon 
which  he  will  rely : 

First.  The  court  erred  in  failing  to  hold  that  the  petition- 
ers had  estopped  themselves  from  prosecuting  their  petition 
herein  on  account  of  the  execution  by  the  said  C.  D,  &  Com- 
pany of  the  alleged  deed  of  assignment. 

Second.  The  court  erred  in  adjudicating  the  firm  of  C.  D. 
&  Company  bankrupt. 

Third.  The  court  erred  in  adjudicating  the  individual  mem- 
bers of  said  firm,  and  especially  your  petitioner,  bankrupt. 

Wherefore,  your  petitioner  prays  that  the  court  would  allow 
an  appeal  herein  from  the  said  decree  of ,  and  would  ap- 
prove a  bond  for  the  stay  of  all  proceedings  pending  such  ap- 
peal, and  your  petitioner  will  ever  pray,  etc. 

D.  G. 
X.  &X. 
Attorneys  for  D.  G. 

No.  173. 

Assignment  of  Errors  by  a  Trustee  in   Bankruptcy   to  the 

Allowance  of  a  Claim. 

The  District  Court  of  the  United  States,  for  the District 

of . 

In  the  Matter  of  L.  W.,  doing  business  )  _    „     , 

T     ,\-    o    c        T3     1       ^  f  In  Bankruptcy. 

as  L.  W  .  &  Son,  Bankrupt.  ) 

And  now  on  the day  of ,  comes  the  said  B.  Y.,  as 

trustee  in  bankruptcy  of  L.  W.,  doing  business  as  L.  W.  &  Son, 


APPEALS    FROM     DISTRICT    COURT.  1063 

bankrupt,  by  R.  X.,  Esq..  his  solicitor,  and  says  that  the  decree 
in  said  cause  is  erroneous  and  against  the  just  rights  of  said 
trustee  in  bankruptcy  for  the  following  reasons : 

First.  Because  the  evidence  shown  and  set  out  in  the  agreed 
statement  of  facts  certified  by  the  referee  to  be  correct  shows 
that  said  The  S.  D.  Grocery  Company,  received  preferences 
which  it  did  not  surrender  or  offer  to  surrender  at  the  time  of 
or  before  proving  its  claim. 

Second.  Because  the  facts  as  set  out  in  the  agreed  state- 
ment of  facts  and  certified  by  the  referee  to  be  correct  shows 
that  said  claimant.  The  S.  D.  Grocery  Company,  within  four 
months  next  preceding  the  date  when  the  petition  in  bank- 
ruptcy was  filed,  had  received  preferences  in  excess  of  further 
credits  afterward  given  in  good  faith  by  it  to  said  bankrupt 
debtor  without  security  of  any  kind  for  property  which  became 
a  part  of  the  estate  of  said  bankrupt  debtor,  and  remained  un- 
paid at  the  time  of  adjudication  for  bankruptcy  herein,  in  the 
sum  of  $ . 

Third.  Because  the  evidence  showed  that  said  claimant, 
the  S.  D.  Grocery  Company,  should  not  be  allowed  to  prove  its 
claim  until  it  had  surrendered  or  offered  to  surrender  the 
amount  of  the  excess  of  preference  it  has  received  from  said 
bankrupt  within  four  months  prior  to  the  filing  of  the  petition 
in  bankruptcy,  over  the  amount  of  subsequent  credits  extended 
to  said  bankrupt,  without  security  of  any  kind,  by  said  claimant 
for  property  which  became  a  part  of  the  estate  of  said  bank- 
rupt. 

Fourth.  Because  the  evidence  showed  that  the  finding  and 
order  of  the  referee  in  bankruptcy  disallowing  and  expung- 
ing the  claim  of  said  The  S.  D.  Grocery  Company  was  correct 
and  legal. 

I'ifth.  Because  the  finding,  judgment  and  decree  of  this 
court  reversing  the  action  of  tlie  referee  in  disallowing  said 
claim  for  $ without  any  refunder  of  preferring  and  ex- 
punging said  claim  and  in  allowing  said  claim  for  $ with- 


l(i()4  APi'Ki.i.A'PK   iMv(H'i;i;i>iN(;s. 

out  any  rofunder  of  preference  on  the  ]):irt  of  said  claimant  is 
erroneous  and  illci^^al. 

Sixth.  Because  tlie  evidence  showed  that  within  four 
months  prior  to  the  time  of  the  hHnp;  of  the  ])etitiou  in  l)ani<- 
ruptcy  claimant  received,  at  different  times,  within  said  period, 
payments  of  money  from  said  bankrupt  in  excess  of  subse- 
quent sales  of  merchandise  to  said  bankrupt  by  said  claimant 
without  security  of  any  kind  therefor. 

Wherefore,  the  said  B.  Y.,  trustee  in  bankruptcy  of  said  L. 
W.,  doing-  business  as  L.  W.  &  Son,  bankrupt,  pray  that  said 
order,  judgment  and  decree  reversing  the  action  and  ruling  of 
the  referee  and  allow'ing  the  claim  of  said  The  S.  D.  Grocery 

Company  in  the  sum  of  $ ,  be  reversed  and  that  the  said 

court  mav  be  directed  to  enter  a  decree  affirming  the  action  rul- 
ing an  order  of  the  referee. 

R.  X. 
Solicitor  for  B.  Y.,  Trustee  in  Bankruptcy  of  L.  W.,  doing 
business  as  L.  W.  &  Son. 


No.  174. 

Assignment  of  Errors  by  a  Creditor  to  Judgment  Disallow^ing 

Claim. 

The  District  Court  of  the  United  States,  for  the District 

of . 


In  Bankruptcy. 
Assignment  of 
Error  on  Appeal. 


In  the  Matter  of  A.  B.  &  Co.,  et  al. 

I'S. 

C.  D.  and  Son,  Defendants. 

And  now,  on  the day  of ,  came  the  said  E.  F.  Com- 
pany, a  creditor  of  the  above  named  defendants,  C.  D,  and  Son, 
by  Messrs.  X.  &  X.,  its  solicitors,  and  says  that  the  judgment 
and  decree,  in  said  cause  is  erroneous  and  against  the  just 
rights  of  said  creditor  of  said  defendants  for  the  following 
reasons : 


APPEALS    FROM     DISTRICT     COURT.  1065 

First.  Because  the  evidence  shows  that  the  claim  of  said 
creditor  of  said  above  named  defendants  was  a  provable  debt 
against  the  estate  of  the  bankrupts. 

Second.  Because  the  evidence  shows  that  the  claim  of  said 
creditor  of  said  above  named  defendants  should  have  been  al- 
lowed as  a  valid  debt  against  the  estate  of  the  bankrupts. 

Third.  Because  the  evidence  shows  that  the  judgment  and 
decree  should  have  been  in  favor  of  this  creditor  of  the  said 
above  named  defendants  and  against  the  trustee  of  the  above 
named  defendant. 

Wherefore,  the  said  creditor  of  the  above  named  defendant 
prays  that  said  judgment  and  decree  be  reversed,  and  that  the 
said  court  may  be  directed  to  enter  a  decree  and  judgment  al- 
lowing said  claim  of  said  creditor  as  a  provable  debt  against 
the  estate  of  the  bankrupts,  in  accordance  with  the  prayer  of 
the  bill. 

X.  &  X. 
Solicitors  for  said  Creditor,  The  E.  F.  Company. 

No.  175. 

Assignment  of  Errors   to   an   Order   Disallowing   Claims   in 

Bankruptcy. 

The  District  Court  of  the  United  States  for  the Division 

of  the District  of . 

In  re  A.  B.  Hardware  Company.     ,  .  ^ 

^      'No 


Bankrupt. 

In  the  matter  of  the  petition  of  M.  R..  G.  R.,  and  W.  R., 
partners  as  R.  &  R.,  for  allowance  of  their  claim  for  fees  and 
payment  of  the  same,  as  expenses,  or  as  preferred,  out  of  the 
assets  of  the  bankrupt. 

Assignment  of  errors  by  R.  &  R.  in  the  above  matter  made 
a  part  of  their  petition  for  appeal.  The  said  appellants  come, 
and  for  error  in  the  order  and  judgment  of  the  court  herein,  as- 
siirn  as  follows : 


lOGG  Al'l'Kl.l.ATK    I'UOCEKDINGS. 

First.  The  court  erred  in  holding-  and  adjudging  that  the 
general  assignment  of  the  A.  B.  Hardware  Company  was  a 
fraud  upon  the  Bankrupt  Act. 

Second.  The  court  erred  in  holding  and  adjudging  that  the 
services  charged  for  by  petitioners,  rendered  in  preparing  the 
said  assignment,  and  in  the  effort  to  uphold  and  execute  the 
same,  can  not  and  should  not  be  paid  out  of  the  assets  belong- 
ing to  the  estate  of  the  bankrupt. 

Third.  The  court  erred  in  holding  and  adjudging  that  there 

was  no  lien  under  the  statutes  and  laws  of  the  state  of , 

on  assets  of  the  bankrupt,  in  favor  of  the  said  R.  &  R.,  for  the 
payment  of  their  fees  for  the  services  set  out  in  their  petition, 
at  the  time  of  the  filing  of  the  petition  herein  for  adjudication 
in  involuntary  bankruptcy,  and  at  the  time  such  adjudication 
was  made. 

.  Fourth.  The  court  erred  in  holding  and  adjudging  that  the 
assets  of  the  bankrupt  came  to  the  hands  of  the  trustee  upon  the 
adjudication  of  bankruptcy,  and  his  appointment  as  such,  free 
and  discharged  of  any  lien  in  favor  of  petitioners  for  compen- 
sation for  their  said  services,  and  in  not  holding  that  such  as- 
sets were  legally  and  equitably  charged,  with  a  lien  for  and 
the  payment  of  the  compensation  due  therefor,  upon  their  re- 
ceipt by  the  said  trustee. 

Fifth.  The  court  erred  in  holding  and  adjudging  that  the 
referee  in  bankruptcy  was  in  error  in  ruling  that  the  fee  of  pe- 
titioners for  preparing  the  general  assignment  was  a  provable 
debt  against  the  estate  of  the  bankrupt,  and  payable  out  of  such 
estate,  and  in  reversing  the  judgment  of  the  referee  as  to  the 
said  matter. 

Sixth.  The  court  erred  in  dismissing  the  petition  of  petition- 
ers, and  in  not  granting  them  the  relief  they  therein  prayed 
for. 

Wherefore  the  said  R.  &  R.  pray  that  the  judgment  of  said 
District  Court  be  reversed  with  diections  to  said  court  to  allow 
their  claim. 

R.  &  R. 


PETITIONS    TO    REVIEW    ORDERS    IN    BANKRUPTCY.      1067 


PETITIONS  TO  REVIEW  ORDERS  IN  BANKRUPTCY 
IN  A  CIRCUIT  COURT  OF  APPEALS. 

No.  176. 

Notice  of  Filing  Petition  for  Review  (i). 

United  States  Circuit  Court  of  Appeals 

For  the Circuit. 

In  re  Petition  of  A.  B.,      )  j^  Bankruptcy. 
For  Review.  ) 

To  R.  Y.,  attorney  for  the  C.  D.  Trust  Company,  trustee 
in  bankruptcy  for  G.  H. : 

You  are  hereby  notified  that  on  the day  of  ,  at 

12  o'clock  m.,   I  will  file  in  the  clerk's  office  of  the  United 

States  Circuit  Court  of  Appeals  for  the Circuit,  in  the 

city  of ,  a  petition  for  review  in  the  above  entitled  cause, 

a  copy  of  which  ])etition  is  hereto  attached  as  a  part  of  this 
notice,  and  I  will  then  ask  to  have  the  case  docketed  and  the 
necessary  order  made  therein  to  have  such  case  set  down  for 
hearing.  R-  ^^ 

Attorney  for  Petitioner. 

I  hereby  accept  service  of  the  above  notice  this  day 

of .  R.  Y.. 

Attorney  for  C.  D.  Trust  Co..  Trustee  in  Bankruptcy 
of  the  said  Bankrupt's  Estate. 

Ct)  Some  notice  should  be  given  the  parties  in  the  bankruptcy  court 
who  are  interested  in  the  appeal  either  by  form  of  citation  or  notice.  The 
petition  is  sometimes  filed  in  the  Court  of  Appeals  and  when  docketed  and 
printed,  a  copy  of  the  printed  petition  and  exhibits  are  served  upon  oppos- 
ing counsel.  The  better  practice,  however,  is  to  give  notice  in  substantially 
the  form  above  given. 


10G8  APPELLATE  PROCKKDINGS. 

No.  178. 

Petition  to  a  Circuit  Court  of  Appeals  to  Review  an  Order 
in  Bankruptcy   (i). 

The  United  States  Circuit  Court  of  Appeals 
Fur  the Circuit. 

In  the  Matter  of  A.  B.  and  C.  B.,     1  ^    .  .        ,      ^     . 
,,    .  .  I  Petition  for  Review. 

Petitioners.  [ 

To  the  Honorahle  Judges  of  the  United  States  Circuit  Court 
of  Appeals  for  the Circuit. 

The  petition  of  A.  B.  and  C.  B.  respectfully  shows  unto  the 
court : 

First  That  on  the  -^ day  of ,  A.  D,  ,  they  pre- 
sented the  petition  unto  the  Honorable  G.   S.,  judge  of  the 

District  Court  of  the  United  States  for  the  District  of 

,  a  true  copy  of  which  petition  is  hereto  attached  and 

marked  "Exhibit  A." 

Second.  On  the  day  of  ,  A.  D.  ,  the  said 

A.  H.,  trustee  in  bankruptcy,  and  G.  F.,  administrator  of  the 
estate  of  E.  F.,  deceased,  by  their  counsel,  filed  a  plea  and  d(^ 
murrer  to  said  petition,  a  true  copy  of  each  of  which  is  here- 
to attached  and  marked  "Exhibit  B  and  C."  No  other  per- 
sons appeared  in  opposition  thereto. 

Third.  On  the  day  of  ,   A.  D.  ,  the  Hon-- 

orable  G.  S.  entered  an  order  duly  dismissing  said  petition 
with  costs  and  sustaining  said  demurrer ;  said  matter  having 
been  fully  argued  before  said  court. 

Fourth.  Your  petitioners  charge  the  fact  to  be  that  the  said 
District  Court  erred  in  dismissing  said  petition  and  in  sus- 
taining said  demurrer;  and  your  petitioners  are  aggrieved 
thereby  and  therefore  pray  this  honorable  court  to  review 
and  revise  the  decision  of  said  court  below. 

Fifth.  No  proof  was  taken  in  connection  with  the  deter- 
mination by  the  Honorable  G.  S.  and  the  entire  proceedings 


PETITIONS    TO    REVIEW    ORDERS    IN    BANKRUPTCY.       1069 

upon  which  said  dismissal  was  grounded  appear  in  the  ex- 
hibits hereto  attached. 

Sixth.  Your  petitioners  further  show  that  no  opinion  was 
filed  by  said  court  in  the  matter. 

Seventh.  Your  petitioners  therefore  pray  that  such  order 
of  the  District  Court  be  set  aside  and  held  for  naught  and  that 
by  the  order  of  this  court  it  be  decreed  that  your  petitioners 
have  a  right  to  have  an  issue  framed  and  the  truth  of  the 
averments  contained  in  their  said  petition  determined  accord- 
ing to  the  rules  and  procedure  applicable  in  such  cases,  and 
that  your  petitioners  be  given  such  other  relief  as  shall  be 
proper. 

rhat  an  order  be  entered  directing  the  manner  and  time 
of  service  of  this  petition.  A.   B., 

C.  B.. 

R.  X..  Attorney  for  Petitioners. 
A.   B.,  one  of  the  petitioners  mentioned  and  described  in 
tb^  foregoing  petition,  does  hereby  make  solemn  oath  that  the 
statements  contained  therein  are  true  according  to  the  best  of 
hiii  knowledge,  information  and  belief.  A.  B. 

Sworn  and  subscribed  to  before  me  this day  of , 

A.  D.  .  J.  N., 

Notary  Public,  County.  . 

(l)  Congress  has  provided  two  means  of  review  by  a  Circuit  Court  of 
Appeals  of  orders  and  judgments  of  a  court  of  bankruptcy.  Sec.  25  of  the 
bankruptcy  Act  of  1898  provides  for  appeals  in  three  classes  of  cases. 
Par.  24/)  of  the  same  act  provides  for  superintending  and  revising  in  mat- 
ters of  law  only.  An  appeal  is  taken  in  the  usual  form,  and  the  Court  of 
Appeals  may  review  both  matters  of  fact  and  law  on  such  proceedings.  But 
on  a  petition  to  review  an  order  of  a  court  of  bankruptcy  the  Circuit  Courts 
of  Appeals  are  confined  to  questions  of  law.  This  distinction  has  been 
clearly  made  in  the  opinions.  See  Mueller  vs.  Nugent.  184  U.  S.  i  ;  Cun- 
ningham vs.  German  Ins.  Bank.  loi  Fed.  Rep.  977.  4  Am.  B.  R.  192;  Cour- 
ier-Journal Job  Print.  Co.  vs.  Schacffer-Meyer  Brewing  Co..  lOi  Fed.  Rep. 
^X),  4  Am.  B.  R.  18.^;  j«  re  Rouse,  Hazard  &  Co.,  33  C.  C.  A.  356.  91 
Fed.  Rep.  96;  in  re  Richards.  37  C.  C.  A.  634.  96  Fed.  Rep.  935;  in  re 
Abraham,  35  C.  C.  A.  592,  93  Fed.  Rep.  767 :  in  re  Purvine,  37  C.  C.  A.  446, 
f/)  Fed.  Rep.  192.     See  also  Loveland  on  Bankrtiptcy.  sec.  312. 


1070  APPIiLLATE    PROCEEDINGS. 

This  petition  sliould  bo  tiled  in  the  United  States  Circuit  Court  of  Ap- 
peals. /;/  >•<•  Williams,  105  Fed.  Rep.  906;  Courier-Journal  Job.  Print.  Co. 
vs.  SchaefFer-Meyer  Brew.  Co.,  loi  Fed.  Rep.  699,  4  Am.  B.  R.  183. 
As  to  the  form  of  petition  and  proceedings  on  petition  to  review  and  re- 
vise matters  of  law  in  a  Circuit  Court  of  Appeals,  consult  Loveland  on 
Bankruptcy,  sec.  313. 

The  statute  prescribes  no  time  limit  within  which  to  file  a  petition  for 
review  in  a  Circuit  Court  of  Appeals.  In  re  New  York  Economical  Print- 
ing Co.,  106  Fed.  Rep.  839.  5  Am.  B.  R.  697 ;  in  re  Good,  99  Fed.  Rep.  389, 
3  Am.  B.  R.  605. 

No  answer  or  reply  need  be  filed  to  a  petition  for  review  in  a  United 
States  Circuit  Court  of  Appeals.  A  question  of  law  is  presented  to  the 
court  substantially  as  on  a  writ  of  error. 

The  record  must  contain  sufficient  matter  upon  which  the  court  may  re- 
view and  revise  a  question  of  law  and  no  other.  See  Cumiingham  vs.  Ger- 
man Ins.  Bank,  103  Fed.  Rep.  932. 


No.  179. 

Petition  in  a  Circuit  Court  of  Appeals  to  Review  an  Order 
in  Bankruptcy  Disallowing  Labor  Claims. 

The  United  States  Circuit  Court  of  Appeals 

For  the Circuit. 

In  re  A.  B.  &  Company  et  al.,  Petitioners. 

And  now  comes  E.  F.,  for  himself  and  eighty-eight  other 
labor  claimants,  whose  names,  as  well  as  the  amounts  due 
them,  respectively,  for  labor  performed  by  them  for  said  A.  B. 
&  Company  within  three  months  next  before  the  appointment 
of  the  receiver,  August  27th,  1898,  appear  in  the  agreed  state- 
ment of  facts  attached  to  this  petition  and  marked  "Exhibit 
A,"  and,  complaining  of  the  orders  and  judgment  heretofore 
rendered  against  these  complainants  by  the  Hon.  A.  J.,  judge 

of  the  District  Court  of  the  United  States  for  the District 

of ,  says : 

On  the  22nd  day  of  October,  A.  D.  1900,  this  cause  came  on 
to  be  heard  before  said  judge,  to  review  the  proceedings  and 


PETITIONS    TO    REVIEW    ORDERS    IN    BANKRUPTCY.      1071 

final  order  of  A.  M.,  Esq.,  one  of  the  referees  in  bankruptcy 
within  and  for  said  district,  which  said  proceedings  and  final 
order  was  based  upon  said  agreed  statement  of  facts. 

All  creditors  and  all  persons  in  interest  having  consented 
to  said  agreement,  and  to  this  proceeding,  and  having  so  con- 
sented after  the  expiration  of  the  time  limited  for  other  per- 
sons to  come  into  the  case,  it  is  conceded  that  all  are  bound 
by  the  order  of  this  court  under  the  provisions  of  said  stipu- 
lation. 

Your  petitioners  contended  in  the  court  below,  as  they  now 
contend  in  this  court : 

First.  That  upon  the  facts  set  forth  in  said  agreed  statement 
of  facts  which  is  attached  hereto,  marked  "Exhibit  A,"  and 
made  a  part  of  this  petition,  said  funds  passed  into  the  hands 

of  the  said  trustee  charged  by  force  of  the  laws  of with 

an  equitable  lien  in  favor  of  said  claimants,  and  each  of  them, 
as  set  forth  in  schedule  B,  attached  to  said  statement  of  facts, 
and  that  said  claimants  were  and  are  entitled  to  be  first  paid 
from  said  funds  after  the  payment  of  taxes  and  costs  of  ad- 
ministration. 

Second.  That  in  said  proceeding  of  the  Common  Pleas 
Court,  that  court  acquired  full  and  complete  jurisdiction  for 
the  purpose  of  determining  the  respective  rights  of  the  parties 
to  that  suit.  That  the  parties  and  subject  matter  were  all  be- 
fore that  court,  and  that  no  other  court  had  jurisdiction,  nor 
could  they  acquire  jurisdiction  to  adjudicate  and  determine 
the  issues  there  involved. 

That  no  proceedings  were  ever  instituted  in  the  court  of 
bankruptcy  to  stay  that  proceeding,  and  that  that  court  had, 
therefore,  complete  jurisdiction  to  proceed  as  it  did  proceed 
to  final  decree,  and  that  before  the  adjudication  in  bank- 
ruptcy. 

The  petitioners,  therefore,  contended,  as  they  now  contend, 
that  that   fund  was  in  the  custody  of  that  court,  which  was 


IOTL'  APPELLATK    I'ROCF.KDINGS. 

proccciling'  to  administer  uiH)n  it.  and  that  by  reason  of  tlie 
rulinij^  and  jndgment  herein  complained  of,  they  have  been 
agg;rieved  and  damaged  to  the  fnll  extent  of  the  several 
amonnts  due  them  as  aforesaitl. 

This  cause  thus  being-  submitted  to  the  court  on  questions 
oi  law  arising  upon  the  facts  so  as  aforesaid  agreed  upon  by 
all  the  parties  having  an  interest  in  the  estate  of  said  bank- 
rupt, or  either  of  thenis  the  court  decided  and  held,  as  matter 
of  law. 

First.  That  section  3206a  of  the  Revised  Statutes  of 

created  no  lien  in  favor  of  said  labor  claimants  upon  the  funds 
in  the  hands  of  the  receiver  in  the  state  courts,  or  in  the  hands 
of  the  trustee  in  l)ankruptcy  for  distribution. 

Second.  That  section  64b  of  the  Bankrupt  Act  does  not 
fix  or  prescribe  any  lien  in  favor  of  the  wages  due  these 
claimants. 

Third.  That  under  the  facts  set  forth  under  the  agreed 
statement  of  facts,  said  labor  claimants  have  no  interest  in 
said  funds  other  than  as  common  creditors. 

The  court  declined  to  pass  upon  and  construe  the  effect  and 

validity  of  the  decree  of  the  Court  of  Common  Pleas  of 

county,  ,  in  favor  of  said  labor  claimants  January  13th, 

1899. 

The  court  thereupon  ordered,  adjudged  and  decreed  that 
the  orders  of  said  referee  heretofore  made  in  this  case  upon 
the  same  issues,  and  based  upon  the  same  facts  in  respect  to 
these  labor  claims,  be  affirmed,  and  that  the  petition  of  these 
claimants  on  their  behalf  be,  and  the  same  was  dismissed.  A 
copy  of  said  order,  marked  "  B,"  is  attached  hereto. 

To  all  of  which  ruling  of  law  and  judgment  of  the  court 
these  labor  claimants  at  the  time  excej)ted  and  still  do  except, 
and  they  now  pray  this  honorable  court  to  review  said  rulings, 
orders  and  judgments  of  the  honorable  District  Court  herein 
complained  of,  order  the  payment  of  said  lal3or  claims  as  set 
forth  in  said  schedule  "A,"  attached  to  said  agreed  statement 


PETITIONS    TO    REVIEW    ORDERS    IN    BANKRrPTCV.      1073 

of  facts  from  the  funds  now  in  the  hands  of  the  trustee,  H.  S., 
and  for  such  other  rehef  as  they  may  be  found  entitled  to. 

Y.  &  Y. 
Attorneys  for  all  the  within  named  labor  claimants  and  Peti- 
tioner E.  F. 

United  States  of  America,  State  of .  County  of ,  ss. 

District  aforesaid. 
E.  F.,  being  the  petitioner  above  named,    for  himself  and 
others,  does  hereby  make  solemn  oath  that  the  statements  con- 
tained in  the  foregoing-  petition  subscribed  by  him  are  true. 

E.  F. 

Sworn  to  and  subscribed  by  E.  F.,  before  me,  this day 

of .  A.  D. . 

W.  E., 
Notary  Public, 
County. 

(l)   Taken  from  the  record  in  re  Laird,  109  Fed.  Rep.  550.  48  C.  C.  A.  538. 


No.  177. 

Petition  to  a  Circuit  Court  of  Appeals  to  Review  an  Order  in 
Bankruptcy  to  Compel  Assignee  to  Pay  over  Moneys 
to  Trustee. 

United  States   Circuit  Court  of  Appeals,   Sixth  Circuit. 

Leonard  Comingor,    )  j     t>     i        *. 

**         r  Tn  Bankruptcy. 
Petitioner.  ) 

The  petitioner,  Leonard  Comingor,  respectfully  represents 

that  on   the    14th   day  of   February,    1899,    Sinsheimer,   and 

others,  creditors  of  Simonson,  Whitcson  and  Conii)any,   filed 

their  petition  in  bankruj)tcy  in  the  District  Court  of  the  Ihiiled 

States  for  the  district  of  Kentucky,  showing  that  said  debtors 

made   an  assignment   to  this  petitioner  December  5th.    iS()8. 

for  the  benefit  of  creditors,  asking  an  adjudication   in  bank- 


IdT-i  AITELLATK  PROCEEDINGS. 

ruptcy  and  praying-  a  snhpcx^na  against  the  alleged  bankrupts 
and  this  petitioner,  to  which  said  alleged  bankrupts  tendered 
answer  and  plea  and  this  petitioner  did,  March  21st,  1H99, 
move  the  court  to  dismiss  as  to  him  and  without  waiving-  the 
same,  tender  an  answer,  although  nothing  was  alleged  against 
him  save  that  he  was  assignee  for  creditors.  Petitioner  says 
that  no  further  notice  was  taken  of  him  in  this  proceeding 
and  no  action  taken  on  his  motion  to  dismiss  or  offer  to 
answer.  He  says  that  in  both  subsequent  appeals  and  in  all 
proceedings  subsequent  to  said  motion  to  dismiss,  he  was 
simply  dropped  out  of  the  case  by  common  consent.  He  says 
he  was  never  treated  or  considered  as  a  party  to  this  bank- 
ruptcy proceeding  by  the  court  or  the  parties,  since  March, 
1899,  either  in  the  District  Court  or  either  of  the  appeals  to  this 
court,  as  the  orders,  pleadings  and  records  will  show.  (See 
record  in  this  court  No.  716,  page  20,  paragraph  3,  which 
record  is  hereinafter  referred  to  as  part  hereof.) 

This  petitioner  says  further  that  on  March  28th,  1899,  said 
Simonson,  Whiteson  and  Company  were  adjudged  bankrupts 
and  an  appeal  was  taken  to  this  honorable  court,  resulting  in 
a  reversal,  with  directions  to  the  District  Court  to  allow  the 
tendered  answer  of  Simonson,  Whiteson  and  Company  to  be 
filed  and  directing  a  trial  on  issue  made.  In  accordance  there- 
to said  District  Court  did  on  August  12th,  1899,  set  aside  and 
annul  said  adjudication,  file  said  answer,  and  on  the  20th  day 
of  September,  1899.  again  adjudge  said  Simonson,  Whiteson 
and  Company  bankrupts,  who  again  appealed,  September 
22nd,  1899.  All  of  the  matters  herein  so  far  referred  to  ap- 
pear in  Records  Nos.  716  and  yjy,  in  this  court,  and  are  re- 
ferred to  as  parts  hereof. 

Petitioner  says  that  on  said  last  appeal  the  adjudication  of 
the  said  District  Court,  made  the  20th  day  of  September,  1899, 
was  affirmed  and  the  mandate  of  this  court  w-as  filed  below  on 
the  17th  day  of  May,  1900,  and  the  case  referred  to  Baskin, 
referee  in  bankruptcy,  who  did  on  the  28th  day  of  May,  1900, 
enter  an  order  without  notice  and  no  appearance  of  any  one,. 


PETITIONS    TO    REVIEW    ORDERS    IN    BANKRUPTCY.       1075 

directing  this  petitioner  to  file  with  him  an  itemized  statement 
of  receipts  and  disbursements  as  assignee  under  the  deed  of 
assignment  of  the  bankrupts  and  to  appear  before  him  in  per- 
I  son  to  settle  his  accounts  as  said  assignee.  A  certified  copy  of 
said  order  was  served  on  this  petitioner  and  is  filed  herewith 
as  part  hereof,  marked  Exhibit  No.  i. 

Petitioner  says  that  he  was  thus  required  to  give  and  did 
give  to  said  referee  said  itemized  account,  from  which  it  ap- 
peared that  before  any  proceedings  in  bankruptcy  he  had 
realized  on  all  the  assets  of  the  bankrupts,  under  direction  and 
order  of  the  state  court,  where  a  suit  was  pending  long  before 
any  petition  in  bankruptcy,  in  which  he  was  settling  his  ac- 
counts ;  that  he  realized  from  said  assets  the  sum  of  $92,865.77, 
being  over  22  per  cent,  more  than  the  appraised  value  as  made 
under  oath  by  the  appraisers  appointed  by  the  state  court ;  that 
he  had  disbursed  for  expenses  in  carrying  on  the  business  and 
converting  assets  into  cash  the  sum  of  $19,876.73;  that  he 
drew  as  his  commissions  $3,398.90,  and  paid  his  counsel  for 
necessary  services  $3,200.00,  all  before  any  proceedings  in 
bankruptcy.  A  copy  of  said  statement  is  filed  as  part  hereof, 
marked  Exhibit  No.  2. 

Whereupon  on  the  20th  of  June,  1900.  the  referee  entered 
an  order  appointing  the  Louisville  Trust  Company  receiver 
herein  and  directing  the  said  receiver  to  apply  to  the  Jefferson 
Circuit  Court,  Common  Pleas  Division,  for  an  order  directing 
the  state  court  receiver  to  pay  over  to  the  receiver  herein  the 
entire  fund  in  said  state  court  in  the  action  of  L.  Comingor, 
asignee,  etc.,  vs.  Simonson.  Whiteson  and  Co.,  at  the  same 
time  directing  that  the  receiver  shall  not  appear  in  said  action 
and  shall  not  receive  less  than  the  whole  sum  in  said  court. 
Said  referee's  order  further  required  petitioner  herein  and  his 
counsel  in  said  state  court  proceedings  to  appear  three  days 
thereafter  and  show  cause  why  they  should  not  pav  over  to 
the  receiver  the  sums  held  by  them  as  commissions  and  fees 
and  the  balance  of  $6,766.53.  not  then  paid  into  the  state  court 
by  Comingor,  assignee,  for  creditors  and  still  in  his  hands.     A 


107G  AITELLATE    PROCEEDINGS. 

cc)j)y  <,>t  said  order  is  tiled  as  part  hereof,  marked  Exhibit  No. 
3.  On  tlie  next  day.  June  Jist,  1900.  said  Trust  Company,  re- 
ceiver herein.  a])])eared  before  said  state  Circuit  Court  and 
asked  leaNc  to  withdraw  the  entire  fund  in  court,  $46,305.03, 
all  of  which  was  submitted  to  said  Circuit  Court.  A  copy  of 
said  motion  is  filed  as  part  hereof,  marked  Exhibit  No.  4.  i\c- 
comj)anying'  said  motion  was  a  notice  served  on  petitioner  by 
the  receiver  in  bankruptcy  that  the  motion  would  be  made  be- 
fore the  state  court  June  21st,  1900,  and  a  copy  of  an  injunc- 
tion of  the  District  Court  in  this  matter  enjoining  and  restrain- 
ing this  petitioner  from  making  any  opposition  to  said  motion, 
said  injunction  expressly  prohibiting  this  petitioner  by  name 
**  from  taking  any  steps,  instituting  or  having  any  proceedings 
affecting  the  estate  and  assets  of  Simonson,  Whiteson  and  Co., 
in  any  state  court  and  especially  in  action  No.  19,944,  entitled 
L.  Comingor,  etc.,  vs.  Simonson,  Whiteson,  etc.,  pending  in 
the  Jefferson  Circuit  Court."  A  certified  copy  of  said  injunc- 
tion and  said  notice  are  hereby  filed  herewith  as  part  hereof 
marked  Exhibits  Nos.  5  and  6,  respectively.  All  of  which 
the  state  court  took  under  advisement. 

At  the  same  time  that  the  receiver  in  bankruptcy  was  ap- 
plying to  the  state  court  as  shown,  and  your  petitioner  was 
restrained  from  opposing  or  appearing  in  response  to  said  no- 
tice, the  referee  in  bankruptcy,  sua  sponte,  ruled  the  petitioner 
iierein  to  pay  to  said  receiver  the  money  retained  by  him  as 
commissions  as  appears  in  said  Exhibit  No.  3.  Petitioner  re- 
sponded June  23rd,  1900,  to  this  rule,  that  he  retained  the 
money  as  his  commissions  as  assignee  under  the  deed  before 
any  proceedings  in  bankruptcy,  and  that  he  had  used  them 
and  was  unable  to  pay  it  to  the  receiver.  A  copy  is  herewith 
filed  as  part  hereof,  marked  Exhibit  No.  7.  Immediately  on 
filing  said  response,  said  referee  adjudged  the  same  insuf- 
ficient, made  the  rule  absolute,  and  ordered  the  petitioner  to 
pay  said  sum  to  the  receiver  before  June  30th,  1900.  A  copy 
of  said  order  is  filed  herewith  as  part  hereof  marked  Exhibit 
No.  8.    Before  said  date,  however,  viz.:  June  28th,  1900,  said 


PETITIONS    TO    REVIEW    ORDERS    IN    BANKRUPTCY.      1077 

referee,  without  notice  or  appearance  of  any  one  and  sua 
sponte  entered  another  show  cause  order  and  had  the  same 
served  on  petitioner,  ruHng  him  to  pay  by  June  30th,  1900, 
to  the  receiver  in  bankruptcy  the  further  sum  of  $3,000.00, 
"  recited  in  his  report,"  as  having  been  paid  to  his  counsel  and 
the  further  sum  of  $200.00,  as  shown  in  said  report  to  have 
been  paid  to  others  counsel.  A  copy  of  which  order  is  filed 
as  part  hereof,  marked  Exhibit  No.  9.  To  which  this  peti- 
tioner responded  June  30th,  1900,  that  these  payments  were 
made  before  any  bankruptcy  proceedings,  that  he  has  no 
means  to  pay  said  sums  to  the  receiver,  that  before  the  petition 
in  bankruptcy  was  filed  and  before  he  had  any  knowledge,  in- 
formation or  intimation  that  it  would  be  filed,  relying  upon 
it  that  he  would  wind  up  his  trust  under  the  assignment,  he 
filed  his  petition  in  the  said  court  and  his  action  is  there  pend- 
ing and  he  is  still  subject  to  that  jurisdiction  and  required  to 
settle  in  the  state  court.  A  copy  of  this  response  is  filed  as 
part  hereof  marked  Exhibit  No.  10.  On  the  same  day  that 
said  response  was  filed.  June  30th,  1900,  the  Jefferson  Circuit 
Court  declined  to  entertain  said  bankruptcy  receiver's  motion 
hereinabove  shown  to  withdraw  funds  from  the  court,  because 
said  receiver  was  not  a  party  to  the  action,  and  said  court  sug- 
gested that  the  motion  would  be  entertained  when  said  receiver 
filed  its  petition  asserting  claim  to  the  fund  as  provided  in 
section  29,  Kentucky  Code  of  Practice.  Said  ruling  of  the 
court  is  in  writing  and  a  copy  thereof  is  filed  as  part  hereof, 
marked  Exhibit  No.  11. 

In  accordance  with  the  suggestion  of  the  state  Circuit  Court 
the  receiver  (who  had  in  the  meantime  been  chosen  trustee  in 
bankruptcy),  did  on  the  3rd  day  of  July,  1900.  file  a  claimant's 
petition  under  said  Kentucky  Code  provision,  in  the  state  Cir- 
cuit Court,  making  himself  a  party  to  said  action,  having  been 
directed  so  to  do  by  the  order  of  the  referee  in  bankruptcy. 
A  copy  of  said  petition  and  exhibits  attached  thereto,  including 
the  said  referee's  order  are  filed  as  parts  hereof,  marked  Ex- 
hibit No.  12.     Thereafter,  on  July  5th,   1900,  said  trustee  in 


lOTS  APPELLATE    PROCEEDINGS. 

bankruptcy  tendered  his  proiX)sed  order  for  withdrawal  of  said 
fund  accompanying-  the  same  with  notice  to  petitioner's  counsel 
and  their  response  whereupon  the  court  made  him  a  party  and 
entered  the  motion  for  leave  to  withdraw  the  funds  then  in 
said  court,  and  sustained  his  motion  and  gave  said  trustee  leave 
to  withdraw,  which  was  done.  A  copy  of  said  motions  or  or- 
der and  the  notice  to  petitioner's  counsel  and  their  reply  is 
filed  as  part  hereof,  marked  Exhibit  No.  13. 

From  all  of  which  it  appears  that  the  trustee  in  bankruptcy 
became  a  party  to  the  petitioner's  suit  for  settlement  in  the 
state  court,  made  it  appear  to  said  court  that  all  its  officers, 
including  petitioner  and  his  counsel,  were  paid  and  the  fund 
remaining  in  said  court  would  be  distributed  among  the  cred- 
itor beneficiaries  of  said  deed  of  assignment  and  thus  obtained 
the  said  fund  for  distribution  in  bankruptcy  herein.  At  the 
same  time,  w^hilst  this  was  being  done,  the  petitioner  was  un- 
der injunction  from  the  District  Court  herein  as  already  shown, 
preventing  any  action  on  his  part  in  said  state  court,  and  at 
the  same  time  was  being  pressed  by  said  show  cause  rules  of 
the  referee  in  bankruptcy  to  surrender  his  commission  and  pay 
back  the  money  expended  by  him  in  paying  counsel  before 
any  bankruptcy  proceedings,  his  response  to  said  rules,  among 
other  things,  showing  that  the  state  court  suit  was  pending  and 
he  was  within  that  jurisdiction  making  his  settlement.  He, 
therefore,  filed  his  petition  for  review  by  the  District  Court,  a 
copy  of  which  is  filed  as  part  hereof,  marked  Exhibit  No.  14. 
Upon  which  the  referee  filed  his  report  in  said  District  Court, 
of  which  a  copy  is  filed  as  part  hereof,  marked  Exhibit  No.  15. 
On  the  7th  day  of  July,  1900,  said  petition  foi  review  came 
on  for  hearing  before  the  District  Court,  was  heard,  and  the 
District  Court  took  time  to  consider;  then,  on  the  i6th  day  of 
July,  1900,  the  court  entered  an  order  referring  the  matter 
back  to  the  referee  with  directions  to  take  testimony  concern- 
ing the  character  of  the  services  of  the  petitioner  and  his  coun- 
sel under  the  deed  of  assignment,  and  their  value  to  the  bank- 
rupt estate,  and  directing  the  referee  to  report  fiindings  of  fact 


PETITIONS    TO    REVIEW    ORDERS    IN    BANKRUPTCY.      1079 

and  any  modification  he  might  d^-'.oose  to  make  of  his  former 
report  and  recommendation,  a  copy  of  which  is  filed  as  part 
hereof,  marked  Exhibit  No.  i6A  Whereupon  the  referee  im- 
mediately commenced  taking  evi'i^l^nce  and  continued  to  take 
from  time  to  time,  during  which, ''"riz. :  on  the  loth  day  of 
November,  1900,  this  petitioner  filets  an  additional  response 
before  the  referee,  showing  in  substance  that  as  appears  in 
these  proceedings,  neither  the  referee  nor  the  District  Court  has 
any  jurisdiction  of  the  petitioner  or  of  the  subject  matter  in 
controversy,  and  this  whole  proceeding  is  illegal  and  in  con- 
flict with  the  provisions  of  the  bankruptcy  law.  A  copy  of 
sa>d  response  is  filed  as  part  hereof,  marked  Exhibit  No.  17. 
Tiiereafter  the  referee  reported  to  the  District  Court  on  De- 
cember II,  1900,  in  which  report  he  declines  to  modify  his  for- 
mer rulings  and  report  and  recommends  the  dismissal  of  pe- 
titioner's appeal  to  the  District  Court  for  review.  A  copy  of 
sad  report  is  filed  herewith  as  part  hereof,  marked  Exhibit 
N'j.  18.  Thereafter,  on  December  22nd,  1900,  and  whilst 
tb's  matter  was  pending  before  the  District  Court,  the  said 
amended  or  additional  response  (Exhibit  No.  17)  was  also 
fil-d  in  said  court. 

Thereafter,  on  the  19th  day  of  January,  1901,  the  District 
C'.'urt  filed  an  opinion,  of  which  a  copy  is  filed  as  part  hereof, 
marked  Exhibit  No.  20,  sustaining  the  referee  and  dismissing 
the  petition  for  review  and  directing  proper  orders  to  be  en- 
tered to  that  end,  which  orders  were  entered  on  the  26th  day  of 
January.  1901,  and  a  copy  of  the  same  is  filed  as  part  hereof, 
marked  Exhibit  No.  21,  and  which  is  in  words  and  figures 
as  fr)]lows : 

In  the  District  Court  of  the  United  States,  Saturday,  Janu- 
ary 26th,  1901. 
In  the  matter  of 
Sinsheimer.  Lcvinson  &  Co.,  etc.. 


Simon.  Whiteson  &  Co.,  D.  G.  Simon- 
son,  I  Whiteson  &  Leo  Stern. 


In  Bankruptcy. 


■f 


1080  APPKLLATt:  .  PROCKKDINGS. 

This  cause  coming-  i>n  to  be'neard  on  the  petition  of  Leonard 
Comingor.  for  review  of  the  order  of  court  entered  herein  by 
John  B.  Baskin,  one  of  tlie  referees  of  this  court,  requiring 
Leonard  Comingor  to  i)ay  Tver  to  the  Louisville  Trust  Com- 
pany, trustee  in  bankruptcy*'  herein,  the  sums  of  $3,398.90  and 
$3,000.00  and  the  court  l/cing  fully  advised,  delivered  a  writ- 
ten opinion  which  was  filed  herein,  and  on  Jan.  19,  1901, 
and  in  pursuance  of  said  written  opinion,  it  is  considered,  or- 
dered and  decreed  by  the  court  that  said  petition  for  review 
filed  by  said  Comingor,  June,  1900,  is  refused  and  dismissed, 
to  which  said  Comingor  excepts  and  it  is  adjudged  and  or- 
dered by  the  court  that  said  Comingor  pay  to  said  Louisville 
Trust  Company,  trustee,  the  said  sums  of  $3,398.90  and 
$3,000.00  on  or  before  February  i6th.  1901,  to  all  of  which 
said  Comingor  excepts. 

Your  petitioner  further  shows  that  he  is  aggrieved  by  the 
orders  of  said  District  Court  and  injured  thereby  and  that  the 
errors  com]:)lained  of  consist : 

First.  In  said  court  holding  that  the  referee  and  said  court 
had  jurisdiction  and  power  to  proceed  against  petitioner 
Leonard  Comingor,  in  the  summary  way  had,  he  being  a 
third  party,  and  not  one  of  the  bankrupts,  in  said  court  re- 
fusing and  dismissing  said  petition  for  review  and  in  not 
sustaining  same. 

Second.  In  said  court  holding  that  it  had  jurisdiction  and 
power  upon  the  proceedings,  orders  and  recommendations  of 
the  referee  had  to  adjudge  said  Leonard  Comingor  in  con- 
tempt, and  to  punish  him  for  contempt,  or  to  order  him  to 
pay  said  money. 

Third.  In  said  court  holding  that  the  referee  had  jurisdic- 
tion and  power  to  proceed  against  said  Leonard  Comingor,  in 
said  summary  manner  had. 

Fourth.  In  said  court  holding  that  said  Leonard  Comingor 
held  said  money  for  the  bankrupts  and  could  be  proceeded 
against  in  said  summary  manner  had. 

Fifth.  In  said  court  holding  that  it  had  the  power  and  juris- 


PETITIONS    TO    REVIEW    ORDERS    IN    BANKRUPTCY.       1081 

diction  herein  to  grant  or  issre  the  injunction  against  Leonard 
Comingor. 

Sixth.  In  said  court  holding  that  said  referee  had  the  power 
or  jurisdiction  to  issue  said  show  cause  orders  or  rules  there- 
on or  to  proceed  against  said  Leonard  Comingor  in  the  man- 
ner had  upon  said  orders  issued. 

Seventh.  In  said  court  nolding  that  the  fiHng  of  said  re- 
sponses of  Leonard  Comingor  gave  said  referee  or  court  juris- 
diction or  power  to  proceed  thereon  in  any  manner  in  said 
matter,  or  in  the  manner  had. 

Eighth.  In  said  referee  and  said  court  adjudging  said  re- 
sponses and  each  of  them  insufficient. 

Ninth.  In  said  court  finding  the  facts  to  be  and  adjudging 
that  said  sums  of  money  were  the  property  of  the  bankrupts' 
estate  and  that  said  Leonard  Comingor  never  claimed  title 
to  any  of  it  nor  made  any  claim  of  right  to  it,  or  ownership 
thereof  at  any  time,  and  that  he  had  never  claimed  to  have 
converted  it  to  his  own  use,  or  to  have  claimed  it  adversely  to 
the  bankrupts  or  the  trustee  or  tlie  receiver  in  bankruptcy. 

Tenth.  In  the  court's  adjudging  that  said  money  was  not 
converted  by  Leonard  Comingor  to  his  own  use,  but  held  for 
the  benefit  of  the  trustee. 

Eleventh.  In  tlie  court's  adjudging  that  said  Leonard  Co- 
mingor was  prof)erly  before  the  court  in  said  proceedings. 

Twelfth.  In  the  court's  failing  to  dismiss  said  contempt  pro- 
ceedings against  Leonard  Comingor  and  discharging  him. 

Thirteenth.  In  the  court's  finding  as  a  fact  and  adjudging 
that  said  Leonard  Comingor  was  a  party  to  this  proceeding  in 
bankruptcy. 

Fourteenth.  In  the  court  adjudging  and  ordering  said  Leon- 
ard CV)mingnr  to  i)av  said  sums  of  mf)ney  to  the  receiver  (  who 
afterwards  became  the  trustee  in  bankrujjtcy )  in  the  summary 
manner  had,  after  ordering  said  receiver  and  trustee  to  make 
itself  a  party  to  the  state  court  proceeding  which  was  done, 
and  the  receiver  and  trustee  became  a  party  to   said  suit  in 


1082  APPELLATE    PgOCEEDINGS. 

the  state  court   and   withdrew  all    the  money   paid   into   the 
state  court  hy  said  Leonard  Comingor. 

Fifteenth.  In  the  court  holding  that  the  proceedings  herein 
against  petitioner  Comingor  are  equivalent  to  a  plenary  pro- 
ceeding against  him. 

Sixtcoifh.  In  the  court  holding  that  the  acts  and  proceed- 
ings herein  by  or  on  behalf  of  the  petitioner,  Comingor,  amount 
to  or  are  equivalent  to  or  constitute  a  consent  to  the  jurisdic- 
tion of  the  referee  in  bankruptcy  or  the  District  Court  herein, 
in  these  proceedings  against  petitioner. 

Wherefore  your  petitioner  prays  that  the  orders,  judgments 
and  decrees  of  the  District  Court  be  reviewed  and  revised 
in  the  matters  of  law  and  that  it  be  adjudged  that  said  Dis- 
trict Court  was  without  jurisdiction,  and  if  that  can  not  be 
done,  then  adjudge  that  the  summary  proceedings  herein  were 
illegal  and  void  or  if  that  can  not  be  done  then  adjudge  that 
his  responses  were  sufficient  in  law  and  he  be  discharged.  He 
prays  for  an  order  of  this  honorable  court  directing  the  Dis- 
trict Court  to  suspend  the  execution  of  its  judgment  of  Janu- 
ary 26th,  1 90 1,  and  all  further  proceedings  against  your  peti- 
tioner in  this  matter  until  the  further  order  of  this  court,  and 
he  prays  further  for  all  other  necessary  and  proper  relief  herein. 

R.  X., 
Attorney  for  Petitioner. 

State  of  Kentucky,  County  of  Jefferson,  ss. 

Petitioner,  L.  Comingor,  on  oath  states  that  the  statements 
of  the  foregoing  petition  are  true  as  he  believes. 

Leonard  Comingor. 
Subscribed  and  sworn  to  before  me  by  L.  Comingor,  this 
28th  day  of  January,  1901.     My  commission  expires  January 
6,  1904.  D.  A.  Sachs, 

Notary   Public   in   and    for  Jefferson 
County,  Kentucky. 

(i)  Taken  from  the  record  in  Louisville  Trust  Co.  vs.  Comingor,  184 
U.  S.  18. 


PETITIONS    TO    REVIEW    ORDERS    IN    BANKRUPTCY.        1083 

No.  180. 

Petition  to  a  Circuit  Court  of  Appeals  to  Review  an  Order  in 

Bankruptcy  Marshalling  Liens. 

United  States  Circuit  Court  of  Appeals 

For  the  Circuit. 

In  the  matter  of 

E.  F.,  3.  H.,  &  J.  K., 

vs.  In  Bankruptcy. 

The  A.  B.  Company,  Bankrupt. 

Petition  of  First  National  Bank  of for  Review. 

The  petition  of  the  First  National  Bank  of ,  a  creditor 

of  the  A.  B.  Company,  bankrupt  herein,  respectfully  shows 
to  this  court  that  on  the  3rd  day  of  April,  1899,  a  creditor's 
petition  was  filed  against  the  said  A.  B.  Company,  which  is  a 
corporation,  in  the  District  Court  of  the  United  States  for  the 

district  of ,  and  that  on  the  21st  day  of  April,  1899,  the 

said  A.  B.  Company  was  duly  adjudged  a  bankrupt,  and  that 

on  said  21st  day  of  April  the  District  Court  of referred 

said  estate  to  A.  M.,  referee  for  said  court,  and  that  one  of  the 
purposes  of  said  reference  was  for  said  referee  to  receive 
claim  against  said  bankrupt's  estate,  allow  or  disallow  same, 
and  to  pass  upon  secured  and  preferred  claims. 

Your  petitioner  shows  that  on  the  7th  day  of  June,  1899, 
it  filed  its  duly  verified  proof  of  claim  with  said  referee,  set- 
ting up  a  claim  against  said  bankrupt's  estate  for  seventeen 
hundred  ($1,700.00)  dollars,  said  claim  consisting  of  a  note 
for  a  like  amount,  signed  by  said  bankrupt  and  A.  B.,  and 
also  claiming  and  asserting  a  lien  upon  certain  property  of 
said  bankrupt  under  and  by  virtue  of  a  mortgage  executed 
by  said  bankrupt  to  said  A.  B.,  J.  F.  and  N.  G.  mortgagees, 
to  secure  them  or  any  of  them  from  loss  by  reason  of  their 
being  liable  as  sureties  for  debts  of  said  bankrupt  or  becom- 
ing liable  therefor  within  a  period  of  four  years  thereafter. 
The  property  conveyed  by  said  mortgage  is  as  follows : 


]()S4  AI'PKI.LATK    PUOI'KKDINC.S. 

"Lyitij;-  aticl  beino-  in  county,  of  ,  and  more  par- 
ticularly described  as  follows,  to  wit : 

[Here  describe  the  property  mart  imaged.] 
Said  mortgage  was  dated  April  15th,  1892,  was  duly  ac- 
knowledged and  recorded  October  12th,  1892,  and  the  limit  of 
indemnity  afforded  the  mortgagees  thereby  was  twenty-five 
thousand  ($25,000.00)  dollars.  A  copy  of  said  mortgage  was 
filed  with  said  proof  of  claim,  and  a  copy  thereof  is  filed  here- 
with as  a  part  hereof  marked  "Exhibit  A." 

Your  petitioner  further  shows  that  its  said  debt  was  origi- 
nally created  April  loth,  1895,  within  the  four  years'  limit 
set  out  in  said  mortgage,  and  it  claimed  and  now  claims  to 
be  substituted  and  subrogated  to  the  rights  of  said  mortgagee, 
A.  B.,  under  said  mortgage  and  that  its  said  debt  was  protected 
thereby  and  entitled  to  share  in  the  indemnity  thereof.  Your 
petitioner  also  showed  and  shows  that  its  said  debt  was  origi- 
nally for  the  sum  of  three  thousand  ($3,000)  dollars,  and 
had  been  reduced  from  time  to  time  by  partial  payments  there- 
on down  to  seventeen  hundred  ($1,700)  dollars,  and  that  this 
sum  was  due  and  unpaid,  and  is  now  due  and  unpaid,  and  the 
lien  had  not  and  has  not  been  waived,  released  nor  in  any 
wise  relinquished. 

Your  petitioner  further  shows  that  on  the  i8th  day  of  No- 
vember, 1899,  said  referee  passed  upon  its  said  claim,  and  al- 
lowed it  only  as  a  general  or  unsecured  claim  against  said  bank- 
rupt's estate,  and  refused  to  allow  the  same  as  secured  or  en- 
titled to  any  lien  under  said  mortgage  dated  April  15th,  1892, 
or  the  rights  of  the  said  mortgagee,  A.  B.,  therein.  A  copy 
of  the  order  of  said  referee  upon  the  claim  is  filed  herewith  as 
a  part  hereof,  marked  "Exhibit  B." 

Your  petitioner  shows  that  thereafter  on  the  24th  day  of 
November,  1899,  it  filed  its  petition  for  review  with  said  ref- 
eree, setting  out  the  error  complained  of,  and  that  the  referee 
forthwith  certify  to  the  judge  of  the  District  Court  the  ques- 
tion presented,  a  summary  of  the  evidence  relative  thereto  and 
the  finding  and  order  of  the  referee  thereon.     Whereupon  said 


PETITIONS    TO    REVIEW    ORDERS    I.\     BANKRUPTCY.       1085 

reteree  certified  to  said  judg-e  the  question  presented,  a  sum- 
mary of  the  evidence  relating  thereto,  the  finding  and  the 
order  thereon.  A  copy  of  said  order  of  the  referee  is  filed  here- 
with as  a  part  hereof  marked  "Exhibit  C." 

Your  petitioner  further  shows  that  thereafter,  on  the  ist 
day  of  December,  1899,  the  judge  of  the  said  District  Court 
in  reviewing  the  findings  and  orders  of  the  referee  on  said 
questions,  held  that  said  debt  was  only  a  common  or  unsecured 
claim  against  said  bankrupt's  estate  and  not  protected  nor  se- 
cured by  the  mortgage  of  April  15th,  1892,  but  said  District 
Court  allowed  as  a  prior  and  secured  claim  a  debt  of  twenty- 
five  thousand  ($25,000)  dollars  due  to  the  Third  National 
Bank  by  said  bankrupt,  giving  to  said  bank  the  entire  indemni- 
ty afforded  by  said  mortgage  of  April  15th,  1892.  and  adjudg- 
ing to  said  bank  a  lien  for  the  entire  sum  of  twenty-five 
thousand  ($25,000)  dollars.  A  copy  of  the  order  of  the  said 
District  Judge  is  filed  herewith  as  a  part  hereof  marked  "Ex- 
hibit D." 

Your  petitioner  further  shows  that  the  question  of  law  de- 
cided by  the  District  Court  was,  that  under  the  provisions  and 
construction  of  the  mortgage  of  April  15th,  1892,  your  peti- 
tioner was  not  entitled  to  any  share  or  pro  rata  in  the  indem- 
nity of  said  mortgage,  or  to  be  substituted  to  the  rights  of  the 
mortgagee,  A.  B.,  thereunder,  but  that  the  Third  National  Bank 
was  entitled  to  and  should  receive  all  of  said  indemnity,  and 
be  adjudged  a  lien  for  the  entire  sum  of  twenty-five  thousand 
($25,000)  dollars. 

Your  petitioner  further  shows  that  at  the  time  the  District 
Court  made  the  order  complained  of  herein  there  was  only 
twenty-two  thousand  ($22,000)  dollars  of  indebtedness  of 
said  bankrui)t  due  said  Third  National  Bank  which  was  in 
existence  at  the  execution  of  the  mortgage,  or  was  created 
within  four  years  thereafter,  and  that  the  balance  of  said  twen- 
ty-five thousand  ($25,000)  dollars,  to  wit,  three  thousand 
($3,000)  dollars,  was  not  created  until  more  than  four  years 


lOSG  APrELLATE    PROCEEDINGS. 

after  the  execution  of  said  mortgage,  and  said  three  thousand 
($3,000)  dollars  was  not  and  is  not  secured  thereunder. 

Your  petitioner  further  shows  that  it  is  aggrieved  by  the 
orders  of  the  said  District  Court,  and  injured  thereby,  and  that 
the  error  complained  of  consists: 

First.  That  said  District  Court  did  not  allow  and  refused 
to  adjudge  your  petitioner  a  lien  for  its  said  debt  upon  the 
property  of  said  bankrupt's  estate  under  and  by  virtue  of  the 
provisions  of  the  mortgage  of  April  15th,  1892,  and  the 
rights  of  mortgagee,  A.  B.,  thereunder,  upon  the  property  of 
the  bankrupt  described  therein,  and  refused  to  subrogate  your 
petitioner  to  said  mortgagee's  rights. 

Second.  That  said  District  Court  did  not  allow,  and  re- 
fused to  adjudge  your  petitioner  its  pro  rata  share  upon  its  said 
debt  of  the  indemnity  afforded  the  mortgagees  in  the  mort- 
gage of  April  15th,  1892. 

Third.  That  said  District  Court  allowed  and  adjudged  to 
the  Third  National  Bank  the  full  amount  of  indemnity  af- 
forded the  mortgagees  in  the  mortgage  of  April  15th,  1892, 
to  secure  a  debt  of  twenty-five  thousand  ($25,000)  dollars, 
when  your  petitioner  shows  that  three  thousand  ($3,000)  dol- 
lars thereof  was  not  and  is  not  secured  by  said  mortgage. 

Fourth.  That  said  District  Court  adjudged  that  the  entire 
security  of  said  mortgage  redounded  to  the  benefit  of  said 
Third  National  Bank,  when  the  debt  of  said  bank  is  not  spe- 
cifically provided  for  therein,  nor  does  said  mortgage  show 
said  bank  is  entitled  to  any  priority  or  security  superior  to  your 
petitioner. 

Your  petitioner  shows  that  under  the  provisions  of  the  mort- 
gage of  April  15th,  1892,  and  under  the  rules  of  equity  and 
the  law  of  substitution  and  subrogation,  and  under  section  64, 
b.  5,  chapter  7,  of  the  Bankruptcy  Act  of  1898,  your  peti- 
tioner is  entitled  to  all  the  rights  of  said  mortgagee,  A.  B.,  to 
the  extent  of  its  said  debt,  and  that  thereunder  your  petitioner 
has  a  lien  upon  the  property  in  said  mortgage  described  to  se- 
cure its  said  debt,  inferior  only  to  that  of  the  S.  Trust  Com- 


PETITIONS    TO    REVIEW    ORDERS    IN    BANKRUPTCY.       1087 

pany,  trustee,  and  Mrs.  Anna  Mueller,  and  of  equal  dignity 
to  the  lien  of  the  Third  National  Bank,  and  that  it  was  the 
duty  of  the  District  Court  to  so  hold. 

Your  petitioner  asks  for  an  early  hearing  of  this  matter, 
and  that  the  same  may  be  presented  upon  the  petition  and  ex- 
hibits filed  herewith,  or  if  your  honors  so  direct,  upon  the  orig- 
inal pleadings,  proofs,  evidence  and  proceedings  now  on  file  in 
the  office  of  the  clerk  of  the  United  States  District  Court,  where 
said  proceedings  were  had. 

Wherefore,  your  i>etitioiier  prays  that  the  order  of  the  said 
District  Court  may  be  reviewed  and  revised  in  matters  of  law 
so  as  to  adjudge  your  petitioner  a  lien  for  its  said  debt  under 
the  mortgage  of  April  15th,  1892,  and  the  rights  of  mortgagee, 
A.  B.,  thereunder  for  its  costs  herein,  and  all  proper  and  equita- 
ble relief.  R.  X., 

[VeriHcation.l  Attorney  for  Petitioner. 

Taken  from  the  record  in  Courier-Journal  Job  Printing  Co.  vs.  Schaeffer- 
Meyer  Brewing  Co.,  loi  Fed.  Rep.  699;  41  C.  C.  A.  614. 


No.  181. 

Petition  to  a  Circuit  Court  of  Appeals  to  Review  an  Order  in 
Bankruptcy  under  Sec.  dji. 

The  United  States  Circuit  Court  of  Appeals 

For  the Circuit: 

In  the  matter  of  A.  B..   )    ^    _     , 

Bankrupt,  (    In  Bankruptcy. 

Your  petitioner.  T.  A.,  conies  and  shows  to  the  Honorable 
Court,  that  on  September  10,  1900,  A.  B.  was  adjudged  a 
bankrupt  in  the  District  Court  of  the  United  States  for  the 

Division  of  the District  of ,  and  that  on  the 

22nd  day  of  the  same  month  your  petitioner  was  duly  appoint- 
ed trustee  of  the  estate  of  said  bankrupt,  and  having  qualified 


1088  Al'l'liLLATK    I'KOCKKDINC.S. 

as  such,  has  since  been,  and  is  nt)\v,  in  tlie  discharge  of  the  du- 
ties of  said  trust. 

At  the  time  of  fiHng  his  petition  in  bankruptcy,  the  said 

A.  B.  was  the  owner  of  a  stock  of  inerchandise  in county, 

.  which  he  had  acquired  about  two  months  previous,  and 

which  constituted  all  his  available  assets.  In  October,  1893, 
C.    Bros,    obtained   judgment   against   him    in   the   Supreme 

Court  at ,  for  $ and  cost  of  suit.     An  alias  execution 

was  issued  on  this  judgment  by  the  clerk  of  the  Supreme  Court 
on  September  6,  1900,  tested  the  first  day  of  the  preceding 
term,  to  wit,  the  second  Monday  in  September,  1899,  which 

came  to  the  hands  of  the  sheriff  of  county,  ,  the 

next  day,  and  was  by  him,  on  September  8,  1900,  levied  on 
said  stock  of  merchandise.  This  with  the  levy  of  another 
execution,  precipitated  the  bankruptcy  of  A.  B.,  who  filed  his 
petition  the  same  day,  but  a  few  hours  later.  He  was  insolvent 
when  the  levy  was  made,  and  had  been  more  than  four  months 
prior  thereto. 

Under  the  orders  of  the  bankrupt  court  said  stock  of  goods 
was  turned  over  to  petitioner  as  trustee,  who  converted  the 
same  into  cash.  The  proceeds  were  enough  to  pay  said  judg- 
ment and  cost,  but  insufficient  to  pay  all  the  creditors  of  said 
bankrupt. 

The  said  judgment  creditors  asserted  a  prior  claim  to  the 
proceeds  of  said  stock  of  goods,  claiming  a  lien  thereon  by 
virtue  of  the  levy  of  said  execution  as  of  the  date  of  the  teste 
of  the  execution,  which  your  petitioner  denied,  insisting  the 
levy  and  whatever  lien  the  creditors  obtained  by  said  levy,  was 
avoided  by  the  subsequent  bankrupt  proceedings  had  within 
four  months  next  after  the  levy.  The  referee  refused  to  allow 
the  judgment  creditors  priority,  sustaining  the  contention  of 
the  trustee,  but  his  action  was  overruled  by  said  district 
judge,  who  sustained  the  contention  of  the  said  judgment  cred- 
itors, and  ordered  the  payment  of  their  judgment,  interest  and 
cost  in  full. 

Your  petitioner  excepted  to  the  said  action  and  judgment 


PETITIONS    TO    REVIEW    ORDERS    IN    BANKRUPTCY.       1089 

of  said  district  judge,  and  the  said  creditors  and  petitioner 
filed  in  said  court  a  condensed  and  agreed  statements  of  facts 
and  the  record  in  the  cause,  and  a  duly  certified  copy  of  the 
same  is  filed  herewith  as  Exhibit  No.  i,  with  the  prayer  that 
it  be  made  part  of  this  petition. 

Your  petitioner  shows  that  the  levy  and  lien  created  by  the 
levy  of  said  execution,  was  avoided  by  the  subsequent  bank- 
ruptcy proceedings,  under  section  67/  of  the  B.  A.  of  1898, 
making  null  and  void  all  levies,  judgments,  attachments  or  oth- 
er liens,  obtained  against  an  insolvent  person  at  any  time  within 
four  months  prior  to  filing  a  petition  in  bankruptcy,  and  the 
said  trustee  is  aggrieved  by  the  action  and  judgment  of  said 
district  judge  in  refusing  to  avoid  the  levy  of  said  execution 
and.  discharge  the  lien  created  thereby,  thus  defeating  the  law- 
ful application  of  the  section  referred  to.  and  preventing  a 
ratable  distribution  of  the  estate  of  said  bankrupt  amongst  all 
his  creditors. 

The  trustee  therefore  prays  that  he  be  allovved  to  file  this, 
his  petition  for  a  review  of  the  action  of  said  district  judge, 
and  that  said  judgment  be  reviewed,  revised  and  reversed,  and 
that  petitioner  be  allowed  and  directed  to  make  a  ratable  distri- 
bution of  the  estate  of  said  bankrupt  amongst  all  his  creditors, 
and  he  will  ever  so  pray.  T.  A..  Trustee. 

R.  Y.,  Attorney. 

State  of , 

County  of ,  ss. 

Personally  appeared  before  me,  the  undersigned  authority, 
T.  A.,  and  makes  oath  in  due  form  of  law.  that  he  is  the  trus- 
tee in  the  foregoing  matter,  and  is  familiar  with  all  the  facts  set 
out  in  the  foregoing  petition,  and  that  the  same  are  true  to 
the  best  of  his  knowledge  and  belief.  T.  A., 
Sworn  to  and  subscribed  before  me.  this day  of . 

\SeaI.^  '     J.  N.. 

Notary  Public  in  and  for , 

County . 

(^)   Taken  from  the  record  in  re  Darwin,  Petitioner,  117  Fed.  Rep.  407. 


101)0 


APPEIXATE    TROCEEDINGS. 


MISCELLANEOUS  ENTRIES,  ORDERS,  ETC. 

No.  182. 

Stipulation  Reducing  Record. 

The  District  Court  of  the  United  States,  for  the 

District  of . 

A.  B.,  Plaintiff, 

vs. 
C.  D.,  Defendant. 

In  the  above-entitled  case,  it  is  hereby  stipulated  by  the 
solicitors  for  the  parties  thereto  that  if  an  appeal  be  taken, 
the  clerk,  in  making  a  transcript  of  the  record  may  omit 
therefrom  the  following  papers  and  records,  to  wit,  [here  xet 
forth  the  papers  and  records  by  name  which  are  to  be  omitted^ 
and  that  an  order  may  be  entered  if  the  same  to  the  court 
shall  seem  proper,  in  accordance  with  this  stipulation. 
Dated  —— ,  [  To  be  signed  by  all  the  solicitors^ 

(i)  Unless  a  stipulation  or  prcecipc  is  filed  with  the  clerk,  designating 
what  parts  of  the  record  are  to  be  included  in  making  a  transcript,  it  is  his 
duty  to  send  up  the  whole  record  in  the  strict  sense  of  the  word,  made  as 
directed  by  R.  S.  sec.  750.  Keene  vs.  Whitaker,  13  Pet.  459;  Curtis  vs. 
Petitpain,  18  How.  109;  West  vs.  East  Coast  Cedar  Co.,  113  Fed.  Rep.  7xr; 
Meyer  vs.  Mansur  &  Tebbetts  Imp.  Co.,  85  Fed.  Rep.  874;  29  C.  C.  A. 
465 ;  R.  R.  Co.  vs.  Schutte,  100  U.  S.  644 ;  Cunningham  vs.  German  I«s. 
Bank,  103  Fed.  Rep.  932;  Nashua  &  Lowell  Corp.  vs.  Boston  &  Lowell 
Corp.,  61  Fed.  Rep.  237  (244),  9  C  C.  A.  468. 

If  the  record  is  too  meager  the  Appellate  Court,  upon  proper  application, 
settles  it  by  a  certiorari.  Rcdfield  vs.  Parks,  130  U.  S.  625,  9  Sup.  Ct.  642, 
32  L.  Ed.  1053;  Hoskin  vs.  Fisher,  125  U.  S.  217.  8  Sup.  Ct.  834,  31  L.  Ed. 
759.  If  it  contain  unnecessary  matter,  the  Appellate  Court  can  rectify  this 
\n  fixing  the  costs  of  the  case. 

In  case  the  clerk  is  requested  by  one  party  to  include  a  paper  in  the 


MISCELLANEOUS    ORDERS,    ETC.  1091 

transcript  and  is  requested  bj^  the  other  party  to  leave  out  the  same  paper, 
he  may  apply  to  the  judge  for  instruction.     Hoe  vs.  Kahler,  27  Fed.  Rep. 

145- 

The  clerk  should  not  transmit  original  papers  e.xcept  for  the  purpose  of 
inspection.     Smith  vs.  Craig,  100  U.  S.  226. 


No.  183. 

Praecipe    Designating    Parts    of   Record   to    be    Included   in 
Transcript  of  Appeal  or  Writ  of  Error  (i). 

The  District  Court  of  the  United  States 

For  the District  of . 

A.  B., 
vs. 
CD. 
To  the  Clerk : 

You  are  requested  to  take  a  transcript  of  record  to  be  filed 
in  the  United  States  Circuit  Court  of  Appeals  for  the Cir- 
cuit, pursuant  to  an  appeal  [or  writ  of  error]  allowed  in  the 
above  entitled  cause  and  to  include  in  such  transcript  of  record 
thie  following  and  no  other  papers  or  exhibits,  to  wit : 

[Here  specif  v  by  name  each  paper  desired  to  be  included  in 
thi'  transcript.']  Respectfully, 

X.  &  X., 
Attorneys  for  Appellant  [or  Plaintiff  in  Error.] 

(l)  The  certificate  of  the  clerk  should  show  that  the  transcript  of  record 
was  made  in  accordance  with  pracipe  of  the  party  removing  the  case,  desig- 
nating the  papers  to  be  included.  See  Meyer  vs.  Mansur  &  Tebbetts  Imp. 
Co.,  85  Fed.  Rep.  874,  29  C.  C.  A.  465  ;  Nashua  &  Lowell  Corp.  vs.  Boston 
&  Lowell  Corp.,  61  Fed.  Rep.  237  (244),  9  C.  C  A.  468;  Cunningham  vs. 
German  Ins.  Bank,  103  Fed.  Rep.  932;  R.  R.  Co.  vs.  Schutte,  100  U.  S.  644; 
West  vs.  East  Coast  Cedar  Co.,  113  Fed.  Rep.  72,7. 

It  is  proper,  but  not  necessary,  for  counsel  to  submit  prcrcipe  to  adverse 
counsel  before  the  tran.script  is  made.  In  case  the  clerk  is  requested  by  one 
party  to  include  a  paper  in  the  transcript  and  is  requested  by  the  other 
party  to  leave  out  the  same  paper,  he  may  apply  to  the  judge  for  instruc- 
tion.    Hoe  vs.  Kahler,  27  Fed.  Rep.  145. 

The  clerk  should  not  transn'it  original  papers  except  for  the  purpose  of 
inspection.     Smith  vs.  Craig,  100  U.  S.  226. 


1002  APPELLATK    PROCEEDINGS. 

No.  184. 
Praecipe  for  Transcript  in  Bankruptcy   (i). 

[Caption.] 
To  Clerk  : 

Please  make  tranecript  of  following  named  papers  in  the 
above  entitled  matter : 

I'irst.  Claim  of  The  E.  F.  Company. 

Second.  Petition  of  trustee  to  expunge  said  claim. 

Third.  Waiver  of  the  E.  F.  Company  as  to  the  filing  and 
date  of  hearing  of  said  petition. 

Fourth.  Proceedings  before  referee  in  the  claim  of  the  E. 
F.  Grocery  Company. 

Fifth.  Petition  of  The  E.  F.  Co.  in  review  of  referee's  opin- 
ion and  order  expunging  its  claim. 

Sixth.  Opinion  of  District  Judge.  Hon.  A.  C. 

Seventh.  Decree  filed  March  28,  1902. 

Eighth.   Petition  on  appeal. 

Ninth.  Assignment  of  errors. 

Tenth.  Allowance  of  appeal. 

Eleventh.  Citation  and  service  of  same. 

Tzvelfth.  Motion  of  the  E.  F.  Co.  to  correct  entry  of  March 
28th,  1902. 

Thirteenth.  Entry  overruling  same. 

Fourteenth.  Praecipe  for  transcript. 

Fifteenth.     Certificate. 

And  file  said  transcript  with  clerk  of  the  United  States  Cir- 
cuit Court  of  Appeals  for  the  Circuit. 

B.  Y., 
Trustee  in  Bankruptcy. 

Dated . 

(i)  As  to  this  practice  see  Cunningham  vs.  German  Ins.  Bank,  103  Fed. 
Rep.  932. 


MISCELLANEOUS    ORDERS,    ETC.  1093 

No.  185. 

Order  that  Defendant  Deliver  to  Clerk  Exhibit  to  be  Trans- 
mitted with  the  Transcript  to  the  Court  of  Appeals  (i). 

[Caption  in  Trial  Court. 1 

This  matter  coming'  on  to  be  heard  upon  the  motion  of  com- 
plainant, therefor,  after  hearing  counsel,  on  motion  of  R.  X., 
Esq.,  solicitor  and  of  counsel  for  complainant,  it  is  ordered 
that  the  defendants  in  this  cause,  produce  and  deliver  to  the 
clerk  of  this  court,  the  original  trust  deed  marked  "Exhibit 
I,"  which  was  produced  and  offered  in  evidence  at  the  taking 
of  proofs  and  hearing  of  said  cause ;  and  that  the  same  be  trans- 
mitted by  the  clerk  of  this  court  with  the  record  of  this  case 
on  appeal  to  the  Circuit  Court  of  Appeals,  for  inspection  at  the 
hearing  and  determination  of  said  cause,  and  that  the  same 
be  returned  to  defendants  forthwith  after  said  hearing. 

(i;  R.  S.  sec.  698.  Original  papers  can  be  transmitted  to  Appellate 
Court  only  for  inspection  and  not  in  lieu  of  a  transcript  of  them.  Smith 
vs.  Craig,  100  U.  S.  226. 


No.  186. 

Order  to  send  Exhibits  to  a  Circuit  Court  of  Appeals  with 

Transcript. 

[Caption.^ 

On  motion  of  Messrs.  X.  &  X.,  solicitors  for  complainant,  it 
is 

Ordered  that  in  addition  to  the  transcript  of  the  record  on 
appeal  in  this  suit  that  the  clerk  of  this  court  transmit  to  the 
clerk  of  the  United  States  Circuit  Court  of  Appeals  for  the 

Circuit  at  ,  the  following  original  exhibits  in  this 

suit  to  he  bv  him  safely  ke])t  and  returned  to  this  ccnirt  upoti 
the  final  determination  of  the  appeal  in  this  suit  in  said  Court 
of  Appeals,  viz. : 

\flcrc  iun)U'  exhibits  to  be  traiisiiiittcd.] 


10P4  Ari'KLLATK     I'lJOi  1:1:1)1  N(iS. 

No.  187. 
Order  to  Send  Exhibits  to  Circuit  Court  of  Appeals. 

[Caption  iii  District  Court. 

It  is  onlnrd  by  llic  coiii'l  thai  all  original  exhibits  produced 
or  used  at  tlu'  lu-aring  of  the  motion  for  a  preliminary  injunc- 
tion in  the  District  Court  be  forwarded  to  the  clerk  of  the  United 

States  Circuit  Court  of  Appeals  for  the  Circuit  at  , 

to  be  used  on  the  hearing  of  said  cause  in  said  Court  of 
Appeals. 


No.  188. 

Stipulation  that  Printed  Record  May  be  Certified  as 
Transcript 

The  District  Court  of  the  United  States 

For  the District  of Division — In  Equity. 

The  A.  B.  Company,  Complainant, 

vs. 
C.  D.  and  E.  R, 
Doing  Business  as  the  C.  D.  Company,  Defendants. 

In  the  above  entitled  cause  it  is  stipulated  that  the  forego- 
ing- printed  volume  may  be,  by  the  clerk  of  the  District  Court, 
returned  to  the  Circuit  Court  of  Appeals  as  and  for  the  tran- 
script upon  the  appeal  in  this  cause. 

Dated  .  X.  &  X., 

Solicitors  for  Complainant. 
R.  Y., 
Solicitor  for  Defendants. 


MISCELLANEOUS    ORDERS,    ETC.  1095 

No.  189. 

Stipulation  to  use   Printed   Records  on  a   Former   Writ  of 

Error. 

[Caption.] 

It  is  agreed  by  counsel  for  both  sides  that  this  case  was  heard 
on  being  remanded  to  the  record  on  which  it  was  heard  in  this 
court  on  the  former  appeal  by  the  A.  B.  Company,  with  the  ad- 
dition of  certain  letters  now  shown  in  the  transcript  as  writ- 
ten by  Harrison  &  Dortch,  agents  of  said  company,  to  the 
said  company  and  its  special  agerit,  Kimball,  from  December 
6th,  1896,  to  January  5th,  or  6th,  1897;  and  it  has  heretofore 
been  agreed,  and  is  agreed,  that  the  printed  record  in  this  court 
may  be  used  upon  this  appeal,  up  to  the  action  of  the  court  in 
taking  the  case  from  the  jury  on  the  completion  of  the  hear- 
ing, and  that  the  said  letters,  the  said  action  of  the  court,  and 
the  exceptions  filed  to  such  action  only  need  to  be  printed  upon 
this  pppeal ;  the  record  in  this  case  on  this  appeal  is  the  same 
as  the  record  on  the  former  appeal,  with  the  exception  of  said 
letters  introduced  as  evidence  below,  the  said  action  of  the 
court,  and  the  exceptions  made  thereto  by  the  plaintiffs  be- 
low. R.  X., 

Attorney  for  Appellant. 
R.  Y., 
For  Appellees. 


No.  190. 

Order  Extending  Time  Within  Which  to  File  Record  in  Ap- 
pellate Court   (i). 

[Caption.] 

For  satisfactory  reasons  ap])earing  to  the  court  the  time  for 
filing  the  record  in  this  cause  in  the  Circuit  Court  of  .\i)peals, 

pursuant  to  the  appeal  sued  out,  is  extended  until  the  

day  of . 

(i)   This  order  should  he  filed  in  trial  court  and  sent  to  Appellate  Court 


ll);)(;  APPELLATK    I'KOCKEDINGS. 

No.  191. 

Appearance  of   U.  S.  in  Circuit  Court  of  Appeals  Without 

Citation. 

United  States  Circuit  Court  of  Appeals 

For  the Circuit. 

A.  B..  ct  al.,  Appellants,  1 

vs.  I  ^     

The  United  States  of  America,  Appellee.    J 

The  United  States  come  into  court  and  say  that  there  is 
no  error  either  in  the  record  or  proceedings,  or  in  the  giving  of 
the  judgment  aforesaid,  and  pray  that  the  said  Circuit  Court 
of  Appeals  may  proceed  to  examine  as  well  the  record  and  pro- 
ceedings aforesaid  as  the  matters  aforesaid  above  assigned  for 
error,  and  that  the  judgment  aforesaid,  in  form  aforesaid 
given,  may  be  in  all  things  afifirmed.  H.  C, 

United  States  Attorney 
For  the  United  States,  Appellees. 


No.  192. 
Motion  to  Dispense  with  Printing  Record   (i). 

[Caption.  ] 

Now  comes  the  appellant  \or  plaintiff  in  error]  and  moves 
the  court  for  leave  to  prosecute  his  appeal  [or  writ  of  error]  in 
this  court  without  printing  the  record  in  accordance  with  the 
rules  of  this  court. 

R.  X., 
Attorney  for  Appellant. 

(i)  It  has  been  the  practice  in  the  Circuit  Courts  of  Appeals  to  permit 
a  writ  of  error  to  be  prosecuted  in  forma  pauperis,  as  provided  by  the  Act 
of  Congress  of  July  20,  1892,  27  Stat,  at  L.  252 ;  Volk  vs.  Sturtevant  Co., 
99  Fed.  Rep.  532,  39  C.  C.  A.  647;  Wickelman  vs.  A.  B.  Dick  Co.,  85  Fed. 
Rep.  851,  29  C.  C.  A.  436;  Reed  vs.  Pennsylvania  Co.,  in  Fed.  Rep.  714,  49 
C.  C.  A.  572.  But  see  in  re  Presto,  93  Fed.  Rep.  522.  35  C.  C.  .^.  394  The 
Supreme  Court  in  Callaway  vs.  Fort  Worth  Bank,  186  U.  S.  177,  held  that 


MISCELLANEOUS    ORDERS.    ETC.  1097 

a  writ  of  error  could  not  be  prosecuted,  without  giving  bond  as  required 
by  R.  S.  sec.  looo,  under  the  Act  of  Congress  of  July  20,  1892,  supra.  The 
effect  of  this  ruling  is  that  the  security  for  costs  and  deposit  for  costs  in 
the  Appellate  Court  are  not  affected  by  the  Act  of  July  20,  1892.  Whether 
printing  the  record  may  be  dispensed  with  is  Still  left  to  the  discretion  of 
the  Appellate  Court,  because  the  printing  is  done  under  a  rule  of  court  and 
not  under  an  act  of  Congress.  It  is  clear,  however,  that  a  poor  person 
cannot  claim  it  as  a  matter  of  right  under  the  statute  above  referred  to. 


No.  193. 
Order  to  Dispense  with  Printing  Record  (i). 

[Caption.] 

Upon  motion  of  the  appellant  [or  plaintiff  in  error]   it  is 
hereby  ordered  that  the  printing  of  the  record  in  this  court  be 
dispensed  with  and  no  deposit  made  therefor, 
(i)   See  Form  No.  192. 


No.  194. 

Order  Granting  Leave  to  use  Printed  Records  in  Making  up 
Record  in  an  Appellate   Court. 

[Caption.l 

Upon  the  application  of  the  appellant  [or  plaintiff  in  error] 
it  is  hereby  ordered  that  the  clerk  of  this  court  may  use  the 
records  printed  in  the  court  below  in  making  the  record  in 
this  court  upon  the  payment  of  the  usual  supervision  fee. 


No.  195. 

Stipulation  to  Omit  Parts  of  Record  in  Printing. 

The  United  States  Circuit  Court  of  Appeals  for  the Dis- 
trict. 
A.  B.,  Appellant. 

vs.  IXo. . 

C.  D..  Appellee. 

In  the  above  cause  it  is  mutually  agreed  between  the  parties, 
signing  this  stipulation  that  the  transcrijjt  of  the  record  •?ent 


l(n)8  Al'I'ELLATE  PROCEEDINGS. 

.Up  by  the  clerk  of  the  Circuit  Court  of  the  United  States  for  the 
western  division  of  the  western  district  of  Tennessee,  at 
Memphis,  shall  be  printed  as  sent  up,  except  that  the  following 
portions  thereof  may  be  omitted  : 

The  pages  referred  to  are  the  manuscript  pages  of  the 
record : 

First.  Subpoena  in  Chancery,  p.  53. 

Second.  Marshal's  service  of  same,  p.  54. 

Third.  Order  of  continuance,  p.  72. 

Fourth.  Order  of  continuance,  p.  78. 

Fifth.  Notice  of  taking  depositions,  p.  80. 

Si.x'th.  Order  of  continuance,  p.  82. 

Sn.'€nth.  Order  showing  plaintiff's  motion  to  remand,   p. 

234- 

Eighth.   Opinion  of  Hammond.  Judge,  pp.  235-238. 

Ninth.  Order  of  court  denying  motion  to  remand,  p.  239. 

Tenth.  Order  setting  demurrer  for  hearing,  p.  342. 

Eleventh.  Order  setting  demurrer  for  hearing,  p.  343. 

Tivelfth.  Order  setting  demurrer  for  hearing,  p.  344. 

Thirteenth.   Order  setting  demurrer  for  hearing,  p.  345. 

Fourteenth.  Order  setting  demurrer  for  hearing,  p.  346. 

Fifteenth.  Oder  of  continuance,  p.  457. 

Sixteenth.   Notice  for  taking  de|XDsitions,  p.  478. 

Seventeenth.  Order  of  continuance,  p.  480. 

Eighteenth.  Transcript  of  Record  in  National  Revere  Bank 
vs.  Potter  and  others,  pp.  481-499. 

Nineteenth.  Subpoena  to  answer  Cross  Bill,  p.  546. 

Twentieth.  Marshal's  return  of  service,  p.  547. 

Twenty-first.  Exhibit  "  A  "  to  Vogel's  deposition,  debts  due 
to  Hill  Shoe  Company,  pp.  671-693. 

Twenty-second.  Exhibit  "  B  "  to  Vogel's  deposition,  debts 
due  by  Hill  Shoe  Company,  and  dividends  paid,  pp.  694-703. 

Tiventy-third.  Exhibit  "  B  "  to  C.  W.  Edmonds'  deposition 
being  assignment  of  Mary  T.  Hill  to  Edmonds,  provided  page 
of  the  record  where  the  assignment  is  previously  copied  is  re- 
ferred to  in  this  connection.    Record,  pp.  756-760. 


MISCELLANEOUS    ORDERS.    ETC.  1099 

Twenty-fourth.  Petition  of  National  City  Bank  of  New 
York,  pp.  1035- 1036. 

Twenty-fifth.  Deposition  of  W.  A.  Wheatley,  pp.  1094- 
1103. 

Twenty-sixth.  Deposition  of  S.  L.  Moore,  pp.  11 26-1 127. 
Twenty-seventh.  Order  of  continuance,  p.  1143. 
Twenty-eighth.  Order  of  continaunce,  p.  1309. 
Twenty-ninth.  This  stipulation. 

But  the  appellees  reserve  the  right  to  insist  hereafter,  if  ma- 
terial or  necessary,  that  many  parts  of  the  record  are  designated 
to  be  printed  by  the  appellants,  and  agreed  to  by  them  for  that 
reason,  which  are  not  required  for  the  purpose  of  the  appeal. 

Dated  . 

X.  &  X. 
For  Appellants. 

Y.  &  Y. 
For  Appellees. 


No.  196. 

Writ   of   Certiorari  for  Diminution  of  Record.  ^ 

United  States  Circuit  Court  of  Appeals,  for  the  Circuit. 

United  States  of  America,  Judicial  Circuit,  ss. : 

The  President  of  the  United  States  of  xVnierica  to  the  Honor- 
able Judfj;e  of  the  District  Court  of  the  United  States  for  the 
District  of : 


JlOO  MISCKLLANEOLS    HKDEKS,    KTC. 

Whereas,  there  is  now  pending  before  ns  a  suit  in  which 
S.  M.,  receiver  of  the  A.  B.  Railway  Company,  and  the  Mer- 
chantile  Trust  Company  are  appellants,  and  C.  D.,  guardian  of 
E.  F.,  and  R.  II..  guardian  of  G.  IL.  are  appellees,  which  suit 
was  removed  into  this  court  by  virtue  of  an  ai>peal  from  the 

District   Court    of   the    United    States    for    the   district 

of ;  and,  whereas,  it  has  been  suggested  to  this  court  that 

there  is  a  diminution  of  the  record  in  said  cause  because  the 
transcript  of  record  in  this  court  does  not  contain  certain  rec- 
ord [  here  )iaiiie  the  papers  claimed  to  be  omitted  from  the 
transcript^,  which  were  introduced  in  evidence  as  alleged. 

We  being  willing  that  said  omission  or  defect,  if  any,  may  be 
corrected,  herewith  return  such  transcript  and  do  command 
that  under  your  seal,  distinctly  and  openly  you  send  the  rec- 
ord and  ])roceedings,  with  all  things  concerning  the  same,  as 
fully  and  entirely  as  they  remain  of  record  in  said  District  Court 
of  the  United  States  to  the  United  States  Circuit  Court  of 
Appeals  for  the circuit,  together  with  this  writ  forthwith. 

Witness  the  Honorable  Melville  W.  Fuller,  chief  justice  of 

the  United  States,  this day  of ,  in  the  year  of  our 

Lord  one  thousand  nine  hundred  and  ,  and  of  the  inde- 
pendence of  the  United  States  the  one  himdred  and  twenty- 

ISeal.']  F.  L., 

Clerk  of  the  United  States  Circuit  Court 
of  Appeals  for  the Circuit. 

(i)  The  Supreme  Court  is  authorized  by  sec.  716  to  issue  writs  of  cer- 
tiorari, {ex  parte  Vallandingham,  i  Wall.  243,  249,)  to  supply  imperfections 
in  a  record  of  a  case  already  before  it ;  and,  not  like  a  writ  of  error,  to  re- 
view the  judgment  of  an  inferior  court.  Luxton  vs.  North  River  Bridge 
Co.,  147  U.  S.  ay,  U.  S.  vs.  Young,  94  U.  S.  258;  ex  parte  Gordon,  i  Black 
503;  Beach  Mod.  Eq.  Prac,  sec.  963.  See  also  ex  parte  Hitz,  iii  U.  S.  766. 
The  Court  of  Appeals  act  did  not  affect  this  power.  Am.  Construe.  Co. 
vs.  Jacksonville  Ry.  Co.,  148  U.  S.  380;  Sup.  Ct.  Rule  14. 

The  Circuit  Courts  of  Appeals  are  vested  by  the  act  creating  them  with 
power  to  grant  writs  of  certiorari.  Act  of  March  3,  1891,  sec.  12,  26  Stat, 
at  L.  826;  Rule  18,  C.  C.  A.;  Merrill  vs.  Floyd,  2  C.  C  A.  58,  50  Fed.  Rep. 
849;  Blanks  vs.  Klein,  I  C.  C.  A.  254,  49  Fed.  Rep.  i ;  Randolph  vs.  Allen, 


MISCELT.AXEOUS    ORDERS,    ETC.  1101 

19  C.  C.  A.  353,  "72,  Fed.  Rep.  23 ;  Burnham  vs.  Ry.  Co.,  30  C.  C.  A.  594,  87 
Fed.  Rep.  168;  Dow  vs.  U.  S.  27,  C.  C.  A.  42,  81  Fed.  Rep.  1004. 

The  application  for  writ  of  certiorari  to  supply  an  omission  or  cure  a 
defect  in  a  record  should  be  made  to  the  court  in  which  the  case  is  peiwl- 
ing.  It  is  usually  made  by  petition,  entitled  in  the  court  and  cause  and 
addressed  to  the  court.  It  should  state  the  defect  or  parts  claimed  to  be 
omitted,  and  pray  for  a  writ  of  certiorari  to  issue.  The  petition  should  be 
signed  and  verified.  If  a  proper  showing  is  made,  the  court  will  ordinarily 
order  a  writ  to  issue,  directed  to  the  court  below,  commanding  it  to  re- 
turn a  true  and  complete  record,  including  the  omitted  or  defective  parts,  if 
any  there  be.  The  order  also  regularly  contains  a  direction  to  the  clerk 
of  the  Appellate  Court  to  also  return  the  transcript  for  the  purpose  of  be- 
ing corrected.  The  court  will  not  usually  order  the  alleged  omitted  por- 
tions or  the  defective  portions  to  be  corrected.  If  the  record  is  faulty  it 
should  be  made  to  conform  to  the  record  below  by  certifying  the  correc- 
tions to  be  made.  The  Appellate  Court  will  not  undertake  to  make  a 
record  in  the  inferior  court. 

The  writ  of  certiorari  is  regularly  issued  under  the  hand  and  seal  of 
the  clerk  of  the  Appellate  Court,  and  is  transmitted  to  the  clerk  of  the 
court  below,  together  with  the  transcript  and  a  copy  of  the  petition,  setting 
forth  the  alleged  defects  or  omissions  in  the  record.  The  clerk  of  the  in- 
ferior court  thereupon  compares  the  transcript  with  the  original  record, 
and  returns  the  writ  with  a  certified  correction,  or  a  certified  copy  of  the 
omitted  papers,  or  with  a  certificate  to  the  effect  that  the  record  is  true  and 
complete,  or  such  other  facts  as  may  be  necessary  for  a  full  understanding 
of  the  matter.  This  is  to  be  returned  under  the  seal  of  the  court.  It  is 
not  necessary  to  have  the  return  made  by  the  judge.  Stewart  vs.  Ingle.  9 
Wheat.  526.     It  is  regularly  made  by  the  clerk. 

A  writ  of  certiorari  for  diminution  of  the  record  will  not  be  granted  if 
the  application  is  not  made  at  the  first  term  as  required  by  Supreme  Court 
Rule  14  and  Rule  18,  C.  C.  A.     See  Chappell  vs.  U.  S.,  160  U.  S.  499- 


No.  197. 
Return  to  Writ  of  Certiorari  for    Diminution  of  Record. 
United  States  of  America. District  of . 


In  pursuance  of  the  command  of  the  within  writ  of  cer- 
tiorari,  T,    R.   R.,  clerk  of  the  District  Court  of  the   United 

States,  within  and  for  the district  of and  the 

division  thereof,  do  herewith  transmit,  under  the  seal  of  said 
Cfiurt.  a  full  niul  coniplctc  cof)v  of  the  records  referred  to  in  the 


IIO'J  AlM'M.Ari':     l'KOCKKl)lX(iS. 

testinionv  taken  l)et\>ie  the  master  appointed  in  the  cause  of  the 
Mercantile  Trust  Company  against  the  C.  &  D.  Railway  Com- 
pany, in  the  matter  of  the  intervening  petitions  of  E.  F.,  guard- 
ian of  G.  H..  and  R.  S.,  guardian  of  F.  S.,  against  said  rail- 
way company,  and  inadvertently  omitted  from  the  record  of 
said  cause  now  pending  on  appeal  in  the  Circuit  Court  of  Ap- 
peals for  the circuit,  and  which  by  the  command  of  said 

writ  were  ordered  to  be  returned. 

In  testimony  whereof.  I  have  affixed  my  signature  as  clerk 

of  said  court  and  the  seal  thereof,  at ,  in  said  district,  this 

day  of ,  Anno  Domini  ,  and  in  the year 

of  the  independence  of  the  United  States  of  America. 

[Seal.]  B.  R., 

Clerk  of  the  District  Court  of  the  United 
States  for  the District  of . 


No.  198. 
Final  Decree  or  Judgment  on  Mandate  (1). 

The  District  Court  of  the  United  States 

For  the District  of . 

A.   B. 

vs. 

C.  D. 

On  reading  and  filing  the  mandate  of  the  United  States  Cir- 
cuit Court  of  Appeals  for  the circuit,  in  this  cause,  bear- 
ing date  the day  of ,  A.  D. ,  in  obedience  to  said 

mandate  and  in  cognizance  with  the  opinion  of  the  said  United 
States  Circuit  Court  of  Appeals  herein,  it  is  hereby  ordered, 
adjudged  and  decreed  that  {here  set  out  the  proper  judgment 
or  decree  according  to  the  lazv  and  facts  of  the  case.] 


CERTIORARI.  1103 

CERTIORARI. 

No.  199. 

Petition  for  Writ  of  Certiorari  in  Bankruptcy. 

In  the  Supreme  Court  of  the  United  States. 

October  Term,  A.  D.  1900. 
Arthur  E.  Mueller,  Trustee  in  Bankruptcy 
of  Edward  B.  Nugent,  Bankrupt,  Petitioner, 
vs. 
William  T.  Nugent,  Respondent. 
Petition  for  Writ  of  Certiorari,  to  the  United  States  Circuit 
Court  of  Appeals  for  the  Sixth  Circuit.  Requiring  it  to 
Certify  to  the  Supreme  Court  of  the  United  States,  for 
its  Revision  and  Determination,  the  Petition  for  Review- 
in  Bankruptcy  taken  by  said  W.  T.  Nugent  against  Ar- 
thur E.  Mueller,  Trustee  in  Bankruptcy  of  Edward  B. 
Nugent,  in  the  Matter  of  Wayne  Knitting  Mills,  Belding 
Bros.  &  Co.  and  the  German  Insurance  Bank  7's.  Edward 
B.  Nugent,  Bankrupt,  in  Bankruptcy,  Lately  Depending 
in  said  Court  of  Appeals. 
To  the  Honorable,  the  Chief  Justice  and  Associate  Justices  of 
the  Supreme  Court  of  the  United  States : 


1104  APPELLATE    PROCEEDINGS. 

The  petition  of  Arthur  K.  Aiuelier.  trustee  in  bankruptcy 
of  Edward  B.  Nugent,  bankrupt,  filed  under  the  provisions  of 
section  2^d  of  tlie  Bankruptcy  Act  of  1898,  respectfully  rep- 
resents as  follows : 

First.  This  cause  involves  a  question  entirely  novel  and  one 
of  the  most  vital  importance  arising  under  the  Act  of  1898 — a 
question  more  far-reaching-  in  its  importance  than  the  one  de- 
cided by  this  court  in  Bardes  vs.  Bank,  178  U.  S.,  page  524. 
Upon  its  determination  by  this  court  depends  to  a  large  extent 
the  usefulness  of  said  act. 

On  February  19,  1900.  about  the  hour  of  2  o'clock  p.  m., 
being  more  than  three  hours  before  a  petition,  praying  for  the 
involuntary  adjudication  of  Edward  B.  Nugent,  bankrupt,  was 
filed,  the  respondent.  W.  T.  Nugent,  son  of  the  bankrupt,  re- 
ceived from  the  bankrupt  (Edward  B.  Nugent),  as  his  agent 
and  as  custodian  of  the  fund,  money  belonging  to  the  bank- 
rupt amounting  to  $14,233.95.  It  is  nowhere  claimed  by  the 
one  side  or  relied  upon  by  the  other  in  this  controversy  that 
the  delivery  of  said  fund  to  the  agent  as  custodian  was  a 
"transfer"  or  "fraudulent  transfer"  within  the  meaning  of  the 
case  of  Bardes  vs.  Bank,  178  U.  S.,  524. 

After  the  adjudication,  certain  proceedings  in  contempt 
were  had  against  Edward  B.  Nugent,  the  bankrupt,  looking 
to  the  recovery  of  that  fund,  but  because  of  the  then  condition 
of  mind  of  said  bankrupt  he  was  discharged  from  further  at- 
tendance about  that  matter.  Upon  the  petition  of  the  trustee, 
the  referee,  to  whom  the  case  had  been  referred,  then  issued 
a  rule  against  said  W.  T.  Nugent  to  show  cause,  five  days 
after  service  thereof,  why  he  should  not  be  required  to  turn 
over  said  funds  to  the  trustee.  (R.,  p.  19.)  After  some 
months'  delay,  said  W.  T.  Nugent,  having  been  served  with 
a  copy  of  said  order,  appeared  before  the  referee  in  person 
and  by  counsel,  and  without  objecting  to  the  time  given  for 
response,  or  that  he  was  improperly  or  irregularly  made  a 
party,  filed  a  response  (R.,  p.  23)  to  the  rule  in  which  he 
objected  only  to  the  jurisdiction  of  the  referee  or  the  court 


CERTIORARI.  1105 

to  issue  said  rule ;  and  further  responded  that  if  he  had  re- 
ceived the  said  money,  or  any  part  thereof,  it  was  before  the 
petition  in  bankruptcy  was  filed.  He  also  responded  that  by 
reason  of  the  fact  that  he  was  indicted,  charged  with  the  of- 
fense of  receiving-  said  money  and  retaining  the  same  and  aid- 
ing and  abetting  in  the  retention  thereof,  after  Hie  filing  of  the 
petition  in  bankruptcy,  he  could  not  make  further  response 
without  incriminating  himself.  Without  waiving,  but  reserv- 
ing, the  jurisdictional  question.  Nugent  then  agreed  that  cer- 
tain depositions  of  his  father  the  bankrupt,  his  sisters  and  oth- 
ers should  be  read  on  the  hearing  of  the  response.  (R.,  p.  21.) 
Nugent  offered  no  proof  in  his  own  behalf. 

The  referee,  in  order  to  first  determine  whether  he  had  ju- 
risdiction, then  heard  the  proof  offered  by  the  trustee  and 
found  that  said  Nugent  had  received  said  money  only  as  agent 
and  custodian  of  his  father,  the  bankrupt ;  that  he  had  not  ac- 
counted for  the  same,  and  that  said  money  belonged  at  the 
time  of  the  hearing  of  the  rule  to  the  bankrupt's  estate.  No 
additional  resi)onse  was  then  offered  by  Nugent.  Whereupon 
the  referee  then  exercised  jurisdiction  and  made  said  rule  ab- 
solute and  ordered  Nugent  to  pay  over  the  money  to  the  trus- 
tee in  bankruptcy.  ( R.,  p.  21.)  Upon  his  failure  to  comply 
with  said  order,  and  still  without  additional  resjwnse,  the  ref- 
eree found  him  guilty  of  contempt  and  certified  the  c^se  to 
the  judge,  with  a  recommendation  that  said  W.  T.  Nugent 
be  punished  for  contempt  and  committed  until  he  should  ])ay 
said  sum.     ( R..  p.  25.) 

The  respondent  then  filed  witli  referee  his  j)etition  for  re- 
view, in  pursuance  of  General  Order  No.  ly  of  the  Supreme 
Court  (R.,  J).  26),  and  upon  the  certification  by  the  referee 
to  the  judge,  showing  the  question  presented,  the  summary 
of  the  evidence,  and  the  findings  and  order  thereon,  accord- 
ing to  said  General  Order  27,  and  form  56,  a  hearing  was  had 
before  him.  The  referee  also  certified.to  the  judge  the  deposi- 
tions read  on  the  hearing  of  the  case,  and  same  were  before 
the  judge. 


11(U>  AI'PKLLATE    PROCEEDINGS. 

The  jiult^e.  after  the  hearing-,  rendered  an  opinion  (R.,  p. 
28)  in  whieh  the  tinding  of  the  referee  was  sustained,  and  said 
W.  T.  Nugent,  being-  in  court,  he  was  called  to  the  bar  to 
receive  sentence ;  whereupon,  at  the  request  of  said  W.  T.  Nu- 
gent by  his  counsel,  the  judge  deferred  passing  sentence  for 
t\\  o  days.  At  the  expiration  of  said  two  days  said  respondent, 
bv  his  ctmnsel,  tendered  an  amended  res|X)nse  (R.,  p.  37)  in 
which  for  the  lirst  time  he  sought  to  answer,  in  general  terms, 
and  with  conclusions  of  law  only,  that  the  funds  in  question 
were  held  and  claimed  by  him  adversely  to  the  bankrupt  or 
his  estate.  The  judge,  on  the  theory  that  the  hearing  was 
in  the  nature  of  an  api)eal  from  the  decision  of  the  referee, 
refused  to  permit  that  response  to  be  filed,  holding  that  it 
manifestly  came  too  late  (R.,  p.  36)  ;  that  such  response  should 
have  been  filed  before  the  referee  at  the  time  of  the  hearing 
upon  the  rule.  That  amended  response  so  offered  was  neither 
filed  generally  nor  for  the  purposes  of  appeal  or  review.  In 
his  opinion  filed,  the  judge,  in  addition  to  sustaining  the  find- 
ings of  fact  by  the  referee  above  recited,  also  found  from  the 
proof  before  him  the  following  facts  in  this  language: 

"The  court  finds  the  facts  of  the  case  to  be  as  above  stated, 
with  the  addition  that  the  entire  amount,  $14,233.95,  is  the 
property  of  the  bankrupt's  estate  alone;  that  it  had  been  taken 
possession  of,  and  was  held  by  W.  T.  Nugent  as  the  agent  only 
of  his  father  up  to  and  at  the  time  of  the  adjudication,  and 
that  the  resix)ndent  never  claimed  title  to.  any  part  of  it, 
nor  made  any  claim  or  right  to  it  by  reason  of  any  attempted 
transfer  of  title  or  ownership  therein  to  him  at  any  time,  either 
in  fraud  of  the  bankrupt's  creditors  or  otherwise,  nor  has  he 
ever  claimed  to  have  converted  any  part  of  it  to  his  own  use, 
nor  in  anywise  to  have  claimed  it  adversely  to  the  bankrupt  or 
the  trustee."     (R.,  pp.  30-31.) 

In  refusing  to  permit  said  amended  response  to  be  filed,  the 
court  entered  the  following  order : 

"Came  William  T.  Nugent,  respondent  herein,  and  tendered 
an  amended  response  and  moved  to  file  same,  and  the  court 


CERTIORARI.  1107 

not  having  postponed  the  imposing  of  the  sentence  for  that 
purpose,  and  being  of  the  opinion  that  it  is  not  discreet  or  ad- 
missible practice  to  permit  amendments  upon  hearings  such  as 
this,  especially  after  the  delivery  of  an  opinion  of  the  court, 
declines  at  this  stage  of  the  proceedings  to  permit  a  further  re- 
sponse to  be  filed. 

"And  thereupon,  pursuant  to  the  opinion  of  the  court  filed 
herein  on  the  ist  instant,  it  is  the  judgment  of  the  court  that 
William  T.  Nugent,  for  his  contempt  aforesaid,  be  imprisoned 
and  confined  in  the  county  jail  of  Jefferson  county,  Kentucky, 
until  he  shall  deliver  or  pay  to  Arthur  E.  Mueller,  the  trustee 
herein,  said  sum  of  $14,233.95.  or  otherwise  satisfy  the  said 
trustee  with  respect  thereto;  and  the  court  reserves  the  right 
and  power  to  suspend  or  set  aside  this  judgment  and  sentence 
upon  the  delivery,  payment  or  satisfaction  aforesaid. 

"To  all  of  which  the  respondent,  William  T.  Nugent,  ex- 
cepts."    (R.,  p.  36.) 

Thereafter  said  W.  T.  Nugent,  under  section  24b  of  the  act, 
filed  a  petition  in  the  United  States  Circuit  Court  of  Appeals 
for  review,  praying  that  the  orders,  judgment  and  sentence  oi 
the  District  Court  be  reviewed  and  revised  in  the  matter  of 
law,  etc.     (R.,  p.  i.  i.) 

After  hearing  said  petition  for  review,  said  Circuit  Court  of 
Appeals,  on  the  13th  day  of  December,  1900,  entered  a  decree 
(R..  p.  53)  reversing  and  vacating  the  order  of  the  District 
Court  for  the  commitment  of  the  respondent,  and  the  order 
made  by  the  referee  upon  the  respondent  to  show  cause,  and 
the  further  order  of  the  referee  adjudging  that  said  res|)ond- 
ent  be  required  to  pay  to  the  trustee  the  moneys  alleged  to  be 
under  his  control,  as  well  as  the  order  of  the  referee  adjudg- 
ing the  respondent  to  be  in  contempt;  and  on  the  same  day 
filed  a  memorandum  opinion  (R.,  p.  54)  and  issued  its  forth- 
with mandate  (R..  p.  53)  in  direct  contravention  of  its  Rules 
of  Court  No.  29  and  32.  which  are  as  follows : 

29.  "A  petition  for  rehearing  after  judgment  can  be  pre- 
sented only  within  thirty  days  after  the  day  when  the  printed 


1108  ArPKLLATK    PROCEEDINGS. 

opinion  of  the  court  is  rctunio<l  l)y  the  printer  to  the  clerk,  and 
can  be  obtained  by  counsel  for  the  parties  (  which  date  the  clerk 
shall  note  ui)on  the  appearance  docket),  unless  by  special  leave 
granted  during  such  thirty  days,  and  must  be  printed,  and 
briefly  and  distinctly  state  its  grounds,  and  be  su]>p()rted  by 
certificate  of  counsel,  and  will  not  be  granted  or  permitted  to 
be  argued,  unless  a  judge  who  concurred  in  the  judgment  de- 
sires it  and  a  majority  of  the  court  so  determine." 

T,2.  "In  all  cases  finally  determined  in  this  court  a  mandate 
or  other  proper  process  in  the  nature  of  a  procedendo  shall  be 
issued,  on  the  order  of  this  court,  to  the  court  below,  for  the 
purpose  of  informing  such  court  of  the  proceedings  in  this 
court,  so  that  further  proceedings  may  be  had  in  such  court 
as  to  law'  and  justice  may  appertain. 

"  Such  mandate  shall  not  issue  until  time  has  elapsed  far  fil- 
ing a  petition  to  rehear,  as  defined  by  rule  29;  and  no  man- 
date or  other  process  or  procedendo  shall  issue  when  a  peti- 
tion to  rehear  is  pending,  unless  specially  ordered. 

"Every  mandate  shall  be  accompanied  by  a  copy  of  the 
opinion  filed  in  the  cause  in  which  it  is  issued,  and  the  charge 
for  the  same  shall  be  taxed  in  the  costs  of  the  case." 

By  that  action  W.  T.  Nugent  was  immediately  released 
from  custody,  and  that  before  this  petitioner  could  apply  for 
a  rehearing  in  that  court  or  certiorari  here. 

On  the  17th  day  of  January,  1901,  said  Circuit  Court  of 
Appeals  filed  a  printed  opinion  in  the  case.     (R..  p.  56.) 

Second.  With  the  petition  for  review  said  W.  T.  Nugent 
filed  various  exhibits  containing  matters  not  part  of  the  rec- 
ord in  the  court  below,  one  of  which  was  a  copy  of  said 
amended  response  (R.,  p.  37),  which  was  not  a  part  of  the 
record  or  before  the  referee  or  judge  below,  as  shown  herein 
above.  And  said  petition  for  review  further  contained  alle- 
gations of  fact  not  in  or  shown  by  the  record,  and  not  before 
the  District  Court  or  the  referee. 

Among  other  things  said  petition  for  review  contained  the 
following  allegations,  to  wit : 


CERTIORARI.  1109 

"  He  says  that  he  had  converted  all  of  said  money  of  E. 
B.  Nugent  which  came  into  his  hands  to  his  own  use,  he  being 
a  creditor  of  said  Nugent,  and  to  the  paying  of  the  other  debts 
of  E.  B.  Nugent  before  the  filing  of  said  petition  in  bankrupt- 
cy or  the  appointment  of  said  trustee  or  the  adjudication  there- 
in, and  that  there  was  no  evidence  to  the  contrary,  or  that  he 
had  any  of  said  money  on  hand  or  under  his  control  when 
he  was  sensed  herein  as  stated."  (R.,  p.  6,  beginning  on  25th 
line.) 

As  stated,  that  allegation  was  never  before  the  referee  or 
the  judge  of  the  District  Court,  nor  was  it  acted  upon  by 
them,  but  was  wholly  original  matter,  and  not  properly  a  part 
of  the  record.  All  the  irrelevant  and  impertinent  matter  the 
trustee  moved  the  Circuit  Court  of  Appeals  to  expunge  from 
the  record,  which  motion  said  Court  of  Appeals  failed  to  sus- 
tain or  act  upon;  though  it  is  contended,  as  appears  from  the 
opinion  of  that  court,  many  of  those  impertinent  matters,  and 
particularly  said  so-called  amended  response,  were  relied  upon. 

Third.  The  Supreme  Court,  in  Bardes  vs.  Bank,  178  U.  S., 
524.  has  decided  that,  except  with  the  consent  oi  the  proposed 
defendant,  the  District  Court  has  no  jurisdictimi  to  entertain 
an  independent  suit  brought  by  a  trustee  in  bankruptcy  to  set 
aside  a  fraudulent  transfer  made  by  the  bankrupt  to  a  third 
party,  in  possession  of  and  claiming  the  property  "cks  his  own," 
and  which  transfer  is  alleged  to  have  been  fraudtdent  as 
against  creditors.  Except  as  to  suing  a  debtor,  that  is  all  that 
said  case  does  decide. 

But,  upon  authority  of  that  decision,  the  Circuit  Court  of 
Appeals  has  held  that  the  District  Court,  which  included  the 
referee,  has  no  jurisdiction,  by  summary  process  or  rule,  to 
compel  a  mere  custodian  of  the  proj)erty  of  a  bankrupt  to  de- 
liver the  same  to  a  trustee  in  baiikruptcy  when  the  elements 
f)f  a  fraudulent  transfer  did  not  exist,  nor  were  alleged;  and 
that,  too,  even  though  it  be  conceded  that  the  legal  title  of  said 
property  was  in  the  bankrupt  and  is  vested  by  the  Bankrupt 
Act  in  the  trustee;  and,  too,  when  the  custodian  is  asserting 


1110  APTELLATE  rROCEEDl  NC.S. 

no  adverse  title  to  the  property;  and,  further,  the  Court  of 
Appeals  has  decided  that  where  a  party  makes  a  general  as- 
signment for  the  benefit  of  creditors,  and  by  reason  thereof  is 
adjudged  a  bankrupt,  the  trustee  in  bankruptcy  can  not  recover 
the  property  of  the  bankrupt  from  the  assignee  by  summary 
process,  notwithstanding  the  deed  of  assignment  is  made  void 
bv  the  adjudication  in  bankruptcy;  but  he  must  resort  to  an 
independent  action  unless  there  be  jurisdiction  upon  other 
grounds  than  those  arising  under  the  bankruptcy  law. 

And  the  Court  of  Appeals  has  in  effect  held  that  the  referee 
may  not  by  summary  procedure  inquire  into  the  nature  of  the 
custodian's  holdiifg.  to  ascertain  if  it  be  adverse  or  not;  and 
it  has  further  held  that,  though  the  custodian  fails  to  assert 
any  adverse  claim,  and  the  proof  shows  his  holding  to  be 
amicable,  the  referee  is  nevertheless  without  jurisdiction  to 
compel  him  to  surrender  the  property  to  the  trustee.  These 
rulings  it  is  contended  are  not  warranted  by  Bardes  vs.  Bank, 
supra. 

It  is  to  review  the  rulings  of  the  Circuit  Court  of  Appeals 
on  these  questions  that  this  petition  for  a  writ  of  certiorari  is 
applied  for.  The  questions  are  of  paramount  importance, 
because,  unless  that  decision  of  the  Court  of  Appeals  is  re- 
versed or  materially  modified,  the  power  of  the  Bankruptcy 
Court  under  section  2  (6),  (7)  and  (13)  of  the  act  to  bring 
in  and  substitute  additional  persons  or  parties  in  proceedings 
in  bankruptcy,  when  necessary  for  the  complete  determination 
of  a  matter  in  controversy,  to  cause  the  estate  of  bankrupts 
to  be  collected,  reduced  to  money  and  distributed,  to  deter- 
mine controversies  in  relation  thereto,  and  to  enforce  obedi- 
ence by  bankrupts  and  other  persons,  will  be  almost,  if  not 
entirely,  rendered  nugatory. 

The  question  in  this  case  is  not  as  it  was  in  Bardes'  case, 
whether  the  District  Court  has  jurisdiction  to  entertain  a 
plenary  and  independent  suit,  brought  by  a  trustee  in  bank- 
ruptcy against  a  citizen  of  the  same  state  to  recover  assets, 
the  title  of  which  is  in  dispute;  but  the  question  involved  is 


CERTIORARI.  1111> 

this :  Can  the  District  Court  by  rule  compel  an  agent  or  cus- 
todian for  the  bankrupt  or  for  the  court,  who  has  the  mere 
naked  possession  of  the  bankrupt's  estate,  claiming  no  inter- 
est therein,  and  asserting  no  title  thereto,  to  deliver  such 
property  to  the  trustee?  Or  must  the  trustee  be  compelled 
to  resort  to  an  ordinary  action  and  the  expense  and  delays 
incident  thereto  in  another  court  to  obtain  possession  of  such 
property  from  such  a  custodian?  Or  does  not  the  bankruptcy 
law  provide  means  for  the  speedy  and  economical  adminis- 
tration of  the  estate,  and  does  not  section  2  with  its  sub-sec- 
tions exactly  cover  just  such  cases  as  this? 

Your  petitioner,  with  all  due  respect,  maintains  that  the 
case  of  Bardes  vs.  Bank,  supra,  is  not  susceptible  of  the  con- 
structions placed  upon  it  by  the  Court  of  Appeals,  and  was 
evidently  not  so  intended  by  this  court;  and  therefore  under 
that  authority,  the  Court  of  Appeals  erred  when  it  held,  as 
it  did  in  effect,  that  under  no  circumstances  can  the  posses- 
sion of  property  be  recovered,  except  by  an  independent, 
plenary,  dilatory  and  expensive  suit  in  some  other  court. 

Your  petitioner  contends  that,  on  the  contrary,  the  Dis- 
trict Court  has  jurisdiction  by  summary  process  to  require  the 
custodian  of  property  belonging  to  the  bankrupt's  estate,  to 
deliver  the  same  to  the  trustee,  unless  said  custodian  is  hold- 
ing the  proi)erty  adversely  or  claiming,  in  good  faith,  title,  or 
at  least  colorable  title,  to  said  property;  that  the  custodian  is 
the  agent  or  trustee  of  the  court  holding  such  property,  and 
can  by  a  rule  be  compelled  to  deliver  it  over  to  the  trustee; 
that  the  mere  naked  possession  of  property  without  claim  of 
title  or  color  of  title,  is  not  sufficient  to  put  the  case  at  bar 
within  the  princii)les  of  the  Bardes  case.  In  fact,  this  court, 
in  stating  the  question  decided  in  the  Bardes  case,  laid  stress 
upon  the  point  that  the  third  party,  from  whom  it  was  sought 
to  recover  the  property,  was  holding  it  adversely;  and  that 
adverse  holding  was  the  foundation  upon  which  this  court 
based  that  ojjinion. 

After  diligent  search  petitioner  has  been  unable  to  hnd  any 


nil'  APPELLATli    I'ROCliEDlNGS. 

clofinition  of  "adverse  possession"  which  does  not  contemplate 
the  lu>l(hng"  by  some  chiim  or  color  of  title. 

The  petition  for  review  hied  in  the  Conrt  of  Appeals  gave 
that  court  only  the  power  to  review  matters  of  law.  {In  re 
Purvine.  5th  Circuit  Court  of  Appeals,  96  Fed.,  192.)  And 
the  Circuit  Court  of  Appeals  in  this  circuit  has  so  declared 
in  Cunningham  vs.  German  Insurance  Bank,  103  Fed.,  932, 
and  has  further  decided  that  only  such  matters  as  were  acted 
upon  by  the  court  below  could  be  reviewed. 

So  that  upon  the  record,  disregarding  the  impertinent  mat- 
ter as  it  reached  the  District  Court  and  Circuit  Court  of  Ap- 
peals, it  was  conclusively  established,  as  matter  of  fact,  that 
W.  T.  Nugent  received  said  funds  only  as  the  agent  or  cus- 
todian of  the  bankrupt ;  that  at  no  time  until  after  the  rendition 
of  the  opinion  by  the  District  Judge  was  he  asserting  any  claim 
or  right  to  or  ownership  in  said  fund;  consequently  the  cold 
question  of  law  was  before  the  Court  of  Appeals  as  to  whether 
or  not  the  referee  or  the  District  Court  had  power  by  rule  to 
compel  such  a  custodian,  claiming  no  title  in  the  property,  to 
deliver  it  to  the  trustee. 

Fourth.  This  court,  in  the  case  of  White  vs.  Schloerb,  178 
U.  S.,  542,  decided  that  a  judge  of  the  Bankruptcy  Court  may 
compel  a  sheriff  to  return  goods  to  the  judicial  custody  of 
his  court,  seized  and  taken  therefrom  by  a  sheriff  in  replevin 
proceedings. 

The  petitioner  contends  that  in  the  case  at  bar,  the  agent's 
custody,  being  amicable  and  without  adverse  claim,  placed 
the  agent  in  the  attitude  of  the  sheriff  in  the  White  vs.  Schlo- 
erb case;  and  there  being  no  adverse  claim  at  the  time  of  the 
adjudication,  trial  and  decision  by  the  referee  and  judge,  the 
property  could  not  be  lifted  from  the  judicial  custody  by  any 
adverse  claim  thereafter  made. 

Nugent's  taking  or  holding  the  money  as  custodian  was 
continuous  from  the  moment  he  received  it  until  he  was  or- 
dered to  pay  it  over ;  and  it  was  at  all  times  a  holding  for 


CERTIORARI,  1113 

the  benefit  of  the  bankrupt,  and  hence  for  the  court  and  its  of- 
ficer, the  trustee.    There  never  was  a  break  in  that  continuity. 

In  the  case  of  in  re  Rosser,  loi  Fed.,  562,  the  Eighth  Cir- 
cuit Court  of  Appeals  has  held  that  upon  adjudication  all  the 
property  of  the  bankrupt  is  placed  in  custodia  Icgis,  and  that 
the  bankrupt  and  every  other  party  who  has  the  possession  or 
control  of  any  part  of  it,  holds  that  part  as  agent  and  trus- 
tee of  the  court  and  its  officer. 

The  Circuit  Court  of  Appeals  for  the  Ninth  Circuit,  in  re 
Francis-Valentine  Co.,  94  Fed..  793,  has  decided  that  the  court 
may  summarily  require  a  sheriff  to  deliver  to  the  trustee  the 
possession  of  a  bankrupt's  property  seized  within  four  months 
prior  to  the  proceedings  in  bankruptcy;  and  in  that  case  the 
court,  commenting  on  Marshall  vs.  Knox,  16  Wall.,  551,  used 
this  language : 

"In  that  case  a  lessor  of  the  bankrupt  had  caused  the  sheriff, 
under  a  writ  of  provisional  seizure,  to  take  possession  of  cer- 
tam  property  of  the  bankrupt,  which  the  lessor  claimed  the 
right  to  hold  as  a  pledge  for  the  payment  of  rent  which  was 
due  him.  It  was  held  that  the  District  Court  sitting  in  bank- 
ruptcy has  no  jurisdiction  to  proceed  by  rule  to  take  the  goods 
from  the  possession  of  the  sheriff.  The  court,  referring  to 
The  seizure  of  the  goods,  said :  'The  landlord  claimed  the  right 
tnus  to  hold  i)ossession  of  them  until  his  rent  was  satisfied. 
This  claim  was  adverse  to  that  of  the  assignee.'  These  words 
quoted  from  the  opinion  fully  explain  the  ground  of  the  decis- 
ion. It  was  because  the  claim  was  adverse  to  that  of  the  as- 
signee. In  the  present  case  the  sheriff  had  possession,  not 
in  opposition  to  the  right  of  the  bankrupt  nor  in  antagonism 
to  its  title,  but  his  possession  was  based  entirely  upon  the  as- 
sumption that  the  title  was  in  the  bankrupt." 

The  court  will  observe  that  the  analogy  between  the  Valen- 
tine case  and  the  case  at  bar  is  complete,  for  it  is  established 
by  facts  binding  upon  the  Court  of  Appeals  that  W.  T.  Nugent 
received  this  money  as  custodian  only,  that  the  capacity  of 
custodian  was  never  changed,  and  tli.it  he  was  asserting  no 


1114:  APPELLATK    I'ROCEliDlNGS. 

adverse  claim  or  title  thereto ;  but.  in  the  words  of  the  Court 
of  Appeals  for  the  Ninth  Circuit,  Nugent  "had  possession, 
not  in  opposition  to  the  right  of  the  bankrupt,  nor  in  opposi- 
tion to  his  title,  but  his  possession  was  based  entirely  upon 
the  assumption  that  the  title  was  in  the  bankrupt."  The  Dis- 
trict Courts  in  Vermont.  New  York  and  West  Virginia,  which 
decisions  are  the  law  in  those  districts  respectively,  have  also 
sustained  the  right  to  issue  such  rules.  (In  re  Brooks,  91 
Fed..  518;  in  re  Raymond  W.  Kenney,  95  Fed.,  427;  in  re 
Moore.  104  Fed.,  869.)  Then,  too,  it  is  contended  the  opin- 
ion of  the  Court  of  Appeals  is  in  conflict  with  White  vs.  Schlo- 
erb,  178  U.  S.,  542. 

In  re  Ward,  104  Fed.,  985,  it  was  sought  to  obtain  an  in- 
junction against  one  O'Donald  from  disposing  of  certain 
''funds  and  credits  due"  to  the  bankrupt  and  which  were  in 
the  possession  of  the  said  O'Donald.  Judge  Lowell,  of  the 
Massachusetts  district,  basing  his  opinion  upon  the  case  of 
Bardes  vs.  Bank  refused  to  grant  the  injunction,  and  comment- 
ing on  the  cases  of  Bardes  vs.  Bank  and  White  vs.  Schloerb, 
closes  his  opinion  with  the  following  language : 

"It  is  greatly  to  be  desired  that  a  further  exposition  of  the 
jurisdiction  of  the  District  Court  in  bankruptcy  should  be 
made  as  speedily  as  possible  by  the  Supreme  Court,  and  if 
counsel  for  the  petitioners  shall  desire  to  take  this  case  direct- 
ly to  the  Supreme  Court,  as  is  provided  by  section  5  of  the 
Judiciary  Act  of  1891,  26  Stat.,  827,  I  will  gladly  facilitate 
proceedings  to  that  end." 

And  so  it  is  that  your  petitioner  contends  that  by  reason 
of  the  decision  in  the  case  at  bar,  and  the  others  so  cited,  there 
is  a  contrariety  of  opinion,  and  not  a  uniform  administration 
of  the  Bankruptcy  Act  (as  necessary  as  uniformity  in  the  act 
itself,  required  by  section  8,  sub-section  4.  Article  I.,  of  the 
constitution  of  the  United  States)  as  to  the  grave  and  impor- 
tant question,  to  wit :  The  right  of  the  court  of  bankruptcy 
to  summarily  order  in  property  which  is  admittedly  assets  of 


CERTIORARI.  1115 

a  bankrupt's  estate  and  which  the  holder  thereof  is  not  claim- 
ing as  his  own. 

Your  petitioner  appends  hereto  his  brief  in  support  of  this 
petition. 

Wherefore,  your  petitioner  prays  that  a  writ  of  certiorari 
may  be  issued  out  of  and  under  the  seal  of  this  court,  di- 
rected to  the  United  States  Circuit  Court  of  Appeals  for  the 
Sixth  Circuit,  commanding  said  court  to  certify  and  send  to 
this  court  a  full  and  complete  transcript  of  the  record  in  all 
proceedings  in  said  Circuit  Court  of  Appeals  in  the  case  there- 
in, entitled  'The  Wayne  Knitting  Mills,  Belding  Brothers  & 
Company  and  the  German  Insurance  Bank,  against  E.  B. 
Nugent,  bankrupt,  on  petition  of  W.  T.  Nugent  for  review, 
No.  920,"  to  the  end  that  said  case  may  be  reviewed  and 
determined  by  this  court,  as  provided  by  law;  and  that  the 
judgment  of  the  said  Circuit  Court  of  Appeals  in  said  case 
may  be  modified  so  as  to  deny  the  petition  for  review  filed  by 
said  W.  T.  Nugent  to  that  court  in  bankruptcy. 

And  your  petitioner  will  ever  pray. 

William  W.  Watts, 
John  Richard  Watts, 
Counsel  for  Petitioner. 


Set. 


State  of  Kentucky, 
Jefferson  County. 
William  W.  Watts,  being  duly  sworn,  says  that  he  is  one 
of  the  counsel  for  Arthur  E.  Mueller,  trustee  in  bankruptcy 
of  Edward  B.  Nugent,  bankrupt,  the  petitioner  named;  that 
he  has  read  tlie  foregoing  petition,  and  the  facts  therein  stated 
are  true,  as  he  believes.  William  W.  Watts. 

Subscribed  and  sworn  to  before  me  this  29th  day  of  Jan- 
uary, A.  D.  1 901.  My  commission  as  Notary  Public  expires 
on  the   1 2th  day  of  January,  A.  D.   1904. 

E.  B.  Kerr, 
[Scal.l  Notary  I'ublic  within  and  for  County  of 

Jefferson.    State   of    Kentucky. 

( 1  )Takcn  from  the  record  in  Nugent  is.  U.  S.,  184  U.  S.  1. 
See  Loveland  on  Banknii)tcy,  sections  307  suul  30H. 


...THE... 


United  States  Bankruptcy  Law 


OF 


1898 

AS  AMENDED  FEBRUARY  5,    1903. 


PRINTED  FROM  THE  OFFICIAL  COPT. 


THE 

UNITED   STATES   BANKRUPTCY  LAW, 

1898. 

As  Amended  February  5,  1903,  at  Stat,  at  L.  797. 

(Sections   amended   are   inclosed   in   brackets   [],   amendments   and 
new  sections  are  printed  in  italics.) 


AN  ACT  TO  ESTABLISH  A  UNIFORM  SYSTEM  OF  BANKRUPTCY 
THROUGHOUT  THE  UNITED  STATES. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of  the 
United  States  of  America  in  Congress  assembled., 

CHAPTER  I. 
Definitions. 

Section  i.  Meaning  of  words  and  phrases,  a  The  words 
and  phrases  used  in  this  Act  and  in  proceedings  pursuant  hereto 
shall,  unless  the  same  be  inconsistent  with  the  context,  be  con- 
strued as  follows: 

(1)  *'A  person  against  wlwm  a  petition  has  been  filed." 
''A  person  against  whom  a  petition  has  been  filed"  shall  include 
a  person  who  has  filed  a  voluntary  petition  ; 

(2)  ''Adjudication."  "Adjudication"  shall  mean  the  date 
of  the  entry  of  a  decree  that  the  defendant,  in  a  bankruptcy  pro- 
ceeding, is  a  bankrupt,  or  if  such  decree  is  appealed  from,  then 
the  date  when  such  decree  is  finally  confirmed; 

(3)  "Appellate  courts."  "Appellate  courts"  shall  inclnde 
the  circuit  courts  of  appeals  of  the  ITnited  vStates,  the  supreme 
courts  of  the  Territories,  and  the  vSuprcme  Court  of  the  United 
States ; 

(4)  "Bankrupt."  "Bankrupt"  shall  include  a  person 
against  wiiom  an  involuntary  petition  or  an  application  to  set  a 
composition  aside  or  to  revoke  a  discharge  has  been  filed,  or  who 


ll'JO  BANKRUPTCY    ACT    OF    1898.  §1 

has  filed  a  voluntary  petition,  or  who  has  been  adjndged  a  bank- 
rupt; 

(5)  *' Clerk."  "Clerk"  shall  mean  the  clerk  of  a  court  of 
bankruptcy ; 

(6)  **  Corporations."  "Corporations"  shall  mean  all  bodies 
having  any  of  the  powers  and  privileges  of  private  corporations 
not  possessed  by  individuals  or  partnerships,  and  shall  include 
limited  or  other  partnership  associations  organized  under  laws 
making  the  capital  subscribed  alone  responsible  for  the  debts  of 
the  association ; 

(7)  *<  Court."  "Court"  shall  mean  the  court  of  bankruptcy 
in  which  the  proceedings  are  pending,  and  may  include  the  referee; 

(8)  "Courts  of  bankruptcy."  "Courts  of  bankruptcy" 
shall  include  the  district  courts  of  the  United  States  and  of  the 
Territories,  the  supreme  court  of  the  District  of  Columbia,  and 
the  United  States  court  of  the  Indian  Territory,  and  of  Alaska ; 

(9)  "Creditor."  "Creditor"  shall  include  anyone  who 
owns  a  demand  or  claim  provable  in  bankruptcy,  and  may  include 
his  duly  authorized  agent,  attorney,  or  proxy ; 

(10)  "Date  of  bankruptcy";  "  bankruptcy,"  etc.  "Date 
of  bankruptcy,"  or  "time  of  bankruptcy,"  or  "commencement  of 
proceedings,"  or  "bankruptcy,"  with  reference  to  time,  shall 
mean  the  date  when  the  petition  was  filed ; 

(11)  "Debt."  "Debt"  shall  include  any  debt,  demand,  or 
claim  provable  in  bankruptcy; 

(12)  "Discharge."  "Discharge"  shall  mean  the  release 
of  a  bankrupt  from  all  of  his  debts  which  are  provable  in  bank- 
ruptcy, except  such  as  are  excepted  by  this  Act ; 

(13)  "Document."  "Document"  shall  include  any  book, 
deed,  or  instrument  in  writing; 

(14)  "Holiday."  "Holiday"  shall  include  Christmas,  the 
Fourth  of  July,  the  Twenty-second  of  February,  and  any  day  ap- 
pointed by  the  President  of  the  United  States  or  the  Congress  of 
the  United  States  as  a  holiday  or  as  a  day  of  public  fasting  or 

ll  thanksgiving; 

(15)  When  deemed  "  insolvent."  A  person  shall  be  deemed 
insolvent  within  the  provisions  of  this  Act  whenever  the  aggregate 
of  his  property,  exclusive  of  any  property  which  he  may  have  con- 
veyed, transferred,  concealed,  or  removed,  or  permitted  to  be  con- 
cealed  or  removed,  with    intent  to  defraud,  hinder  or    delay  his 


§1  BANKRUPTCY    ACT    OF    1 898.  1121 

creditors,  shall  not,  at  a  fair  valuation,  be  sufficient  in  amount  to 
pay  his  debts; 

(16)  "Judge."  "Judge"  shall  mean  a  judge  of  a  court 
of  bankruptcy,  not  including  the  referee ; 

(17)  ''Oath."     "Oath"  shall  include  affirmation; 

(18)  ''Officer."  "Officer"  shall  include  clerk,  marshal,  re- 
ceiver, referee,  and  trustee,  and  the  imposing  of  a  duty  upon  or 
the  forbidding  of  an  act  by  any  officer  shall  include  his  successor 
and  any  person  authorized  by  law  to  perform  the  duties  of  such 
officer ; 

(19)  "Persons."  "Persons"  shall  include  corporations, 
except  where  otherwise  specified,  and  officers,  partnerships,  and 
women,  and  when  used  with  reference  to  the  commission  of  acts 
which  are  herein  forbidden  shall  include  persons  who  are  partici- 
pants in  the  forbidden  acts,  and  the  agents,  officers,  and  members 
of  the  board  of  directors  or  trustees,  or  other  similar  controlling 
bodies  of  corporations; 

(20)  "Petition."  "Petition"  shall  mean  a  paper  filed  in 
a  court  of  bankruptcy  or  with  a  clerk  or  deputy  clerk  by  a  debtor 
praying  for  the  benefits  of  this  Act,  or  by  creditors  alleging  the 
commission  of  an  act  of  bankruptcy  by  a  debtor  therein  named ; 

(21)  "Referee."  "Referee"  shall  mean  the  referee  who 
has  jurisdiction  of  the  case  or  to  whom  the  case  has  been  referred, 
or  anyone  acting  in  his  stead; 

(22)  "Conceal."  "Conceal"  shall  include  secrete,  falsify, 
and  mutilate; 

(23)  "  Secured  creditor."  "Secured  creditor"  shall  include 
a  creditor  who  has  security  for  his  debt  upon  the  property  of  the 
bankrupt  of  a  nature  to  be  assignable  under  this  Act,  or  who  owns 
such  a  debt  for  which  some  indorser,  surety,  or  other  persons  sec- 
ondarily liable  for  the  bankrupt  has  such  security  upon  the  bank- 
rupt's assets ; 

(24)  "States."  "States"  shall  include  the  Territories,  tl  i 
Indian  Territory.  Alaska,  and  the  District  of  Columbia; 

(25)  "Transfer."  "Transfer"  shall  inchide  the  sale  ana 
every  other  and  different  mode  of  disposing  of  or  parting  with 
property,  or  the  possession  of  property,  absolutely  or  conditionally, 
as  a  payment,  pledge,  mortgage,  gift,  or  security; 

(26)  "Trustee."  "Trustee"  shall  include  all  of  the  trus- 
tees of  an  estate; 


1122  HANKRUI'TCY    ACT    OK    189CS.  4^2 

(27)  **  Wage-earner."  "Wage-earner"  shall  mean  an  indi- 
vidual who  works  for  wages,  salary,  or  hire,  at  a  rate  of  compen- 
sation not  exceeding  one  thousand  five  hundred  dollars  per  year; 

(28)  Words  in  masculine  gender.  Words  importing  the 
masculine  gender  may  be  applied  to  and  include  corporations,  part- 
nerships, and  women ; 

(29)  Importing  plural.  Words  importing  the  plural  num- 
Uer  may  be  applied  to  and  mean  only  a  single  person  or  thing; 

(30)  Importing  singular.  Words  importing  the  singular 
number  may  be  applied  to  and  mean  several  persons  or  things. 


CHAPTER  II. 

Creation  of  Courts  of  Bankruptcy  and  their 
Jurisdiction. 

Section  2.  U.  S.  district  courts;  supreme  court,  D.  C;  Terri- 
torial courts;  jurisdiction.  That  the  courts  of  bankruptcy  as 
hereinbefore  defined,  viz.,  the  district  courts  of  the  United  States 
in  the  several  States,  the  supreme  court  of  the  District  of  Colum- 
bia, the  district  courts  of  the  several  Territories,  and  the  United 
States  courts  in  the  Indian  Territory  and  the  District  of  Alaska, 
are  hereby  made  courts  of  bankruptcy,  and  are  hereby  invested, 
within  their  respective  territorial  limits  as  now  established,  or  as 
they  may  be  hereafter  changed,  with  such  jurisdiction  at  law  and 
in  equity  as  will  enable  them  to  exercise  original  jurisdiction  in 
bankruptcy  proceedings,  in  vacation  in  chambers  and  during  their 
respective  terms,  as  they  are  now  or  may  be  hereafter  held,  to 

(1)  To  adjudge  bankrupt.  Adjudge  persons  bankrupt  who 
have  had  their  principal  place  of  business,  resided,  or  had  their 
domicile  within  their  respective  territorial  jurisdictions  for  the  pre- 
ceding six  months,  or  the  greater  portion  thereof,  or  who  do  not 
have  their  principal  place  of  business,  reside,  or  have  their  domi- 
cile within  the  United  States,  but  have  property  within  their  juris- 

ydictions,  or  who  have  been  adjudged  bankrupts  by  courts  of  com- 
petent jurisdiction  without  the  United  States  and  have  property 
within  their  jurisdictions; 

(2)  Allow  and  disallow  claims,  etc.  Allow  claims,  disallow 
claims,  reconsider  allowed  or  disallowed  claims,  and  allow  or  dis- 
allow them  against  bankrupt  estates; 


§3  BANKRITTCY    ACT    OF    1 898.  1123 

^3)  Appoint  receivers,  etc.  Appoint  receivers  or  the  mar- 
shals, upon  application  of  parties  in  interest,  in  case  the  courts 
shall  find  it  absolutely  necessary,  for  the  preservation  of  estates, 
to  take  charge  of  the  property  of  bankrupts  after  the  filing  of  the 
petition  and  until  it  is  dismissed  or  the  trustee  is  qualified ; 

(4)  Try  and  punish  bankrupts,  etc.  Arraign,  try,  and 
punish  bankrupts,  officers,  and  other  persons,  and  the  agents, 
officers,  members  of  the  board  of  directors  or  trustees,  or  other 
similar  controlling  bodies,  of  corporations  for  violations  of  this 
Act,  in  accordance  with  the  laws  of  procedure  of  the  United  States 
now  in  force,  or  such  as  may  be  hereafter  enacted,  regulating  trials 
for  the  alleged  violation  of  laws  of  the  United  States; 

(5)  To  permit  temporary  transaction  of  business.  [Autlmr- 
i/.e  tlie  business  of  bankrupts  to  l)e  cor.dacied  for  limited  periods  by 
reeeivers,  the  marshals,  or  trustees,  if  necessary  in  the  best  interests  of 
the  estates ;J 

(5)  Aidhorize  the  'business  of  bankrupts  to  be  conducied  for  lim- 
ited periods  by  receivers,  the  marshals,  or  trustees,  if  necessary  in  the 
best  interests  of  the  estates,  and  allow  such  officers  additiorial  compen- 
salion  for  such  services,  but  not  at  a  greater  rate  than  in  tJiis  act 
allowed  trustees  for  similar  services; 

(6)  To  substitute  additional  persons  in  proceedings,  etc. 
Bring  in  and  substitute  additional  persons  or  parties  in  proceeding's 
in  bankruptcy  when  necessary  for  the  complete  determination  of 
a  matter  in  controversy ; 

(7)  To  collect  and  distribute  assets.  Cause  the  estates  of 
bankrupts  to  be  collected,  reduced  to  money  and  distributed,  and 
determine  controversies  in  relation  thereto,  except  as  herein  other- 
wise provided ; 

(8)  To  close  estates.  Close  estates,  whenever  it  appears 
that  they  have  been  fully  administered,  by  approving  the  final  ac- 
counts and  discharging  the  trustees,  and  reopen  them  whenever  it 
appears  they  were  closed  before  being  fully  administered; 

(9)  To  confirm  or  reject  compositions.  Confirm  or  reject 
compositions  between  debtors  and  their  creditors,  and  set  aside 
compositions  and  reinstate  the  cases ; 

(10)  To  confirm,  etc.,  referee's  findings.  Consider  and  con- 
firm, modify  or  overrule,  or  return,  with  instructions  for  further 
proceedings,  records  and  findings  certified  to  them  by  referees; 


irJ4  UANKIUI'TCV    ACT   OF    18*J8,  §§'^j  *5 

^11)  Determine  exemptions.  Determine  all  claims  of  bank- 
rupts to  their  exemptions; 

(12)  Discharge  bankrupts,  etc.  Discharge  or  refuse  to  dis- 
charge bankrupts  and  set  aside  discharges  and  reinstate  the  cases; 

(18)  Enforce  orders.  Enforce  obedience  by  bankrupts,  of- 
ficers, and  other  persons  to  all  lawful  orders,  by  fine  or  imprison- 
ment or  tine  and  imprisonment ; 

(14)  Extradite  bankrupts.  Extradite  bankrupts  from  their 
respective  districts  to  other  districts; 

(15)  Make  orders.  Make  such  orders,  issue  such  process, 
and  enter  such  judgments  in  addition  to  those  specifically  provided 
for  as  may  be  necessary  for  the  enforcement  of  the  provisions  of 
this  Act ; 

(16)  Punish  for  contempt.  Punish  persons  for  contempts 
committed  before  referees; 

1 17)  Appoint  trustees.  Pursuant  to  the  recommendation 
of  creditors,  or  when  they  neglect  to  recommend  the  appointment 
of  trustees,  appoint  trustees,  and  upon  complaints  of  creditors,  re- 
move trustees  for  cause  upon  hearings  and  after  notices  to  them ; 

(18)  Tax  costs.  Tax  costs,  whenever  they  are  allowed  by 
law,  and  render  judgments  therefor  against  the  unsuccessful  party, 
or  the  successful  party  for  cause,  or  in  part  against  each  of  the 
parties,  and  against  estates,  in  proceedings  in  bankruptcy;  and 

(19)  Transfer  cases.  Transfer  cases  to  other  courts  of  bank- 
ruptcy. 

Unspecified  powers.  Nothing  in  this  section  contained  shall 
be  construed  to  deprive  a  court  of  bankraptcy  of  any  power  it 
would  possess  were  certain  specific  powers  not  herein  enumerated. 


CHAPTER  III. 
Bankrupts. 

Section  3.  Acts  of  bankruptcy  ;  of  what  to  consist,  a  Acts  of 
oankruptcy  by  a  person  shall  consist  of  his  having  (1)  conveyed, 
transferred,  concealed,  or  removed,  or  permitted  to  be  concealed 
or  removed,  any  part  of  his  property  with  intent  to  hinder,  delay, 
or  defraud  his  creditors,  or  any  of  them ;  or  (2)  transferred,  while 
insolvent,  any  portion  of  his  property  to  one  or  more  of  his  cred- 


|3  BANKRUPTCY   ACT   OF   1898.  11-5 

itors  with  intent  to  prefer  such  creditors  over  his  other  creditors; 
or  (3)  suffered  or  permitted,  while  insolvent,  any  creditor  to  ob- 
tain a  preference  through  legal  proceedings,  and  not  having  at 
!east  five  days  before  a  sale  or  final  disposition  of  any  property 
affected  by  such  preference  vacated  or  discharged  such  preference; 
or  [(4)  made  a  general  assignment  for  the  benefit  of  his  creditors;] 

or  (4)  made  a  general  assignment  for  the  henefit  of  his  creditors,  or, 
heing  insolvent,  applied  for  a  received  or  trustee  for  his  property  or 
because  of  insolvency  a  receiver  or  trustee  has  been  put  in  charge  of 
his  property  under  the  laws  of  a  state,  of  a  territory,  or  of  the 
United  States; 

or  (5)  admitted  in  writing  his  inability  to  pay  his  debts  and  his 
willingness  to  be  adjudged  a  bankrupt  on  that  ground. 

Petition  to  be  filed  within  four  months,  d  A  petition  may  be 
filed  against  a  person  who  is  insolvent  and  who  has  committed  an 
act  of  bankruptcy  within  four  months  after  the  commission  of  such 
act.      Such  time  shall  not  expire  until  four  months  after 

(1)  From  when  to  date.  The  date  of  the  recording  or  reg- 
istering of  the  transfer  or  assignment  when  the  act  consists  in 
having  made  a  transfer  of  any  of  his  property  with  intent  to  hin- 
der, delay,  or  defraud  his  creditors  or  for  the  purpose  of  giving  a 
preference  as  hereinbefore  provided,  or  a  general  assignment  for 
the  benefit  of  his  creditors,  if  by  law  such  recording  or  registering 
is  required  or  permitted,  or,  if  it  is  not,  from  the  date  when  the 
beneficiary  takes  notorious,  exclusive,  or  continuous  possession  of 
the  property  unless  the  petitioning  creditors  have  received  actual 
notice  of  such  transfer  or  assignment. 

Defense  of  solvency,  c  It  shall  be  a  complete  defense  to  any 
proceedings  in  bankruptcy  instituted  under  the  first  subdivision  of 
this  section  to  allege  and  prove  that  the  party  proceeded  against 
was  not  insolvent  as  defined  in  this  Act  at  the  time  of  the  filing 
the  petition  against  him,  and  if  solvency  at  such  date  is  proved 
by  the  alleged  bankrupt  the  proceedings  shall  be  dismissed, 

Burden  of  proof.  And  under  said  subdivision  one  the  burden 
of  proving  solvency  shall  be  on  the  alleged  bankrupt. 

Person  denying  insolvency;  to  testify.  ^Whenever  a  per- 
son against  whom  a  petition  has  been  filed  as  hereinbefore  pro- 
vided under  the  second  and  third  subdivisions  of  this  section  takes 
issue  with  and  denies  the  allegation  of  his  insolvency,  it   shall  be 


I  lJ(i  UANKUri'TCV     ACT    OK     1S!)8.  §§'^J   4: 

his  duty  to  appear  in  court  on  the  hearing,  with  his  books,  papers, 
and  accounts,  and  submit  to  an  examination,  and  give  testimony 
as  to  all  matters  tending  to  establish  solvency  or  insolvency, 

Burden  of  proof,  etc.  And  in  case  of  his  failure  to  so  attend 
and  submit  to  examination  the  burden  of  proving  his  solvency 
shall  rest  upon  him. 

Petitioner  to  give  bond.  ^Whenever  a  petition  is  filed  by 
anv  person  for  the  purpose  of  having  another  adjudged  a  bank- 
rupt, and  an  application  is  made  to  take  charge  of  and  hold  the 
property  of  the  alleged  bankrupt,  or  any  part  of  the  same,  prior 
to  the  adjudication  and  pending  a  hearing  on  the  petition,  the 
petitioner  or  applicant  shall  file  in  the  same  court  a  bond  with  at 
least  two  good  and  sufficient  sureties  who  shall  reside  within  the 
jurisdiction  of  said  court,  to  be  approved  by  the  court  or  a  judge 
thereof,  in  such  sum  as  the  court  shall  direct,  conditioned  for  the 
payment. 

Liability  for  costS)  etc.  In  case  such  petition  is  dismissed, 
to  the  respondent,  his  or  her  jDersonal  representatives,  all  costs, 
expenses,  and  damages  occasioned  by  such  seizure,  taking,  and 
detention  of  the  property  of  the  alleged  bankrupt. 

Allowance  of  costs,  etc.  If  such  petition  be  dismissed  by 
the  court  or  withdrawn  by  the  petitioner,  the  respondent  or  respon- 
dents shall  be  allowed  all  costs,  counsel  fees,  expenses,  and  dam- 
ages occasioned  by  such  seizure,  taking,  or  detention  of  such 
property. 

Counsel  fees,  etc.,  to  be  fixed  by  court.  Counsel  fees,  costs, 
expenses,  and  damages  shall  be  fixed  and  allowed  by  the  court, 
and  paid  by  the  obligors  in  such  bond. 

Section  4.  Who  may  become  voluntary  bankrupt,  a  Any  per- 
son who  owes  debts,  except  a  corporation,  shall  be  entitled  to  the 
benefits  of  this  Act  as  a  voluntary  bankrupt. 

Who  may  become  involuntary  bankrupt.  |]&  Any  natural  per- 
son, except  a  waye  earner  or  a  i)ei-.s()a  enju'aged  chiefly  in  farniin*;^  or 
the  tilla<,'e  of  the  soil,  any  u.n incorporated  comi)any,  and  any  corpora- 
tion enjjaged  principally  in  manufacturing,  trading,  printing,  pub- 
lishinf.',  or  mercantile  pursuits,  owing  debts  to  tlie  amount  of  one 
thousand  dollars  or  over,  may  be  adjudged  an  involuntary  bankrupt 
ufton  default  or  an  impartial  trial,  and  shall  be  subject  to  the  provi- 
sions and  entitled  to  the  benefits  of  this  Act.  Private  bankers,  but 
not  national  banks  or  banks  incorporated  under  State  or  Territorial 
laws,  may  be  adjudged  involuntary  bankrupts.] 


S5  BANKRUPTCY    ACT    OF     1898.  11-7 

h  Any  natural  person,  except  a  wage-earner,  or  a  person  engaged 
chiefly  in  farming  or  the  tillage  of  the  soil,  any  unincorporated  com- 
pany, and  any  corporation  engaged  principally  in  manufacturing, 
trading,  printing,  publishing,  mining  or  mercantile  pursuits,  owing 
debts  to  the  amount  of  one  thousand  dollars  or  over,  may  he  adjudged 
an  involuntary  bankrupt  upon  default  or  an  impartial  trial,  and  shall 
he  subject  to  the  provisions  and  entitled  to  the  benefits  of  this  act. 
Private  hankers,  hut  not  national  hanks  or  hanks  incorporated  under 
state  or  territorial  laws,  may  be  adjudged  involuntary  bankrupts. 

The  bankruptcy  of  a  corporation  shall  not  release  its  officers,  di- 
rectors, or  stock]iolders.  as  such,  from  any  liability  under  the  laws  of  a 
state  or  territory  or  of  the  United  States. 

Sections.  Partners;  partnership.  «A  partnership,  during 
the  continuation  of  the  partnership  business,  or  after  its  dissolu- 
tion and  before  the  final  settlement  thereof,  may  be  adjudged  a 
bankrupt. 

Administration  of  estate.  (^  The  creditors  of  the  partnership 
shall  appoint  the  trustee;  in  other  respects  so  far  as  possible  the 
estate  shall   be  administered  as  herein  provided   for  other  estates. 

Jurisdiction  over  one  partner  sufficient.  rThe  court  of  bank- 
ruptcy which  has  jurisdiction  of  one  of  the  partners  may  have 
jurisdiction  of  all  the  partners  and  of  the  administration  of  the 
partnership  and  individual  property. 

Trustee's  duty.  ^The  trustee  shall  keep  separate  accounts 
of  the  partnership  property  and  of  the  property  belonging  to  the 
individual  partners. 

Expenses.  ^The  expenses  shall  be  paid  from  the  partner- 
ship property  and  the  individual  j^roperty  in  such  proportions  as 
the  court  shall  determine. 

Payment  of  partnership  debts.  /"The  net  proceeds  of  the 
partnership  property  shall  be  appropriated  to  the  f)ayment  of  the 
partnership  debts,  and  the  net  proceeds  of  the  individual  estate  of 
each  partner  to  the  payment  of  his  individual  debts. 

Surplus  of  individual  property.  Should  any  surplus  remain 
of  the  property  of  any  partner  after  paying  his  individual  debts, 
such  surplus  shall  be  added  to  the  partnership  assets  and  be  ap- 
plied to  the  payment  of  the  partnership  debts. 

Surplus  of  partnership  property.  Should  any  surplus  of  the 
partnersiiip  pro])erty  remain  after  paying  the  partnership  debts, 
such  surplus  shall  be  added  to  the  assets  of  the  individual  partners 
in  the  proportion  of  their  respective  interests  in  the  partnersiiip. 


1128  HANKKMI-l'C'V    A(   T    (»K    1898.  §§5 7 

Claims  of  partnership  against  individual  estates,  etc.  ^The 
court  uiay  permit  the  proof  of  the  claim  of  the  partnership  estate 
ai^ainst  the  individual  estates,  and  vice  versa,  and  may  marshal 
the  assets  of  the  partnership  estate  and  individual  estates  so  as  to 
prevent  preferences  and  secure  the  equitable  distribution  of  the 
property  of  the  several  estates. 

Administration  of  estate  where  all  partners  are  not  bank- 
rupt. //  In  the  event  of  one  or  more  but  not  all  of  the  members 
of  a  partnership  being  adjudged  bankrupt,  the  partnership  prop- 
erty shall  not  be  administered  in  bankruptcy,  unless  by  consent  of 
the  partner  or  partners  not  adjudged  bankrupt;  but  such  partner 
or  partners  not  adjudged  bankrupt  shall  settle  the  partnership 
business  as  expeditiously  as  its  nature  will  permit,  and  account  for 
the  interest  of  the  partner  or  partners  adjudged  bankrupt. 

Section  6.  Exemptions  of  bankrupts,  a  This  Act  shall  not 
affect  the  allowance  to  bankrupts  of  the  exemptions  which  are 
prescribed  by  the  State  laws  in  force  at  the  time  of  the  filing  of 
the  petition  in  the  State  wherein  they  have  had  their  domicile  for 
the  six  months  or  the  greater  portion  thereof  immediately  preced- 
ing the  filing  of  the  petition. 

Section  7.     Duties  of  bankrupts,     a  The  bankrupt  shall 

(1)  Attend  meetings.  Attend  the  first  meeting  of  his  cred- 
itors, if  directed  by  the  court  or  a  judge  thereof  to  do  so,  and  the 
hearing  upon  his  application  for  a  discharge,  if  filed; 

(2)  Comply  with  orders.  Comply  with  all  lawful  orders 
of  the  court ; 

(3)  Examine  proofs  of  claims.  Examine  the  correctness  of 
all  proofs  of  claims  filed  against  his  estate; 

(4)  Execute  papers.  Execute  and  deliver  such  papers  as 
shall  be  ordered  by  the  court ; 

(5)  Execute  transfers.  Execute  to  his  trustee  transfers  of 
all  his  property  in  foreign  countries; 

(6)  Inform  trustee.  Immediately  inform  his  trustee  of  any 
attempt,  by  his  creditors  or  other  persons,  to  evade  the  provisions 
of  this  Act,  coming  to  his  knowledge; 

(7)  Disclose  false  claims.  In  case  of  any  person  having  to 
his  knowledge  proved  a  false  claim  against  his  estate,  disclose  that 
fact  immediately  to  his  trustee; 


§§7,  8  BANKRUPTCY  ACT  OF  1898.  1129 

(8)  Prepare  schedule  of  property.  Prepare,  make  oath  to, 
and  file  in  court  within  ten  days,  unless  further  time  is  granted, 
after  the  adjudication,  if  an  involuntary  bankrupt,  and  with  the 
petition  if  a  voluntary  bankrupt,  a  schedule  of  his  property,  show- 
ing the  amount  and  kind  of  property,  the  location  thereof,  its 
money  value  in  detail,  and  a  list  of  his  creditors,  showing  their 
residences,  if  known,  if  unknown,  that  fact  to  be  stated,  the 
amounts  due  each  of  them,  the  consideration  thereof,  the  security 
held  by  them,  if  any,  and  a  claim  for  such  exemptions  as  he  may 
be  entitled  to,  all  in  triplicate,  one  copy  of  each  for  the  clerk,  one 
for  the  referee,  and  one  for  the  trustee ;  and 

(9)  Submit  to  examination.  When  present  at  the  first  meet- 
ing of  his  creditors,  and  at  such  other  times  as  the  court  shall  order, 
submit  to  an  examination  concerning  the  conducting  of  his  busi- 
ness, the  cause  of  his  bankruptcy,  his  dealings  with  his  creditors 
and  other  persons,  the  amount,  kind,  and  whereabouts  of  his  prop- 
erty, and,  in  addition,  all  matters  which  may  affect  the  adminis- 
tration and  settlement  of  his  estate ;  but  no  testimony  given  by 
him  shall  be  offered  in  evidence  against  him  in  any  criminal 
proceeding. 

Bankrupt,  when  not  compelled  to  attend  meeting;  examine 
claims.  Provided,  hoivever,  That  he  shall  not  be  required  to  at- 
tend a  meeting  of  his  creditors,  or  at  or  for  an  examination  at  a 
place  more  than  one  hundred  and  fifty  miles  distant  from  his  home 
or  principal  place  of  business,  or  to  examine  claims  except  when 
presented  to  him,  unless  ordered  by  the  court,  or  a  judge  thereof, 
for  cause  shown, 

Expenses  for  attending  meetings.  And  the  bankrupt  shall 
be  paid  his  actual  expenses  from  the  estate  when  examined  or 
required  to  attend  at  any  place  other  than  the  city,  town,  or  vil- 
lage of  his  residence. 

Section  8.  Death  or  insanity  of  bankrupts;  not  to  abate  pro- 
ceedings, a  The  death  or  insanity  of  a  bankrupt  shall  not  abate 
the  proceedings,  but  the  same  shall  be  conducted  and  concluded  in 
the  same  manner,  so  far  as  possible,  as  though  he  had  not  died  or 
become  insane : 

Widow  entitled  to  dower,  etc.  Provided,  That  in  case  of 
death  the  widow  and  children  shall  be  entitled  to  all  rights  of 
dower  and  allowance  fixed  by  the  laws  of  the  State  of  the  bank- 
rupt's residence. 


ll;U)  HAN'KKri'TCV    ACT  OF   1898.  §§t) — 11 

t 

Section  9.  Protection  and  detention  of  bankrupts;  exemption 
from  arrest.  a  A  bankrupt  shall  be  exempt  from  arrest  upon 
civil  process  except  in  the  following  cases:  (1)  When  issued  from 
a  court  of  bankruptcy  for  contempt  or  disobedience  of  its  lawful 
orders;  (2)  when  issued  from  a  State  court  having  jurisdiction, 
and  served  within  such  State,  upon  a  debt  or  claim  from  which 
his  discharge  in  bankruptcy  would  not  be  a  release,  and  in  such 
case  he  shall  be  exempt  from  such  arrest  when  in  attendance  upon 
a  court  of  bankruptcy  or  engaged  in  the  performance  of  a  duty 
imposed  by  this  Act. 

Detention  for  purposes  of  examination.  ^^'The  judge  may, 
at  any  time  after  the  filing  of  a  petition  by  or  against  a  person, 
and  before  the  expiration  of  one  month  after  the  qualification  of 
the  trustee,  upon  satisfactory  proof  by  the  affidavits  of  at  least  two 
persons  that  such  bankrupt  is  about  to  leave  the  district  in  which 
he  resides  or  has  his  principal  place  of  business  to  avoid  examina- 
tion, and  that  his  departure  will  defeat  the  proceedings  in  bank- 
ruptcy, issue  a  warrant  to  the  marshal,  directing  him  to  bring 
sucli  bankrupt  forthwith  before  the  court  for  examination. 

May  be  kept  in  custody  ten  days,  etc.  If  upon  hearing  the 
evidence  of  the  parties  it  shall  appear  to  the  court  or  a  judge  there- 
of that  the  allegations  are  true  and  that  it  is  necessary,  he  shall 
order  such  marshal  to  keep  such  bankrupt  in  custody  not  exceed- 
ing ten  days,  but  not  imprison  him,  until  he  shall  be  examined 
and  released  or  give  bail  conditioned  for  his  appearance  for  exam- 
ination, from  time  to  time,  not  exceeding  in  all  ten  days,  as  re- 
quired by  the  court,  and  for  his  obedience  to  all  lawful  orders 
made  in  reference  thereto. 

Section  10.  Extradition  of  bankrupts,  a  Whenever  a  warrant 
for  the  apprehension  of  a  bankrupt  shall  have  been  issued,  and  he 
shall  have  been  found  within  the  jurisdiction  of  a  court  other  than 
the  one  issuing  the  warrant,  he  may  be  extradited  in  the  same 
manner  in  which  persons  under  indictment  are  now  extradited 
from  one  district  within  which  a  district  court  has  jurisdiction  to 
another. 

Section  11.  Suits  by  and  against  bankrupts;  stay  until  ad- 
judication, u  A  suit  which  is  founded  upon  a  claim  from  which 
a  discharge  would  be  a  release,  and  which  is  pending  against  a 
person  at  the  time  of  the  filing  of  a  petition  against  him,  shall  be 
stayed  until  after  an  adjudication  or  the  dismissal  of  the  petition ; 


§§11,  12  BANKRUPTCY  ACT  OF  1898.  1131 

Further  stay.  If  such  person  is  adjudged  a  bankrupt,  such 
action  may  be  further  stayed  until  twelve  months  after  the  date 
of  such  adjudication,  or,  if  within  that  time  such  person  applies 
for  a  discharge,  then  until  the  question  of  such  discharge  is  deter- 
mined. 

Appearance  of  trustee.  (^The  court  may  order  the  trustee 
to  enter  his  appearance  and  defend  any  pending  suit  against  the 
bankrupt. 

Commenced  prior  to  adjudication,  c  A  trustee  may,  with  the 
approval  of  the  court,  be  permitted  to  prosecute  as  trustee  any  suit 
commenced  by  the  bankrupt  prior  to  the  adjudication,  with  like 
force  and  effect  as  though  it  had  been  commenced  by  him. 

Time  for  bringing  suits  by  or  against  trustees.  «f  Suits  shall 
not  be  brought  by  or  against  a  trustee  of  a  bankrupt  estate  subse- 
quent to  two  years  after  the  estate  has  been  closed. 

Section  12.  Compositions,  when  confirmed;  when  may  be  of- 
fered, a  A  bankrupt  may  offer  terms  of  composition  to  his  cred- 
itors after,  but  not  before,  he  has  been  examined  in  open  court  or 
at  a  meeting  of  his  creditors  and  filed  in  court  the  schedule  of  his 
property  and  list  of  his  creditors,  required  to  be  filed  by  bankrupts. 

Application  for  confirming,  b  kn  application  for  the  con- 
firmation of  a  composition  may  be  filed  in  the  court  of  bankruptcy 
after,  but  not  before,  it  has  been  accepted  in  writing  by  a  majority 
in  number  of  all  creditors  whose  claims  have  been  allowed,  which 
number  must  represent  a  majority  in  amount  of  such  claims,  and 
the  consideration  to  be  paid  by  the  bankrupt  to  his  creditors,  and 
the  money  necessary  to  pay  all  debts  which  have  priority  and  the 
cost  of  the  proceedings,  have  been  deposited  in  such  place  as  shall 
be  designated  by  and  subject  to  the  order  of  the  judge. 

Date,  etc.,  for  hearing.  <rA  date  and  place,  with  reference 
to  the  convenience  of  the  parties  in  interest,  shall  be  fixed  for  the 
hearing  upon  each  application  for  the  confirmation  of  a  composi- 
tion, and  such  objections  as  may  be  made  to  its  confirmation. 

Conditions  of  confirmance.  ^/The  judge  shall  confirm  a 
composition  if  satisfied  that  (1)  it  is  for  the  best  interests  of  the 
creditors;  (2)  the  bankrupt  has  not  been  guilty  of  any  of  the  acts 
or  failed  to  perform  any  of  the  duties  which  would  be  a  bar  to  his 
discharge;  and  (8)  the  offer  and  its  acceptance  are  in  good  faith 
and  have  not  been  made  or  procured  except  as  herein  provided,  or 
by  any  means,  promises,  or  acts  herein  forbidden. 


11;{-J  UANKKIPTCV    ACT    OF    1S;>8.  §§12—14 

Distribution  of  convsideration,  ^Upon  the  confirmation  of  a 
composition,  the  consideration  shall  be  distributed  as  the  judge 
shall  direct,  and  the  case  dismissed.  Whenever  a  composition  is 
not  confirmed,  the  estate  shall  be  administered  in  bankruptcy  as 
herein  provided. 

Section  13.  Compositions,  when  set  aside;  upon  practice  of 
fraud,  a  The  judge  may,  upon  the  application  of  parties  in  inter- 
est filed  at  any  time  within  six  months  after  a  composition  has 
been  confirmed,  set  the  same  aside  and  reinstate  the  case  if  it  shall 
be  made  to  appear  upon  a  trial  that  fraud  was  practiced  in  the 
procuring  of  such  composition,  and  that  the  knowledge  thereof  has 
come  to  the  petitioners  since  the  confirmation  of  such  composition. 

Section  14.  Discharges,  when  granted;  application  for.  a  Any 
person  may,  after  the  expiration  of  one  month  and  within  the  next 
twelve  months  subsequent  to  being  adjudged  a  bankrupt,  file  an 
application  for  a  discharge  in  the  court  of  bankruptcy  in  which 
the  proceedings  are  pending ;  if  it  shall  be  made  to  appear  to  the 
judge  that  the  bankrupt  was  unavoidably  prevented  from  filing  it 
within  such  time,  it  may  be  filed  within  but  not  after  the  expira- 
tion of  the  next  six  months. 

Hearing  of  application.  \b  The  judge  shall  hear  the  applica- 
tion for  a  discluirj:;e,  and  such  proofs  and  pleas  as  may  be  made  in 
opposition  thereto  by  parties  in  interest,  at  such  time  as  mIII  give 
parties  in  interest  a  reasona])le  opi)ortunity  to  be  fully  heard,  and 
investigate  the  merits  of  the  application  and  discharge  the  applicant 
unless  he  has  (1)  committed  an  offense  punishable  by  imprisonment 
as  herein  provided;  or  (2)  with  fraudulent  intent  to  conceal  his  true 
financial  condition  and  in  contemplation  of  bankruptcy,  destroyed, 
concealed,  or  failed  to  keep  hooks  of  account  or  records  from  which 
his  true  condition  might  be  ascertained.] 

6  The  judge  shall  hear  the  application  for  a  discharge,  and  such 
proofs  ami  pleas  as  may  he  made  in  opposition  thereto  by  parties  m 
interest,  at  such  time  as  will  give  parties  in  interest  a  reasonable  op- 
portunity to  be  fully  heard,  and  investigate  tJie  merits  of  the  applica- 
tion, and  discharge  the  applicant  unless  he  has  (1)  committed  an 
offense  punishable  by  imprisonment  as  herein  provided;  or  (2)  with 
intent  to  conceal  his  financial  condition,  destroyed,  concealed,  or  failed 
to  keep  books  of  account  or  records  from  which  such  condition  might 
be  ascertained ;  or  (3)  obtained  property  on  credit  from  any  person 
upon  a  materially  false  statement  in  writing  made  to  such  person  for 
the  purpose  of  obtaining  such  property  on  credit;  or  (4)  at  any  time 
subsequent  to  the  first  day  of  the  four  months  immediately  preceding 
the  filing  of  the  petition  transferred,  removed,  destroyed,  or  concealed, 
or  permitted  to  be  removed,  destroyed,  or  concealed  any  of  his  pro})- 


§§  14-17  BANKRUPTCY   ACT    OF    1898.  1133 

erty  with  intent  to  hinder,  delay,  or  defraud  his  creditors;  or  (5)  in 
voluntary  proceedings  been  granted  a  discharge  in  bankruptcy  within 
six  years;  or  (6)  in  the  course  of  the  proceedings  in  bankruptcy  re- 
fused to  obey  any  lawful  order  of  or  to  answer  any  material  question 
approved  by  the  court. 

Confirmation  discharges  from  debts.  cThe  confirmation  of 
a  composition  shall  discharge  the  bankrupt  from  his  debts,  other 
than  those  agreed  to  be  paid  by  the  terms  of  the  composition  and 
those  not  affected  by  a  discharge. 

Section  15.  Discharges,  when  revoked,  a  The  judge  may, 
upon  the  application  of  parties  in  interest  who  have  not  been 
guilty  of  undue  laches,  filed  at  any  time  within  one  year  after  a 
discharge  shall  have  been  granted,  revoke  it  upon  a  trial  if  it  shall 
be  made  to  appear  that  it  was  obtained  through  the  fraud  of  the 
bankrupt,  and  that  the  knowledge  of  the  fraud  has  come  to  the 
petitioners  since  the  granting  of  the  discharge,  and  that  the  actual 
facts  did  not  warrant  the  discharge. 

Section  16.  Co-debtors  of  bankrupts;  liability  not  affected 
by  bankrupt's  discharge,  etc.  czThe  liability  of  a  person  who  is 
a  co-debtor  with,  or  guarantor  or  in  any  manner  a  surety  for,  a 
bankrupt  shall  not  be  altered  by  the  discharge  of  such  bankrupt. 

rSection  17.  Debts  not  effected  by  a  discharge,  a  A  discharge 
in  bankruptcy  shall  release  a  bankrupt  from  all  of  his  provable 
debts,  except  such  as 

(1)  U.  S.  and  State  taxes.  Are  due  as  a  tax  levied  by  the 
United  States,  the  State,  county,  district,  or  municipality  in  which 
he  resides; 

(2)  Judgments  in  actions  for  frauds,  etc.  Are  judgments  in 
actions  for  frauds,  or  obtaining  property  by  false  pretenses  or  false 
representations,  or  for  willful  and  malicious  injuries  to  the  person 
or  property  of  another ; 

(3)  Claims  not  scheduled,  etc.  Have  not  been  duly  .sched- 
uled in  time  for  proof  and  allowance,  with  the  name  of  the  cred- 
itor if  known  to  the  bankrupt,  unless  such  creditor  had  notice  or 
actual  knowledge  of  the  proceedings  in  bankruptcy ;  or 

(4)  Created  by  fraud,  etc.  Were  created  by  his  fraud,  em- 
bezzlement, misappropriation,  or  defalcation  while  acting  as  an 
oflficer  or  in  any  fi(lu(!ijir>'  (•Mi)<icity.] 


1  KM  UANKUlTTiV    ACT    Ol'     1898.  j,^^    17,18 

Section  17.  Debts  not  afTccted  by  a  discharge— a  A  dhcharge  in 
hiiidritptcn  sliall  release  a  bankrupt  from  all  uf  his  provable  debts, 
except  such  as  (1)  a-re  due  as  a  tax  levied  by  the  United  States,  tlie 
state,  county,  district,  or  municipality  in  whick  he  resides;  (2)  are 
liabilities  for  obtaining  property  by  false  pretenses  or  false  representa- 
tions, or  for  willful  and  malicious  injuries  to  the  person  or  property 
of  anollur,  or  for  alintony  due  or  to  become  due,  or  for  niaintenance 
or  supjwrt  of  wife  or  child,  or  for  seduction  of  an  unmarried  female, 
or  for  eriniinal  conversation ;  (3)  liave  not  been  duly  scheduled  in  time 
for  proof  and  allowance,  with  the  name  of  the  creditor  if  known  to  the 
bankrupt,  unless  such  creditor  had  notice  or  actual  knowledge  of  the 
proceedings  in  bankruptcy ;  or  (1)  were  created  by  his  fraud,  embez- 
zlement, misappropriation,  or  defalcation  while  acting  as  an  officer  or 
in  any  fiduciary  capacity. 

CHAPTER    IV. 
Courts  and  Procedure  Therein. 

Section  18.  Process,  pleadings,  and  adjudications;  service 
of  petition,  involuntary  bankruptcy,  [a  Upon  the  filing  of  a  peti- 
tion for  involuntary  bankruptcy,  service  thereof,  with  a  writ  of 
subpoena,  shall  be  made  upon  the  person  therein  named  as  defend- 
ant in  the  same  manner  that  service  of  such  process  is  now  had 
upon  the  commencement  of  a  suit  in  equity  in  the  courts  of  the 
United  States,  except  that  it  shall 

Returnable  in  fifteen  days.  Be  returnable  within  fifteen  days, 
unless  the  judge  shall  for  cause  fix  a  longer  time; 

By  publication.  But  in  case  personal  service  can  not  be  made, 
then  notice  shall  be  given  by  publication  in  the  same  manner  and 
for  the  same  time  as  provided  by  law  for  notice  by  publication  in 
suits  in  eciuity  in  courts  of  the  United  States.] 

a  Upon  the  filing  of  a  petition  for  involuntary  "bankruptcy,  service 
thereof,  with  a  writ  of  subpoena,  shall  be  made  upon  the  person 
therein  named  as  defendant  in  the  same  manner  that  service  of  such 
process  is  now  had  upon  the  commencement  of  a  suit  in  equity  in  the 
courts  of  the  United  States,  except  that  it  shall  be  returnable  within 
fifteen  days,  unless  the  judge  shall  for  cause  fix  a  longer  time;  but 
in  case  personal  service  can  not  be  made,  then  notice  shall  be  given 
by  publication  in  the  same  manner  and  for  the  same  time  as  provided 
by  law  for  notice  by  publication  in  suits  to  enforce  a  legal  or  equitable 
lien  in  courts  of  the  United  States,  except  that,  unless  the  judge  shall 


§§  18,  19  BANKRITPTOY    ACT   OF    1898.  1135 

otherwise  direct,  the  order  shall  be  published  not  more  than  once  a 
week  for  two  consecutive  weeks,  and  the  return  day  shall  he  ten  days 
after  the  last  publication  unless  the  judge  shall  for  cause  fix  a  longer 
time. 

Pleading  within  ten  days.  [/>  The  bankrupt,  oi-  any  creditor, 
may  appear  and  plead  to  the  petition  within  ten  days  after  the 
return  day,  or  within  such  further  time  as  the  court  may  allow.] 

6  The  bankrupt,  or  any  creditor,  may  appear  and.  plead  to  the 
petition  witJiin  five  days  after  the  return  day,  or  within  such  further 
tim,e  as  the  court  may  allow. 

Verification.  rAll  pleadings  setting  up  matters  of  fact  shall 
be  verified  under  oath. 

Court  to  determine  issues  when  facts  controverted,  dli  the 
bankrupt,  or  any  of  his  creditors,  shall  appear,  within  the  time 
limited,  and  controvert  the  facts  alleged  in  the  petition,  the  judge 
shall  determine,  as  soon  as  may  be,  the  issues  presented  by  the 
pleadings,  without  the  intervention  of  a  jury,  except  in  cases  where 
a  jury  trial  is  given  by  this  Act,  and  makes  the  adjudication  or 
dismiss  the  petition. 

Decision  where  pleadings  not  filed.  <^lf  on  the  last  day  within 
which  pleadings  may  be  filed  none  are  filed  by  the  bankrupt  or  any 
of  his  creditors,  the  judge  shall  on  the  next  day,  if  present,  or  as 
soon  thereafter  as  practicable,  make  the  adjudication  or  dismiss 
the  petition. 

If  judge  absent,  case  to  be  referred  to  referee.  /If  the  judge 
is  absent  from  the  district,  or  the  division  of  the  district  in  which 
the  petition  is  pending,  on  the  next  day  after  the  last  day  on  which 
pleadings  may  be  filed,  and  none  have  been  filed  by  the  bankrupt 
or  any  of  his  creditors,  the  clerk  shall  forthwith  refer  the  case  to 
the  referee. 

Hearing  on  filing  voluntary  petition,  g  Upon  the  filing  of  a 
voluntary  petition  the  judge  shall  hear  the  petition  and  make  the 
adjudication  or  dismiss  the  petition. 

Absence  of  judge.  If  the  judge  is  absent  from  the  district,  or 
the  division  of  the  district  in  which  the  petition  is  filed  at  the  time 
of  the  filing,  the  clerk  shall  forthwith  refer  the  case  to  the  referee. 

Section  19.  Jury  trials  ;  person  against  whom  involuntary 
petition  filed,  entitled,  a  A  person  against  v/hom  an  involuntary 
petition  has  been  filed  shall  be  entitled  to  have  a  trial  by  jury,  in 
respect  to  the  question  of   his   insolvency,  except  as  herein  other- 


ll;5(;  n.vNKKri'TCY  act  of  1898.  §§lt) — '2i 

wise  provided,  and  any  act  of  bankruptcy  alleged  in  such  petition 
to  have  been  committed,  upon  filing  a  written  application  therefor 
at  or  before  the  time  within  which  an  answer  may  be  filed. 

Right  waived.  If  such  application  is  not  filed  within  such 
lime,  a  trial  bv  jury  shall  be  deemed  to  have  been  waived. 

Attendance  of  jury,  etc.  dU  a.  jury  is  not  in  attendance  upon 
tiie  court,  one  may  be  specially  summoned  for  the  trial,  or  the 
case  may  be  postponed,  or,  if  the  case  is  pending  in  one  of  the 
district  courts  within  the  jurisdiction  of  a  circuit  court  of  the 
I'nited  States,  it  may  be  certified  for  trial  to  the  circuit  court  sit- 
ting at  the  same  place,  or  by  consent  of  parties  when  sitting  at  any 
other  place  in  the  same  district,  if  such  circuit  court  has  or  is  to 
have  a  jury  first  in  attendance. 

Laws  as  to  jury  trials  applicable.  ^rThe  right  to  submit  mat- 
ters in  controversy,  or  an  alleged  offense  under  this  Act,  to  a  jury 
shall  be  determined  and  enjoyed,  except  as  provided  by  this  Act, 
according  to  the  United  States  laws  now  in  force  or  such  as  may 
be  hereafter  enacted  in  relation  to  trials  by  jury. 

Section  20.  Oaths,  affirmations;  by  whom  administered. 
a  Oaths  required  by  this  Act,  except  upon  hearings  in  court,  may 
be  administered  by  (1)  referees;  (2)  officers  authorized  to  ad- 
minister oaths  in  proceedings  before  the  courts  of  the  United 
States,  or  under  the  laws  of  the  State  where  the  same  are  to  be 
taken;  and  (3)  diplomatic  or  consular  oflficers  of  the  United 
States  in  any  foreign  country. 

Affirmations.  ^  Any  person  conscientiously  opposed  to  taking 
an  oath  may,  in  lieu  thereof,  affirm.  Any  person  who  shall  afl5rm 
falsely  shall  be  punished  as  for  the  making  of  a  false  oath. 

Section  21.  Evidence;  compulsory  attendance  of  witnesses. 
[^;  A  court  of  bankruptcy  may,  upon  application  of  any  officer,  bank- 
rupt, or  creditor,  by  order  require  any  designated  person,  including 
thf  bankrupt,  who  is  a  competent  witness  under  the  laws  of  the 
State  in  which  the  proceedings  are  pending,  to  appear  in  court  or 
before  a  referee  or  the  judge  of  any  State  court,  to  be  examined  con- 
ci-rning  the  acts,  conduct,  or  property  of  a  bankrupt  whose  estate 
is  in  process  of  administration  under  this  Act.] 

a  A  court  of  bankruptcy  may,  upon  application  of  any  officer, 
haitkrupt,  or  creditor,  hy  order  require  any  designated  person,  in- 
chiding  the  bankrupt  and  his  wife,  to  appear  in  court  or  before  a 
referee  or  the  judge  of  any  slate  court,  to  be  examined  concerning  the 


I  21,  22  BANKKLPTCY    AlT    OF    1898.  11 '57 

acts,  conduct,  or  property  of  a  hankrupt  whose  estate  is  in  process  of 
administration  under  this  act;  provided,  that  the  wife  maxj  he  exam- 
ined only  touching  business  transacted  hy  her  or  to  which  she  is  a, 
party,  and  to  determine  the  fact  whether  she  has  transacted  or  leen 
a  party  to  any  business  of  the  hankrupt. 

Depositions,  laws  governing,  d  The  right  to  take  depositions 
in  proceedings  under  this  Act  shall  be  determined  and  enjoyed 
according  to  the  United  States  laws  now  in  force,  or  such  as  may 
be  hereafter  enacted  relating  to  the  taking  of  depositions,  except 
as  herein  provided. 

Notice  of  taking,  c  Notice  of  the  taking  of  depositions  shall 
be  filed  with  the  referee  in  every  case.  When  depositions  are  to  be 
taken  in  opposition  to  the  allowance  of  a  claim  notice  shall  also 
be  served  upon  the  claimant,  and  when  in  opposition  to  a  discharge 
notice  shall  also  be  served  upon  the  bankrupt. 

Certified  copies  of  proceedings  evidence,  d  Certified  copies  of 
proceedings  before  a  referee,  or  of  papers,  when  issued  by  the  clerk 
or  referee,  shall  be  admitted  as  evidence  with  like  force  and  effect 
as  certified  copies  of  the  records  of  district  courts  of  the  United 
States  are  now  or  may  hereafter  be  admitted  as  evidence. 

Of  order  approving  trustees'  bond,  e  A  certified  copy  of  the 
order  approving  the  bond  of  a  trustee  shall  constitute  conclusive 
evidence  of  the  vesting  in  him  of  the  title  to  the  property  of  the 
bankrupt,  and  if  recorded  shall  impart  the  same  notice  that  a  deed 
from  the  bankrupt  to  the  trustee  if  recorded  would  have  imparted 
had  not  bankruptcy  proceedings  intervened. 

Of  order  confirming  composition,  etc.  /A  certified  copy  of  an 
order  confirming  or  setting  aside  a  composition,  or  granting  or 
setting  aside  a  discharge,  not  revoked,  shall  be  evidence  of  the 
jurisdiction  of  the  court,  the  regularity  of  the  proceedings,  and  of 
the  fact  that  the  order  was  made. 

Evidence  of  revesting  title  in  bankrupts.  ^A  certified  copy 
of  an  order  confirming  a  composition  shall  constitute  evidence  of 
the  revesting  of  the  title  of  his  property  in  the  bankrupt,  and  if 
recorded  shall  impart  the  same  notice  that  a  deed  from  the  trustee 
to  the  bankrupt  if  recorded  would  impart. 

Section  22.  Reference  of  cases  after  adjudication,  n  After  a 
person  has  been  adjudged  a  bankrupt  the  judge  may  cause  the 
trustee  to  proceed  with  the  administration  of  the  estate,  or  refer 
it  (J)  generally  to  the  referee  or  specially  with  only  limited  au- 


11:>S  RANKKri'lH'V    ACT    OF    18!)8.  §§2'^j   ^4 

thority  to  act  in  the  premises  or  to  consider  and  report  upon  spec- 
ified issues;  or  (2)  to  any  referee  within  the  territorial  jurisdiction 
of  the  court,  if  the  convenience  of  parties  in  interest  will  be  served 
therein-,  or  for  cause,  or  if  the  bankrupt  does  not  do  business, 
reside,  or  luue  his  domicile  in  the  district. 

Transfer  of  case  to  different  referee,  b  The  judge  may,  at  any 
time,  for  the  convenience  of  parties  or  for  cause,  transfer  a  case 
from  one  referee  to  another. 

Section  23.  Jurisdiction  of  the  United  States  and  State  courts. 
a  The  United  States  circuit  courts  shall  have  jurisdiction  of  all 
controversies  at  law  and  in  equity,  as  distinguished  from  proceed- 
ings in  bankruptcy,  between  trustees  as  such  and  adverse  claimants 
concerning  the  property  acquired  or  claimed  by  the  trustees,  in  the 
same  manner  and  to  the  same  extent  only  as  though  bankruptcy 
proceedings  had  not  been  instituted  and  such  controversies  had 
been  between  the  bankrupts  and  such  adverse  claimants. 

Suits  by  trustees,  where  brought.  \\)  Suits  by  the  trustee  shall 
only  be  brought  or  prosecuted  in  the  courts  wliere  the  bankrupt, 
whose  estate  is  being  administered  by  such  trustee,  mig^ht  have  brought 
or  prosecuted  them  if  proceedings  in  bankruptcy  had  not  been  insti- 
tuted, unless  by  consent  of  the  proposed  defendant.] 

h  Suits  hy  the  trustee  shall  only  he  brought  or  prosecuted  in  the 
courts  where  the  bankrupt,  whose  estate  is  being  administered  by  such 
trust rr,  might  have  brought  or  prosecuted  them  if  proceedings  in 
bankruptcy  had  not  been  insiituted.  unless  by  consent  of  the  proposed 
defendant,  except  suits  for  the  recovery  of  property  under  section 
sij-ty.  subdivision  b,  and  section  sixty-seven,  subdivision  e.    '^.  •'^&'7C  -ti^^ 

Concurrent  jurisdiction  of  circuit  courts  and  courts  of  bank- 
ruptcy. <rThe  United  States  circuit  courts  shall  have  concurrent 
jurisdiction  with  the  courts  of  bankruptcy,  within  their  respective 
territorial  limits,  of  the  offenses  enumerated  in  this  Act. 

Section  24.  Jurisdiction  of  appellate  courts,  a  The  Supreme 
Court  of  the  United  States,  the  circuit  courts  of  appeals  of  the 
United  States,  and  the  supreme  courts  of  the  Territories,  in  vaca- 
tion in  chambers  and  during  their  respective  terms,  as  now  or  as 
they  may  be  hereafter  held,  are  hereby  invested  with  appellate 
jurisdiction  of  controversies  arising  in  bankruptcy  proceedings 
from  the  courts  of  bankruptcy  from  which  they  have  appellate 
jurisdiction  in  other  cases. 

Appeals  from  courts  not  in  organized  circuits  and  in  District 
of  Columbia.  The  Supreme  Court  of  the  United  States  shall  exer- 
cise a  like  jurisdiction  from  courts  of  bankruptcy  not  within  any 


§§24,    25  BANKRUPTCY    ACT    OF    1 898.  1139 

organized  circuit  of  the  United  States  and  from  the  supreme  court 
of  the  District  of  Columbia. 

Jurisdiction  of  circuit  court  of  appeals,  b  The  several  circuit 
courts  of  appeal  shall  have  jurisdiction  in  equity,  either  interlocu- 
tory or  final,  to  superintend  and  revise  in  matter  of  law  the  pro- 
ceedings of  the  several  inferior  courts  of  bankruptcy  within  their 
jurisdiction.  Such  power  shall  be  exercised  on  due  notice  and 
petition  by  any  party  aggrieved. 

Section  25.  Appeals  and  writs  of  error;  when  taken,  a  That 
appeals,  as  in  equity  cases,  may  be  taken  in  bankruptcy  proceed- 
ings from  the  courts  of  bankruptcy  to  the  circuit  court  of  appeals 
of  the  United  States,  and  to  the  supreme  court  of  the  Territories, 
in  the  following  cases,  to  wit,  (1)  from  a  judgment  adjudging  or 
refusing  to  adjudge  the  defendant  a  bankrupt ;  (2)  from  a  judg- 
ment granting  or  denying  a  discharge;  and  (3)  from  a  judgment 
allowing  or  rejecting  a  debt  or  claim  of  five  hundred  dollars  or 
over. 

To  be  within  ten  days;  hearing.  Such  appeal  shall  be  taken 
within  ten  days  after  the  judgment  appealed  from  has  been  ren- 
dered, and  may  be  heard  and  determined  by  the  appellate  court  iu 
term  or  vacation,  as  the  case  may  he. 

Appeal  to  U.  S.  Supreme  Court,  b  From  any  final  decision  of 
a  court  of  appeals,  allowing  or  rejecting  a  claim  under  this  Act, 
an  appeal  may  be  had  under  such  rules  and  within  such  time  as 
may  be  prescribed  by  the  Supreme  Court  of  the  ITnited  States,  in 
the  following  cases  and  no  other: 

1.  Where  amount  exceeds  $2,000,  etc.  Where  the  amount 
in  controversy  exceeds  the  sum  of  two  thousand  dollars,  and  the 
question  involved  is  one  which  might  have  been  taken  on  appeal 
or  writ  of  error  from  the  highest  court  of  a  State  to  the  Supreme 
Court  of  the  United  States;  or 

2.  Where  question  certified  by  Supreme  Court  Justice. 
Where  some  Justice  of  the  Supreme  Court  of  the  United  States 
shall  certify  that  in  his  opinion  the  determination  of  the  question 
or  questions  involved  in  the  allowance  or  rejection  of  such  claim  is 
essential  to  a  uniform  construction  of  this  Act  throughout  the 
United  States. 

Trustees  not  to  give  bond.  ^Trustees  shall  not  be  required  to 
give  bond  when  they  take  appeals  or  sue  out  writs  of  error. 

Certification    to  Supreme  Court   by  courts,      a^  Controversies 


1140  HANKKll'TCV    ACT    OK    1 898.  §§26 — 29 

may  be  certified  to  the  Supreme  Court  of  the  United  States  from 
other  courts  of  the  United  States,  and  the  former  court  may  exer- 
cise jurisdiction  thereof  and  issue  writs  of  certiorari  pursuant  to 
the  provisions  of  the  United  States  laws  now  in  force  or  such  as 
may  be  hereafter  enacted. 

Section  26.  Arbitration  of  controversies;  trustees  may  sub- 
^mit  to.  a  The  trustee  may,  pursuant  to  the  direction  of  the  court, 
submit  to  arbitration  any  controversy  arising  in  the  settlement  of 
the  estate. 

Selection  of  arbitrators,  b  Three  arbitrators  shall  be  chosen 
by  mutual  consent,  or  one  by  the  trustee,  one  by  the  other  party 
to  the  controversy,  and  the  third  by  the  two  so  chosen,  or  if  they 
fail  to  agree  in  five  days  after  their  appointment  the  court  shall 
appoint  the  third  arbitrator. 

Findings  of  arbitrators.  <rThe  written  finding  of  the  arbitra- 
tors, or  a  majority  of  them,  as  to  the  issues  presented,  may  be  filed 
in  court  and  shall  have  like  force  and  effect  as  the  verdict  of  a 
jury. 

Section  27.  Compromises,  a  The  trustee  may,  with  the  ap- 
proval of  the  court,  compromise  any  controversy  arising  in  the 
administration  of  the  estate  upon  such  terms  as  he  may  deem  for 
the  best  interests  of  the  estate. 

Section  28.  Designation  of  newspapers  to  publish  notices. 
a  Courts  of  bankruptcy  shall  by  order  designate  a  newspaper  pub- 
lished within  their  respective  territorial  districts,  and  in  the  county 
in  which  the  bankrupt  resides  or  the  major  part  of  his  property  is 
situated,  in  which  notices  required  to  be  published  by  this  Act 
and  orders  which  the  court  may  direct  to  be  published  shall  be 
inserted.  Any  court  may  in  a  particular  case,  for  the  convenience 
of  parties  in  interest,  designate  some  additional  newsj)aper  in 
which  notices  and  orders  in  such  case  shall  be  published. 

Section  29.  Offenses  ;  penalty  for  misappropriating  property* 
etc.  a  A  person  shall  be  punished,  by  imprisonment  for  a  period 
not  to  exceed  five  years,  upon  conviction  of  the  offense  of  having 
knowingly  and  fraudulently  appropriated  to  his  own  use,  embez- 
zled, spent,  or  unlawfully  transferred  any  property  or  secreted  or 
destroyed  any  document  belonging  to  a  bankrupt  estate  which 
came  into  his  charge  as  trustee. 

Concealing  property,     b  h.  person  shall   be  punished,  by  im- 
prisonment for  a  period  not  to  exceed  two  years,  upon  conviction 


§§29 3^  BANKRUPTCY    ACT    OK    I  8y8.  1141 

of  the  offense  of  having  knowingly  and  fraudulently  (1)  concealed 
while  a  bankrupt,  or  after  his  discharge,  from  his  trustee  any  of 
the  property  belonging  to  his  estate  in  bankruptcy  ;  or 

(2)  False  oath  or  account,  etc.  Made  a  false  oath  or  account 
in,  or  in  relation  to,  any  proceeding  in  bankruptcy; 

(3)  Presenting  false  claim.  Presented  under  oath  any  false 
claim  for  proof  against  the  estate  of  a  bankrupt,  or  used  any  such 
claim  in  composition  personally  or  by  agent,  proxy,  or  attorney, 
or  as  agent,  proxy,  or  attorney ;  or 

(4)  Receiving  property  from  bankrupt.  Received  any  mate- 
rial amount  of  property  from  a  bankrupt  after  the  filing  of  the 
petition,  with  intent  to  defeat  this  Act ;  or 

(5)  Extorting  money  for  forbearing  to  act,  etc.  Extorted  or 
attempted  to  extort  any  money  or  property  from  any  person  as  a 
consideration  for  acting  or  forbearing  to  act  in  bankruptcy  pro- 
ceedings. 

Acting  as  referee  when  interested,  c  A  person  shall  be  pun- 
ished by  fine,  not  to  exceed  five  hundred  dollars,  and  forfeit  his 
office,  and  the  same  shall  thereupon  become  vacant,  upon  convic- 
tion of  the  offense  of  having  knowingly  (1)  acted  as  a  referee  in  a 
case  in  which  he  is  directly  or  indirectly  interested;  or 

(2)  Purchasing  property,  etc.  Purchased,  while  a  referee, 
directly  or  indirectly,  any  property  of  the  estate  in  bankruptcy  of 
which  he  is  referee  ,  or 

(3)  Refused  to  permit  inspection  of  accounts.  Refused, 
while  a  referee  or  trustee,  to  permit  a  reasonable  opportunity  for 
the  inspection  of  the  accounts  relating  to  the  affairs  of,  and  the 
papers  and  records  of  estates  in  his  charge  by  parties  in  interest 
when  directed  by  the  court  so  to  do. 

Prosecutions  to  be  in  one  year,  d K  person  shall  not  be  prose- 
cuted for  any  offense  arising  under  this  Act  unless  the  indictment 
is  found  or  the  information  is  filed  in  court  within  one  year  after 
the  commission  of  the  offense. 

Section  30.  Rules,  forms,  and  orders;  United  States  Supreme 
Court  to  make,  a  All  necessary  rules,  forms,  and  orders  as  to 
procedure  and  for  carrying  this  Act  into  force  and  effect  shall  be 
prescribed,  and  may  be  amended  from  time  to  time,  by  the  Supreme 
Court  of  the  United  States. 

Section  31.  Computation  of  time,  a  Whenever  time  is  enu- 
merated  by  days  in  this  Act,  or  in  any  proceeding  in  bankruptcy, 


1142  l^ANKKUPTCV    ACT    OK    1898.  *^§3I 35 

the  miniber  of  days  shall  be  computed  by  excluding  the  first  and 
iuchuling  the  last,  unless  the  last  fall  on  a  Sunday  or  holiday,  in 
which  event  the  day  last  included  shall  be  the  next  day  thereafter 
which  is  not  a  Sunday  or  a  legal  holiday. 

Section  32.  Transfer  of  cases  in  different  courts,  a  In  the 
event  petitions  are  filed  against  the  same  person,  or  against  differ- 
ent members  of  a  partnership,  in  different  courts  of  bankruptcy 
each  of  which  has  jurisdiction,  the  cases  shall  be  transferred,  by 
order  of  the  courts  relinquishing  jurisdiction,  to  and  be  consoli- 
dated by  the  one  of  such  courts  which  can  proceed  with  the  same 
tor  the  greatest  convenience  of  parties  in  interest. 


CHAPTER  V. 
Officers,  their  Duties  and  Compensation. 

Section  33.    Creation  of  two  ofi&ces,  referee  and  trustee,    a  The 

offices  of  referee  and  trustee  are  hereby  created. 

Section  34.  Appointment,  removal,  and  districts  of  referees. 
fl  Courts  of  bankruptcy  shall,  within  the  territorial  limits  of  which 
they  respectively  have  jurisdiction,  (1)  appoint  referees,  each  for 
a  term  of  two  years,  and  may,  in  their  discretion,  remove  them 
because  their  services  are  not  needed  or  for  other  cause ;  and 

(2)  Designation  of  districts.  Designate,  and  from  time  to 
time  change,  the  limits  of  the  districts  of  referees,  so  that  each 
county,  where  the  services  of  a  referee  are  needed,  may  constitute 
at  least  one  district. 

Section  35.  Qualifications  of  referees.  « Individuals  shall 
not  be  eligible  to  appointment  as  referees  unless  they  are  respec- 
tively (1)  competent  to  perform  the  duties  of  that  office;  (2)  not 
holding  any  office  of  profit  or  emolument  under  the  laws  of  the 
United  States  or  of  any  State  other  than  commissioners  of  deeds, 
justices  of  the  peace,  masters  in  chancery,  or  notaries  public;  (3) 
not  related  by  consanguinity  or  affinity,  within  the  third  degree  as 
determined  by  the  common  law,  to  any  of  the  judges  of  the  courts 
of  bankruptcy  or  circuit  courts  of  the  United  States,  or  of  the  jus- 
tices or  judges  of  the  appellate  courts  of  the  districts  wherein  they 
may  be  appointed;  and  (4)  residents  of,  or  have  their  offices  in, 
the  territorial  districts  for  which  they  are  to  be  appointed. 


§§3^ 39  BANKRUPTCY    ACT    OF    1 898.  1143 

Section  36.  Oath  of  ofl&ce  of  referees,  a  Referees  shall  take 
the  same  oath  of  office  as  that  prescribed  for  judges  of  United 
States  courts. 

Section  37.  Number  of  referees,  a  Such  number  of  referees 
shall  be  appointed  as  may  be  necessary  to  assist  in  expeditiously 
transacting  the  bankruptcy  business  pending  in  the  various  courts 
of  bankruptcy. 

Section  38.  Jurisdiction  of  referees,  a  Referees  respectively 
are  hereby  invested,  subject  always  to  a  review  by  the  judge, 
within  the  limits  of  their  districts  as  established  from  time  to  time, 
with  jurisdiction  to 

(1)  To  consider  petitions.  Consider  all  petitions  referred  to 
them  by  the  clerks  and  make  the  adjudications  or  dismiss  the 
petitions ; 

(2)  Administer  oaths,  examine  witnesses,  etc.  Exercise  the 
powers  vested  in  courts  of  bankruptcy  for  the  administering  of 
oaths  to  and  the  examination  of  persons  as  witnesses  and  for  re- 
quiring the  production  of  documents  in  proceedings  before  them, 
except  the  power  of  commitment; 

(3)  Take  possession  and  release  property,  etc.  Exercise  the 
powers  of  the  judge  for  the  taking  possession  and  releasing  of  the 
property  of  the  bankrupt  in  the  event  of  the  issuance  by  the  clerk 
of  a  certificate  showing  the  absence  of  a  judge  from  the  judicial 
district,  or  the  division  of  the  district,  or  his  sickness,  or  inability 
to  act ; 

(4)  Perform  certain  duties  of  bankruptcy  courts.  Perform 
such  part  of  the  duties,  except  as  to  questions  arising  out  of  the 
applications  of  bankrupts  for  compositions  or  discharges,  as  are  by 
this  Act  conferred  on  courts  of  bankruptcy  and  as  shall  be  pre- 
scribed by  rules  or  orders  of  the  courts  of  bankruptcy  of  their 
respective  districts,  except  as  herein  otherwise  provided ;  and 

(5)  Authorize  employment  of  stenographers.  Upon  the  ap- 
plication of  the  trustee  during  the  examination  of  the  bankrupts, 
or  other  proceedings,  authorize  the  employment  of  stenographers 
at  the  expense  of  the  estates  at  a  compensation  not  to  exceed  ten 
cents  per  folio  for  reporting  and  transcribing  the  proceedings. 

Section  39.      Duties  of  referees,     a  Referees  shall 

(1)      Declare  dividends.      Declare  dividends  and   prepare  and 

deliver  to  trustees  dividend  sheets  showing  the  dividends  declared 

and  to  whom  payable; 


1144  BANKRUl'TCV    ACT    OK    1898.  ^§39»   4° 


y-2)  Examine  schedules,  etc.  Kxainine  all  schedules  of  prop- 
erty and  lists  of  creditors  filed  b>-  bankrupts  and  cause  such  as  are 
incomplete  or  defective  to  be  amended ; 

(S^l  Furnish  information,  etc.  Furnish  such  information 
concerning  the  estates  in  process  of  administration  before  them  as 
mav  be  requested  by  the  parties  in  interest ; 

(1)  Give  notices.  Give  notices  to  creditors  as  herein  pro- 
vided ; 

(5)  Prepare  records,  etc.  Make  up  records  embodying  the 
evidence,  or  the  substance  thereof,  as  agreed  upon  by  the  parties 
in  all  contested  matters  arising  before  them,  whenever  requested 
to  do  so  by  either  of  the  parties  thereto,  together  with  their  find- 
ings therein,  and  transmit  them  to  the  judges; 

( G )  Prepare  schedules,  etc.  Prepare  and  file  the  schedules 
of  property  and  lists  of  creditors  required  to  be  filed  by  the  bank- 
rupts, or  cause  the  same  to  be  done,  when  the  bankrupts  fail, 
refuse,  or  neglect  to  do  so ; 

( 7 )  Preserve  records,  etc.  Safely  keep,  perfect,  and  transmit 
to  the  clerks  the  records,  herein  required  to  be  kept  by  them,  when 
the  cases  are  concluded  ; 

(8)  Tra;ismit  papers  to  clerks,  etc.  Transmit  to  the  clerks 
such  papers  as  may  be  on  file  before  them  whenever  the  same  are 
needed  in  any  proceedings  in  courts,  and  in  like  manner  secure 
the  return  of  such  papers  after  they  have  been  used,  or,  if  it  be 
impracticable  to  transmit  the  original  papers,  transmit  certified 
copies  thereof  by  mail ; 

(9)  Preserve  evidence,  etc.  Upon  application  of  any  party 
in  interest,  preserve  the  evidence  taken  or  the  substance  thereof 
as  agreed  upon  by  the  parties  before  them  when  a  stenographer  is 
not  in  attendance;  and 

(10)  Obtain  papers,  etc.  Whenever  their  respective  offices 
are  in  the  same  cities  or  towns  where  the  courts  of  bankruptcy 
convene,  call  upon  and  receive  from  the  clerks  all  papers  filed  in 
courts  of  bankruptcy  which  have  been  referred  to  them. 

Referees  not  to  act  if  interested.  <^  Referees  shall  not  (1)  act 
in  cases  in  which  they  are  directly  or  indirectly  interested;  (2) 
practice  as  attorneys  and  counselors  at  law  in  any  bankruptcy  pro- 
ceedings; or  (.3)  purchase,  directly  or  indirectly,  any  property  of 
an  estate  in  bankruptcy. 

Section  40.  Compensation  of  referees,  [a  Refc'rees  sliall  re- 
Cfiv.-  ;is  full   <'omT.ctis;itioii   for  their  services,  pnyable  after  they  are 


§§40,41  BANKRITPTCY    ACT    OF    1898.  11 15 

rendered,  a  fee  of  ten  dollars  deposited  with  the  elerk  at  the  time 
the  petition  is  filed  in  each  case,  except  when  a  fee  is  not  required 
from  a  voluntary  bankrupt,  and  from  estates  which  have  been  admin- 
istered before  them  one  per  centum  commissions  on  sums  to  be 
paid  as  dividends  and  commissions,  or  one-half  of  one  per  centum 
on  the  amount  to  be  paid  to  creditors  upon  the  confirmation  of  a 
composition.] 

a  Referees  shall  receive  as  full  compensation  for  their  services, 
payable  after  they  are  rendered,  a  fee  of  fifteen  dollars  deposited  with 
the  clerk  at  tJie  time  the  petition  is  filed  in  each  case,  except  when  a 
fee  is  not  required  from  a  voluntary  bankrupt,  and  twenty-five  cents 
for  every  proof  of  claim  filed  for  allowance,  to  be  paid  from  the 
estate,  if  any,  as  a  part  of  the  cost  of  administration,  and  from 
estates  which  have  been  administered  before  them  one  per  centum 
commissions  on  all  moneys  disbursed  to  creditors  by  the  trustee,  or 
one-half  of  one  per  centum,  on  the  amount  to  be  paid  to  creditors 
upon  the  confirmation  of  a  composition. 

On  transfer  from  one  to  another,  b  Whenever  a  case  is  trans- 
ferred from  one  referee  to  another  the  judge  shall  determine  the 
proportion  in  which  the  fee  and  commissions  therefor  shall  be 
divided  between  the  referees. 

Where  reference  revoked,  c  In  the  event  of  the  reference  of  a 
case  being  revoked  before  it  is  concluded,  and  when  the  case  is 
especially  referred,  the  judge  shall  determine  what  part  of  the  fee 
and  commissions  shall  be  paid  to  the  referee. 

Section  41.  Contempts  before  referees,  ah  person  shall  not, 
in  proceedings  before  a  referee,  (1)  disobey  or  resist  any  lawful 
order,  process,  or  writ ;  (2)  misbehave  during  a  hearing  or  so  near 
the  place  thereof  as  to  obstruct  the  same;  (3)  neglect  to  produce, 
after  having  been  ordered  to  do  so,  any  pertinent  document ;  or 
(4)  refuse  to  appear  after  having  been  subpcenaed,  or,  upon  ap- 
pearing, refuse  to  take  the  oath  as  a  witness,  or,  after  having  taken 
the  oath,  refuse  to  be  examined  according  to  law : 

When  witness  not  required  to  attend.  Provided^  That  no 
person  shall  be  required  to  attend  as  a  witness  before  a  referee  at 
a  place  outside  of  the  State  of  his  residence,  and  more  than  one 
hundred  miles  from  such  place  of  residence,  and  only  in  case  his 
lawful  mileage  and  fee  for  one  day's  attendance  shall  be  first  paid 
or  tendered  to  him. 


114(i 


HANKIUI'TCV    ACT   OK    1808.  §§41—46 


Contempt  proceedings;  penalty.  /^The  referee  shall  certify 
Ihe  facts  to  the  judge,  if  any  person  shall  do  any  of  the  things 
forbidden  in  this  section.  The  judge  shall  thereupon,  in  a  sum- 
niarv  manner,  hear  the  evidence  as  to  the  acts  complained  of,  and, 
if  it  is  such  as  to  warrant  him  in  so  doing,  punish  such  person" in 
the  same  manner  and  to  the  same  extent  as  for  a  contempt  com- 
mitted before  the  court  of  bankruptcy,  or  commit  such  person 
upon  the  same  conditions  as  if  the  doing  of  the  forbidden  act  had 
occurred  with  reference  to  the  process  of,  or  in  the  presence  of,  the 

court. 

Section  42.  Records  of  referees  ;  manner  of  keeping,  a  The 
records  of  all  proceedings  in  each  case  before  a  referee  shall  be 
kept  as  nearly  as  may  be  in  the  same  manner  as  records  are  now 
kept  in  equity  cases  in  circuit  courts  of  the  United  States. 

/;  A  record  of  the  proceedings  in  each  case  shall  be  kept  in  a 
separate  book  or  books,  and  shall,  together  with  the  papers  on  file, 
constitute  the  records  of  the  case. 

Books  to  be  certified  and  transmitted  to  court,  c  The  book  or 
books  containing  a  record  of  the  proceedings  shall,  when  the  case 
is  concluded  before  the  referee,  be  certified  to  by  him,  and,  together 
with  such  papers  as  are  on  file  before  him,  be  transmitted  to  the 
court  of  bankruptcy  and  shall  there  remain  as  a  part  of  the  records 
of  the  court. 

Section  43.  Referee's  absence  or  disability;  filling  vacancy. 
a  Wlienever  the  office  of  a  referee  is  vacant,  or  its  occupant  is 
absent  or  disqualified  to  act,  thp  judge  may  act,  or  may  appoint 
another  referee,  or  another  referee  holding  an  appointment  under 
the  same  court  may,  by  order  of  the  judge,  temporarily  fill  the 
vacancy. 

Section  44.  Appointment  of  trustees.  a  The  creditors  of  a 
bankrupt  estate  shall,  at  their  first  meeting  after  the  adjudication 
or  after  a  vacancy  has  occurred  in  the  office  of  trustee,  or  after  an 
estate  has  been  reopened,  or  after  a  composition  has  been  set  aside 
or  a  discharge  revoked,  or  if  there  is  a  vacancy  in  the  office  of 
trustee,  appoint  one  trustee  or  three  trustees  of  such  estate.  If  the 
creditors  do  not  appoint  a  trustee  or  trustees  as  herein  provided, 
the  court  shall  do  so. 

Section  45.  Qualifications  of  trustees.  <a;  Trustees  may  be  (1) 
individuals  who  are  respectively  competent  to  perform  the  duties 


§§45 — 47  BANKRUPTCY  ACT  OF  1898.  1147 

of  that  office,  and  reside  or  have  an  office  in  the  judicial  district 
within  which  they  are  appointed,  or  (2)  corporations  authorized 
by  their  charters  or  by  law  to  act  in  such  capacity  and  having  an 
office  in  the  judicial  district  within  which  they  are  appointed. 

Section  46.  Death  or  removal  of  trustees  ;  suits  not  to  abate, 
etc.  aThe  death  or  removal  of  a  trustee  shall  not  abate  any  suit 
or  proceeding  which  he  is  prosecuting  or  defending  at  the  time  of 
his  death  or  removal,  but  the  same  may  be  proceeded  with  or 
defended  by  his  joint  trustee  or  successor  in  the  same  manner  as 
though  the  same  had  been  commenced  or  was  being  defended  by 
such  joint  trustee  alone  or  by  such  successor. 

Section  47.  Duties  of  trustees,  a  Trustees  shall  respectively 
(1)  account  for  and  pay  over  to  the  estates  under  their  control  all 
interest  received  by  them  upon  property  of  such  estates ; 

(2)  Collect  money,  etc.  Collect  and  reduce  to  money  the 
property  of  the  estates  for  which  they  are  trustees,  under  the  direc- 
tion of  the  court,  and  close  up  the  estate  as  expeditiously  as  is 
compatible  with  the  best  interests  of  the  parties  in  interest ; 

(3)  Deposit  money,  etc.  Deposit  all  money  received  by  them 
in  one  of  the  designated  depositories ; 

(4)  Disburse  money  ;  how.  Disburse  money  only  by  check 
or  draft  on  the  depositories  in  which  it  has  been  deposited ; 

(5)  Furnish  information.  Furnish  such  information  con- 
cerning the  estates  of  which  they  are  trustees  and  their  adminis- 
tration as  may  be  requested  by  parties  in  interest ; 

(6)  Keep  accounts.  Keep  regular  accounts  showing  all 
amounts  received  and  from  what  sources  and  all  amounts  expended 
and  on  what  accounts ; 

(7)  Detailed  statements  to  creditors.  Lay  before  the  final 
meeting  of  the  creditors  detailed  statements  of  the  administration 
of  the  estates ; 

(8)  Make  final  reports.  Make  final  reports  and  file  final 
accounts  with  the  courts  fifteen  days  before  the  days  fixed  for  the 
final  meetings  of  the  creditors; 

(9)  Pay  dividends.  Pay  dividends  within  ten  days  after  they 
are  declared  ])v  the  referees; 

(10)  Report  condition  of  estates.  Report  to  the  courts,  in 
writing,  the  condition  of  the  estates  and  the  amounts  of  money  on 
hand,  and  such  other  details  as  may  be  required   by  the  courts, 


llk^  BANKKll'TCV    ACT    OK    1S!)S.  §§47,   48 

within    the  first    month   after    their  appointment  and  every  two 

months  thereafter,  nnless  otherwise  ordered  by  the  courts;  and 
(11)     Exemptions.     Set  apart  the  bankrupt's  exemptions  and 

report  the  items  and  estimated  value  thereof  to  the  court  as  soon 

as  practicable  after  their  appointment. 

Concurrence  of  two  out  of  three  necessary,     b  Whenever  three 

trustees  have  been  appointed   for  an  estate,  the  concurrence  of  at 

least  two  of  them  shall  be  necessary  to  the  validity  of  their  every 

act  concerning  the  administration  of  the  estate. 

File  adjudication  in  recorder's  office,  c  The  trustee  shall,  within 
thirty  days  after  the  adjudication,  file  a  certified  copy  of  the  decree 

of  adjudication  in  the  office  where  conveyances  of  real  estate  are 
recorded  in  every  county  where  the  bankrupt  owns  real  estate  not 
exempt  from  execution,  and  pay  the  fee  for  such  filing,  and  he  shall 
receive  a  compensation  of  fifty  cents  for  each  copy  so  filed,  which, 
together  with  the  filing  fee,  shall  he  paid  out  of  the  estate  of  the  hank- 
rupt  as  a  part  of  the  cost  and  dishursements  e)f  the  proceedings. 

Section  48.  Compensation  of  trustees;  fee.  \a  Trustees  shall 
receive  as  full  compensation  for  their  services,  payable  after  they 
are  rendered,  a  fee  of  five  dollars  deposited  with  the  clerk  at  the 
time  the  petition  is  filed  in  each  case,  except  when  a  fee  is  not  required 
from  a  voluntary  bankrupt. 

Commissions.  And  from  estates  which  they  have  administered, 
such  conmiissions  on  sums  to  be  paid  as  dividends  and  commissions 
as  may  be  allowed  by  the  courts,  not  to  exceed  three  per  centum 
on  the  first  five  thousand  dollars  or  less,  two  per  centum  on  the  second 
five  thousand  dollars  or  part  thereof,  and  one  per  centum  on  such 
sums  in  excess  of  ten  thousand  dollars.] 

a  Trustees  shall  receive  for  their  services,  payable  after  they  are 
rendered,  a  fee  of  five  dollars  deposited  with  the  clerk  at  the  time 
the  petition  is  filed  in  each  case,  except  when  a  fee  is  not  required 
from  a  voluntary  bankrupt,  and  from  estates  which  they  have  admin- 
i><tered  such  commissions  on  all  moneys  disbursed  hy  them  as  may  he 
allowed  hy  the  courts,  ved  to  exceed  six  per  centum  on  the  first  five 


II  48-50  BANKRUPTCY  ACT  OF    1898.  1149 

hundred  dollars  or  less,  four  per  centum  on  moneys  in  excess  of  five 
hundred  dollars,  and  less  than  fifteen  hundred  dollars,  two  per  centum 
on  moneys  in  excess  of  fifteen  hundred  dollars  and  less  than  ten 
thousand  dollars,  and  one  per  centum  on  moneys  in  excess  of  ten 
thousand  dollars.  And  in  case  of  the  confirmation  of  a  composition 
after  the  trustee  has  qualified  the  court  may  allow  him,  as  compen- 
sation, not  to  exceed  one-half  of  one  per  centum  of  the  amount  to 
he  paid  the  creditors  on  such  composition. 

Apportionment  where  more  than  one.  d  In  the  event  of  an 
estate  being  administered  by  three  trustees  instead  of  one  trustee 
or  by  successive  trustees,  the  court  shall  apportion  the  fees  and 
commissions  between  them  according  to  the  services  actually  ren- 
dered, so  that  there  shall  not  be  paid  to  trustees  for  the  adminis- 
tering of  any  estate  a  greater  amount  than  one  trustee  would  be 
entitled  to. 

Withholding  of.  ^The  court  may,  in  its  discretion,  withhold 
all  compensation  from  any  trustee  who  has  been  removed  for  cause. 

Section  49.  Accounts  and  papers  of  trustees,  a  The  accounts 
and  papers  of  trustees  shall  be  open  to  the  inspection  of  oflEicers 
and  all  parties  in  interest. 

Section  50.  Bonds  of  referees  and  trustees,  a  Referees,  be- 
fore assuming  the  duties  of  their  offices,  and  within  such  time  as 
the  district  courts  of  the  United  States  having  jurisdiction  shall 
prescribe,  shall  respectively  qualify  by  entering  into  bond  to  the 
I'nited  States  in  such  sum  as  shall  be  fixed  by  such  courts,  not  to 
exceed  five  thousand  dollars,  with  such  sureties  as  shall  be  ap- 
proved by  such  courts,  conditioned  for  the  faithful  performance  of 
their  official  duties. 

Of  trustees,  d  Trustees,  before  entering  upon  the  performance 
of  their  official  duties,  and  within  ten  days  after  their  appoint- 
ment, or  within  such  further  time,  not  to  exceed  five  days,  as  the 
court  may  permit,  shall  respectively  qualify  by  entering  into  bond 
to  the  United  States,  with  such  sureties  as  shall  be  approved  b\ 
the  courts,  conditioned  for  the  faithful  performance  of  their  official 
duties. 

Of  new  trustee,  etc.;  amount  may  be  increased.  rThe  cred- 
itors of  a  bankrupt  estate,  at  their  first  meeting  after  the  adjudica- 
tion, or  after  a  vacancy  has  occurred  in  the  office  of  trustee,  or 
after  an  estate  has  been  reopened,  or  after  a  composition  has  been 
set  aside  or  a  discharge  revoked,  if  there  is  a  vacancy  in  the  office 


li:>0  IJANKKri-TCV    ACT    OK    181)8.  ^W\  '^^ 

of  trustee,  shall  fix  the  amount  of  the  bond  of  the  trustee;  they 
niav  at  aiiv  time  increase  the  amount  of  the  bond.  If  the  creditors 
do  not  fix  the  amount  of  the  bond  of  the  trustee  as  herein  provided 
the  court  shall  do  so. 

Surety's  property,  value.  ^^j'The  court  shall  require  evidence 
as  to  the  actual  value  of  the  property  of  sureties. 

Two  necessary.  <?  There  shall  be  at  least  two  sureties  upon 
each  bond. 

Excess  of  property.  /The  actual  value  of  the  property  of  the 
sureties,  over  and  above  their  liabilities  and  exemptions,  on  each 
bond  shall  equal  at  least  the  amount  of  such  bond. 

Corporations  may  be.  £■  Corporations  organized  for  the  pur- 
pose of  becoming  sureties  upon  bonds,  or  authorized  by  law  to  do 
so,  may  be  accepted  as  sureties  upon  the  bonds  of  referees  and 
trustees  whenever  the  courts  are  satisfied  that  the  rights  of  all 
parties  in  interest  will  be  thereby  amply  protected. 

Filing  of  bonds,  /i  Bonds  of  referees,  trustees,  and  designated 
depositories  shall  be  filed  of  record  in  the  oflEice  of  the  clerk  of  the 
court  and  may  be  sned  upon  in  the  name  of  the  United  States  for 
the  use  of  any  person  injured  by  a  breach  of  their  conditions. 

Bond,  trustee's  liability,  z  Trustees  shall  not  be  liable,  per- 
sonallv  or  on  their  bonds,  to  the  United  States,  for  any  penalties 
or  forfeitures  incurred  by  the  bankrupts  under  this  Act,  of  whose 
estates  they  are  respectively  trustees. 

Joint,     y  Joint  trustees  may  give  joint  or  several  bonds. 

Failure  to  give  creates  vacancy,  k  If  any  referee  or  trustee 
shall  fail  to  give  bond,  as  herein  provided  and  within  the  time 
limited,  he  shall  be  deemed  to  have  declined  his  appointment,  and 
such  failure  shall  create  a  vacancy  in  his  office. 

Suits  upon  referees'.  /Suits  upon  referees'  bonds  shall  not  be 
brought  subsequent  to  two  years  after  the  alleged  breach  of  the 
bond. 

Suits  upon  trustees'.  ;;/ Suits  upon  trustees'  bonds  shall  not 
be  brought  subsequent  to  two  years  after  the  estate  has  been  closed. 

Section  51.     Duties  of  clerks.     ^2  Clerks  shall  respectively 

(  1  I  To  account.  Account  for,  as  for  other  fees  received  by 
ihem,  the  clerk's  fee  paid  in  each  case  and  such  other  fees  as  may 
be  received  for  certified  copies  of  records  which  may  be  prepared 
for  persons  other  than  oflficers; 

(2  I     Collect  fees.  etc.     Collect  the  fees  of  the  clerk,  referee, 


§§51 54  BANKRUPTCY  ACT  OF  1898.  1151 

and  trustee  in  each  case  instituted  before  filing  the  petition,  except 
the  petition  of  a  proposed  vohmtary  bankrupt  which  is  accom- 
panied by  an  affidavit  stating  that  the  petitioner  is  without,  and 
can  not  obtain,  the  money  with  which  to  pay  such  fees; 

(o)  Deliver  papers  to  referee,  etc.  Deliver  to  the  referees 
upon  application  all  papers  which  may  be  referred  to  them,  or,  if 
the  offices  of  such  referees  are  not  in  the  same  cities  or  towns  as ' 
the  offices  of  such  clerks,  transmit  such  papers  by  mail,  and  in 
like  manner  return  papers  which  were  received  from  such  referees 
after  they  have  been  used  ; 

(4)  Pay  referee.  And  within  ten  days  after  each  case  has 
been  closed  pay  to  the  referee,  if  the  case  was  referred,  the  fee 
collected  for,  him,  and  to  the  trustee  the  fee  collected  for  him  at 
the  time  of  filing  the  petition. 

Section  52.  Compensation  of  clerks  and  marshals,  rt;  Clerks 
shall  respectively  receive  as  full  compensation  for  their  service  to 
each  estate,  a  filing  fee  of  ten  dollars,  except  when  a  fee  is  not 
required  from  a  voluntary  bankrupt. 

Of  marshals,  b  Marshals  shall  respectively  receive  from  the 
estate  where  an  adjudication  in  bankruptcy  is  made,  except  as 
herein  otherwise  provided,  for  the  performance  of  their  services  in 
proceedings  in  bankruptcy,  the  same  fees,  and  account  for  them  in 
the  same  way,  as  they  are  entitled  to  receive  for  the  performance 
of  the  same  or  similar  services  in  other  cases  in  accordance  with 
laws  now  in  force,  or  such  as  may  be  hereafter  enacted,  fixing  the 
compensation  of  marshals. 

Section  53.  Duty  of  Attorney-General  to  report  annually, 
a  The  Attorney-Cieneral  shall  annually  lay  before  Congress  statis- 
tical tables  showing  for  the  whole  country,  and  by  States,  the 
number  of  cases  during  the  year  of  voluntary  and  involuntary 
bankruptcy;  the  amount  of  the  property  of  the  estates;  the  divi- 
dends paid  and  the  expenses  of  administering  such  estates;  and 
such  other  like  information  as  he  may  deem  important. 

Section  54.  Statistics  of  bankruptcy  proceedings,  a  Officers 
shall  furnish  in  writing  and  transmit  by  mail  such  information  as 
is  within  their  knowledge,  and  as  may  be  shown  by  the  records 
and  papers  in  their  possession,  to  the  Attorney-General,  for  statis- 
tical purposes,  within  ten  days  after  being  requested  by  him  to 
do  so. 


lir>2  BANKKri'TCY    ACT    OF    \H\)^.  §    55 

CHAPTER  VI. 
Creditors. 

Section  55.  Meetings  of  creditors,  a  The  court  shall  cause 
iie  first  meeting  of  the  creditors  of  a  bankrupt  to  be  held,  not  less 
than  ten  nor  more  than  thirty  days  after  the  adjudication,  at  the 
county  seat  of  the  county  in  which  the  bankrupt  has  had  his  prin- 
cipal place  of  business,  resided,  or  had  his  domicile;  or  if  that 
place  would  be  manifestly  inconvenient  as  a  place  of  meeting  for 
the  parties  in  interest,  or  if  the  bankrupt  is  one  who  does  not  do 
business,  reside,  or  have  his  domicile  within  the  United  States, 
the  court  shall  fix  a  place  for  the  meeting  which  is  the  most  con- 
venient for  parties  in  interest.  If  such  meeting  should  by  any 
mischance  not  be  held  within  such  time,  the  court  shall  fix  the 
date,  as  soon  as  may  be  thereafter,  when  it  shall  be  held. 

Presiding  officer,  duties.  <5'At  the  first  meeting  of  creditors 
the  judge  or  referee  shall  preside,  and,  before  proceeding  with  the 
other  business,  may  allow  or  disallow  the  claims  of  creditors  there 
presented,  and  may  publicly  examine  the  bankrupt  or  cause  him 
to  be  examined  at  the  instance  of  any  creditor. 

Creditors'  duty.  rThe  creditors  shall  at  each  meeting  take 
such  steps  as  may  be  pertinent  and  necessary  for  the  promotion  of 
the  best   interests  of  the  estate  and  the  enforcement  of  this  Act. 

Subsequent  meetings  of.  d  A  meeting  of  creditors,  subsequent 
to  the  first  one,  may  be  held  at  any  time  and  place  when  all  of  the 
creditors  who  have  secured  the  allowance  of  their  claims  sign  a 
written  consent  to  hold  a  meeting  at  such  time  and  place. 

Call  of  meeting  by  court.  ^The  court  shall  call  a  meeting  of 
creditors  whenever  one-fourth  or  more  in  number  of  those  who 
have  proven  their  claims  shall  file  a  written  request  to  that  effect; 
if  such  request  is  signed  by  a  majority  of  such  creditors,  which 
number  represents  a  majority  in  amount  of  such  claims,  and  con- 
tains a  request  for  such  meeting  to  be  held  at  a  designated  place, 
the  court  shall  call  such  meeting  at  such  place  within  thirty  days 
after  the  date  of  the  filing  of  the  request. 

Final  meeting.  /Whenever  the  affairs  of  the  estate  are  ready 
to  oe  closed  a  final  meeting  of  creditors  shall  be  ordered. 


Oi  BANKRUPTCY  ACT  OF  1898.  1153 

Section  56.  Voters  at  meetings  of  creditors,  a  Creditors  shall 
pass  upon  matters  submitted  to  them  at  their  meetings  by  a  major- 
ity vote  in  number  and  amount  of  claims  of  all  creditors  whose 
claims  have  been  allowed  and  are  present,  except  as  herein  other- 
wise provided. 

Holders  of  secured  claims  not  entitled,  etc.  <^  Creditors  hold- 
ing claims  which  are  secured  or  have  priority  shall  not,  in  respect 
to  such  claims,  be  entitled  to  vote  at  creditors'  meetings,  nor  shall 
such  claims  be  counted  in  computing  either  the  number  of  cred- 
itors or  the  amount  of  their  claims,  unless  the  amounts  of  such 
claims  exceed  the  values  of  such  securities  or  priorities,  and  then 
only  for  such  excess. 

Section  57.  Proof  and  allowance  of  claims  ;  of  what  to  con- 
sist, a  Proof  of  claims  shall  consist  of  a  statement  under  oatli,  in 
writing,  signed  by  a  creditor  setting  forth  the  claim,  the  consid- 
eration therefor,  and  whether  any,  and,  if  so  what,  securities  are 
held  therefor,  and  whether  any,  and,  if  so  what,  payments  have 
been  made  thereon,  and  that  the  sum  claimed  is  justly  owing  from 
the  bankrupt  to  the  creditor. 

When  founded  upon  a  writing,  d  Whenever  a  claim  is  founded 
upon  an  instrument  of  writing,  such  instrument,  unless  lost  or 
destroyed,  shall  be  filed  with  the  proof  of  claim.  If  such  instru- 
ment is  lost  or  destroyed,  a  statement  of  such  fact  and  of  the 
circumstances  of  such  loss  or  destruction  shall  be  filed  under  oath 
with  the  claim.  After  the  claim  is  allowed  or  disallowed,  such 
instrument  may  be  withdrawn  by  permission  of  the  court,  upon 
leaving  a  copy  thereof  on  file  with  the  claim. 

After  proved,  may  be  filed,  c  Claims  after  being  proved  may, 
for  the  purpose  of  allowance,  be  filed  by  the  claimants  in  the  court 
where  the  proceedings  are  pending  or  before  the  referee  if  the  case 
has  been  referred. 

Allowance  of  claims,  etc.  a' Claims  which  have  been  duly 
proved  shall  be  allowed,  upon  receipt  by  or  upon  presentation  to 
the  court,  unless  objection  to  their  allowance  shall  be  made  by 
parties  in  interest,  or  their  consideration  be  continued  for  cause  by 
the  court  upon  its  own  motion. 

Claims  of  secured  creditors,  etc.  e  Claims  of  secured  creditors 
and  those  who  have  priority  may  be  allowed  to  enable  such  cred- 
itors to  participate  in  the  proceedings  at  creditors'  meetings  lield 
prior  to  the  determination  of  the  value  of  their  securities  or  prior- 


jl.")J  HANKlUl'TlY    AC'V    OK     1898.  §56 

itii's.  but  slmll  bo  nllowcd    lor  such  sums  only  as  to  the  courts  seem 
to  bf  cnviuix  over  ;iml  ;ihovc  the  v;iluo  of  Ihcir  securities  or  priorities. 

Claims,  hearing  objections.  /'  Ohjeetiotis  to  claims  shall  be 
lu'jinl  and  dt'ltM-iiiiiu'd  as  soon  as  the  convenience  of  the  court  and 
till'  best  interests  of  the  estates  and  the  claimants  will  permit. 

Preferred  claims.  [7  The  claims  of  creditors  who  have  received 
|iret'ei-enees  sliall  not  be  allowed  unless  such  creditors  shall  surrender 
their  preferences.^ 

g  The  claims  of  crcdifors;  who  have  received  preferences,  voidable 
under  section  sixty,  sid)division  h,  or  to  whom  conveyances,  transfers, 
assignments,  or  incund)rances,  void  or  voidable  under  section  sixty-  ' 
seven,  subdivision  e,  have  been  made  or  given,  shall  not  be  allowed 
unless  such  creditors  shall  surrender  such  preferences,  conveyances, 
ira))sf(  rs.  assigntnrnts.  or  iHCinvhrances. 

Value  of  securities  held  by  secured  creditors,  etc.  k  The  value 
of  securities  held  by  secured  creditors  shall  be  determined  by  con- 
verting the  same  into  money  according  to  the  terms  of  the  agree- 
ment pursuant  to  which  such  securities  were  delivered  to  such 
creditors  or  by  such  creditors  and  the  trustee,  by  agreement,  arbi- 
tration, compromise,  or  litigation,  as  the  court  may  direct,  and  the 
amount  of  such  value  shall  be  credited  upon  such  claims,  and  a 
dividend  shall  be  paid  only  on  the  unpaid  balance. 

Claims  secured  by  individual  undertaking.  z  Whenever  a 
creditor,  whose  claim  against  a  bankrupt  estate  is  secured  by  the 
individual  undertaking  of  any  person,  fails  to  prove  such  claim, 
such  person  may  do  so  in  the  creditor's  name,  and  if  he  discharge 
such  undertaking  in  whole  or  in  part  he  shall  be  subrogated  to 
that  extent  to  the  rights  of  the  creditor. 

Penalty,  forfeiture,  debts  due  as,  allowance.  /Debts  owing  to 
the  United  States,  a  State,  a  county,  a  district,  or  a  municipality 
as  a  penalty  or  forfeiture  shall  not  be  allowed,  except  for  the 
amount  of  the  pecuniary  loss  sustained  by  the  act,  transaction,  or 
proceeding  out  of  which  the  penalty  or  forfeiture  arose,  with  rea- 
sonable and  actual  costs  occasioned  thereby  and  such  interest  as 
mav  have  accrued  thereon  according  to  law. 

Reconsideration  of  claims.  /C- Claims  which  have  been  allowed 
may  be  reconsidered  for  cause  and  reallowed  or  rejected  in  whole 
or  in  part,  according  to  the  equities  of  the  case,  before  but  not  after 
the  estate  has  been  closed. 

Recovery  of  dividend.  /Whenever  a  claim  shall  have  been 
rcfronsidered  and  rejected,  in  whole  or  in  part,  upon  which  a  divi- 


§§57-59  BANKRUPTCY  ACT  OF   1898,  1155 

dend  has  been  paid,  the  trustee  may  recover  from  the  creditor  the 
amount  of  the  dividend  received  upon  the  claim  if  rejected  in 
whole,  or  the  propoitional  part  thereof  if  rejected  only  in  part. 

Claims  of  one  bankrupt  against  another,  m  The  claim  of  any 
estate  which  is  being  administered  in  bankruptcy  against  any  like 
estate  may  be  proved  by  the  trustee  and  allowed  by  the  court  in  the 
same  manner  and  upon  like  terms  as  the  claims  of  other  creditors. 

Time  for  proving  claims,  n  Claims  shall  not  be  proved  against 
a  bankrupt  estate  subsequent  to  one  year  after  the  adjudication; 
or  if  they  are  liquidated  by  litigation  and  the  final  judgment 
therein  is  rendered  within  thirty  days  before  or  after  the  expiration 
of  such  time,  then  within  sixty  days  after  the  rendition  of  such 
judgment : 

Of  infants,  etc.  Provided^  That  the  right  of  infants  and  insane 
persons  without  guardians,  without  notice  of  the  proceedings,  may 
continue  six  months  longer. 

Section  58.  Notices  to  creditors;  unless  waived,  etc.  a  Cred- 
itors shall  have  at  least  ten  days'  notice  by  mail,  to  their  respective 
addresses  as  they  appear  in  the  list  of  creditors  of  the  bankrupt, 
or  as  afterwards  filed  with  the  papers  in  the  case  by  the  creditors, 
unless  they  waive  notice  in  wTiting,  of  (1)  all  examinations  of  the 
bankrupt;  (2)  all  hearings  upon  applications  for  the  confirmation 
of  compositions  or  the  discharge  of  bankrupts:  (3)  all  meetings  of 
creditors;  (4)  all  proposed  sales  of  property;  (5)  the  declaration 
and  time  of  payment  of  dividends;  (6)  the  filing  of  the  final  ac- 
counts of  the  trustee,  and  the  time  when  and  the  place  where  they 
will  be  examined  and  passed  upon;  (7)  the  proposed  compromise 
of  any  controversy,  and  (8)  the  proposed  dismissal  of  the  proceed- 
ings. 

Of  first  meeting,  z^*  Notice  to  creditors  of  the  first  met  ting 
shall  be  published  at  least  once  and  may  be  published  such  num- 
ber of  additional  times  as  the  court  may  direct;  the  last  publica- 
tion shall  be  at  least  one  week  prior  to  the  date  fixed  for  the 
meeting. 

Other  notices.     ( )ther  notices  may  be  published   as  the  court 

shall  direct. 

By  referee,  r  All  notices  shall  be  given  by  the  referee,  unless 
I  otherwise  ordered  by  the  judge. 

Section  59.  Petition,  who  may  file  as  voluntary  bankrupt, 
a  Any  qualified  person  may  file  a  petition  to  be  adjudged  a  volun- 
tary bankrupt. 


iir)(; 


ivvNKiui-TCV  ACT  OK   USDS.  §§59,  no 


Involuntary.  (^  Three  or  more  creditors  who  have  provable 
claims  against  any  person  which  amount  in  the  aggregate,  in  ex- 
cess of  the  value  of  securities  held  by  them,  if  any,  to  five  hundred 
dollars  or  over;  or  if  all  of  the  creditors  of  such  person  are  less 
than  twelve  in  number,  then  one  of  such  creditors  whose  claim 
equals  such  amount  may  file  a  petition  to  have  him  adjudged  a 
bankrupt. 

To  be  in  duplicate,  c  Petitions  shall  be  filed  in  duplicate,  one 
copy  for  the  clerk  and  one  for  service  on  the  bankrupt. 

Notice  to  creditors  not  joined  in  petition,  d  If  it  be  averred  in 
the  petition  that  the  creditors  of  the  bankrupt  are  less  than  twelve 
in  number,  and  less  than  three  creditors  have  joined  as  petitioners 
therein,  and  the  answer  avers  the  existence  of  a  larger  number  of 
creditors,  there  shall  be  filed  with  the  answer  a  list  under  oath  of 
all  the  creditors,  with  their  addresses,  and  thereupon  the  court 
shall  cause  all  such  creditors  to  be  notified  of  the  pendency  of  such 
petition  and  shall  delay  the  hearing  upon  such  petition  for  a  rea- 
sonable time,  to  the  end  that  parties  in  interest  shall  have  an 
opportunity  to  be  heard  ; 

Hearing  of  case,  etc.;  when  dismissed.  If  upon  such  hearing 
it  shall  appear  that  a  sufficient  number  have  joined  in  such  peti- 
tion, or  if  prior  to  or  during  such  hearing  a  sufficient  number  shall 
join  therein,  the  case  may  be  proceeded  with,  but  otherwise  it  shall 
be  dismissed. 

Creditors,  computing  number  of.  ^In  computing  the  number 
of  creditors  of  a  bankrupt  for  the  purpose  of  determining  how 
many  creditors  must  join  in  the  petition,  such  creditors  as  were 
employed  by  him  at  the  time  of  the  filing  of  the  petition  or  are 
related  to  him  by  consanguinity  or  affinity  within  the  third  degree, 
as  determined  by  the  common  law,  and  have  not  joined  in  the 
petition,   shall  not  be  counted. 

Appearance  of.  /"Creditors  other  than  original  petitioners  may 
at  any  time  enter  their  appearance  and  join  in  the  petition,  or  file 
an  answer  and  be  heard  in  opposition  to  the  prayer  of  the  petition. 

Notice  of  dismissal,  g  A  voluntary  or  involuntary  petition 
shall  not  be  dismissed  by  the  petitioner  or  petitioners  or  for  want 
of  prosecution  or  by  consent  of  parties  until  after  notice  to  the 
creditors. 

Section  60.  Preferred  creditors,  [a  A  person  shall  bo  deemed 
to  liave  j^iveu  a  profcrcnee  if,  being  insolvent,  he  has  procured  or 
suffered  a  judgment  to  be  entered  against  himself  in  favor  of  any 
person,  or  made  a  transfer  of  any  of  his  property,  and  the  effect  of 
the  enforeeniont  of  such    iudornent  or  trarisif'cr  will  hp  to  i^nalili^  mtiv 


§§  60  BANKRUPTCY    ACT    OF    1898.  1157 

one  of  his  creditors  to  obtain  a  greater  percentage  of  his  debt  than 
any  other  of  such  creditors  of  the  same  class.] 

a  A  person  shall  be  deemed  to  have  given  a  preference  if.  being 
insolvent,  he  has,  within  four  months  before  the  filing  of  the  petition, 
or  after  the  filing  of  the  petition  and  before  the  adjudication,  pro- 
cured or  suffered  a  judgment  to  be  entered  against  himself  in  favor 
of  any  person,  or  made  a  transfer  of  any  of  his  property,  and  the 
effect  of  the  enforcement  of  such  judgment  or  transfer  will  be  to  en- 
able any  one  of  his  creditors  to  obtain  a  greater  percentage  of  his  debt 
than  any  other  of  such  creditors  of  the  same  class.  Where  the  prefer- 
ence consists  in  a  transfer,  such  period  of  four  months  shall  not  ex- 
pire until  four  months  after  the  date  of  the  recording  or  registering 
of  the  transfer,  if  by  law  such  recording  or  registering  is  required. 

Preference,  when  given;  voidable.  [?>  If  a  bankrupt  shall  have 
given  a  preference  within  four  months  before  the  filing  of  a  peti- 
tion, or  after  the  filing  of  the  petition  and  before  the  adjudication, 
and  the  person  receiving  it,  or  to  be  benefited  thereby,  or  his  agent 
r.cting  therein,  shall  have  had  reasonable  cause  to  believe  that  it 
was  intended  thereby  to  give  a  preference,  it  shall  be  voidable  by 
the  trustee,  and  he  may  recover  the  property  or  its  value  from 
^uch  person.] 

b  If  a  bankrupt  shall  have  given  a  preference,  and  the  person 
receiving  it,  or  to  be  benefited  thereby,  or  his  agent  acting  therein, 
shall  have-  had  reasonahle  cause  to  believe  that  it  was  intended  thereby 
to  give  a  preference,  it  shall  be  voidable  btj  the  trustee,  and  he  may 
recover  the  property  or  its  value  from  such  person.  And,  for  the 
purpose  of  such  recovery,  any  court  of  bankruptcy,  as  hereinbefore 
defined,  and  any  state  court  which  would  have  had  jurisdiction  if 
biuilruptcn  had  iiof  infrtrcn'-d,  shall  have  concuriu  iif  juri.'idici  ion. 

Preferred  creditor  giving  further  credit ;  set  off  of  new  credit. 
c\i  a  creditor  has  been  preferred,  and  afterwards  in  good  faith 
gives  the  debtor  further  credit  without  security  of  any  kind  for 
property  which  becomes  a  part  of  the  debtor's  estates,  the  amount 
of  such  new  credit  remaining  unpaid  at  the  time  of  the  adjudica- 
tion in  bankruptcy  may  be  set  off  against  the  amount  which  would 
otlierwise  be  recoverable  from  him. 

Payments  to  attorneys,  etc.;  re-examination  of.  dUa  debtor 
shall,  directly  or  indirectly,  in  contemplation  of  the  filino;  of  a 
petition  by  or  against  him,  pay  money  or  transfer  property  to  an 
attorney  and  counselor  at  law,  solicitor  in  equity,  or  proctor  in 
admiralty  for  services  to  be  rendered,  the  transaction  shall  be  re- 
examined by  the  court  on  petition  of  the  trustee  or  any  creditor 
and  shall  only  be  held  valid  to  the  extent  of  a  reasonable  amount 
to  be  determined  by  the  court,  and  the  excess  may  be  recovered 
bv  the  trustee  for  the  benefit  of  the  estate. 


ll.Vv}  HANKIUPTCY    ACT   OF    1898.  §§61 — ()-'? 

CHAPTER  VII. 

Estates. 

Section  6i.  Depositories  for  money.  «  Courts  of  bankruptcy 
shall  designate,  by  order,  banking  institutions  as  depositories  for 
the  money  of  bankrupt  estates,  as  convenient  as  may  be  to  the 
residences  of  trustees, 

Bond.  And  shall  require  bonds  to  the  United  States,  subject 
to  their  approval,  to  be  given  by  such  banking  institutions,  and 
may  from  time  to  time  as  occasion  may  require,  by  like  order 
increase  the  number  of  depositories  or  the  amount  of  any  bond  or 
change  such  depositories. 

Section  62.  Expenses  of  administering  estates;  report  and 
approval,  a  The  actual  and  necessary  expenses  incurred  by  officers 
in  the  administration  of  estates  shall,  except  where  other  provi 
sions  are  made  for  their  payment,  be  reported  in  detail,  under 
oath,  and  examined  and  approved  or  disapproved  by  the  court. 
If  approved,  they  shall  be  paid  or  allowed  out  of  the  estates  in 
which  they  were  incurred. 

Section  63.  Debts  which  may  be  proved.  ^  Debts  of  the 
bankrupt  may  be  proved  and  allowed  against  his  estate  which  are 

(1)  Fixed  liability.  A  fixed  liability,  as  evidenced  by  a 
judgment  or  an  instrument  in  writing,  absolutely  owing  at  the 
time  of  the  filing  of  the  petition  against  him,  whether  then  pay- 
able or  not,  with  any  interest  thereon  which  would  have  been 
recoverable  at  that  date  or  with  a  rebate  of  interest  upon  such  as 
were  not  then  payable  and  did  not  bear  interest; 

(2)  Costs  of  suit  due,  etc.  Due  as  costs  taxable  against  an 
involuntary  bankrupt  who  was  at  the  time  of  the  filing  of  the  peti- 
tion against  him  plaintiff  in  a  cause  of  action  which  would  pass 
to  the  trustee  and  which  the  trustee  declines  to  prosecute  after 
notice; 

( 3 )  Costs  incurred  before  filing  petition.  Founded  upon  a 
claim  for  taxable  costs  incurred  in  good  faith  by  a  creditor  before 
the  filing  of  the  petition  in  an  action  to  recover  a  provable  debt ; 

(4)  On  open  account.  P'ounded  upon  an  open  account,  or 
upon  a  contract  express  or  implied;  and 

(5)  Judgments,  etc.  Founded  upon  provable  debts  reduced 
to  judgments  after  the  filing  of  the  petition  and  before  the  consid- 


§§63,  tU  BANKRUPTCY  ACT  OF  1898.  1159 

eration  of  the  bankrupt's  application  for  a  discharge,  less  costs 
incurred  and  interests  accrued  after  the  filing  of  the  petition  and 
up  to  the  time  of  the  entry  of  such  judgments. 

Allowances  of  unliquidated  claims,  b  Unliquidated  claims 
against  the  bankrupt  may,  pursuant  to  application  to  the  court, 
be  liquidated  in  such  manner  as  it  shall  direct,  and  may  thereafter 
be  proved  and  allowed  against  his  estate. 

Section  64.  Debts  which  have  priority;  taxes,  a  The  court 
shall  order  the  trustee  to  pay  all  taxes  legally  due  and  owing  by 
the  bankrupt  to  the  United  States,  State,  county,  district,  or  munic- 
ipality in  advance  of  the  payment  of  dividends  to  creditors,  and 
upon  filing  the  receipts  of  the  proper  public  officers  for  such  pay- 
ment he  shall  be  credited  with  the  amount  thereof,  and  in  case 
any  question  arises  as  to  the  amount  or  legality  of  any  such  tax 
the  same  shall  be  heard  and  determined  by  the  court. 

Order  of  payment.  <^The  debts  to  have  priority,  except  as 
herein  provided,  and  to  be  paid  in  full  out  of  bankrupt  estates,  and 
the  order  of  payment  shall  be 

(1)  Cost  of  preserving  estate.  The  actual  and  necessary  cost 
of  preserving  the  estate  subsequent  to  filing  the  petition; 

(2)  Filing  fees.  [The  filing  fees  paid  by  creditors  in  invol- 
untary eases ;] 

(2)  The  filing  fees  paid  by  creditors  in  involuntary  cases,  and^ 
where  property  of  the  bankrupt,  transferred  or  concealed  by  him 
either  before  or  after  the  filing  of  the  petition,  shall  have  been  re- 
covered for  the  benefit  of  the  estate  of  the  bankrupt  by  the  efforts 
and  at  the  expense  of  one  or  more  creditors,  the  reasonable  expenses 
of  such  recovery. 

(3)  Cost  of  administration,  etc.  The  cost  of  administration, 
including  the  fees  and  mileage  payable  to  witnesses  as  now  or  here- 
after provided  by  the  laws  of  the  United  States,  and  one  reasonable 
attorney's  fee,  for  the  professional  services  actually  rendered,  irre- 
spective of  the  number  of  attorneys  employed,  to  the  petitioning 
creditors  in  involuntary  cases,  to  the  bankrupt  in  involuntary  cases 
while  performing  the  duties  herein  prescribed,  and  to  the  bank- 
rupt in  voluntary  cases,  as  the  court  may  allow; 

(4)  Wages  of  workmen,  etc.  Wages  due  to  workmen,  clerks, 
or  servants  which  have  been  earned  within  three  months  before 
the  date  of  the  commencement  of  proceedings,  not  to  exceed  three 
hundred  dollars  to  each  claimant;  and 


llt;0  nANKHUPTCY  ACT  OF   185)8.  §§^4,  B5 

(5)  Owing  to  person  entitled  to  priority,  etc.  Debts  owing 
to  any  person  who  by  the  laws  of  the  States  or  the  United  States 
is  entitled  to  priority. 

Payment  of  claims  accruing  after  composition  set  aside  or  dis- 
charge revoked,  r  In  the  event  of  the  confirmation  of  a  composition 
being  set  aside,  or  a  discharge  revoked,  the  property  acquired  by 
the  bankrupt  in  addition  to  his  estate  at  the  time  the  composition 
was  confirmed  or  the  adjudication  was  made  shall  be  applied  to 
the  pavment  in  full  of  the  claims  of  creditors  for  property  sold  to 
him  on  credit,  in  good  faith,  while  such  composition  or  discharge 
was  in  force,  and  the  residue,  if  any,  shall  be  applied  to  the  pay- 
ment of  the  debts  which  were  owing  at  the  time  of  the  adjudica- 
tion. 

Section  65.  Dividends,  declaration  and  payment  on  allowed 
claims,  n  Dividends  of  an  equal  per  centum  shall  be  declared  and 
paid  on  all  allowed  claims,  except  such  as  have  priority  or  are 
secured. 

Declaration  of  first.  [^The  first  dividend  shall  be  declareci 
within  thirty  days  after  the  adjudication,  if  the  money  of  the  estate 
in  excess  of  the  amount  necessary  to  pay  the  debts  which  have 
priority  and  such  claims  as  have  not  been,  but  probably  will  be, 
allowed  equals  five  per  centum  or  more  of  such  allowed  claims. 

Subsequent.  Dividends  subsequent  to  the  first  shall  be  de- 
clared upon  like  terms  as  the  first  and  as  often  as  the  amount  shall 
equal  ten  per  centum  or  more  and  upon  closing  the  estate.  Divi- 
dends may  be  declared  oftener  and  in  smaller  proportions  if  tlie 
judge  shall  so  order.  ] 

b  The  first  dividend  shall  he  declared  within  thirty  days  after  the 
adjudication,  if  the  money  of  the  estate  in  excess  of  the  amount 
necessary  to  pay  the  debts  which  have  priority  and  such  claims  as 
have  not  been,  but  probably  will  be,  allowed  equals  five  per  centum 
or  more  of  such  allowed  claims.  Dividends  subsequent  to  the  first 
shell  be  declared  upon  like  terms  as  the  first  and  as  often  as  the 
amount  shall  equal  ten  per  centum  or  more  and  upon  closing  the 
estate.  Dividends  may  be  declared  oftener  and  in  smaller  propor- 
tions if  the  judge  shall  so  order;  provided,  that  the  first  dividend 
shall  not_  include  more  than  fifty  per  centum  of  the  money  of  the 
estate  in  excess  of  the  amount  necessary  to  pay  the  debts  which  have 
priority  and  such  claims  as  probably  will  be  allowed:  .And  provided 
further,  that  the  final  dividend  shall  not  he  declared  within  three 
months  after  the  first  dividend  shall  be  declared. 


§§65 — 67  BANKRUPTCY   ACT   OF    1898-  il<jl 

Creditors  receiving,  not  affected  by  proof  of  subsequent  claims, 
etc.  <rThe  rights  of  creditors  who  have  received  dividends,  or 
in  whose  favor  final  dividends  have  been  declared,  shall  not  be 
affected  by  the  proof  and  allowance  of  claims  subsequent  to  the 
date  of  such  payment  or  declarations  of  dividends;  but  the  cred- 
itors proving  and  securing  the  allowance  of  such  claims  shall  be 
paid  dividends  equal  in  amount  to  those  already  received  by  the 
other  creditors  if  the  estate  equals  so  much  before  such  other  cred- 
itors are  paid  any  further  dividends. 

Preference  of  certain  creditors.  ^Whenever  a  person  shall 
have  been  adjudged  a  bankrupt  by  a  court  without  the  United 
States  and  also  by  a  court  of  bankruptcy,  creditors  residing  within 
the  United  States  shall  first  be  paid  a  dividend  equal  to  that  re- 
ceived in  the  court  without  the  United  States  by  other  creditors 
before  creditors  who  have  received  a  dividend  in  such  courts  shall 
be  paid  any  amounts. 

Limit  to  claimant's  right  to  collect.  ^  A  claimant  shall  not  be 
entitled  to  collect  from  a  bankrupt  estate  any  greater  amount  than 
shall  accrue  pursuant  to  the  provisions  of  this  Act. 

Section  66.  Unclaimed  dividends  ;  after  six  months  paid  into 
court,  a  Dividends  which  remain  unclaimed  for  six  months  after 
the  final  dividend  has  been  declared  shall  be  paid  by  the  trustee 
into  court. 

After  one  year,  distributed,  b  Dividends  remaining  unclaimed 
for  one  year  shall,  under  the  direction  of  the  court,  be  distributed 
to  the  creditors  whose  claims  have  been  allowed  but  not  paid  in 
full,  and  after  such  claims  have  been  paid  in  full  the  balance  shall 
be  paid  to  the  bankrupt : 

Of  minors.  Provided^  That  in  case  unclaimed  dividends  be- 
long to  minors  such  minors  may  have  one  year  after  arriving  at 
majority  to  claim  such  dividends. 

Section  67.  Liens;  unrecorded  claims  not.  a  Claims  which 
for  want  of  record  or  for  other  reasons  would  not  have  been  valid 
liens  as  against  the  claims  of  the  creditors  of  the  bankrupt  shall 
not  be  liens  against  his  estate. 


lUi'J  BANKKITTCY    ACT    OF    1898.  §()7 

Trustee  subrogated  to  rights  of  creditor,  b  Whenever  a  cred- 
itor is  prevented  from  enforcing  his  rights  as  against  a  lien  created, 
or  attempted  to  be  created,  by  his  debtor,  who  afterwards  becomes 
a  bankrupt,  the  trustee  of  the  estate  of  such  bankrupt  shall  be 
subrogated  to  and  may  enforce  such  rights  of  such  creditor  for  the 
benefit  of  the  estate. 

Lien,  judgment,  etc.;  created  within  four  months,  to  be  dis- 
solved, c  \  lien  created  by  or  obtained  in  or  pursuant  to  any  suit 
or  proceeding  at  law  or  in  equity,  including  an  attachment  upon 
mesne  process  or  a  judgment  by  confession,  which  was  begun 
against  a  person  within  four  months  before  the  filing  of  a  petition 
in  bankruptcy  by  or  against  such  person  shall  be  dissolved  by  the 
adjudication  of  such  person  to  be  a  bankrupt  if 

( 1 )  If  defendant  were  insolvent.  It  appears  that  said  lien 
was  obtained  and  permitted  while  the  defendant  was  insolvent  and 
that  its  existence  and  enforcement  will  work  a  preference,  or 

(2)  Knowledge  of.  The  party  or  parties  to  be  benefited  there- 
by had  reasonable  cause  to  believe  the  defendant  was  insolvent  and 
in  contemplation  of  bankruptcy,  or 

(3)  Through  fraud.  That  such  lien  was  sought  and  per- 
mitted in  fraud  of  the  provisions  of  this  Act;  or  if  the  dissolution 
of  such  lien  would  militate  against  the  best  interests  of  the  fc:>tate 
of  such  person  the  same  shall  not  be  dissolved, 

Trustee  subrogated,  etc.  But  the  trustee  of  the  estate  of  such 
person,  for  the  benefit  of  the  estate,  shall  be  subrogated  to  the 
rights  of  the  holder  of  such  lien  and  empowered  to  perfect  and 
enforce  the  same  in  his  name  as  trustee  with  like  force  and  effect 
as  such  holder  might  have  done  had  not  bankruptcy  proceedings 
intervened 

Liens  given  in  good  faith,  etc.  d  Liens  given  or  accepted  in 
good  faith  and  not  in  contemplation  of  or  in  fraud  upon  this  Act, 
and  for  a  present  consideration,  which  have  been  recorded  accord- 
ing to  law,  if  record  thereof  was  necessary  in  order  to  impart 
notice,  shall  not  be  affected  by  this  x^ct. 

Conveyances,  etc.,  subsequent  to  act  and  within  four  months 
of  petition  ;  to  defraud,  etc.,  void.  6' That  all  conveyances,  trans- 
fers, assignments,  or  incumbrances  of  his  property,  or  any  part 
thereof,  made  or  given  by  a  person  adjudged  a  bankrupt  under  the 
provisions  of  this  Act  subsequent  to  the  passage  of  this  Act  and 


§67  BANKRUPTCY  ACT  OF  1898.  116:1 

within  four  months  prior  to  the  filing  of  the  petition,  with  the 
intent  and  purpose  on  his  part  to  hinder,  delay,  or  defraud  his 
creditors,  or  any  of  them,  shall  be  null  and  void  as  against  the 
creditors  of  such  debtor,  except  as  to  purchasers  in  good  faith  and 
for  a  present  fair  consideration. 

Property  remains  part  of  assets.  And  all  property  of  the 
debtor  conveyed,  transferred,  assigned,  or  encumbered  as  aforesaid 
shall,  if  he  be  adjudged  a  bankrupt,  and  the  same  is  not  exempt 
from  execution  and  liability  for  debts  by  the  law  of  his  domicile, 
be  and  remain  a  part  of  the  assets  and  estate  of  the  bankrupt  and 
shall  pass  to  his  said  trustee,  whose  duty  it  shall  be  to  recover  and 
reclaim  same  by  legal  proceedings  or  otherwise  for  the  benefit  of 
the  creditors. 

Conveyances,  etc.,  within  four  months  of  petition;  void  under 
state  laws;  void  under  this  act.  And  all  conveyances,  trans- 
fers, or  incumbrances  of  his  property  made  by  a  debtor  at  any 
time  within  four  months  prior  to  the  filing  of  the  petition  against 
him,  and  while  insolvent,  which  are  held  null  and  void  as  against 
the  creditors  of  such  debtor  by  the  laws  of  the  State,  Territory,  or 
District  in  which  such  property  is  situate,  shall  be  deemed  null 
and  void  under  this  Act  against  the  creditors  of  such  debtor  if  he 
be  adjudged  a  bankrupt,  and  such  property  shall  pass  to  the  as- 
signee [trustee]  and  be  by  him  reclaimed  and  recovered  for  the 
benefit  of  the  creditors  of  the  bankrupt. 

For  the  purpose  of  such  recovery  anjf  court  of  hankruptcy  as 
lureinbefore  defined,  and  any  state  court  which  would  have  had 
jxrisdiction  if  hanlruptcy  had  not  intervened,  shell  have  concurrent 
jurisdiction. 

Liens,  etc.,  created  through  legal  proceedings ;  void,  etc. 
/"That  all  levies,  judgments,  attachments,  or  other  liens,  obtained 
through  legal  proceedings  against  a  person  who  is  insolvent,  at 
any  time  within  four  months  prior  to  the  filing  of  a  petition  in 
bankruptcy  against  him,  shall  be  deemed  null  and  void  in  case  he 
is  adjudged  a  bankrupt,  and  the  property  affected  by  the  levy, 
judgment,  attachment,  or  other  lien  shall  be  deemed  wholly  dis- 
charged and  released  from  the  same. 

Property  passes  to  trustee.  And  shall  pass  to  the  trustee  as 
a  part  of  the  estate  of  the  l^ankrupt,  unless  the  court  shall,  on  due 
notice,  order   that  the  right   under  such   levy,  judgment,  attach- 


Illi4  BANKRUPTCY    ACT    OK    1898.  §§67 — 69 

meiit,  or  other  lien  shall  be  preserved  for  the  benefit  of  the  estate; 
ami  thereupon  the  same  may  pass  to  and  shall  be  preserved  by  the 
trustee  for  the  benefit  of  the  estate  as  aforesaid. 

Court  may  order  conveyances;  purchaser  for  value.  And  the 
court  may  order  such  conveyance  as  shall  be  necessary  to  carry  the 
purposes  of  this  section  into  effect:  Provided^  That  nothing  herein 
contained  shall  have  the  effect  to  destroy  or  impair  the  title  ob- 
tained by  such  levy,  judgment,  attachment,  or  other  lien,  of  a  bona 
fide  purchaser  for  value  who  shall  have  acquired  the  same  without 
notice  or  reasonable  cause  for  inquiry. 

Section  68.  Set-offs  and  counterclaims;  allowed,  a  In  all 
cases  of  mutual  debts  or  mutual  credits  between  the  estate  of  a 
bankrupt  and  a  creditor  the  account  shall  be  stated  and  one  debt 
shall  be  set  off  against  the  other,  and  the  balance  only  shall  be 
allowed  or  paid. 

Not  allowed,  b  K  set-off  or  counterclaim  shall  not  be  allowed 
in  favor  of  any  debtor  of  the  bankrupt  which  (1)  is  not  provable 
against  the  estate;  or  (2)  was  purchased  by  or  transferred  to  him 
after  the  filing  of  the  petition,  or  within  four  months  before  such 
filing,  with  a  view  to  such  use  and  with  knowledge  or  notice  that 
such  bankrupt  was  insolvent,  or  had  committed  an  act  of  bank- 
ruptcy. 

Section  69.  When  property  may  be  seized;  possession  of 
property,  a  A  judge  may,  upon  satisfactory  proof,  by  affidavit,  that 
a  bankrupt  against  whom  an  involuntary  petition  has  been  filed  and 
is  pending  has  committed  an  act  of  bankruptcy,  or  has  neglected 
or  is  neglecting,  or  is  about  to  so  neglect  his  property  that  it  has 
thereby  deteriorated  or  is  thereby  deteriorating  or  is  about  thereby 
to  deteriorate  in  value,  issue  a  warrant  to  the  marshal  to  seize  and 
hold  it  subject  to  further  orders. 

Bond  of  indemnity.  Before  such  warrant  is  issued  the  peti- 
tioners applying  therefor  shall  enter  into  a  bond  in  such  an  amount 
as  the  judge  shall  fix,  with  such  sureties  as  he  shall  approve,  con- 
ditioned to  indemnify  such  bankrupt  for  such  damages  as  he  shall 
sustain  in  the  event  such  seizure  shall  prove  to  have  been  wrong- 
fully obtained. 

Released  on  giving  bond.  Such  property  shall  be  released,  if 
such  bankrupt  shall  give  bond  in  a  sum  which  shall  be  fixed  by 
the  judge,  with  such  sureties  as  he  shall  approve,  conditioned  to 
turn  over  such  property,  or  pay  the  value  thereof  in  money  to  the 


§70  BANKRUPTCY    ACT    OF    1 898.  1165 

trustee,  in  the  event  he  is  adjudged  a  bankrupt  pursuant  to  such 
petition. 

Section  70.  Title  to  property,  a  The  trustee  of  the  estate  of 
a  bankrupt,  upon  his  appointment  and  qualification,  and  his  suc- 
cessor or  successors,  if  he  shall  have  one  or  more,  upon  his  or  their 
appointment  and  qualification, 

Vested  in  trustee.  Shall  in  turn  be  vested  by  operation  of 
law  with  the  title  of  the  bankrupt,  as  of  the  date  he  was  adjudged 
a  bankrupt,  except  in  so  far  as  it  is  to  property  which  is  exempt, 
to  all 

(1)  Documents.      Documents  relating  to  his  property ; 

(2)  Patents,  etc.  Interests  in  patents,  patent  rights,  copy- 
rights, and  trade-marks; 

(3)  Certain  powers.  Powers  which  he  might  have  exercised 
for  his  own  benefit,  but  not  those  which  he  might  have  exercised 
for  some  other  person  ; 

(4)  Transferred  in  fraud.  Property  transferred  by  him  in 
fraud  of  his  creditors; 

(5)  Which  might  have  been  transferred,  etc.  Property  which 
prior  to  the  filing  of  the  petition  he  could  by  any  means  have 
transferred  or  which  might  have  been  levied  upon  and  sold  under 
judicial  process  against  him : 

Policy  of  insurance.  Provided^  That  when  any  bankrupt  shall 
have  any  insurance  policy  which  has  a  cash  surrender  value  pay- 
able to  himself,  his  estate,  or  personal  representatives,  he  may, 
within  thirty  days  after  the  cash  surrender  value  has  been  ascer- 
tained and  stated  to  the  trustee  by  the  company  issuing  the  same, 
pay  or  secure  to  the  trustee  the  sum  so  ascertained  and  stated,  and 
continue  to  hold,  own,  and  carry  such  policy  free  from  the  claims 
of  the  creditors  participating  in  the  distribution  of  his  estate  under 
the  bankruptcy  proceedings,  otherwise  the  policy  shall  pass  to  the 
trustee  as  assets ;   and 

(6)  Rights  of  action  upon  contracts.  Rights  of  action  aris- 
ing upon  contracts  or  from  the  unlawful  taking  or  detention  of,  or 
injury  to,   his  pro])erty. 

Appraisal  of  property.  I>  \\\  real  and  personal  property  be- 
longing to  bankrupt  estates  shall  be  appraised  by  three  disinter- 
ested appraisers;  they  shall  be  appointed  by,  and  report  to,  the 
court. 

Sale  for  not  less  than  seventy-five  per  centum  of  appraised 


UtH't  BANKRUPTCY    ACT    OF    1 898.  §70 

value.  Real  and  personal  property  shall,  when  practicable,  be 
sold  subject  to  the  approval  of  the  court;  it  shall  not  be  sold 
otherwise  than  subject  to  the  approval  of  the  court  for  less  than 
seventy-five  per  centum  of  its  appraised  value. 

Trustee  to  convey  title,  c  The  title  to  property  of  a  bankrupt 
estate  which  has  been  sold,  as  herein  provided,  shall  be  conveyed 
to  the  purchaser  by  the  trustee. 

Vesting  title  on;  setting  composition  aside,  of  Whenever  a 
composition  shall  be  set  aside,  or  discharge  revoked,  the  trustee 
shall,  upon  his  appointment  and  qualification,  be  vested  as  herein 
provided  with  the  title  to  all  of  the  property  of  the  bankrupt  as  of 
the  date  of  the  final  decree  setting  aside  the  composition  or  revok- 
ing the  discharge. 

May  avoid  certain  transfers,  etc.  <^The  trustee  may  avoid 
any  transfer  by  the  bankrupt  of  his  property  which  any  creditor 
of  such  bankrupt  might  have  avoided,  and  may  recover  the  prop- 
erty so  transferred,  or  its  value,  from  the  person  to  whom  it  was 
transferred,  unless  he  was  a  bona  fide  holder  for  value  prior  to  the 
date  of  the  adjudication. 

Recovery  of  property.  vSuch  property  may  be  recovered  or  its 
value  collected  from  whoever  may  have  received  it,  except  a  bona 
fide  holder  for  value.  For  the  purpose  of  such  recovery  any  court 
of  bankruptcy  as  hereinbefore  fore  defined,  and  any  state  court  which 
would  have  had  jurisdiction  if  bankruptcy  had  not  intervened,  shall 
have  concurrent  jurisdiction. 

Title  revested  on  confirming  composition,  f  Upon  the  confirma- 
tion of  a  composition  offered  by  a  bankrupt,  the  title  to  his  property 
shall  thereupon  revest  in  him. 

The  Time  When  This  Act  Shall  Oo  Into  Effect. 

Force  and  effect ;  petition  for  voluntary  bankruptcy ;  involuntary. 

a  This  Act  shall  go  into  full  force  and  effect  upon  its  passage:  Pro- 
vided, however,  That  no  petition  for  voluntary  bankruptcy  shall  be 
filed  within  one  month  of  the  passage  thereof,  and  no  petition  for  in- 
voluntary bankruptcy  shall  be  filed  within  four  months  of  the  passage 
thereof. 

Cases  pending  under  State  laws,  h  Proceedings  commenced 
undfT  State  insolvency  laws  before  the  passage  of  this  Act  shall  not 
be  affected  by  it. 


§§  71,  72  BAXKKrPTCY  ACT  OF  1898.  1167 

Section  71.  Clerks  to  keep  indexes  and  make  searches,  etc.  That 
the  clerks  of  the  several  district  courts  of  the  United  States  shall 
prepare  and  keep  in  their  respective  offices  complete  and  covenient 
indexes  of  all  petitions  and  discharges  in  hankruptejj  heretofore  or 
hereafter  filed  in  the  said  courts,  and  shall,  when  requested  so  to  do, 
issue  certificates  of  search  certifying  as  to  whether  or  not  any  such 
petitions  or  discharges  have  heen  filed;  and  said  clerks  shall  he  en- 
titled to  receive  for  such  certificates  the  same  fees  as  now  allowed  hy 
law  for  certificates  as  to  judgments  in  said  courts;  provided,  that  said 
hankruptcy  indexes  and  dockets  shall  at  all  times  he  open  to  inspec- 
tion and  examination  hy  all  persons  or  corporations  ivithout  any  fee 
or  charge  therefor. 

Section  72.  No  additional  fees  to  referees  or  trustess.  TJiat  neitJur 
the  referee  nor  the  trustee  shell  in  any  for)n  or  guise  receive,  nor 
shall  the  court  allow  them,  any  other  or  further  compensation  for 
their  services  than  that  expressly  authorized  and  prescrihed  in  this 
act. 

Section  19.*  lliat  tlie  provisions  of  this  amendatory  act  shall  not 
apply  to  hankruptcy  cases  pending  ichen  this  act  takes  effect,  hut 
such  cases  shall  he  adjudicated  and  disposed  of  conformahly  to  the 
provisions  of  the  said  act  of  July  first,  eighteen  hundred  and  ninety- 
eight. 

*  Tliis  is  Bectiou  VJ  of  tlie  amendatory  act  of  Febmary  .'i,  15)0:5,  112  Stat,  at  ]> 
7lt7. 


INDEX  TO  ACT  OF  1898. 


References  to  Sections. 


Bankruptcy  proceedings,  of,  death  or  insanity  of  bankrupt  doeP 

not  cause     ^ 

Absence—  21  r 

Judge's,  in,  case  sent  to  referee '226 

Referee's'  effect, : 

Acceptance—                             ,       ,.^       .         ...  219 

Composition,  of,  by  majority  of  creditors  in  writing «i^ 

■^IkSK^ofTdestruction,  concealment,  etc.,  prevents  discharge    .  .    •    •  |14 

Debts  founded  upon  open,  allowed |oj 

Notice  to  creditors  of  filing  final «^° 

Partnership,  insolvent,  kept  by  trustee e^ 

Penalty  for  making  false     -    •  .       •    '        '   , |oq 

Referee's  punishment  for  refusing  inspection  of «|y 

Trustees  to  keep L- 

file  final,  when,      :       \ 290 

punishment  for  refusing  inspection  of e^^ 

■A-Ct —  270 

When  to  take  effect      ^"^ 

Action  (seeaho  Suits)—  ,,, 

Bankrui)t,  bv  and  against |.j. 

Bonds  of  referees  and  trustees,  on |^^ 

time  of  bringing     •    • .    .    .  J23 


Trustee,  by,  in  what  courts  •  • 
death  or  removal  not  to  abate 
time  of  bringing  by  or  against 


§11 


Acts  of  bankruptcy—  ,3 

Consist  of  what '    " 

Adjudication—  ^ig 

Court  to  make,  when .    .    gl 

Definition         »2'> 

Reference  after ^  " 

Administration  of  estates  (.w  also  Estates)—  ^^^ 

Kxpenscsof :  Z^ 

Administration  of  oaths,  etc. ^*' 

Admission—  23 

Of  insolvency,  effect  of 

Affidavit  .       •      /  90 

Arrest  of  bankrupt  for  exammatum  for         • «" 

Voiuiitarv  bankrupt,  of,  of  inal)ility  to  pay  fees eoi 

IIC.'J 


1170  INDEX    TO    ACT    OP"    1 898. 

Refereiu'os  to  St'ctioiis. 

Agent— 

••  C'retlitor"  includes,  under  Act §1 

IVnalty  for  use  in  composition  false  claims,  aa  or  by §2!) 

■•  IV'rsons  "  include,  ot  corporation il 

Affirmation 

False,  punisluuent  lor  nuikinj; J20 

When  may  be  taken  instead  of  oath 220 

Whonuiy  take    .    .    .' §20 

Alaska  - 

"States"  include       .    .        §1 

United  iStatefl  Courts  in  district  of,  made  courts  of  bankruptcy,  .   .    •  i2 

jurisdiction  of §2 

Allowance — 

I'laiins,  of,  against  bankrupt's  estate §57 

preferred  claims,  of §57 

secured  creditors,  of §57 

unlicjuidated ...  §(>:i 

Debts,  subject  of W-^ 

Widuw  and  children,  to,  fixed  by  state  laws ...  §8 

Amendment- 
Rules,  forms  and  orders,  etc.,  by  U.  S.  Supreme  Court,  of §oO 

Schedules  of,  by  referee  if  defective §39 

Amount- 
Appeal  to  U.  S.  Supreme  Court §25 

Bonds  of  referee  and  trustee         §50 

Claims  of  creditors  who  tile  involuntary  petition §59 

Debts  corporation  owes  to  be  adjudged  bankrupt      §4 

Answer 

Bankrupt  or  creditor  to  make,  when §18 

Creditor  may  file  to  petition,  when .    .  §59 

Appeal- 
Courts  exercising  jurisdiction  on         §24 

Trustee  not  required  to  give  bond  on §25 

U.  y.  Circuit  Court  of  Appeals,  to §25 

from  what  judgments §25 

time  of  taking     ....  §25 

U.  S.  Supreme  Court,  to §25 

when  amount  exceeds  $2,000         §25 

where  question  certified  by  supreme  court  justice §25 

Appearance— 

of  creditors  after  filing  petition §59 

Appellate  Courts— 

Definition  of ,  .  .    .    .    §1 

Jurisdiction  of §24 

U.  S.  Circuit  Court  of  Appeals §§24,  25 

U.  S.  Supreme  Court §25 

Appointment- 
Arbitrators,  by  court,  when §2(") 

Referees §34 

in  case  of  absence  or  disability     §43 

Trustees,  by  creditors §44 

by  court,  when §44 

Apportionment- 
Referee's,  compensation,  of §40 

Trustee's,  compensation,  of §48 

Appraisal- 
Bankrupt's  property,  by  three  appraisers §70 

can  not  be  sold  for  less  than  75%  of §70 


INDEX    TO    ACT    OF    1898.  HTl 

References  to  Sections. 


Approval- 
Compromises,  of,  by  court 

Expenses  of  administering  bankrupt  estates 


?27 


Sale,  of  property  subject  to       ,'    \,'u  '  i    '*'''' l^^ 

Trustee  may  prosecute  suits  already  commenced,  with,  ot  court    •    •    -gii 

Arbitrators—  ,„^ 

Findings,  of,  force  and  eflFect      |^o 

Selection  of 

Trustees  may  submit  controversy  to 

Bankrupt,  of,  about  to  leave  district  to  avoid  examination    -    .   • 

exemption  from,  of  bankrupt  on  civil  process,  etc.,      

except  in  wbat  cases 


Assignment  — 

General,  an  act  of  bankruptcy ,'    "    "    ',  r  '    j  "    1  ' 

Subsequent  to  act,  etc.,  within  four  months,  to  defraud,  etc.. 
void 


Attachment— 

Against  insolvent  within  four  months,  etc.,  void 
Title  of  bona  fide  purchaser  protected 


§26 
§26 


?0 
§9 
§9 


Courts  of  bankruptcy  to  collect  and  distribute §2 


§3 
§67 

?67 
§67 


Attendance—  ,.  .,11 

Bankrupt  exempt  from  arrest,  attending  court  of  bankruptcy  • 
Compulsory, of  bankrupt  and  witnesses  before  referee  or  court 
Jury,  of 

Attorney— 

"  Creditor  "  to  include,  under  Act •  .•    •       ' 

Fees  of,  included  in  costs  of  administration,  have  priority     .    ■ 

allowance  of,  on  dismissing  petition  wlien  property  seized    .   .    ■    .    i6 
Payment  or  transfer  to,  by  insolvent  for  services,  etc.,  re-ex 

amined  .  ■. 

Penalty  for  using  false  claim  in  composition,  as  or  by 


§9 
§21 
§19 


§1 
§64 


§60 

§29 


Referee  can  not  practice  as,  in  bankruptcy  proceedings      i6\f 

Attorney  General—  ^  ,^0 

Dutv  to  lay  Htatistical  tables  before  Congress,  etc., |0^ 

Officers  to  furnish  statistical  information  to 2^-* 


Bail—  »q 

Of  bankrupt  about  to  depart ^^ 

Banking  institutions—  ,    •       .  m\\ 

As  depositories  for  moneys,  courts  to  designate |o' 

r.onds  subject  to  courts'  approval 2^^ 


Bankrupt—                                     r    i    ^ 
Act  of  bankruptcy,  by,  consists  of  what 

admitting  inability  to  i)ay  debts 

general  assignment,  making 

permitting  preferences ^        

transferring,  etc.,  property  to  defraud,  etc 

while  insolvent,  to  prefer  creditors 

Answer  to  be  made  when 

Bail,  to  secure  release  from  custody,  etc ^•' 

Bond  to  secure  release  of  property  seized p' 

Claims  against,  allowance  of         ^^' 

disclose  false  to  trustee 


§3 
§3 
§3 
§3 
§3 
§3 
§18 
§9 


§7 
false,  penaltv  for  presenting |^' 


one  bankrupt  against  another 
proof,  etc.,  of 


§57 


1172  INDEX    TO    ACT    OF    1 898. 

Keferciices  to  Sections. 
Bankrupt  —  Contin  ucd. 

Compositions       ?12 

applii'Htion  for  contirming ^12 

su-c opted  must  be  in  writing  by  majority,  etc gl2 

consideration  to  be  paid  and  costs  deposited,  etc §12 

date  and  place  of  hearing jl2 

confirmation  of,  discharges  from  debts 214 

conditions  of  confirmation      ^12 

distribution  of  consideration      ^12 

set  aside  for  fraud,  may  be     ^13 

when  may  be  ofiVred  by §12 

must  be  examined  and  file  schedule §12 

Co-debtors'  liabiUty  not  affected  by  discharge |l6 

Compulsory  attendance  before  court,  referee,  etc &! 

Concealing'property,  penalty  for ?29 

Corporations  can  not  be  adjudged  voluntary §4 

can  be  adjudged  involuntary  when §4 

Creditors,  number,  etc.,  to  file  petition  against §59 

meetings  of      §55 

to  attend  first  •    • •    •    •    §7 

when  not  recjuired  to  attend §7 

expenses  of  attending  paid  when §7 

Death  of,  does  not  abate  proceedings ...    §8 

Debts  which  may  be  proved ?63 

which  have  priority      ...  §64 

not  afTected  by  discharge §17 

Definition  of §1 

Detention  for  examination     .    .       §8 

may  be  kept  in  custody  ten  days ^10 

released  on  giving  bail §10 

Discharge,  application  for §14 

releases  from  what  debts §17 

when  not  granted §14 

when  revoked §15 

Domicile  of,  claiming  exemptions §6 

Duties  of §7 

claims,  to  examine  §7 

disclose  false §7 

examination,  to  submit  to  .    .  §7 

inform  trustee  of  attempt  to  evade  act §7 

papers,  to  execute      §7 

schedules,  to  prepare    .    .  .    .  §7 

Embezzlement  of  property  of,  penalty  for §29 

Estates (ts-q.  §61 

Exemption  from  arrest,  etc.  §9 

Exemptions  of,  under  State  laws §6 

Expenses  paid  of  attending  meetings  when §7 

Extradition  of     ...    .  §10 

False  claim  against  estate,  penalty  for  presenting  ....  •.    .    .    .  §29 

False  oath  against  estate,  penalty  for  making §29 

Farmers  can  not  be  adjudged  involuntary §4 

Fees,  to  pay 

clerk's §52 

referee's - §40 

trustee's    • .  §48 

voluntary,  not  required  to  pay,  when §51 

Insanity  does  not  abate  proceedings       §8 

Involuntary,  who  may  be  adjudged §4 

who  can  not  be  adjudged §4 

Lists  of  creditors,  to  make §7 

Meetings  of  creditors,  to  attend  first §7 

Misappropriating  property  of,  penalty §29 


INDEX   TO    ACT    OF    1 898.  1173 

References  to  Sections. 
Bankrupt — Continued. 

Partnership  may  be  adjudged §5 

administration  of  estate      25 

where  all  not  bankrupts     •    •    •   ; ^5 

jurisdiction  over  one  partner  sufficient 'ib 

payment  of  debts & 

Petition  to  be  filed  in  four  months '& 

bond,  to  be  accompanied  by,  to  take  property '& 

liability  for  costs ^3 

counsel  fees,  etc.,  fixing  of & 

defense  of  solvency ?3 

burden  of  proof /{^ 

involuntary,  who  may  file  ...       ?o9 

service  of,  manner  of ji]^ 

voluntary,  who  may  file ^59 

Preferred  creditors ^^0 

Property  may  be  seized,  when ?69 

bond  of  indemnity ?^9 

bond  to  release i'^S) 

Protection  of ?9 

Schedule  of  property,  to  prepare §7 

make  oath  to,  and  file      • i^ 

voluntary,  to  file  with  petition §7 

what  to  contain  ....  ?7 

Secured  creditors •  •  ■  ??56,  57 

Service  of  petition ^-^^ 

Seizure  of  property ^^-^ 

Suits  by  and  against ji^l 

appearance  of  trustee  f^^l 

stay  until  adjudication,  etc ...  iW 

further  stay  .  ?11 

time  for  bringing,  by  or  against  trustee ?11 

trustee  permitted  to  prosecute  suits  commenced ?11 

Time  when  act  takes  effect •. |70 

Title  of  property  revested  in,  on  confirmation  of  composition  .  .   .   .  ?70 

Voluntary,  who  may  be  adjudged H 

Widow  and  children,  rights  of k° 

Bankruptcy— 

Acts  of,  of  what  to  consist '    '  I 

"Bankruptcy" |^ 

Bankrupts '    '    '  to 

Courts  of ff 

"Courts  of  Bankruptcy"  include  what  courts ?1 

Creditors ^\^ 

"  Date  of  bankruptcy,"  etc || 

Definitions J-j- 

Estates '^5' 

Jurisdiction  of  courts  of J-^ 

Officers,  their  duties  and  compensation     vM 

Procedure  in  courts «^^ 


Banks—  .„. 

Bond,  to  give  ....  •    •    •  ^}\ 

file<l  in  clerk's  office |''' 

sued  on,  how ^- J^ 

Depositories  for  money,  court  to  designate 2"1 

Board  of  directors - 

Courts  of  bankruptcy  have  power  to  punish ?.^ 

"Persons"  include  members  of ^■*- 

Bona  fide  purchaser— 
Title  of,  olUaincd  by  lien,  etc.,  not  affected ?•>' 


1174  INDEX    TO    ACT    OK    1 898. 

Kt'fcri'iu^es  to  Sections. 

Bond— 

Appoal,  tiu8tt>e  not  rt'(iuir«Hl  to  give ^2'> 

Banks  of,  an  depositories  for  money ^(il 

filed  in  clerk'ir;  olliee  . ^50 

sued  on,  how ^50 

1  lank  nipt,  of,  to  recover  possession  of  property gOK 

condition  of i6U 

Krror,  on,  trustee  not  required  to  give i2h 

Kiled,  to  be  ni  clerk's  office iHO 

Indemnify  bankrupt,  to,  on  seizing  his  property .    .  ^6i) 

condition  of §09 

Joint  trustees,  of §50 

Petitioner  to  give,  to  hold  property,  etc §3 

condition  01         (S3 

sureties  of §."> 

Referees' §50 

amount  and  condition  of ...  §50 

failure  to  give,  creates  vacancy §50 

Release  of  property,  by  bankrupt  to  secure §69 

Suite  on,  how  brought §50 

referees'  and  trustees',  time  of  bringing §50 

Sureties,  corporations  may  be §50 

two  necessary  .  §50 

value  of  property §50 

Trustees' §50 

amount  and  tiondition §50 

failure  to  give,  creates  vacancy §50 

jomt  or  several §50 

liability §50 

not  required  to  give,  on  appeal  or  for  error §25 

title,  certified  copy  of  order  approving,  evidence  of §21 

Books- 
Account,  of,  destruction  of,  etc.,  prevents  discharge §14 

Insolvent's  duty  to  appear  in  court  with  .    .       §3 

Referees  to  keep  separate,  for  each  case §42 

to  certify  and  file,  with  papers  in  court §42 

Burden  of  proof— 
Of  solvency  in  bankruptcy  proceedings §3 

Certification- 
Contempt,  of  facts  constituting,  by  referee §41 

Judge's  absence,  etc.,  by  clerk  authorizing  referee  to  act §38 

Referees'  record,  of §42 

U.  S.  Circuit  Court,  to,  of  case  in  district  court,  when §19 

U.  S.  Supreme  Court,  to,  from  U.  S.  Circuit  Court  of  Appeals     ...  §25 

Certified  copies- 
Composition,  of  order  confirming,  evidence  of  revesting  title    .  .   .   .  §21 

Referee,  of  proceedings  before,  as  evidence ...  §21 

papers  when  issued  by  clerk  or  referee §21 

to  transmit  to  clerk,  by  mail  when §39 

Trustees'  Vjond,  of  order  approving,  evidence  of  title §21 

Children— 
Of  deceased  bankrujit,  riuhts  of §8 


Circuit  Courts  of  Appeals^ 

Appellate  jurisdiction  over  courts  of  bankruptcy §24 

Apr)eal8  to,  from  judgments       §25 

•vljudging  or  refusing  to  adjudge  bankrupt §25 

allowing,  etc.,  debts  of  $500  or  over         §25 

discharge  granting  or  denying §25 

when  appeal  to  be  taken §25 


INDEX   TO    ACT    OF    1 898.  1175 

References  to  Sections. 

Circuit  Courts  of  Appeals— Continued. 

Appeals  to  United  folates  Supreme  Court  from  decisions  of §25 

where  amount  is  over  $2,500 ^5 

where  question  is  certified  by  Supreme  Court  Justice ^25 

Concurrent  jurisdiction  of,  with  court  of  bankruptcy g23 

Trustees  not  required  to  give  bond  on  appeal  or  error g25 

Claims— 

Allowance  of §57 

Amount  necessary  for  filing  involuntary  petition §59 

Bankrupt,  to  examine §7 

Bankrupts,  of,  against  each  other §57 

Debts  which  may  be  proved §63 

which  have  priority §64 

Discharge  releases  from  what ...  §17 

does  not  release  from  what §17 

Dividends  payable  on,  allowed '- §65 

False,  penalty  for  presenting,  etc §29 

or  using  in  composition §29 

Filed  after  being  proved  in  court  or  before  referee §57 

Hearing  objections  to §57 

Infants  and  insane,  rights  of §57 

Instrument  of  writing,  founded  upon,  to  be  filed  with  proof  of  .   .    .    .  §57 

statement  of  loss  filed  under  oath  with §57 

Jurisdiction  of  courts  of  bankruptcy  as  to §2 

Payment  of,  after  composition  set  aside,  etc §64 

Penalty  or  forfeiture,  debt  due  as  how  far  allowed §57 

Preferred  creditors,  of,  not  allowed  unless,  etc §57 

Priority,  debts  which  have    .    .  §64 

not  counted  in  computing  number  of  creditors,  unless,  etc.  .  .  §56 

Proof  of     .    .    .  §57 

when  founded  upon  writing §57 

time  for  proving §57 

Reconsidered,  may  be  reallowed  or  rejected §57 

Referee,  filed  before  if  case  referred •  §56 

Secured  creditors,  of •■     1  •  §§56,67 

allowed  for  what  sums §57 

individual  undertaking,  secured  by §57 

not  counted  unless,  etc §56 

not  entitled  to  vote  at  creditors'  meetings   ...       §56 

value  of  securities  held  by,  how  determined §57 

Time  for  proving §57 

Unliquidated  may  be  liquidated,  etc §63 

Unscheduled,  discharge  no  release  from §17 

unless  creditors  had  notice,  etc §17 

Withdrawn  from  files,  may  be  when §57 

Clerk- 
Certificate  by,  as  to  Judge's  absence,  etc.,  authorizing  referee  to 

act        m 

Compensation  of §52 

Definition  of  <" 

Duties  of sH  51  and  57 

Fees §-'i2 

a<K;ount  for §51 

collect,  of  clerk,  referee,  trustee §51 

except  on  affidavit  of  voluntary  bankrupt  of  inability  to  pay  ■  §51 

pay  to  referee  and  trusttte,  when      ..._....  §51 

"Officer"  includes §1 

Petition,  copy  of,  to  be  filed  for ■    •    •  §59 

Referee  to  call  and  receive  papers  from  when §39 

transmit  papers  to ?;^** 

certified  co{)ieH  of,  by  mail      §'^'' 

Schedule,  copy  of,  to  be  furnished  by  bankrupt §7 


1176  INDEX    TO    ACT    OK    1 898. 

References  to  Sections. 

Clerks— 

W'asjee,  debts  having  priority 2^4 

Co-debtor— 

Liability  of,  not  uflecteil  by  bankrupt's  discharge §16 

Commencement  of  proceedings— 

Detinition ?1 

Commissioner  of  deeds — 

Referee,  may  be §35 

Commissions— 

Referees' f*^ 

apportionment f*^ 

Trustees' |48 

apportionment Ho 

Commitment— 

Contempt,  for,  before  referee I'll 

Referee  can  not  exercise  power  of §38 

Compensation—  -_,^ 

Clerks' f^r, 

Marshals' ^f,i 

Referees' ijy 

when  reference  revoked      Z'*'' 

when  case  transferred |40 

Stenographers' 1'^°^ 

Trustees' |2a 

apportionment  of y/^ 

withholding  of 248 

Compositions — 

Application  for  confirmation  to  be  filed  when §12 

accepted  in  writing  by  majority  of  creditors,  etc §12 

consideration  to  be  paid  and  costs  deposited §12 

date  and  place  of  hearing §12 

Certified  copy  of  order  confirming  evidence  of  title §21 

Confirmation  of,  a  discharge  from  debts §14 

conditions  of §12 

distribution  of  consideration §12 

Courts  of  bankruptcy  to  confirm  or  reject §2 

False  claims,  penalty  for  using  in §29 

Notice  to  creditors  of  hearing,  etc §5H 

Offer  of,  when  may  be  made  .    •  •    • §12 

Payment  of  claims  accruing  after,  set  aside §64 

Set  aside,  may  be  when §1<^ 

upon  proof  of  fraud §1'^ 

Title  revested  in  bankrupt  on  confirmation  of •  §70 

Compromise- 
Notice  to  creditors  of  proposed §58 

Trustees  may,  with  approval  of  court,  controversies §27 

Computation  of  time — 

In  bankruptcy  proceedings,  or  under  Act §31 

Computing  number  of  creditors— 
To  join  in  involuntary  petition §59 

Concealing— 

Books  of  account,  records  of  bankrupt,  prevents  discharge §14 

Definition  of  "  Conceal "     .    .    .    .  §1 

Property  of  bankrupt  with  intent  to  defraud,  etc.,  effect §3 

Punishment  for,  property  by  bankrupt §29 

document  by  trustee ^29 


INDEX    TO    ACT    OF    1 898.  1177 

References  to  Sections. 

Confirmation  of  composition  {see  also  Composition)—  ^ 

Conditions  of Ii'l 

Discharge  from  debts,  a  .    .    .    • ^l"* 

Consent—  „ 

Arbitrators  chosen  bv ^" 

Case  certified  for  trial  to  Circuit  Court,  by «1 » 

Petition  not  to  be  dismissed  by,  until  notice ioJ 


Consolidation— 

Of  cases  in  bankruptcy 


?32 


Construction—  . 

Powers  of  court  not  enumerated |- 

Words  and  phrases ^^ 

Contract—  ,       ,    ,,        ,  x«q 

Debts  founded  upon  may  be  proved  and  allowed |b^ 

Trustee  vested  with  title  to  rights  arising  upon «70 


Contempt— 

Arrest  of  bankrupt  for 

Court  of  bankruptcy  to  punish  for J-jJ 

Referee  before,  what  constitutes ^^T 

certifies  facts  to  judge |*J 

judge  hears  evidence,  punishes  or  commits 2*^ 

Consular  ofB.cers — 

Oaths,  etc.,  may  administer 


?9 


m 


Controversies- 
Arbitration  of 

Certified  to  Circuit  Court 

to  Supreme  Court  

Compromise  by  trustees  of     •    •        ■    •    • ,.•    '    '   *         .^^. 

Jurisdiction  of  appellate  courts  of,  in  bankruptcy  proceedmge  .   .    .    .  g24 


§26 

m 

§27 


Conveyances—  ,  ,      . 

Bankrupt  to  execute  to  trustee  of  foreign  property      .... 

Subsequent  to  act  within  four  months  to  defraud,  etc.,  void     • 

Trustee  to  execute,  to  purchaser  .    .    •    ■■■■■:    "    •    '  .\  '   '    '  ^'' 

Within  four  months  while  insolvent,  void  by  State  laws,  void 

under  Act 


?7 
'i67 


.§()7 


Bankrupt  to  prepare,  make  oath  to  and  file  in  triplicate i< 

claim  for  exemptions,  of |„ 

lists  of  creditors,  etc.,  of "•' 

schedule  of  property,  of  .    ....•••• |' 

Claims  allowed,  withdrawn  may  be,  on  leaving      -       •    •    • «»' 

Order  approving  trustee's  bond,  ot,  certified,  evidence  of  title  .       •    •  M 

§59 


confirming  or  setting  aside  composition,  of  jurisdiction,  etc.  . 
Papers  of,  certified  to  be  transmitted  to  clerk  by  referee  when 

Petitions  in  duplicate  for  clerk  and  bankrupt 

Referee,  certified,  of  proceedings  before,  evidence     . «-i 

Schedule,  of,  bankrupt  to  furnish  clerk,  referee  and  trustee i< 

Corporation  .    ,      ,  •       ,     *  u 

Bankrupt,  when  tube  judged  involuntary |^ 

can  not  be  adjudged  voluntary         ■    •    • « 

Debts  owing  by,  to  be  adjudged  involuntary '.'.'.'.'.    ^ 

Definition  of 3j 

"Persons"    include ,,      \  '    '2. ao 

Punishment  of  agents  etc.,  of,  by  court  of  bankruptcy «^ 

Sureties  on  bonds  of  trustees  and  referees,  ipay  be e-JJJ 

Trustees,  may  act  as •  ' 


11 78  INDEX    TO    ACT    OK    1 898. 

References  to  Sections. 

Costs— 

Ailministration,  of,  prior  debts • ?64 

Ailowfil  airainst  involuntary  bankrupt,  plaintiff ^60 

iiu-urred  ln'toro  tilin;,'  petition §63 

(in  (lisnustiinjx  petition  when      i'^ 

Include  witnesses'  fees,  inileajj;e  and  attorney's  fees, ?64 

.hidgnients  for.  courts  of  bankruptcy  to  render i^- 

IVnalty  on  recovery  of   .    . §57 

Preservini:  estate,  of,  prior  debts §64 

Taxation  of.  by  courts  of  bankruptcy §2 

Counselor  at  law  [sfc  also  Attorney ) — 

Fees  ot,  included  in  cost  of  administration §64 

allowance  on  dismissing  petition  when     §3 

payable  by  obligors  of  bond §3 

Payilients,  transfers  to,  by  insolvent,  when  re-examined       §60 

Counter  claims- 
Allowance  of,  between  bankrupt  and  creditor §68 

not  between  bankrupt  and  debtor  when §68 

••Court"— 

Detinition  of §1 

Referee,  may  include §1 

Courts^ 

Appeals  ajid  writs  of  error §25 

to  U.  S.  Circuit  Court  of  Appeals §25 

to  U.  S.  Supreme  Court      §25 

Arbitration  of  controversies §26 

Creation  of,  of  bankruptcy §2 

Depositions,  laws  governing §21 

Evidence §21 

Jurisdiction  of §23 

of  appellate     §24 

Jury  trials §19 

Newspapers,  designation  of,  for  notices §28 

Oaths  and  affirmations,  administration  of §20 

Process,  pleadings     •    •  §18 

Rules,  forms,  etc.,  U.  S.  Supreme  Court  to  prescribe §30 

Suits  by  trustees §23 

Courts  of  bankruptcy- 
Adjudge  person,  etc.,  bankrupt §2 

Appeal  to  U.  S.  Circuit  Court  of  Appeals §25 

to  U.  S.  Supreme  Court       §25 

Arbitrator,  appoint,  when §2H 

Assets,  collect  and  distribute §2 

Banking  institutions,  designate  as  depositories §61 

Business  of  bankrupt,  permit  temporary  transaction  of §2 

Claims,  allow  and  reject §2 

Confirm  or  reject  compositions §2 

Contempt,  punish  for §2 

Creation  of  §2 

Costs,  tax §2 

Definition  of §1 

Discharge  bankrupts :    §2 

District,  of  bankruptcy §2 

District  of  Columbia,  Supreme  Court  of §2 

Exemptions,  determine       §2 

Extradite  Vjankrupts §2 

Jurisdiction  of §§2,  23 

appellate §24 

Supreme  Court  of  United  States §25 

U.  S.  Circuit  Court  of  Appeals i24,  25 

U.  S.  Circuit  Courts  .    .    . .  §?3 

concurrent  with  courts  of  bankruptcy    .........'..    .923 


INDEX    TO    ACT    OF    1 898.  1179 

References  to  Sections. 

Courts  of  bankruptcy— ConhTiwff/. 

Marshals,  appoint  when §2 

Meetinjrs  of  creditors  when  to  call g55 

Newspapers  to  publish  notices,  designate     §28 

Orders,  make  and  enforce g2 

Powers  unspecified    .    .  §2 

Punish  bankrupts §2 

Receivers  appoint         §2 

Referees,  appoint  and  remove §34 

confirm,  etc.,  records  and  findings g2 

Reference  after  adjudication §22 

Snbstitute  additional  persons  or  parties §2 

Transfer  cases,  etc §2 

Try  bankrupts        §2 

Trustees  when  to  appoint §44 

United  States,  of §2 

Credit— 
Set-oflof  new,  by  preferred  creditor §60 

Creditors- 
Answer  to  petition  to  make  when §18 

Appearance  of §18 

Claims,  allowance  of ......      §57 

filing  after  proof §57 

hearing  objections §57 

lost  or  destroyed,  how  proved §57 

of  one  bankrupt  against  another §57 

penalty,  due  as  how  far  allowed §57 

preferred,  not  allowed  unless,  etc §57 

proof  of §57 

when  founded  on  instrument  of  writing §57 

reconsideration  of §57 

rejected,  dividend  may  b(^  recovered §57 

Becured,  of,  allowed  for  wiiat .§57 

claims  not  counted  unless,  etc §56 

not  entitled  to  vote  at  meetings §56 

value  of  securities,  how  determined §57 

secured  by  individual  undertaking,  how  proved §57 

subrogation  to  extent  of  creditors'  rights §57 

time  for  proving §57 

of  infants,  etc §57 

withdrawn,  on  leaving  copy  §56 

.   writing  wlien  founded  upon,  how  proved §57 

Computing  number  of,  to  tile  petition §59 

•    employees  not  counted §59 

relatives  not  counted §59 

Debts  due  as  penalty,  how  far  allowed §57 

Definition  of  §1 

Dividends  paid  first  to  certain  resident §65 

limit  to  right  to  collect §65 

payment  on  allowed   claims • §65 

recovery  of,  when  claim   rejected §57 

Include  agents,  attorneys,  proxies       §1 

Involuntary  petition,  number,  etc.,  necessary  to  file §59 

amount  of  claims §59 

notice   to  those  not  joined,  etc §59 

Lists  of,  bankrui)t  to  make §7 

referee  to    examine §39 

to  prepare  and  file  when §39 


IISO  INDEX    TO    ACT    OF    1 898. 

Keferonces  to  Sections. 

Creditors — Contimud. 

Moetinjjrs,  lirst  held  when  and  where     §55 

bankrupt  to  attend  tirst §7 

call  of,  by  court,  when ?55 

final ?55 

notice  of ^58 

place  of §55 

presiding  officer,  duties  of ?55 

subsequent i^55 

voters  at §56 

Notice  to,  of  compromise  of  controversy  .    • |58 

dismissal  of  proceedings .       •    •  .   .    .  §58 

of  petition §59 

dividends,  of  declaration  and  time  of  payment §58 

examinations  of  bankrupt §58 

final  account,  of  filing      " §58 

hearing,  on  application  for  confirmation,  etc §58 

meetings,  of  ....  §58 

referee  to  give §58 

sales  of  property §58 

time  of §58 

waiver  of §58 

Number  necessary  to  join  in  petition ,    .  §59 

employees  and  relatives  not  counted §59 

necessary  for  court  to  call  meeting §55 

at  designated  place §55 

Penalty,  debts  due  as  how  far  allowed §57 

Petition,  filed  in    duplicate §59 

number  necessary  to  join  in §59 

Preferred,   who  are      §60 

claims  not  allowed  unless,  etc §57 

Priority,  entitled  to  can  not  vote,  etc §56 

Proof  of  claims  of §57 

Proxy,  included  under §1 

Referee  to  give  notices  to §58 

Relatives  not  counted  in  petition  when §59 

Secured,  defined §1 

claims  allowed  for  what  sums .  ^57 

value  of  securities  held  by,  how  determined §57 

Set-ofl's  between  bankrupt  and §68 

Time  for  proving  claims §57 

Criminal  proceeding- 
Testimony  of  bankrupt  can  not  be  offered  against  him  in §7 

Crimes  and  offenses- 
Concealing   ].roperty  while  bankrupt §29 

Contempt  before  referee §41 

Courts  of  bankruptcy  to  punish  for §2 

P^mbezzlement  by  trustee §29 

Extorting  money,  etc §29 

False  claims,  presenting  under  oath §29 

using  in  composition §29 

False  oath  or  account,  making §29 

Indictment  or  information,  limitation  of §29 

Misappropriation  of  property  ....  §29 

Receiving  property  from  bankrupt  with  intent  to  defraud,  etc.  .    .    .  §29 

Referee  acting  when  interested ....  §29 

purchasing   property  of  bankrupt §29 

refusing  to  permit  inspection  of  accounts,  etc §29 

Tru.stee  refusing  to  permit  inspection  of  accounts §29 

misappropriating,  etc.,  property §29 

secreting  or  destroying  document §29 


INDEX    TO    ACT    OF    1 898.  1181 

References  to  Sections. 
Damages- 
Allowance  of,  on  dismissing  petition,  for  seizure  of  property     ....    §3 

"  Date  of  bankruptcy  "— 

Definition  of gl 

Days— 

Computation  of  time  by      §31 

Death- 
Bankrupt's,  does  not  abate  proceedings §8 

Trustee  s,  does  not  abate  suits §46 

Widow's  and  children's  rights §8 

Debts- 
Allowable  against  estate §63 

account  or  contract,  founded  on  §63 

costs  taxable  against  involuntary  bankrupt,  plaintiff §63 

costs  of  suits  incurred  before  filing  petition §63 

fixed  liability,  as  shown  by  judgment,  etc.  §63 

provable,  founded  on,  reduced  to  judgment  after  filing  peti- 
tion       §63 

unliquidated  claims  .    .  .    . §63 

Any  person  owing  may  become  voluntary  bankrupt §4 

Claims,  proof  and  allowance  of  (see  Claims) §57 

Contract,  founded  on,  allowed §63 

Coporation  owing  $1000  or  over  may  be  adjudged  bankrupt   .  .    .    .    g4 

Definition  of §1 

Discharge  does  not  release  from  what  .    ■  §17 

Fixed  lial)ility,  having,  may  be  allowed ....  §63 

Judgments  may  be  allowed §63 

Payment  of,  having  priority      §64 

accruing  after  composition  set  dside,  etc §64 

Penalty  or  forfeiture,  owing  as  how  far  allowed §57 

Priority,  having §64 

costs  of  administration,  etc §64 

fees,  attorneys' • §64 

filing,  l)y  creditor  .    .     •   .    .    .    .    • §64 

witnesses',  including  mileage §64 

order  of  payment §64 

owing  to  person  entitled  to  priority §64 

taxes §64 

wages  of  workmen,  etc.,  when §64 

Proved,  what  may   be §63 

Provable,  discharge  releases  from §17 

reduced  to  judgment  have  priority     jk)3 

Released  from,  by  discharge,  except  .    .  §17 

claims   not  scheduled  §17 

defalcation  as  officer  created  by i;17 

emVjezzlement,  for •    •    •  §17 

false  preten.ses,  et(".,  judgment  in  action  for  §17 

fiduciary  capacity,  created  while  acting  in, §17 

fraud,  created  by  §17 

judgments  in  actions  for  fraud §17 

false  pretenses,  etc.,  obtaining  property  by     §17 

willful  injury  to  person  or  property §17 

miaaj)propriation,  etc §17 

taxes  .    .  §17 

Set-offs  allowed  between  bankrupt  and  creditor §67 

Taxes  payable  in  advance  of  dividends '<M 

trustee  credited  with,  on  filing  receipt,  etc ■    -§64 

Decision — 

When  pleadings  not  filed il8 


11S"J  INDKX    TO    ACT    OF    1 898. 

References  to  Seeliotis. 
Defense- 
Solvency   a  complete §3 

Trustee  may  be  ordered  to  make §11 

Definitions  - 

"A  person  ajjainst  whom  a  j)etition  has  been  filed" §1 

'"Adjudication" §1 

"Appellate  courts" §1 

"Bankrupt" fl 

"Bankruptcy" §1 

"Clerk" i\ 

"Commmencement  of  proceedings"     jjl 

"Conceal" ....§] 

"Corporations"  •  §1 

"Court" n 

"Courts  of  bankruptcy" §1 

'Creditor" §1 

'Date  of  bankruptcy" ?1 

Debt U 

"Discharge" f,l 

"Document" i^l 

"Holiday" f\ 

Insolvent,  when  person  deemed H 

"Judge"    H 

"Oath" i\ 

"Officer" §1 

"Persons" §1 

"Petition" ?1 

"Referee" ?1 

"Secured  creditor" §1 

"States" n 

"Time  of  bankruptcy" §1 

"Transfer" 'f.\ 

Trustee     ....  i^l 

"Wage  earner" • ?1 

Words  importing  masculine  gender il 

plural  number ?1 

lingular  number  §1 

Departure— 
Of  bankrupt  as  cause  for  detention ?0 

Deposition — 

Notice  of  taking,  to  be  filed  with  referee 221 

w lien  to  be  served  on  claimant |21 

when  to  be  served  on  bankrupt ?21 

United  States  laws  to  govern  right  to  take ^21 

Depositories — 

Bond  to  give •    • ?61 

filed  in  clerk's  office         §50 

Designation  by  courts  of  banks  as,  for  bankrupt's  money ?61 

Detention- 
Bankrupt,  of,  for  examination  §9 

length  of •  . .  §9 

Property  of,  on  petitioner  giving  bond §3 

Disability- 
infant's,  etc.,  rights .       ^57 

Ptfcferee's,  effect  of §43 

Discharge— 

Applicaiion  for §14 

hearing  of §14 

time  of  filing .  §14 

Books  of  account,  concealing,  etc.,  prevents    .  §14 


INDEX   TO    ACT    OF    1 898.  1183 

References  to  Sections. 
Discharge — Continued. 

Co-debtor's  liability  not  aflFected  by ^16 

Composition,  confirmation  of  operates  as     ^16 

Debts  not  affected  by      ^17 

claims  not  scheduled    .....  ^17 

fraud,  embezzlement,  etc.,  created  by ^17 

judgments  in  actions  for  fraud,  etc ^17 

Definition  of il 

Fraud,  may  be  revoked  for gl5 

Granted  when i^H 

when  not  granted U-i 

Guarantor's  liability  not  affected  by iUi 

Offense  punishable  by  imprisonment  prevents ^14 

Payment  of  claims  accruing  after  revocation  of ^64 

Records,  destroying,  etc.,  by  fraud,  prevents ?14 

Releases  from  what  debts  ^17 

Revoked  when  obtained  by  fraud §15 

application,  when  to  be  filed jJ15 

payment   of  claims  after ^t)4 

title  vested  in  trustee ^70 

Surety's  liability  not  affected  by ^16 

Dismissal- 
Cost,  fees,  etc.,  allowed  respondent  on,  of  petition  when 'i'.i 

Notice  to  creditors  of,  of  proceedings ?58 

of  petition iJo9 

Petition  of,  by  referee, iS8 

by  petitioners ■ ?59 

Diplomatic  officers  of  United  States— 

(Jaths,  etc.,  may  administer ?20 

Disobedience— 

Of  referee's  orders,  punishment  for HI 

Distribution- 
Consideration,  of,  on  confirmation  of  composition J12 

Court  of  bankruptcy  to  make ?2 

Dividends,  of  unclaimed ?66 

Districts- 
Referee's,  designation  of  limits  of,  by  court ?:?4 

District  Courts  of  United  States- 
Courts  01  bankruptcy ?2 

Jurisdiction  of i'i 

District  of  Columbia- 
estates"  to  include •    •    •    •    ?1 

Snitrcme  court  of,  a  court  of  bankruptcy i^ 

Dividends- 
Commissions  r.f  referees  on  sums  to  be  paid  as  .  •    •    •. '^■'^^ 

Creditors  receiving  not  afFected  by  proof  of  subsequent  claims    •    •    ■  i}H5 

residing  within  United  States  entitled  to  preference jJlio 

Declaration  and  payment  on  allowed  claims ^(>5 

first,  declaration  of !^*>5 

subsequent <?^'j 

Limit  to  right  to  collect 'I'M^i 

Notice  to  creditors  of  declaration  and  time  of  payment iJoS 

Payment  of  when H7 

Recoverv  of,  when  claims  rejected (^57 

Referees"  to   declare W-) 

commissions  on  sums  to  be  paid  as  HO 

deliver  to  trustees,  sheets ?•>•' 

Trustee  to  j)ay  when ?47 

Unclaimed  after  six  months,  disposition  of     .    .    .        ?»)H 

after  one  year ?<>*> 

of  minors ?'>6 


11S4  INDEX   TO    ACT    OF    1 898. 

References  to  Seclious. 

Document- 
Definition  of §1 

Destroying'  or  secreting,  penalty  for §29 

Referee  niav  require  })roduction  of §158 

Trustee  vested  with  title  to ?70 

Domicile- 
Bankrupt,  of,  claiming  exemptions i^ 

■  Dower— 

'     Widow  entitled  to,  as  fixed  by  state  laws §8 


Duplicate — 

Petitions  to  be  filed  in iJ59 

Duties- 
Attorney  General's §58 

Bankrupt's §7 

Clerk's  ....  §51 

Creditors',  at  meetings §55 

Referee's §-^9 

Trustee's §47 

Embezzlement- 
Debts  created  by,  not  released  bv  discharge    §17 

Penalty  for " §29 

Employees- 
Creditors,  as,  not  counted  in  petition     §59 

Equity- 
Appeals  taken  as  in  cases  in      §25 

Process  served  as  suit  in     §18 

Records  of  referees  kept  as  in  cases  in §42 

Estates- 
Claims,  allowance  and  proof  of §57 

Debts  which  may  be  proved §tJ3 

which  have  priority §(J4 

which  can  not  be  released §17 

Depositories  for  money §<>1 

Dividends,  declaration  and  payment,  etc §(J5 

unclaimed  after  six  months,  paid  into  court .  §(Jt) 

after  one  year  distributed • §66 

rights  of  mmors §6t> 

Liens     .    .  §67 

created  within  four  months,  dissolved  when §67 

subsequent  to  Act,  within  four  months,  to  defraud,  etc.,  void    .    .    .  §67 

within  four  months,  void  by  state  law,  void §67 

Property  of  bankrupt,  when  may  be  seized §69 

when  released •        §69 

Set-offs  and  counter  claims  allowed §68 

Title  vested  in  trustee §70 

revested  in  l)ankrupt  on  confirming  composition  ....       ....  §70 

Trustee  to  convey  title §70 

Evidence- 
Certified  copies  of  proceedings  before  referee  as ...      §21 

order  approving  trustee's  bond,  of  title iJ21 

confirming  or  setting  aside  (composition,  of  jurisdiction,  etc.  .    .    .  §21 

confirming  composition,  of  revesting  title §21 

papers  issued  by  clerk  or  referee,  as §21 

Claims,  proof  of §57 

instrument  of  writing  to  be  filed  with  .    ...        §57 

when  lost  or  destroyed     .    .  

Compulsory  attendance  of  witnesses 

Criminal  proceedings,  testimony  of  bankrupt  can  not  be  offered 

in,  against  him §7 


§57 
21 


INDEX    TO    ACT    OF    1 898.  1185 

References  to  Sections. 
Evidence — Continued. 

Depositions,  laws  governing ?21 

notice  of  taking |21 

Referee  to  preserve  when P9 

Surety's  property,  of  value  of ^50 

Title  "of  bankrupt  m 

of  trustee ^21 

Examination- 
Bankrupt  to  submit  to §7 

compulsory  attendance  for i!2lV 

creditors  to  have  notice      ^58 

proofs  of  claims,  of,  make  ?7 

Detention  of  bankruj)t  about  to  depart,  for id 

Expenses  of,  of  administering  estates ^62 

of  bankrupt  attending,  when §7 

Notice  to  creditors  of,  of  bankrupt ?58 

Referee  may  make,  of  witnesses i^38 

Schedule,  of,  by  referee i'-id 

Stenographers  employed  for,  of  bankrupt,  etc i>;i9 

Witnesses  in  contempt  for  refusing,  etc •  .    .HO 

Exemptions- 
Claim  for,  bankrupt  to  prepare  copies  of,  make  oath  to,  and  file 

in  triplicate,  etc.     .    .  ?7 

Court  of  bankruptcy  to  determine  claims  for ...    §2 

State  laws  to  prescribe i6 

Trustees  to  set  apart,  etc ?47 

Expenses- 
Administering  bankrupt's  estate,  of  'A'y2 

Bankrupt,  of,  paid  attending  examination,  when U 

Dismissal  of  petition,  on     '& 

Partnership  bankrupt,  of,  how  paid ...    25 

Extortion — 

Punishment  for ?29 

Extradition- 
Jurisdiction  of  courts  of  bankruptcy  in ?2 

Manner  of ?10 

False  account— 

Penalty  for  making ?29 

False  claims- 
Bankrupt  to  disclose  proof  of,  to  trustee ?7 

Penalty  for  presenting  under  oath ^29 

using  in  composition ?-*J 

False  pretenses— 

.ludgriients  in  actions  for  obtaining   property  by,  not  udected 

by  discharg.- ?17 

False  representations- 
Judgment  in  actions  for  obtaining  property  by,  not  aflfected  by 

ilischarge       li^' 

Farmers- 
Involuntary  bankrupts,  (tan  not  be  adjudged  .    .  H 


Fees- 
Attorney's,  included  in  costfl  of  administration ?'»4 

one  paid  irr<'spe<'tive  of  number  i^}j 

on  dismissal  of  petition  when  property  seized ''/.'■i 

Clerk's   ....  ' i^-^-i 

Filing  fees  by  creditors  in  involuntary  cases i^<>'t 

Marshal's      i^^ 

Priority  in  payment  of  certain ^<j4 


118t)  INDEX    TO    ACT    OF    1 898. 

Kc'fort'iu'i's  to  !-'c'('ti()iis. 
Fees — Coniinufd. 

Kt'feroe's ?40 

wluMi  refertMU'e  revoked i^4() 

when  case  transferred •      ^^40 

Stenographer's {!;W 

Trustee's  !^48 

apportionment  of ^4S 

Vohintary  bankrupt  not  required  to  pay,  when jiol 

Witnesses  inehided  in  costs  of  administration .^64 

lirst  paid  or  tenilered  when ?41 

Fiduciary  capacity  — 

l»i'l)t  created  wliile  acting  in,  not  ailected  by  discharge ?17 

Filing- 
Arbitrators'  findings ?26 

Bonds,  referees',  trustees'  and  designated  depositories ^50 

Claims  for  exemptions  by  bankrupt PO 

Chiims  before  referee  or  in  court      (?57 

Discnarge,  application  for ^14 

application  to  revoke i^]5 

Information,  time  of (^29 

Jury,  of  application  for ^19 

List  of  creditors  by  bankrupt §7 

by  referee  when ?39 

Notice  to  take  depositions  with  referee ?21 

Schedule  of  property,  of,  by  bankrupt §7 

by  referee  when §39 

Finding- 
Arbitrators',  effect,  etc.,  of §26 

Referees',  transmitted  with  records  to  judges  when §39 

Fines— (st'^  aho  Crimes  and  Offenses) — 

Orders  of  court  enforced  by  •    ?2 

Referee,  of,  acting  when  interested     §29 

purchasing  property  of  estate §29 

refusing  inspection  of  accounts §29 

Trustee  refusing  inspection  of  accounts,  etc §29 

Foreign  country- 
Bankrupt  to  transfer  property  in,  to  trustee §7 

Forfeiture- 
Debts  due  as,  how  far  allowed §59 

Referee,  by,  of  office,  acting  in  case  when  interestea iJ29 

purchasing  property  while,  etc §29 

refusing  inspection  of  accounts     •    .        . .    .§29 

Trustee,  by,  of  office,  refusing  inspection  of  accounts .  §29 

Forms  of  procedure- 
United  States  Supreme  Court  to  prescribe,  for  courts  of  bank 

ruptcy §30 

Fraud- 
Books  of  account  concealed,  etc.,  by,  prevents  discharge §14 

Composition  after  confirmation  set  aside  for §13 

Concealing  of  property  by,  punishment §29 

Debts  created  by,  not  affected  by  discharge §17 

Discharge  revoked  when  obtained  by §15 

Judgment  in  actions  for,  not  affected  by  discharge .§17 

Lien  sought  and  permitted,  in,  of  bankrupt  Act,  dissolved,  etc.  •    •    .  §67 
Trustee  vested  with  title  to  property  transferred  in  §67 

General  assignment- 
Effect  of,  an  act  of  bankruptcy     ^3 

Gender- 
Words  importing  masculine,  etc.,  include,  etc §1 


INDEX   TO    ACT    OF    1898.  1187 

References  to  Sections. 

Good  faith—                        ^       , ,      .   ,     .  lai 

Liens  given  in,  etc.,  not  affected  by  Act,  etc., go/ 

Guarantor—                           ,,,,.,  ■/^i' 

Liability  of,  not  affected  by  bankrupt's  discharge <lt> 


Hearing- 
Appeal  to  Circuit  Court,  of  

JJaukrui)t  to  attend,  on  application  for  discharge 

Claims,  of  objections  to  allowance  of y^' 

Confirmation  of  composition,  application  for ^1- 

notice  to  creditors 


notice  to  creditors 
Insolvency,  on  question  of 
Petition,  voluntary,  of     .    . 


Infants—  , 

Claims  against  bankrupts,  tune  for  proving 
Unclaimed  dividends,  time  for  claiming    .    . 


''J 


§08 


Contempts,  for,  summary 1"*^ 

Discharge,  of  application  for         |i-^ 


?58 

& 

§18 


Holiday—  31 

Definition  of ^ 

Time,  in  computing 

Imprisonment- 
Bankrupt  subject  to,  for  "What  offenses  V,"    ■  V.  ' 

Bankrupt  in  custody  of  marshal  for  examination  not  to  be  sub- 
jected to .... 

Courts  of  bankruptcy  to  enforce  orders  by  

Discharge  prevented  by  offense  punishable  by 

Offenses  punishable  by 

Keferee  can  not  exercise  power  of 

Trustee  subject  to,  for  what  offenses 

Incumbrances— (see  a/.xo  Liens)—  ^u     *     i  f  o.,  1  ^f.. 

.Subsequent  to  act,  etc.,  within  four  months,  to  defraud,  etc., 

Withfn  four  months,  void  under  State  laws,  void  under  Act      .   .    .    .  ^^7 


§31 

§29 

§2 
H4 
§29 
S38 
§29 


§69 
§1 


Bond  of,  by  petitioner,  on  seizure  of  bankrupt's  property        -  • 

Indian  Territory— 

"States"  include        /,  "    ',   '    \ 6-' 

United  States  Courts  in,  made  courts  of  bankruptcy «- 

Indictments—  yn) 

Limitation  of  time  as  to  finding "=-' 


§H6 


Information—  /•>(> 

Liiiiitati(jn  of  tiiiK!  as  to  filing.    •  

^"iShaTge  does  not  release  judgments  in  actions  for  willful,  to  ^^^^ 

person  or  property ' 

Insane  person—  757 

Claims  against  bankrupts,  tini.-    for  proving 

Insolvency—                                    , ,      1        *.    .  33 

Adniission  of,  in  writing,  an  act  of  bankruptcy « 

Person  denyinc  to  testily,  etc. ^jg 

Question  of",  triable  V)y  jury        •    ■    •  i.  "    ' ,".  "    1    1  "  »  il(\ 

StalelawH,  proceedings  under,  not  affected  by  Act,  etc.     ....         d^i 


nSi^  INDEX    TO    ACT    OF    1 898. 

Kefereuces  to  Sectioua. 
Insolvent 

I)i'liniti(Mi  of    .    .    . ?1 

Filing  of  petition  against,  when .    i'S 

Jury  trial,  ontitlod  to §19 

Lions  created  while,  to  be  dissolved,  etc H'u 

State  laws  relating  to,  not  aflected  by  bankrupt  Act §70 

When  person  deemed .        §1 

Inspection — 

IVnalty  against  referee  and  trustee  refusing,of  accounts §29 

Trustee's  accounts  and  papers  open  to §49 

« 

Instrument  of  writing  — 

Debts  evidenced  by,  allowed,  etc §63 

filed  with  proof  of  claim •    •  §57 

Lost  or  destroyed,  statements,  etc.,  to  be  filed  with  claim  under 

oath §57 

Insurance  policy — 

Bankrupt  may  pay  cash  surrender  value  to  trustee  and  retain     .    .    .  §70 
otherwise  policy  to  ])ass  to  trustee  §70 

Interest — 

Judgments  as  debts  proved  and  allowed,  include §63 

Penalty,  on  recovery  of §57 

Referees,  of,  in  case  disqualifies §39 

Trustees  to  account  for  and  pay §47 

Intent — 

Conveying  property,  etc.,  with  fraudulent,  etc.,  effect  .    .  ...    §3 

Destroying  books  of  account  with  fraudulent  effect  §14 

Iveceiving  property  from  bankru])t  with,  to  defeat  Act,  effect   ....  §29 

Involuntary  bankrupt— 

Who  may  be  a<ljuclged §4 

Who  may  nut  be  adjudged §4 

Involuntary  petition- 
Bankrupt  entitled  to  jury  trial,  on  hearing  of §19 

Issues — 

Court  to  determine,  when  facts  controverted §18 

Joint  trustees  — 

B.onds  of       §50 

Suit.s,  may  prosecute  or  defend,  in  case  of  death §46 

Judge- 
Absence  of,  in,  clerk  to  send  case  to  referee     I  .§18 

Definition  of §1 

Keferee  may  exercise  certain  powers  of  or,  isfeuance  of  certiS- 

cate  by  clerk,  etc.  .    .  .....  §38 

powers  subject  to  review  by .  §38 

transfer  of  cases  by,  from  one  retei-ec  to  s.aoih(>r §22 

Judgments— 

I )eht8  reduced  to,  allowed §63 

Discharge  does  not  release  from  what §17 

Fraud,  in  actions  for,  not  affected  by  discharge §17 

Lien,  created  by,  within  four  months,  etc.,  when  dissolved, §67 

Pn  ference,  when  deemed  to  create     ...  §60 

Jurisdiction- 
Appellate  courts,  of  •    .  ...  §24 

Certified  copy  of  order  confirming  composition,  etc.,  evidence  of  .    .    .§12 
Circuit  Courts  of  U.  S.  of,  of  suits  between  trustees  and  adverse 

claimants  §23 

of  Appeal  of  U.  S.  to  superintend  and  revise  proceedings  of 
courts  of  bankruptcy    ...  ...  §24 


INDEX   TO    ACT    OF    1 898.  1189 

References  to  Sections. 

Jurisdiction— Continued. 

Concurrent,  between  circuit  courts  and  courts  of  bankruptcy  of 

ofl'enses ^23 

Courts  of  bankruptcy,  of g2 

Partnership,of  courts  of  bankruptcy,  over  one  member  sufficient.    .    .'  §4 

Referee's ! W22, .    *  ..    38 

JState  courts,  of,  of  suits  by  trustees '.    .    .  ?23 

Jury- 
Application  for,  when  to  be  filed ^li) 

Circuit  court,  case  certified  for  trial  by,  to gJi» 

Insolvent  entitled  to  trial  by 219 

Issues,  court  to  determine  without,  when §18 

Ofienses,  for,  right  to  trial  by       §19 

Special,  summoned  if  one  not  in  attendance gl9 

United  States  laws  as  to  trials,  applicable ....  ^19 

AVaiver  of  right ^19 

Justice  of  the  peace — 

Referee,  may  be §35 

Laches- 
Discharge,  in  filing  application  to  revoke §15 

Levies  — 

Obtained  against  insolvent  v.ithiu  four  months,  etc.,  void      §67 

Liability— 

Debt.s  which  are  a  fixed,  allowed,  etc §63 

Discharge  does  not  affect  co-debtors',  guarantors',  or  surety's  ....  §16 

Petitioner's  bond,  on,  to  hold  property §3 

Trustees,  of      §50 

Lien- 
Created  V)y  suit  within  four  months  of  filing  petition,  to  be  dis- 
solved by  adjudi(;ation  in  l)ankruptcy      §67 

if  defendant  was  insolvent §(57 

believed  to  be  insolvent §67 

permitted  in  fraud  of  Bankrupt  Act §67 

trustee  subrogated  to  rights  of  holder ■  .    .    .  §67 

Conveyance,  incumbrance,  etc.,  by  bankrupt  after  Act  and  with- 
in four  inontlis,  etc.,  to  defraud,  etc.,  void  .  §67 

except  as  to  purchasers  in  good  faith  for  consideration §67 

property  assets,  and  passes  to  trustee  §67 

void  under  State  law,  void  under  Bankru])t  Act §67 

property  passes  to  trustee  to  be  recovered  for  creditors §67 

Given  or  accepted  in  good  faith  for  consideration  not  affected, 

etc .....  §67 

Obtained  through  legal  proceedings  against  insolvent  within 

four  months,  etc.,  void   ...  .    .        .    .  ?67 

property  i)asses  to  trustee  as  part  of  estate §67 

unless  court  otherwise  orders §67 

court  may  order  conveyance §67 

bona  fide  i)unhaser  for  value  protected §67 

Trustee  subrogated  to  rights  of  creditor §67 

Unrecorded  claims  nf)t §67 

Limitation  - 

Actions,  of,  on  V)onds  of  referees  and  trustees      ?50 

by  or  against  trustees §11 

Claims,  tinie  for  proving §57 

rights  of  infants,  etc.  §57 

Indictment,  of  finding,  for  offenses      §-9 

Information,  of  filing,  etc •    •  ■  §20 

Prosecution,  of,  for  ofienses §29 


nOO  INDEX    TO    ACT    OF    1 898. 

References  to  Sections. 
Lists  of  creditors- 
Bankrupt  to  prepare  and  file,  in  triplicate §7 

lu'fi>rec  to  examine J39 

to  prepare  and  tile,  when g39 

When  tiled  with  answer §59 

Mail    - 

Notice  of  creditors'  meetings  by      558 

Referee  to  transmit  certified  copies  of  i)apers  ])>',  to  clerk  when   .    .    .§89 

Marshaling  assets- 
Insolvent  partnership,  01 §5 

Marshals- 
Courts  of  bankruptcy  to  appoint §2 

Custody  of  bankrupt  in,  for  examination §9 

Fees  of §52 

"Ofiicer"  to  include ...        gl 

Warrant  issued  to,  to  seize  proi)erty  when §69 

Masculine  gender- 
Words  importing,  Ikjw  construed •    •    §1 

Master  in  chancery — 

Keferee,  may  be §35 

Meaning — (See  Defimition) — 

Words  antl  phrases,  of §] 

Meetings  of  creditors- 
Bankrupt  to  attend  first §7 

when  not  compelled  to  attend §7 

expenses  of  attending,  paid  when §7 

Court  to  call,  when §55 

Final,  when  ordered  §55 

First,  tim(^  and  place  of §55 

Notice  of,  ten  days  by  mail §58 

Presiding  officer  of  first  §55 

Secured  claims,  holders  of,  not  entitled  to  vote §56 

Subsequent,  time  and  place §55 

Trustees  to  lay  detailed  statements  before  final §47 

Voters  at §55 

Mileage— 

Witnesses  before  referees,  of,  when  to  be  first  paid  or  tendered   .    .    .  §41 

Minors  — (»S'^e  also  Infants) — 

I'uciaimed  dividends,  time  for  claiming §66 

Misappropriation — 

Uebts  created  by,  not  affected  \>y  discharge §17 

Moneys- 
Depositories  designated  for .  §61 

Trustee  to  collect,  deposit,  etc §47 

to  disburse  how t..   .  §4,7 

National  bank- 
Involuntary  bankrupt,  can  not  be  adjudged §4 

Newspapers- 
Designation  of,  by  court  for  publication  of  notices,  etc §28 

when  additional  paper  may  be  designated §28 


INDEX    TO    ACT    OF    1898.  1191 

References  to  Sections. 
Notice- 
Composition,  certified  copy  of  order  confirming,  imparts,  when    .    .   .  ?21 

Creditors,  to §58 

compromise,  proposed     ...  §58 

declaration  and  time  of  payment  of  dividends §58 

dismissals,  proposed  .    .  .  §58 

examinations  of  bankrupt §58 

filing  final  accounts  of  trustee ■    ■  §58 

hearings  on  application  to  confirm,  etc.,  or  discharge §58 

meetings §58. 

publication  of  first  meeting §58 

sales,  proposed §58 

ten  days  by  mail §58 

waiver  of  notice §58 

Depositions,  of  taking  to  be  filed  with  referee §21 

Discharge   does  not  release  from  unscheduled  claims  unless 

creditor  had ]\7 

Newspapers  to  publish,  court  to  designate §28 

Petition  not  be  dismissed  without  .  §59 

Publication,  by,  when  personal  service  can  not  be  made §18 

of  first  meeting  of  creditors ...  §58 

Referee  to  give,  to  creditors §39 

Trustee's  bond,  certified  copy  of  order  approving,  recorded  im- 
parts   §21 

Number — 

Arbitrators,  of §26 

Creditors,  of,  who  may  file  involuntary  petition 34,  §59 

employees  can  not  be  counted §59 

nor  relatives  witliin  third  degree §59 

Referees,  of,  to  be  appointed  §37 

Trustees,  of §44 

Words  importing  singular  and  plural §-' 

Oath— 

Ailministered  by  whom §20 

Baukruj)!  to  make  to  schedule  of  property,  list  of  creditors,  and 

claims  tor  exemptions,  filed,  etc ?7 

Claim  founded  on  lost  writin<r,  ])roof  of  under ...  §57 

presenting  false,  under,  i)enalty §29 

Definition  of        .  §1 

Pleadings  verified  under §18 

Referee,  of §'^<i 

AVitiiPss  in  ronteinpt  for  refusal  to  take §41 

Offenses  1  we  uho  Crimes  and  Offenses) — 

Concealing  property §29 

Contempt  before  referee §41 

Embezzlement §-9 

Extorting  money    •    ■  f.~'^ 

False  oatli  or  account,  making §29 

False  claim,  presenting  under §29 

using  in  composition ^29 

Indictment  or  information,  time  of  finding,  etc §29 

Jury  trial,  accused  entitled  to §19 

Jurisdiction  of  U.  S.  Circuit  Courts §23 

Receiving  property  from  bankrupt  to  defeat  Act §29 

Referee,  a(;ting  when  interested      §29 

purchasing  property  of  bankrupt     •    .  §29 

refusing  to  permit  inspection  of  accounts      §29 

Trustee  refusing,  etc.,  inspection  of  accounts §29 

United  States  laws  applicable  as  to  jury  trials  for §19 

Offer- 
Composition,  of,  when  made  ...       ?'- 


ll:V2  INDEX    TO    ACT   OF    1 898. 

References  to  Sections. 
Office— 

lieferee  can  not  hold  any  other,  except,  etc §35 

must  have,  in,  or  be  resident  of  district §35 

term  of §34 

Trustee  must  have,  iu,  or  be  resident  of  district §45 

Officers- 
Attorney  General §53 

t  iL-rk         §51 

Definition  of §1 

Marshal §2 

C)aths,  authorized  to  administer §20 

"  Persons  "  include §1 

Receiver §2 

Referee      §34 

Trustee §44 

Orders- 
Ban  knii)t  to  comply  with  lawful §7 

Certified  copies  of,  as  evidence §21 

approving  trustee's  bond §21 

confirming,  etc.,  composition §21 

Court  of  bankruptcy,  to  enforce §2 

Precedure,  as  to,  U.  S.  Supreme  Court  to  prescribe §30 

Transferring  cases  in  bankruptcy §32 

Papers- 
Bankrupt  to  execute  and  deliver §7 

Certified  copies  of,  before  referee  as  evidence ».  .    .    .§21 

Penalty  for  refusing  inspection  of,  by  referee  and  trustee §29 

Referees  to  receive  from  clerks  §39 

secure  return  of     §39 

transmit  to  clerks §39 

Trustees,  of,  open  to  inspection ....  §49 

Parties- 
Additional,  courts  may  substitute  in  bankruptcy  proceedings  .  ...    §2 

Evidence  to  be  preserved  by  referee  on  application  of §39 

Referee  to  furnish  information  to §39 

Partnership— 

Adminstration  of  estate  of §5 

when  all  are  not  bankrupt §5 

Bankrupt,  may  be  adjudged  when      §5 

Claims  of,  against  individual  estates,  etc §5 

"  Corporations"  include  what §1 

Creditors  of,  appoint  trustee §5 

Expenses,  payment  of §5 

Jurisdiction  over  one  partner  sufficient §5 

Payment  of  debts  of §5 

.Surplus  of,  property §5 

Transfer  of  cases  against  different  members  of §32 

Trustee's  duty §5 

Words  importing  masculine  gender  include ....  §1 

Pasmient— 

Attorneys,  to,  in  contemplationof  insolvency,  re-examination  of, .    .    .  §60 

Debts,  of,  which  have  priority .    ^   .  ?64 

order  of i   ,  §64 

Dividends,  of,  on  allowed  claims §65 

notice  to  creditors  of §58 

unclaimed  dividends §66 

Patents— 
Tru.stee  invested  with  title  to §70 


INDEX   TO   ACT    OF    1 898.  1193 

References  to  Sections. 

Penalties — (see  also  Offenses) — 

Concealing  property §29 

Debts  due  as,  how  far  allowed §57 

Document,  for  secreting  or  destroying §29 

Embezzlement §29 

Extorting  money,  etc ...  §29 

False  oath,  making §29 

False  claims,  presenting §29 

Receiving  property  from  bankrupt,  to  defeat  Act      ^29 

Trustees  not  liable  for,  etc §50 

Personal  Property 

Not  to  be  sold  for  less  than  75%  of  appraised  value -.  .   §70 

Persons — 

"A  person  against  whom  a  petition  has  been  tiled" §1 

Definition  of    .  §1 

Involuntary  bankrupts,  who  may  be  adjudged §4 

Voluntary  bankrupts,  who  may  be  adjudged  .    .    .  §4 

Petition — 

Answer  to,  when §18 

Definition  of        §1 

Duplicate,  to  be  filed  in §59 

Filed  within  four  months  after  act  of  bankruptcy     ...       §3 

when  time  expires §3 

Hearing  of §18 

Involuntary  bankrupt,  against,  who  may  file §59 

Notice  to  creditors  not  joined  in  §59 

Referee  to  consider,  etc §38 

Service  of      §18 

Voluntary  bankrupt,  who  may  file,  as §59 

Petitioner- 
Bond,  by,  on  taking  i>roperty §3 

Place- 
Creditors'  meetings,  of §55 

when  bankrupt  required  to  attend §7 

Pleadings  and  practice— 

Appeal.s ?25 

Appellate  courts'  jurisdiction §24 

Arbitration  of  controversies .•  •    •    •  ^-*' 

Compromises §27 

Decision  where  pleadings  not  filed iSlS 

Evidence 'i-\ 

certified  copies  of  proceedings,  etc 'i-\ 

compulsory  attendance  of  witnesses §21 

depositions,  laws  governing §21 

Forms  to  be  prescrib.'fi  by  Supreme  Court §30 

Involuntary  bankruptcy,  petition  for §18 

adjudication  when  to  be  made §18 

appearance  and  pleading,  time  of §18 

determination  of  issues §18 

jurv  trial,  application  for §19 

when  to  be  filed      §19 

waiver  of  right §19 

])etition  for,  niiinbt-r  of  creditors  to  file §59 

service  of  petition      §18 

subpfjjna,  service §18 

return  of  ?18 

verification ^1>< 

Issues,  court  to  determine  when  facta  controverted  §ls 

.Jurisdiction  of  TTnited  Slates  Courts 'i- 

Jury  trial,  application  for  §19 


11 JU  INDEX    TO    ACT    OF    1 898. 

References  to  Sections. 

Pleadings  and  practice— Con^mw^d. 

I'liitcd  States  luwa  api>licable  to J19 

Notifes,  liow  publiehtHl    • ?18 

Oaths  and  atliriMations  ■        ^20 

KefeU'iu't'  of  cases  after  adjudication ^22 

Kales  and  orders,  etc.,  to  be  prescribed  by  Supreme  Court §30 

Service  of  petition  with  subpeena  a.s  process,  etc.       .  |l8 

Suits  by  trustees  where  brou<;ht 223 

Time,  computation  of ?31 

pleading  to  petition ^18 

Transfer  of  cases ....  g32 

Verification  of  pleadings     ... §18 

Voluntary  petition,  hearing  on  filing |l8 

Plural  number- 
Construction  of  words  in ?1 

Policy  of  insurance— 

bankrupt's,  how  retained - §70 

Possession- 
Bankrupt's  property,  of,  pending  hearing,  etc ?3 

petitioner  to  give  bond  §3 

when  bankrupt  is  neglecting  property,  etc. §f)9 

petitioner  to  give  bond  of  indemnity §'o9 

bankrupt  to  give  bond  to  release §(»9 

Preference — 

Creditors,  of,  residing  within  United  States §65 

Insolvent  permitting,  eflfect §3 

transferring  property  while  insolvent  to  give §3 

What  deemed  a      §60 

Preferred  creditors- 
Claims  of,  not  allowed  unless,  etc §67 

Set  off  of  further  credit  by      §60 

When  preference  voidable §60 

Who  are §60 

Procedure- 
United  States  Supreme  Court  to  prescribe  rules,  etc §30 

Process— 

Jiankrupt  exempt  from  arrest  upon  civil §8 

Service  of,  as  in  equity  cases,  etc. §18 

Proof- 
Burden  of,  of  solvency  §3 

Claims,  of,  of  what  to  consist §57 

founded  upon  instrument  of  writing      §57 

when  instrument  lost      §57 

time  of §57 

rights  of  infants,  insane  persons,  etc §57 

Partnerstiip  of,  against  individual  e.states §5 

Property — (See  aho  Estates)  — 

Concealing,  embezzling,  etc.,  penalty  for §29 

Conveying  with  intent  to  defraud,  etc.,  effect ....    §3 

Judgments  in  actions  for  willful  injuries  to,  not  released,  etc §17 

Possession  of,  of  bankrupt,  when  taken ?§3,  67 

Referee  purcha.-sing  when  interested,  penalty §29 

to  take  possession  and  release  when  .    .  §38 

Sold,  can  not  be,  for  less  than  75%  of  appraised  value ^  .  §70 

Title  to,  vests  in  trustee  when §70 

revests  in  bankru]>t  when §70 

Trustee  to  convey     §70 

Value  of  surety's §50 


INDEX    TO    ACT    OF    1698.  1195 

References  to  Sections. 
Prosecution- 
Limitation  of §29 

Protection— 

Of  bankrupt  from  arrest §9 

Proxy— 

"Creditor"  includes      ^1 

Penalty  for  using  false  claim  in  composition,  as  or  by     .......  §i><) 

Publication — 

Newspapers  for,  etc.,  courts  to  designate §28 

Notice  to  defendant  by,  when |l8 

Punishment - 

Bankrupts,  of,  by  courts  of  bankruptcy §29 

Concealing,  embezzling  property,  etc.,  by  trustee §29 

Contempt,  for,  manner  of §41 

Offenses,  for,  period  and  enumeration §29 

Keferees,  for  acting  while  interested  in  case §29 

purchasing  property,  etc.    ■ §29 

Trustees  and  referees,  for  refusing  inspection  of  accounts §29 

Purchaser— 

Bona  fide,  for  value,  etc.,  title  by  levy,  lien,  etc.,  not  impaired    .    .    .  §07 
Penalty  against  referee  as §29 

Real  property- 

Not  to  be  sold  for  less  than  75%  of  appraised  value §70 

Receiver- 
Courts  of  bankruptcy  to  appoint §2 

"  Officer  "  to  include     §1 

Re-consideration— 

Of  allowed  claims,  recovery  of  dividends  on go* 

Record- 
Bankrupt's  destruction  of,  prevents  discharge §14 

Notice  imparted  by,  of  order  confirming  composition J21 

approving  trustee's  bond §21 

Referees  to  keep,  how  .  §42 

to  constitute  records  in  each  case §42 

to  make  up  and  send  to  judge  with  findings,  when §39 

Recovery- 
Dividends,  of,  on  reconsidered  claims §57 

Property,  of,  etc.,  transferred  to  attorney,  when §60 

Re-examination— 

Of  payments,  etc.,  made  to  attorneys,  when §60 

Referee- 
Accounts,  penalty  for  refusing  inspection  of   §29 

Absence  or  disability  of §43 

Adjudication,  reference  after  §22 

Administration  of  oaths  by •  •     ,i§20,  38 

Api)ointment  of     •    .  §34 

Attendance  of  witnesses  before §41 

Attorney  in  bHnkriii)t  cases,  can  not  act  as  §39 

Bond  of  §50 

amount  of §50 

.aiiure  to  give,  creates  a  vacancy  §50 

filed  of  record  in  clerk's  office §50 

surdities  on  §50 

value  of  property §50 

suits  on,  how  and  when  l>rought §60 

Books  containing  record,  etc.,  to  keep §42 

certify  and  transmit  to  court §42 

Certified  copies  of  jjroceedings  l)efore,  evidence     .    •    •  .    •    •  §21 


1196  INDEX    TO   ACT   OF    1 898. 

References  to  Sections. 

Referee — Covtimwd. 

(.'hum  for  exemptions,  bankrupt  to  file  copy  of,  for g8 

C'laims  tilfd  before,  when  case  referred •  ?57 

Clerk  to  collect  fees ^51 

except  when §51 

jiay  when §51 

Commissioner  of  deedS;  may  be §35 

Commissions  on  dividends        §^  40  and  72 

Commitment,  can  not  exercise  power  of (J38 

Compensation  of   .       §40 

when  case  transferred      §40 

when  reference  revoked      §40 

Contempt  before §41 

proceedings  to  punish  for  ■  §41 

Counselor  at  law  can  not  act  as,  in  bankruptcy  cases §39 

"Court"  may  include §1 

Creditors'  lists,  to  make  and  file,  when §3<) 

Definition  of §1 

Depositions,  notice  to  take,  filed  with §21 

Disability,  effect  of  §43 

Districts  of,  court  to  designate      §34 

Dividends,  to  declare • §39 

Duties  of §39 

Evidence,  to  preserve,  when  _ §39 

to  make  up  record  embodying,  etc §39 

Fees  of §40 

apportionment  of §40 

clerk  to  collect §51 

Fined,  for  what  offenses     §29 

Findings,  to  transmit,  etc.,  to  judges  when §39 

Forfeit  office,  when §29 

Information  to  furnish,  when §39 

Interested,  penalty  for  acting,  when §3,) 

"Judge"  does  not  include §1 

Jurisdiction  of        §3j? 

administer  oaths §J-'.8 

consider  petitions §38 

examine  witnesses §38 

perform  certain  duties,  etc §38 

stenographers,  employ §38 

take  possession  of  and  release  property §38 

Justice  of  the  peace,  may  be §35 

Limitation  of  action  on  bond        §50 

Lists  of  creditors,  bankrupt  to  file  copy,  for        §7 

when  to  prepare  and  file §39 

Master  in  chancery,  may  be §39 

Meetings  of  creditors,  presides  at  first §55 

Notices  to  creditors,  given  by §39 

to  take  depositions,  filed  with §J1 

Numl).;rof  §37 

Oath  of  oflRce  by §36 

to  administer §36 

not  in  court i  •   iJ20,  38 

Offenses '■    •  §29 

acting  when  interested §29 

purchasing  property  while  §29 

refusing  inspection  of  accounts,  etc. §29 

Office,  can  not  hold,  except     ■    •        §35 

must  be  in  district,  unless  resident  of §35 

term  of •    • §34 

"Officer"  includes §1 

Papers  to  receive  from  clerks  when        §39 

penalty  for  refusing  inspection  of §29 

to  transmit  to  clerk,  when §39 


INDEX   TO   ACT    OF    1 898.  H^" 

References  to  Sections. 

"Referee— Continued. 

Parties  in  interest,  to  furnish  information  to i^ 

Payment  of  fees  to,  by  clerk |51 

Petition,  to  consider,  etc.        ^^ 

(i^ismiss  etc.  2^^ 

Possession  of  bankrupt's  property,  to  take,  when |o8 

Punishment  for  contempt  before     |^1 

for  offenses  by • l'^ 

Purchaser,  can  not  be,  of  bankrupt  s  property,  when i^y 

Qualifications  ...  •••,••, ?oq 

Records,  to  keep  and  transmit  to  clerks |^y 

to  make  up  and  send  to  judges •  t^^ 

penalty  for  refusing  iuspeotion  of •      2-^ 

Reference  of  cases  after  adjudication      |-^ 

Related  to  judges  of  courts,  etc.,  can  not  be |^o 

Release  property  of  bankrupt,  when |^» 

Remove,  court  may •    .       |^3 

Resident  of,  must  be,  or  hold  office  in  district |g 

Review,  powers  subject  to  •  |^^ 

Schedule,  to  examine,  and  amend if^ 


copy  of,  to  be  filed  for «' 

to  prepare  and  file,  if 
Stenographer,  to  employ 


to  prepare  and  file,  if  bankrupt  neglects,  etc. 


§39 


Term  of         • r~ 

Time  of  bringing  suit  on  bond I^^O 

Transfer  of  cases  to |^^ 

apportionment  of  fees |"*^ 

Vacancy,  filling |^^ 

iailure  to  give  bond  creates I^y 

Witnesses  attendance  before      |j| 

examination  of  | , . 

when  not  required  to  attend ^"^^ 


Eeference— 

Absence  of  judge,  etc.,  in 
After  adjudication     .    •    ■ 


§18 
§22 


Eelative—  ,  ^  .         .^.         ,  .-q 

Creditor,  of  bankrupt,  can  not  be  counted  in  petition,  etc joy 

Referee,  not  to  be,  of  judges  of  United  States  courts,  etc i-io 

Aelease  .  •      ,      j  zrq 

Bankrupt's  property  of,  on  giving  bond eo» 

Referee,  by,  of  property,  when ^^° 

Bemoval —                                                 ,  ,       ,     ^       «•    x  t.i 

Property  of  bankrupt  of,  with  intent  to  defraud,  etc.,  effect «^ 

Referee,  of j.,. 

Trustee,  of,  eflFect ^]" 

on  hearing  and  notice *"' 

Officers,  by,  of  expenses  of  administering  estates |^2 

examined  and  apy)roved,  etc.,  by  court ^^ 

Trustee,  by,  of  cfrndition  of  estate,  when |^1 

final,  when        

EepresentationS"                             ,        ,  ,      v    i  ?i7 

Judgment  in  action  for  false,  not  released  by  disclifirge 2^ 

ISnking  institutions,  depofiitorios,  etc.,  convenient  to  trustecB   .   .    ■  §61 

Departure  of  bankrupt  from,  cause  for  detention |J 

Dower  fixed  by  the  laws  of  hankrupt'K ^ 

Expenses  of  bankrupt,  attending  examination  from i' 

List  of  creditors  filed  by  bankrupt  to  show ^ 

Persons  adjudged  bankrupt,  of ^^ 


1198  INDEX    TO    ACT    OF    1 898. 

References  to  Sections. 

Residence — Conlinued. 

Ketcree's,  in  district,  etc §35 

Sureties',  on  bond,  when  property  taken      §3 

Taxes  of,  bankrupt  not  released  by  discharge §17 

Trustee's,  in  district,  etc §45 

Respondent — 

Custti,  counsel  fees,  etc.,  allowed  on  dismissal  of  jielition   ....    §3 

Return — 

Subjiu'na,  of  within  fifteen  days §18 

Revesting— 

C)I  tille  in  bankrupt  when §70 

Revocation — 

Discharge  of  bankrupt,  of  when  may  be  made §15 

Title  vested  in  trustee,  on,  of  discharge     ...        ;    .    .    .    .  §70 

Rules— 

Suiireme  Court  of  U.S.  to  prescribe,  in  bankruptcy  proceedings  .    .    .§30 
may  amend  from  time  to  time §30 

Sale- 
Appraised  value,  for  not  less  than  75  percent  of .  §70 

Approval  of  court,  subject  to §70 

Notice  to  creditors,  ten  days  by  mail  ....  §58 

Real  and  personal  property,  of §70 

Trustee  to  convey  title  on §70 

Schedule — 

Bankrupt  to  make  oath  to  and  file,  when §7 

Composition  can  not  be  offered  before  filing §12 

Copies  in  triplicate  to  be  filed  by  bankrupt §7 

Discharge  does  not  release  from  unscheduled  claims  •    .       §17 

unless  creditors  had  notice §17 

Referee  to  examine  and  amend §.39 

prepare  and  file  when .       §39 

Voluntary  bankrupt  to  file,  with  petition §7 

What  to  contain §7 

Secured  creditor 

Allowance  of  claimG,  for  what  sums v.   .  §57 

Claims  secured  by  individual  undertaking §57 

subrogation  of  obligor  discharging §57 

Definition  of  §1 

Meetings  of  creditors,  not  entitled  to  vote  at  .    .  §56 

claims  not  counted,  etc.,  unless,  etc •    .§56 

Value  of  securities  held  by,  determined  how §57 

;i!aount  of  value  credited  on  claims §57 

Seizure— 

J->ankrupt's  property,  of,  to  prevent  deterioration,  etc §69 

bond  to  indemnify  bankrupt §69 

to  secure  n  lease         §69 

Servant — 

Wages  due,  etc.,  have  priority §64 

Service— 

Ndtice  to  take  depositions,  of §21 

upon  bankrupt,  when §21 

upon  claimant,  when §21 

Petition,  of,  with  subpfjena  for  involuntary  bankrupt §18 

manner  of    .    . §18 

Subprena  of,  etc §18 

manner  of §21 

return  of §18 


INDEX   TO    ACT   OF    1 898.  II99 

References  to  Sections. 
Set-off- 
Allowed  between  creditor  and  bankrupt,  when     ?6S 

not  between  debtor  and  bankrupt,  when      §68 

Preferred  creditor,  bVj  giving  further  credit,  etc ^00 

Sickness- 
Judge,  of,  referee's  powers  when  exercised §38 

Singular  number — 

Construction  of  words  importing §1 

Solicitor— (Se^  also  Attorneys) — 

Payments,  etc.,  to,  by  insolvent  for  services  to  be  rendered,  re- 
examined, etc.     ...  ]60 

Solvency — 

Burden  of  proof  of ?3 

Defense,  a  complete,  etc §3 

Statements — 

Trustee  to  lay  detailed,  before  final  meeting  of  creditors H" 

States — 

Arrest  under  process  of  courts  of,  exemption  of  bankrupt  from   ...    §9 
Banks  of,  can  not  be  adjudged  involuntary  bankrupts    ....  -23 

Debts  owing  to,  as  penalties,  etc.,  how  far  allowed ?57 

Definition  of .    .  ...    §1 

Dower  of  widow,  fixed  by  laws  of ^8 

Exemptions  under  laws  of     .    . §6 

Include  Territories,  Indian  Territory,  Alaska,  District  of  Co- 
lumbia    §1 

Jurisdiction  of  courts  of  •    •  ?23 

Liens,  etc.,  void  under  laws  of,  void  under  bankrupt  Act ?67 

Proceedings  commenced  under  insolvency  laws  of,  not  aft'ected  •    •    •  i~0 

Taxes  of,  no  discharge  from  .    .  ......  ?17 

Trustees  may  bring  suits  in  what  courts  of ?23 

Statistics- 
Attorney  General  to  lay  tah)les  of,  annualh'  before  Congress     ....  ?53 
Officers  to  furnish,  to  Attorney  (ieneral  on  request §53 

Stay— 

(jf  action  pending  against  bankrupt  at  time  of  filing  petition  ....  §11 

Stenographer- 
Fees  oi  .    .  §38 

Referee  to  authorize  employment  of §38 

Subpoena- 
Service  of  with  petition    .       §18 

Successor- 
Duties  imposed  upon  officer  incluil(>   .    .        .    §1 

Title  to  property  vests  in  trustee  and      §"0 

Trustee,  of,  may  pronecute  or  defend  suits W^ 

Subrogation- 
Claims  secured  by  individual  undertaking,  of  ])erson  discharg- 
ing      .    .    .    . " §57 

Trustee,  of,  to  rights  of  creditor  or  hoMcr  of  lien •  §67 

Suits  — 

Jiarikrupt,  by  and  against  .    .  fH 

appearance  of  trustee  ...  §11 

commenced  by,  prior  to  adjudication §H 

stay  of ■■''''■]} 

Bond  on,  to  take  bankrupt's  prfiperty,  etc. §3 

to  indemnify  bankrupt  on  seizure  of  property §69 

to  release  property §69 


r200  INDEX    TO    ACT    OF    1 898. 

References  to  SectiouB. 
Suits — Contiiiwd, 

Bonds  of  reforooa  and  trustees,  on §50 

in  naini>  of  United  States,  etc.,      ....  §50 

limitation  of  action  on §50 

Lien  created  pursuant  to,  etc.,  when  dissolved ^67 

Kcferee,  on  bond  of  §50 

Trustee,  on  bond  of §50 

by,  brought  in  what  courts §23 

death  or  removal  not  to  abate      §46 

time  of  bringing,  by  or  against §11 

on  bond  of       . §50 

Sunday— 

In  computation  of  time §31 

Supreme  Court  of  District  of  Columbia- 
Appeals  from X  .  §24 

A  court  of  bankruptcy §2 

Jurisdiction  of §2 

Supreme  Court  of  United  States- 
Appellate  jurisdiction  of  §24 

Appeals  to,  from  Circuit  Court  of  Appeals §25 

when  amount  exceds  $2,000  ....  §25 

when  question  certified  by  Supreme  Court  Justice ^25 

Rules,  forms  and  orders  for  courts  of  bankruptcy,  etc.,  to  pre- 
scribe      §30 

Sureties- 
Bonds  of  referee  and  trustee,  on §50 

corporations  may  be §50 

two  necessary  on  each §50 

value  of  property §50 

Liability  of,  not  affected  by  bankrupt's  discharge §16 

Taxation  of  costs— 

l'>y  courts  of  bankruptcy fG 

Taxes- 
Discharge  of  bankrupt  not  to  affect §17 

Priority  in  payment  of §64 

Term— 
Referee's  office ?34 

Territories- 
District  Courts  of,  made  courts  of  bankruptcy §2 

Jurisdiction  of §2 

appellate,  of  Supreme  Courts §24 

States  include §1 

Testimony- 
Bankrupt  to  give,  as  to  estate                 §7 

Criminal  proceeding,  in,  can  not  be  offered  against  bankrupt  ....  §7 

Person  denying  insolvency  to  give §3 

Time- 
Accounts,  by  trustee,  of  filing §47 

Actions,  of  bringing  by  and  again.st  trustees §11 

on  bonds  of  referees  and  trustees     .    •  §50 

Appeals,  of  taking  to  Circuit  Court  of  Appeals §25 

Bankrupt  Act,  of  taking  efect §70 

Bonds  of  referees  and  trustees,  of  giving      §50 

of  bringing  suits  on      §50 

Claims,  of  proving §57 

hearing  objections  to §57 

Composition,  of  filing  application  to  set  aside §13 

Computation  of,  in  bankruptcy  proceedings,  etc §31 

Creditors'  meetings,  of ...  §55 


INDEX   TO    ACT    OF    1 898.  1201 

References  to  Sections. 

Time— Continued.  ,.       .       .  ,  215 

Discharge,  of  filing  application  to  revoke go 

Dividends,  of  declaring L- 

of  paying L,; 

unclaimed  dividends  |_j. 

Involuntary  petition,  to  file  under  Act j"^ 

Jury  trial,  of  filing  application  for ^  ;, 

Notice  to  creditors,  of  giving     • •   .    .    .  ij- 

Petition  against  insolvent,  of  filing ^|g 

Pleading  to  petition,  of  ■    •  |.q 

Publication  of  notices  to  creditors  - | 

when  personal  service  can  not  be  had  2  ^ 

Subpoena,  of  return  of ^,^ 

"  Time  of  bankruptcy  "  •    •    •  Jq 

Trustees,  when  to  give  bond  •  j^- 

accounts,  to  file  final  L. 

limitation  of  actions  by  and  against "^.^ 

on  bond jj^Y 

report,  to  make  final    •    • L^ 

Voluntary  petiton,  to  file  under  Act      <:'" 


Title— 

Revests  in  bankrupt  when ..•'■■•  i    '"  ^*  '  '  Z91 

certified  copy  of  ord-r  confirming  composition,  evidence  of  •  .    •    •  |-t 


§70 


Trustee  to  convey 


m 


rusiee  10  c()u\ey  •■■■.,,  1  ^i  i->\ 

certified  copy  of  order  approving  bond,  evidence  ot |- J^ 

Vests  in  trustee  and  successor  ...  |_q 

when  composition  set  aside,  etc.      •  *= 

Tra<iisfer —  3" 

Act  of  bankruptcy,  when    ....  •    •  '^ 

Attornevs,  to,  re-examination,etc  ,  when  •    • ^ 

Bankrupttoexecute,  to  trustee  of  foreign  property ^' 

Cases,  of,  bv  court  of  bankruptcy  '    u- 3^9 

when  petitif)n  filed  against  member  of  partnership !   !       |l 

Definition  of xgO 

Preference,  when  given  by     ••••••■••., mxv 

Subsequent  to  Act,  within  four  months,  etc.,  void  _ ^< 

Within  four  inanths,  void  under  State  laws,  void  under  Act     ...      §67 

Trial—  ,  ^  u     1        *  .   .   .    ?2 

Bv  courts  of  bankruptcy,  of  bankrupts ^ 

By  jury,  in  involuntary  bankruptcy  cases ^ 

Trustee                             .          ^-                                                .  .  .   .  !!49 
Accounts,  etc.,  open  to  inspection •    •    • |^, 

to  keep g47 

file  final,  when  ^r^ 

Appeal  bond,  not  required  to  give .''.'.'.'.   \'l 

Appointment '."^M 

creditors  to  make  when !    !  §44 

court  to  make  when  •••:•■ m^ 

Arbitration,  trustee  to  submit  to,  etc.   •    •    •   ; '3- 

Bankrupt,  to  inform,  of  attempt  to  evade  Act  ^J 

Banks  as  depositories,  etc.,  to  deposit  money  in   •       •    •    ■    •    •   •    •    •  <.^ 

Bonfls  of ..!.....  §50 

amount ...      §50 

creditors  to  fix    •    •  .    .  g50 

court  to  fix,  when 'i2b 

appeal,  not  required  to  give  ••■,■■''     ■        „♦„ 29i 

elidenceof  title,  certified  copy  of  order  approving,  etc.    .   .   .   .    •  §-1 

failure  to  give,  effect 'fiO 

filed  where ^.W 

joint  or  several,  etc .......  §.50 

liability  on  . .i50 

Buita  on 


li!02  INDEX    TO   ACT   OF    1 898. 

References  to  Sections. 

Trustee — Cuntuutcd. 

suri'tit's  jij^proved  by  court f!'30 

torporivtions  may  be ^50 

luiinbrr  of §50 

value  of  property,  etc §50 

court  to  require  evidence §50 

lime  of  giving .    .    .  §50 

Commissions  of §48 

C'oinpensation  of §48 

apportionment  of §48 

withholding        §48 

Compromise  controversies,  may,  when §-7 

Concurrence  of  two  necessary §47 

Condition  of  estate,  to  report  when §47 

Convey  title §70 

Corporations  authorized  to  act  aa §45 

Created  by  Act §33 

Creditors  to  appoint,  when •  §44 

Creditors' meetings,  to  make  detailed  statements,  at  final §47 

Court  to  appoint,  when §44 

Death  or  removal,  effect §46 

Depositories,  deposit  money  in §47 

disburse  by  check,  etc.,  on §47 

Dividends  to  pay,  when §47 

Document,  punishment  for  secreting,  destroying,  etc §29 

Duties  of §47 

Embezzlement  by §20 

Error,  not  required  to  give  bond  on §25 

Estates  to  close  up,  etc ,   ~ ,   .   .  §47 

Exemptions  to  set  apart ^47 

File  order  of  adjudication  with  recorder §46 

Final  accounts  to  file,  when §47 

reports  to  make     §47 

Forfeitures  incurred  by  bankrui)t,  etc.,  not  lial)le  for §50 

Information  to  furnish §47 

Inspection  of  ])apers,  etc.,  penalty  for  refusing §29 

Interest  to  pay §47 

Joint,  may  prosecute  or  defend  suits §45 

Liability  of §50 

Lien,  subrogated  to  rights  of  holder  of §67 

Meetings  of  creditors,  make  statements  before  final §47 

Money,  deposit  in  designated  depository §47 

disbur.se  by  check,  etc., on 'H~ 

Number  of   .    ■    ■ §44 

OfTenses  by §29 

Office  of,  where §45 

"Officer"  includes §1 

Partnership  creditors  to  appoint §4 

Payments  to  attorneys,  etc.,  re-examined  by,  when         §60 

Penalty  incurred  by  bankrupt,  not  liable  personally  for    .  •  §50 

Property  of  V)ankrupt,  to  collect,  etc.     .    •  §47 

Punishment  for  ofTenses,  etc ,  §29 

Qualifications  of §45 

Recovery  of  property  by §70 

Removal  of,  effect §46 

on  hearing  and  notice  §2 

Reports,  to  make ?47 

final,  when §47 

Residents  of,  must  be,  or  have  office  in  district §45 

Schedule,  copy  of,  to  be  filed  for §7 

Subrogation  to  rights  of  lienholder §67 

Successor  may  prosecute  or  defend  suits §46 

Suits  liy.  ill  what  courts  to  be  brought      §23 

limitation  of,  by  or  against §11 

on  bond §50 


INDEX   TO   ACT   OF    1 898.  1203 

References  to  Sections. 

Taxes,  credited  with,  on  receipt  filed,  for  payment  of  .  •       •  ^64 

Title  to  property  vested  in |70 

on  setting  composition  aside,  etc.        |70 

to  convey  ^'^ 

Transfer  by,  penalty  for  unlawful |-J 

Vacancv,  appointment  in  case  of '    '  t-n 

bv  faflure  to  give  bond |^9 

Yaliditv  of  act  requires  concurrence  of  two g-*/ 


Unclaimed  dividends 
Disposition  of 


§66 


Unincorporated  company— 

May  be  adjudged  iuvoluatary  bankrupt 2-i 

United  States— 

J  urv  trials,  laws  of,  applicable  to n^ 

Penalties,  owing,  allowance  of  ...    .  ij>'_ 

Taxes,  of,  discharge  not  to  aflect n< 

United  States  Courts— (&e  also  Courts,  Courts  of  Bankruptcy)— 

Appeals  and  writs  of  error  when  taken  in 22o 

Courts  of  bankruptcy |- 


Jurisdiction  of 

of  appellate  courts 


?2 


circuit  court  of  appeals ^24 

United  States  Circuit  Court  of  Appeals— 


z-^o 


Appeals  to f:~\ 

Jurisdiction 


appellate  . 
concurrent,  etc. 


§25 
§23 


United  States  Supreme  Court— 

Appeals,  etc.,  to |t^. 

Jurisdiction |  ^25 

ai)pellate ^ 

Vacancy—  ^,.. 

Referee's  office,  in •    •       ■■■.;■, l-'n 

Trustee's  or  referee's  office,  in,  by  failure  to  give  bond iou 

Value—                                       ,       -^             X    f  27ft 

Sale  of  property  for  not  less  than  ^0  percent  of  .    •  .-    • (')! 

Securities,  of,  held  by  secured  creditor  how  determined g/ 

Surety's  property,  of,  evidence  required «w 

Venue—                                            , ,      ,       ^  zo 

Transfer  of  cases,  to  other  courts  of  bankruptcy «- 

Trustee's  suits,  of ^"" 

Verification—  ^.^ 

Of  plcatlliiL's,  when  required      «'^ 

Voluntary  bankrupt—       ,     ,     ,  3. 

Corporation  can  not  V)e  adjudge<l ^ 

Who  niav  be  adjudged .^,, 

Wlh.  may  lil.-  petition ^'^• 

Voluntary  petition—  ..,, 

Wliu  may  file *='  " 

Voters—  .  .   .  1,5,; 

At  creditors'   meetings ,"    '    I kfi 

hoMors  of  secured  claims  can  not  be,  etc. sf'^" 

Wage-earner—  _       .   .    91 

Definition  of ,  '    '  i-     1      j 24 

Involuntary  bankrur)t,  can  not  be  adjudged «■* 


1204  INDEX    TO    ACT    OK    1 898. 

Kofereiices  to  Sections. 

Wages  - 

rriority  in  payment  of g(j4 

Waiver  — 

01  right  tt)  jnry  trial gH) 

Warrant 

Departure  of  bankrupt,  on,  when  to  issue    • {J9 

Seizure  of  bankrupt  property,  on,  to  prevent  deterioration §89 

Widow- 
Dower  of,  tixed  liy  laws  of  State,  etc §8 

Witnesses — 

Attendance  before  referee •    • 241 

Compulsory  attendance  for  examination  ?21 

Contempt  for  refusal  to  appear,  etc ^41 

Fees  and  mileage  of,  to  be  first  paid  or  tendered,  when §41 

Women — 

"Persons"  to  include >   .   .    ?1 

Words — {s^ee  Definition) — 

^Meaning  of >  §1 

Workmen — 

Wages  of,  priority  in  payment ?64 

Writing- 
Debts  evidenced  by,  allowed  and  proved §6V 

Filed  to  be,  with  proof  of  claim §57 

Writ  of  Error- 
Trustees  not  required  to  give  bond  when  suing  out §25 


THE  ACT  OF   1867. 


The  Bankruptcy  Law  of  1867/ 


CHAPTER  ONE. 

COURTS   OF   BANKRUPTCY,   THEIR    JURISDICTION,    ORGANIZATION,   ANI> 

POWERS. 

Scope  of  the  jurisdiction  of  courts  of  bankruptcy.  Sec.  4972.  The 
jurisdiction  conferred  upon  the  district  courts  as  courts  of  bankruptcy 
shall  extend : 

First.  To  all  cases  and  controversies  arising  between  the  bankrupt 
and  any  creditor  or  creditors  who  shall  claim  any  debt  or  demand 
under  the  bankruptcy. 

Second.  To  the  collection  of  all  the  assets  of  the  bankrupt. 

Third.  To  the  ascertainment  and  liquidation  of  the  liens  and  other 
specific  claims  thereon. 

Fourth.  To  the  adjustment  of  the  various  priorities  and  conflicting 

interests  of  all  parties. 

Fifth.  To  the  marshaling  and  disposition  of  the  different  funds  and 
assets,  so  as  to  secure  the  rights  of  all  parties  and  due  distribution  of 
the  assets  among  all  the  creditors. 

Sixth.  To  all  acts,  matters,  and  things  to  be  done  under  and  in 
virtue  of  the  bankruptcy,  until  the  final  distribution  and  settlement 

'The   text  is   taken    from   the  the   statutes    of    1878    and    will 
Revised  Statutes   of  the   United  therefore  be  included  in  the  text. 
States,  edition  of  1 87S.    Theorig-  (See  preface  to  edition  of  1878). 
inal  act  of  1867  was  passed  .March  The  eftect  of  passing  the  amend- 
2     1867  (14  Stat,  at  L.  517)  and  nieiit  and  the  revised  statutes  on 
tiie  principal  amendment  to  this  the  same  day  caused  some  con- 
act  was  passed  June  22,    1874  (18  fusion  in  construing  thenu     See 
St'it     at   L     178)       Contempora-  In  re  Oregon  Bui.  Printing  6c  Tub. 
neously  with  the  passage  of  the  Co.    No.    10558  Fed.  Cas..   S.    C 
amendatory  act  of  June  22,    1874,  ^3  N    B^  R.  199:  In  ^"^  Jl^^^J 
amending   by    specific    reference  2  Fed.  Rep.  559:  Brown  i-   ^\  hite 
the   bankni/t   act  of   1867.    con-  16  Fed.   Rep.   200.     A  list  of  all 
gress  enacted  a  complete  substi-  the    amendatory    acts     may     be 
tute  for  the  act,   as  Title  sixty-  found  on  Page  12  ante. 
one  of  the  statutes,  and  repealed  Tins  statute   was   repealed  by 
the   act   in   common   with   other  the  act  of  June  7.    1878    to  take 
general  and  permanent  acts.    The  effect  Sept.  i,  1878.  20  Stat,  at  L. 
amendatory  act  has  been  incor-  99. 
porated  in  the  revised  edition  ot 


;[o^)j^  THE   LAW   OK    1867. 

of  the  estate  of  the  bankrupt,    and  the  close  of  the  proceedings  in 
bankruptcy. 

Authority  of  district  courts  and  judges.  Sec.  4973.  The  district 
courts  shall  be  always  open  for  the  transaction  of  business  in  the  ex- 
ercise of  their  jurisdiction  as  courts  of  bankruptcy;  and  their  powers 
and  jurisdiction  as  such  courts  shall  be  exercised  as  well  in  vacation 
as  in  term  time;  and  a  judge  sitting  at  chambers  shall  have  the  same 
powers  and  jurisdiction,  including  the  power  of  keeping  order  and 
of  punishing  any  contempt  of  his  authority,  as  when  sitting  in  court. 
Sessions  of  the  district  courts.  Sec.  4974.  A  district  court  may 
sit  for  the  transaction  of  business  in  bankruptcy,  at  any  place  within 
the  district,  of  which  place  and  of  the  time- of  commencing  session 
the  court  shall  have  given  notice,  as  well  as  at  the  places  designated 
by  law  for  holding  sessions  of  such  court. 

Power  of  district  courts  to  compel  obedience.  Sec.  4975.  The  dis- 
trict courts  as  courts  of  bankruptcy  shall  have  full  authority  to  com- 
pel obedience  to  all  orders  and  decrees  passed  by  them  in  bankruptcy, 
by  process  of  contempt  and  other  remedial  process,  to  the  same  extent 
that  the  circuit  courts  now  have  in  any  suit  pending  therein  in  equity. 
Powers  of  circuit  judge  during  absence,  sickness,  or  disability  of  dis- 
trict judge.  Sec.  4976.  In  case  of  a  vacancy  in  the  office  of  district 
judge  in  any  distri'ct,  or  in  case  any  district  judge  shall,  from  sick- 
ness, absence,  or  other  disability,  be  unable  to  act,  the  circuit  judge 
of  the  circuit  in  which  such  district  is  included  may  make,  during 
such  disability  or  vacanc}-,  all  necessary  rules  and  orders  preparatory 
to  the  final  hearing  of  all  causes  in  bankruptcy,  and  cause  the  same 
to  be  entered  or  issued,  as  the  case  may  require,  by  the  clerk  of  the 
district  court. 

Powers  of  the  supreme  court  for  the  District  of  Columbia.  Sec.  4977. 
The  same  jurisdiction,  power,  and  authority  which  are  hereby  con- 
ferred upon  the  district  courts  in  cases  of  bankruptcy  are  also  con- 
ferred upon  the  supreme  court  of  the  District  of  Columbia,  when  the 
bankrupt  resides  in  that  District. 

Powers  of  the  supreme  courts  for  the  Territories,  Sec.  4978.  Th^ 
same  jurisdiction,  power,  and  authority  which  are  hereby  conferred 
upon  the  district  courts  in  cases  of  bankruptcy  are  also  conferred  upon 
the  supreme  courts  of  the  several  Territories  when  the  bankrupt  re- 
sides in  either  of  the  Territories.  This  jurisdiction  may  be  exercised, 
upon  petitions  regularly  filed  in  such  courts,  by  either  of  the  justices 
thereof  while  holding  the  district  court  in  the  district  in  which  the 
petitioner  or  the  alleged  bankrupt  resides. 

Jurisdiction  of  actions  between  assignees  and  persons  claiming  ad- 
verse interests.  Six.  4978.  The  several  circuit  courts  shall  have 
within  each  district  concurrent  jurisdiction  with  the  district  court, 
whether  the  powers  and  jurisdiction  of  a  circuit  court  have  been  con- 
ferred on  such  district  court  or  not,  of  all  suits  at  law  or  in  equity 
brought  by  an  assignee  in  bankruptcy  against  any  person  claiming 


THE    LAW   OF    1 867.  1209 

an  adverse  interest,  or  by  any  such  person  against  an  assignee,  touch- 
ing any  property  or  rights  of  the  bankrupt  transferable  to  or  vested 
in  such  assignee. 

Appeals  to  circuit  court.  Sec.  4980.  Appeals  may  be  taken  from 
the  district  to  the  circuit  courts  in  all  cases  in  equity,  and  writs  of 
error  from  the  circuit  courts  to  the  district  courts  may  be  allowed  in 
cases  at  law,  arising  under  or  authorized  by  this  Title,  when  the  debt 
or  damages  claimed  amount  to  more  than  five  hundred  dollars;  and 
any  supposed  creditor,  whose  claim  is  wholly  or  in  part  rejected,  or 
an  assignee  who  is  dissatisfied  with  the  allowance  of  a  claim,  may 
appeal  from  the  decision  of  the  district  court  to  the  circuit  court  for 
the  same  district. 

How  taken.  Sec.  4981.  No  appeal  shall  be  allowed  in  any  case 
from  the  district  to  the  circuit  court  unless  it  is  claimed,  and  notice 
given  thereof  to  the  clerk  of  the  district  court,  to  be  entered  with  the 
record  of  the  proceedings,  and  also  to  the  assignee  or  creditor,  as  the 
case  may  be,  or  to  the  defeated  party  in  equity,  within  ten  da^-s  after 
the  entry  of  the  decree  or  decision  appealed  from;  nor  unless  the 
appellant  at  the  time  of  claiming  the  same  shall  give  bond  in  the 
manner  required  in  cases  of  appeals  in  suits  in  equity;  nor  shall  any 
writ  of  error  be  allowed  unless  the  party  claiming  it  shall  comply 
with  the  provisions  of  law  regulating  the  granting  of  such  writs. 

How  entered.  Sec.  4982.  Such  appeal  shall  be  entered  at  the  term 
of  the  circuit  court  which  shall  be  held  within  the  district  next  after 
the  expiration  of  ten  days  from  the  time.of  claiming  the  same. 

"Waiver  of  appeal.  Sec.  49S3.  If  the  appellant,  in  writing,  waives 
his  appeal  before  any  decision  thereon,  proceedings  may  be  had  in 
the  district  court  as  if  no  appeal  had  been  taken. 

Appeal  from  decision  rejecting  claim.  Sec.  4984.  A  supposed  cred- 
itor who  takes  an  appeal  to  the  circuit  court  from  the  decision  of  the 
district  court,  rejecting  his  claim  in  whole  or  in  part,  shall,  upon  en- 
tering his  appeal  in  the  circuit  court,  file  in  the  clerk's  oflice  thereof 
a  statement  in  writing  of  his  claim,  setting  forth  the  same,  suljstan- 
tially,  as  in  a  declaration  for  the  same  cause  of  action  at  law,  and  the 
assignee  shall  plead  or  answer  thereto  in  like  manner,  and  like  pro- 
ceeding shall  thereupon  be  had  in  the  pleadings,  trial,  and  determina- 
tion of  the  cause,  as  in  actions  at  law  commenced  and  prosecuted,  in 
the  usual  manner,  in  the  courts  of  the  United  States,  exccjjt  that  no 
execution  shall  be  awarded  against  the  assignee  for  the  amount  of  a 
debt  found  due  to  a  creditor. 

Costs.  Six.  4985.  The  final  judgment  of  the  circuit  court,  ren- 
dered upon  any  appeal  provided  for  in  the  preceding  section,  shall  be 
conclusive,  and  the  list  of  debts  shall,  if  necessary,  be  altered  to  con- 
form thereto.  The  party  prevailing  in  the  suit  shall  be  entitled  to 
costs  against  the  adverse  partj',  to  be  taxed  and  recovered  as  in  suits 
at  law;  if  recovered  ai^ainst  tlie  assignee,  they  are  to  be  allowed  out 
of  the  estate. 


1210  THE    LAW   OK    1867. 

Power  of  general  superintendence  conferred  on  circuit  court.  Sec. 
4980.  The  circuit  court  for  each  district  shall  have  a  general  superin- 
tendence and  jurisdiction  of  all  cases  and  questions  arising  in  the 
district  court  for  such  district  when  sitting  as  a  court  of  bankruptcy, 
whether  the  powers  and  jurisdiction  of  a  circuit  court  have  been  con- 
ferred on  such  district  court  or  not;  and  except  when  special  provision 
is  otherwise  made,  nia}-,  upon  bill,  petition,  or  other  proper  process, 
of  any  part}-  aggrieved,  hear  and  determine  the  case  as  in  a  court  of 
equitj" ;  and  the  powers  and  jurisdiction  hereby  granted  may  be  exer- 
cised either  by  the  court  in  term  time,  or,  in  vacation,  by  the  circuit 
justice  or  by  the  circuit  judge  of  the  circuit. 

Superintendence  by  supreme  courts  of  Territories.  Sec.  4987.  The 
several  supreme  courts  of  the  Territories  shall  have  the  same  general 
superintendence  and  jurisdiction  over  the  acts  and  decisions  of  the 
justices  thereof  in  cases  of  bankruptcy  as  is  conferred  on  the  circuit 
courts  over  proceedings  in  the  district  courts. 

Power  of  district  judge  in  a  district  not  within  any  organized  circuit. 
Sec.  4988.  In  districts  which  are  not  within  any  organized  circuit  of 
the  United  States,  the  power  and  jurisdiction  of  a  circuit  court  in 
bankruptcy  may  be  exercised  by  the  district  judge. 

Appeal  and  writ  of  error  to  Supreme  Court.  Sec.  4989.  No  appeal 
or  writ  of  error  shall  be  allowed  in  any  case  arising  under  this  Title 
from  the  circuit  court  to  the  Supreme  Court,  unless  the  matter  in 
dispute  in  such  case  exceeds  two  thousand  dollars. 

Supreme  Court  may  prescribe  rules.  Sec.  4990.  The  general  orders 
in  bankruptcy  heretofore  adopted  by  the  justices  of  the  Supreme 
Court,  as  now  existing,  may  be  followed  in  proceedings  under  this 
Title  ;  and  the  justices  may,  from  time  to  time,  subject  to  the  provis- 
ions of  this  Title,  rescind  or  vary  any  of  those  general  orders,  and 
may  frame,  rescind,  or  vary  other  general  orders,  for  the  following 
purposes: 

First.  For  regulating  the  practice  and  procedure  of  the  district 
courts  in  bankruptcy,  and  the  forms  of  petitions,  orders,  and  other 
proceedings  to  be  UvSed  in  such  courts  in  all  matters  under  this  Title. 

Second.  For  regulating  the  duties  of  the  various  officers  of  such 
courts. 

Third.  For  regulating  the  fees  payable  and  the  charges  and  costs  to 
be  allowed,  except  such  as  are  established  by  this  Title  or  by  law, 
with  respect  to  all  proceedings  in  bankruptcy  before  such  courts,  not 
exceeding  the  rate  of  fees  now  allowed  by  law  for  similar  services  in 
other  proceedings. 

Fourth.  For  regulating  the  practice  and  procedure  upon  appeals. 

Fifth.  For  regulating  the  filing,  custody,  and  inspection  of  records. 

Sixth.  And  generally  for  carrying  the  provisions  of  this  Title  into 
effect. 

All  such  general  orders  shall  from  time  to  time  be  reported  to  Con- 
gress, with  such  suggestions  as  the  justices  may  think  proper. 


THE    LAW   OF    1867.  1211 

What  constitutes  commencement  of  proceedings.  Sec.  4991.  The 
filing  of  the  petition  for  an  adjudication  in  bankruptc}-,  either  by  a 
debtor  in  his  own  behalf,  or  by  any  creditor  against  a  debtor,  shall  be 
deemed  to  be  the  commencement  of  proceedings  in  bankruptcy. 

Records  of  bankruptcy  proceedings.  Sec.  4992.  The  proceedings  in 
all  cases  of  bankruptc}'  shall  be  deemed  matters  of  record,  but  the 
same  shall  not  be  required  to  be  recorded  at  large,  but  shall  be  care- 
fully filed,  kept,  and  numbered  in  the  office  of  the  clerk  of  the  court, 
and  a  docket  only,  or  short  memorandum  thereof,  kept  in  books  to 
be  provided  for  that  purpose,  which  shall  be  open  to  public  inspec- 
tion. Copies  of  such  records,  duly  ce^ified  under  the  seal  of  the 
court,  shall  in  all  cases  be  presumptive  evidence  of  the  facts  therein 
stated. 

Registers  in  bankruptcy.  Sec.  4993.  Each  district  judge  shall  ap- 
point, upon  the  nomination  and  recommendation  of  the  Chief  Justice 
of  the  Supreme  Court,  one  or  more  registers  in  bankruptcy,  when 
any  vacancy  occurs  in  such  office,  to  assist  him  in  the  performance  of 
his  duties,  under  this  Title,  unless  he  shall  deem  the  continuance  of 
the  particular  office  unnecessary. 

Who  are  eligible.  Sec.  4994.  No  person  shall  be  eligible  for  ap- 
pointment as  register  in  bankruptcy,  unless  he  is  a  counselor  of  the 
district  court  for  the  district  in  which  he  is  appointed,  or  of  some  one 
of  the  courts  of  record  of  the  State  in  which  he  resides. 

Qualification.  Sec.  4995.  Before  entering  upon  the  duties  of  his 
office,  every  person  appointed  a  register  in  bankruptcy  shall  give  a 
bond  to  the  United  States,  for  the  faithful  discharge  of  the  duties  of 
his  office,  in  a  sum  not  less  than  one  thousand  dollars,  to  be  fixed  bj' 
the  district  judge,  with  sureties  satisfactory'  to  such  judge;  and  he 
shall,  in  open  court,  take  and  subscribe  the  oath  prescribed  in  section 
seventeen  hundred  and  fiftj'-six.  Title,  "Provisions  applicable  to 
SEVERAL  classes  oe  OFFICERS,  "  and  also  an  oath  that  he  will  not, 
during  his  continuance  in  office,  be,  directly  or  indirect!}',  interested 
in  or  benefited  by  the  fees  or  emoluments  arising  from  any  suit  or 
matter  pending  in  bankruptcy,  in  either  the  district  or  circuit  court 
in  his  district. 

Restrictions  upon  registers.  Sec  4996.  No  register  shall  be  coun- 
sel or  attorney,  either  in  or  out  of  court,  in  any  suit  or  matter  pend- 
ing in  bankruptcy  in  either  the  circuit  or  district  court  of  his  district, 
nor  in  an  appeal  therefrom  ;  nor  shall  he  be  executor,  administrator, 
guardian,  commissioner,  appraiser,  divider,  or  assignee  of  or  upon 
any  estate  within  the  jurisdiction  of  either  of  those  courts  as  courts 
of  bankruptcy,  nor  shall  he  be  interested  in  tlie  fees  or  emoluments 
arising  from  any  such  tru.sts. 

Removal  of  registers.  Skc.  4997.  Registers  are  subject  to  removal 
from  office  by  tlie  judge  of  the  district  court. 

Powers  of  registers.  Sec.  4998.  Every  register  in  Ijankruptcy  has 
power  : 


;i^>l-_)  THE  LAW  OF   1 867. 

First.  To  make  adjudication  of  bankruptcy  in  cases  unopposed. 
Second.  To  receive  the  surrender  of  an\'  bankrupt. 
Third.  To  administer  oaths  in  all  proceedings  before  him. 
Fourth.  To  hold  and  preside  at  meetings  of  creditors. 
Fifth.  To  take  proof  of  debts. 

Sixth.  To  make  all  computations  of  dividends,  and  all  orders  of 
distribution. 

Seventh.  To   furnish   the  assignee  with  a  certified  copy  of  such 
orders,  and  of  the  schedules  of  creditors  and  assets  filed  in  each  case. 
Eighth.  To  audit  and  pass  accounts  of  assignees. 
Ninth.  To  grant  protection. 

Tenth.  To  pass  the  last  •examination  of  any  bankrupt  in  cases 
whenever  the  assignee  or  a  creditor  do  not  oppose. 

Eleventh.  To  sit  in  chambers  and  dispatch  there  such  part  of  the 
administrative  business  of  the  court  and  such  uncontested  matters  as 
shall  be  defined  in  general  rules  and  orders,  or  as  the  district  judge 
shall  in  any  particular  matter  direct. 

Limitations  upon  powers  of  registers.  Sec.  4999.  No  register  shall 
have  power  to  commit  for  contempt,  or  to  make  adjudication  of  bank- 
ruptcy when  opposed  ;  or  to  decide  upon  the  allowance  or  suspension 
of  an  order  of  discharge. 

Registers  to  keep  memoranda  of  proceedings.  Sec.  5000.  Every  regis- 
ter shall  make  short  memoranda  of  his  proceedings  in  each  case  in 
which  he  acts,  in  a  docket  to  be  kept  by  him  for  that  purpose,  and 
shall  forthwith,  as  the  proceedings  are  taken,  forward  to  the  clerk  of 
the  district  court  a  certified  copy  of  these  memoranda,  which  shall  be 
entered  by  the  clerk  in  the  proper  minute-book  to  be  kept  in  his  office. 
Registers  to  attend  at  place  directed  by  judge.  Sec.  5001.  The 
judge  of  the  district  court  may  direct  a  register  to  attend  at  any  place 
within  the  district  for  the  purpose  of  hearing  such  voluntary  appli- 
cations under  this  Title  as  may  not  be  opposed,  of  attending  any  meet- 
ing of  creditors,  or  receiving  any  proofs  of  debts,  and,  generally,  for 
the  prosecution  of  any  proceedings  under  this  Title. 

Power  to  summon  witnesses.  Sec.  5002,  Every  register,  so  acting, 
shall  have  and  exercise  all  powers,  except  the  power  of  commitment, 
vested  in  the  district  court  for  the  summoning  and  examination  of 
persons  or  witnesses,  and  for  requiring  the  production  of  books, 
papers,  and  documents. 

Mode  of  taking  evidence.  Sec.  5003.  Evidence  or  examination  in 
any  of  the  proceedings  under  this  Title  may  betaken  before  the  court, 
or  a  register  in  bankruptcy,  viva  voce  or  in  writing,  before  a  commis- 
sioner of  the  circuit  court,  or  by  affidavit,  or  on  commission,  and  the 
court  may  direct  a  reference  to  a  register  in  bankruptcy,  or  other  suit- 
able person,  to  take  and  certify  such  examination,  and  may  compel 
the  attendance  of  witnesses,  the  production  of  books  and  papers,  and 
the  giving  of  testimony  in  the  same  manner  as  in  suits  in  equity  in 
the  circuit  court. 


THE    LAW   OF    1867.  1213 

Depositions  and  acts  to  be  reduced  to  writing.  Sec.  5004.  All  depo- 
sitions of  persons  and  witnesses  taken  before  a  register,  and  all  acts 
done  by  him,  shall  be  reduced  to  writing,  and  be  signed  bj-  him,  and 
shall  be  filed  in  the  clerk 's  ofl&ce  as  part  of  the  proceedings.  He  shall 
have  power  to  administer  oaths  in  all  cases  and  in  relation  to  all  mat- 
ters in  which  oaths  ma}^  be  administered  by  commissioners  of  circuit 
courts. 

Witnesses  must  attend.  Sec.  5005.  Parties  and  witnesses  sum- 
moned before  a  register  shall  be  bound  to  attend  in  pursuance  of  such 
summons  at  the  time  and  place  designated  therein,  and  shall  be  en- 
titled to  protection,  and  be  liable  to  process  of  contempt  in  like  man- 
ner as  parties  and  witnesses  are  now  liable  thereto  in  case  of  default 
in  attendance  under  any  writ  of  subpoena. 

Contempt  before  register.  Sec.  5006.  Whenever  any  person  exam- 
ined before  a  register  refuses  or  declines  to  answer,  or  to  swear  to  or 
sign  his  examination  when  taken,  the  register  shall  refer  the  matter 
to  the  judge,  who  shall  have  power  to  order  the  person  so  acting  to 
pay  the  costs  thereby  occasioned,  and  to  punish  him  for  contempt,  if 
such  person  be  compellable  by  law  to  answer  such  question  or  to  sign 
such  examination. 

Registers  may  act  for  each  other.  Sec.  5007.  Any  register  ma\-  act 
in  the  place  of  an}'  other  register  appointed  by  and  for  the  same  dis- 
trict court. 

Payment  of  fees  of  registers.  Sec.  5008.  The  fees  of  registers,  as 
estaljlished  by  law  (jr  by  rules  and  orders  framed  pursuant  to  law, 
shall  be  paid  to  them  b}'  the  parties  for  whom  the  ser\'ices  may  be 
rendered. 

Contested  issues  to  be  decided  by  judge.  Sec.  5009.  In  all  matters 
where  an  issue  of  fact  or  of  law  is  raised  and  contested  by  any  part}' 
to  the  proceedings  before  any  register,  he  shall  cause  the  question  or 
issue  to  be  stated  b}'^  the  opposing  parties  in  writing,  and  he  shall 
adjourn  the  same  into  court  for  decision  by  the  judge. 

Certificates  of  matters  to  be  decided  by  judge.  Sec.  5010.  Any  \-iavty 
shall,  during  the  proceedings  before  a  register,  be  at  liberty  to  take 
the  opinion  of  the  district  judge  upon  any  point  or  matter  arising  in 
the  course  of  such  proceedings,  or  upon  the  result  of  such  proceedings, 
which  shall  be  stated  by  the  register  in  the  shape  of  a  short  certificate 
to  the  judge,  who  shall  sign  the  same  if  he  approve  thereof ;  and  such 
certificate,  so  signed,  shall  be  binding  on  all  the  parties  to  the  i)ro- 
cceding  ;  but  every  such  certificate  may  be  discharged  or  varied  by 
the  judge  at  chambers  or  in  open  court. 

Appeal  from  judge's  decision  upon  questions  submitted.  8i:c.  501 1. 
In  any  proceedings  within  the  juri.sdiction  of  the  court,  under  this 
Title,  the  parties  concerned,  or  submitting  to  such  jurisdiction,  may 
at  any  stage  of  the  proceedings,  by  consent,  state  any  questions  in  a 
special  case  for  the  opinion  of  the  court,  and  the  judgment  of  the 
court  shall  be  final  unless  it  is  agreed  and  stated  in  tlie  sjiecial  case 


1JI4  THE    I-AW   OF    1867. 

that  either  party  may  appeal,  if,  in  such  case,  an  appeal  is  allowed  by 
this  Title.  The  parties  may  also,  if  they  think  fit,  agree,  that  upon 
the  questions  raised  by  such  special  case  being  finally  decided,  a  sum 
of  money,  fixed  by  the  parties,  or  to  be  ascertained  by  the  court,  or 
in  such  manner  as  the  court  may  direct,  or  any  property,  or  the 
amount  of  any  disputed  debt  or  claim,  shall  be  paid,  delivered,  or 
transferred  by  one  of  such  parties  to  the  other  of  them,  either  with  or 
without  costs. 

Penalties  against  officers.  Sec.  5012.  If  any  judge,  register,  clerk, 
marshal,  messenger,  assignee,  or  any  other  oflBcer  of  the  several 
courts  of  bankruptcy  shall,  for  anything  done  or  pretended  to  be 
done  under  this  Title,  or  under  color  of  doing  anything  thereunder, 
wilfully  demand  or  take,  or  appoint  or  allow  any  person  whatever  to 
take  for  him  or  on  his  account,  or  for  or  on  account  of  any  other 
person,  or  in  trust  for  him  or  for  any  other  person,  any  fee,  emolu- 
ment, gratuity,  sum  of  money,  or  anything  of  value  whatever,  other 
than  is  allowed  by  law,  such  person  shall  forfeit  and  pay  a  sum  not 
less  than  three  hundred  dollars  and  not  more  than  five  hundred  dol- 
lars, and  be  imprisoned  not  exceeding  three  years. 

Meaning  of  terms  and  computation  of  time.  Sec.  5013.  In  this 
Title  the  word  "assignee,"  and  the  word  "creditor,"  shall  include 
the  plural  also  ;  and  the  word  ' '  messenger, ' '  shall  include  his  assist- 
ant or  assistants,  except  in  the  provision  for  the  fees  of  that  ofl&cer. 
The  word  "marshal,"  shall  include  the  marshal's  deputies  ;  the  word 
' '  person  ' '  shall  also  include  ' '  corporation  ;  ' '  and  the  word  ' '  oath  ' ' 
shall  include  "affirmation. "  And  in  all  cases  in  which  any  particular 
number  of  days  is  prescribed  by  this  Title,  or  shall  be  mentioned  in 
any  rule  or  order  of  court  or  general  order  which  shall  at  any  time  be 
made  under  this  Title,  for  the  doing  of  any  act,  or  for  any  other  pur- 
pose, the  same  shall  be  reckoned,  in  the  absence  of  any  expression  to 
the  contrar3%  exclusive  of  the  first  and  inclusive  of  the  last  day, 
unless  tha  last  day  shall  fall  on  Sunday,  Christmas  Day,  or  on  any 
day  appointed  by  the  President  of  the  United  States  as  a  day  of 
public  fast  or  thanksgiving,  or  on  the  Fourth  of  July,  in  which  case 
the  time  shall  be  reckoned  exclusive  of  that  day  also. 


CHAPTER  TWO. 

VOLUNTARY    UANKRUPTCY. 

Petition  and  schedules.  Sec.  5014.  If  any  person  residing  within 
the  jurisdiction  of  the  United  States,  and  owing  debts  provable  in 
bankruptcy  exceeding  the  amount  of  three  hundred  dollars,  shall 
apply  by  petition  addressed  to  the  judge  of  the  judicial  district  in 
which  such  debtor  has  resided  or  carried  on  business  for  the  six 
months  next  preceding  the  time  of  filing  such  petition,  or  for  the 
longest  period  during  such  six  months,  setting  forth  his  place  of  res- 


THE    LAW   OF    1 867.  1215 

idence,  his  inability  to  pay  all  his  debts  in  full,  his  willingness  to 
surrender  all  his  estate  and  eflfects  for  the  benefit  of  his  creditors,  and 
his  desire  to  obtain  a  discharge  from  his  debts,  and  shall  annex  to 
his  petition  a  schedule  and  inventor}',  in  compliance  with  the  next 
two  sections,  the  filing  of  such  petition  shall  be  an  act  of  bankruptcy, 
and  such  petitioner  shall  be  adjudged  a  bankrupt. 

Schedule  of  debts.  Sec.  5015.  The  said  schedule  must  contain  a 
full  and  true  statement  of  all  his  debts,  exhibiting,  as  far  as  possible, 
to  whom  each  debt  is  due,  the  place  of  residence  of  each  creditor,  if 
known  to  the  debtor,  and  if  not  known  the  fact  that  it  is  not  known; 
also  the  sum  due  to  each  creditor  ;  the  nature  of  each  debt  or  demand, 
whether  founded  on  written  securit}',  obligation,  or  contract,  or 
otherwise ;  the  true  cause  and  consideration  of  the  indebtedness  in 
each  case,  and  the  place  where  such  indebtedness  accrued  ;  and  also  a 
statement  of  any  existing  mortgage,  pledge,  lien,  judgment,  or  collat- 
eral or  other  security  given  for  the  paj^ment  of  the  same. 

Inventory  of  property.  Sec.  5016.  The  said  inventory  must  con- 
tain an  accurate  statement  of  all  the  petitioner's  estate,  both  real  and 
personal,  assignable  under  this  Title,  describing  the  same  and  stating 
where  it  is  situated,  and  whether  there  are  any,  and,  if  so,  what  in- 
•cumbrances  thereon. 

Oath  to  petition  and  schedule.  Sec.  5017.  The  schedule  and  inven- 
tory must  be  verified  by  the  oath  of  the  petitioner,  which  may  be 
taken  either  before  the  district  judge,  or  before  a  register,  or  before  a 
commissioner  of  the  circuit  court. 

Oath  of  allegiance.  Sec.  5018.  Eveiy  citizen  of  the  United  States 
petitioning  to  be  declared  bankrupt  shall,  on  filing  his  petition,  and 
before  any  proceedings  thereon,  take  and  subscribe  an  oath  of  alle- 
giance and  fidelity  to  the  United  States,  which  oath  may  be  taken 
before  either  of  the  officers  mentioned  in  the  preceding  section,  and 
shall  be  filed  and  recorded  with  the  proceedings  in  bankruptcy. 

Warrant  to  marshal.  Sec.  5019.  Upon  the  filing  of  such  petition, 
schedule,  and  inventory,  the  judge  or  register  shall  forthwith,  if  he 
is  satisfied  that  the  debts  due  from  the  petitioner  exceed  three  hun- 
dred dollars,  issue  a  warrant,  to  be  signed  by  such  judge  or  register, 
directed  to  the  marshal  for  the  district,  authorizing  him  forthwith,  as 
messenger,  to  publish  notices  in  such  newspapers  as  the  warrant 
specifies  ;  to  ser\'e  written  or  printed  notice,  by  mail  or  personally,  on 
all  creditors  upon  the  schedule  filed  with  the  debtor's  petition,  or 
whoie  names  may  be  given  to  him  in  addition  bj'^  the  debtor  ;  and  to 
give  such  personal  or  other  notice  to  any  persons  concerned  as  the 
warrant  specifies. 

Amendment  of  schedule.  Sec.  5020.  Ever>'  bankrupt  shall  be  at 
libert}',  from  [time]  to  time,  upon  oath  to  amend  aiid  correct  liis  .sched- 
ule of  creditors  and  property,  so  that  the  same  shall  conform  to  the 
facts. 

Acts  of  bankruptcy.     Sec.   5021.    Any  penson  residing  within  the 


y>lQ  THE   LAW   OF    1 867, 

jurisdiction  of  the  United  States  and  owing  debts  provable  in  bank- 
ruptcy exceeding  the  amount  of  three  hundred  dollars  : 

First.  Who  departs  from  the  State,  district,  or  Territory  of  which 
he  is  an  inhabitant  with  intent  to  defraud  his  creditors,  or,  being  ab- 
sent, remains  absent  with  such  intent ;  or, 

Second.  WHio  conceals  himself  to  avoid  the  service  of  legal  process    • 
in  any  action  for  the  recovery  of  a  debt  or  demand  provable  In  bank- 
ruptcy ;  or. 

Third.  Who  conceals  or  removes  any  of  his  property  to  avoid  its 
being  attached,  taken,  or  sequestered  on  legal  process  ;  or, 

Fourth.  Who  makes  any  assignment,  gift,  sale,  conveyance,  or 
transfer  of  his  estate,  property,  rights,  or  credits,  either  within  the 
United  States  or  elsewhere,  with  intent  to  delay,  defraud,  or  hinder 
his  creditors ;  or, 

Fifth.  Who  has  been  arrested  and  held  in  custody  under  or  by 
virtue  of  mesne  process  or  execution,  issued  out  of  any  court  of  any 
State,  district,  or  Territory  within  which  such  debtor  resides  or  has 
property,  founded  upon  a  demand  in  its  nature  provable  against  a 
bankrupt's  estate,  and  for  a  sum  exceeding  one  hundred  dollars,  if 
such  process  is  remaining  in  force  and  not  discharged  by  payment, 
or  in  some  other  manner  provided  by  the  law  of  such  State,  district, 
or  Territory  applicable  thereto,  for  a  period  of  seven  days  ;  or. 

Sixth.  Who  has  been  actually  imprisoned  for  more  than  seven  days 
in  a  civil  action  founded  on  contract,  for  the  sum  of  one  hundred  dol- 
lars or  upward ;  or, 

Seventh.  Who,  being  bankrupt  or  insolvent,  or  in  contemplation 
of  bankruptcy  or  insolvency,  makes  any  payment,  gift,  grant,  sale, 
conveyance,  or  transfer  of  money  or  other  property,  estate,  rights,  or 
credits,  or  gives  any  warrant  to  confess  judgment ;  or  procures  or  suf- 
fers his  property  to  be  taken  on  legal  process,  with  intent  to  give  a 
preference  to  one  or  more  of  his  creditors,  or  to  any  person  or  persons 
who  are  or  may  be  liable  for  him  as  indorsers,  bail,  sureties,  or  other- 
wise, or  with  the  intent  by  such  disposition  of  his  property,  to  defeat 
or  delay  the  operation  of  this  act ;  or, 

Eighth.  Who,  being  a  banker,  broker,  merchant,  trader,  manufac- 
turer, or  miner,  has  fraudulently  stopped  payment,  or  who  has  stopped 
or  suspended  and  not  resumed  payment  of  his  commercial  paper,  within 
a  period  of  fourteen  days,  shall  be  deemed  to  have  committed  an  act 
of  bankruptcy,  and  to  have  become  liable  to  be  adjudged  a  bankrupt. 
And  if  such  person  shall  be  adjudged  a  bankrupt,  the  assignee,  may 
recover  back  the  money  or  other  property  so  paid,  conveyed,  sold, 
assigned,  or  transferred  contrary  to  this  Title,  provided  the  person 
receiving  such  payment  or  conveyance  liad  reasonable  cause  to  believe 
that  a  fraud  on  this  Title  was  intended,  and  that  the  debtor  was  in- 
solvent, and  such  creditor  shall  not  be  allowed  to  prove  his  debt  in 
bankruptcy. 

Prior  acts  of  bankruptcy.     Sec.  5022.  Any  act  of  bankruptcy  com- 


THE   LAW   OF    1 867.  1217 

mitted  since  the  second  daj'  of  ISIarcli,  eighteen  hundred  and  sixty- 
seven,  may  be  the  foundation  of  an  adjudication  of  involuntan'  bank- 
ruptcy, upon  a  petition  filed  within  the  time  prescribed  by  law, 
equally'  with  one  committed  hereafter. 

Who  may  file  petition.  Sec.  5023.  An  adjudication  of  bankruptcy 
may  be  made  on  the  petition  of  one  or  more  creditors,  the  aggregate 
of  whose  provable  debts  amounts  to  at  least  two  hundred  and  fifty 
dollars,  provided  such  petition  is  brought  within  six  months  after 
the  act  of  bankruptcy  shall  have  been  committed. 

Proceedings  after  filing  the  petition.  Sec.  5024.  Upon  the  filing  of 
the  petition  authorized  by  the  preceding  section,  if  it  appears  that 
sufficient  grounds  exist  therefor,  the  court  shall  direct  the  entry  of  an 
order  requiring  the  debtor  to  appear  and  show  cause,  at  a  court  of 
bankruptcy  to  be  holden  at  a  time  to  be  specified  in  the  order,  not 
less  than  five  days  from  the  sen-ice  thereof,  why  the  praj'er  of  the  peti- 
tion should  not  be  granted.  The  court  may  also,  by  injunction  re- 
strain the  debtor,  and  any  other  person,  in  the  mean  time,  from  making 
any  transfer  or  disposition  of  any  part  of  the  debtor's  propert}-  not  ex- 
cepted b}'  this  Title  from  the  operation  thereof  and  from  any  interfer- 
ence therewith;  and  if  it  shall  appear  that  there  is  probable  cause  for 
believing  that  the  debtor  is  about  to  leave  the  district,  or  to  remove 
or  conceal  his  goods  and  chattels  or  his  evidence  of  propert}',  or  to 
make  any  fraudulent  conveyance  or  disposition  thereof,  the  court  may 
issue  a  warrant  to  the  marshal  of  the  district,  commanding  him  to 
arrest  and  safely  keep  the  alleged  debtor,  unless  he  shall  give  bail  to 
the  satisfaction  of  the  court  for  his  appearance  from  time  to  time,  as 
required  by  the  court,  until  its  decision  upon  the  petition,  or  until 
its  further  order,  and  forthwith  to  take  possession  provisionally  of  all 
the  property  and  effects  of  the  debtor,  and  safely  keep  the  same  until 
the  further  order  of  the  court. 

Service  of  order  to  show  cause.  Sec.  5025.  A  copy  of  the  petition 
and  order  to  show  cause  shall  be  served  on  the  debtor  by  delivering 
the  same  to  him  personally,  or  leaving  the  same  at  his  last  or  usual 
place  of  abode;  or,  if  the  debtor  can  not  be  found,  and  his  place  of  resi- 
dence can  not  be  ascertained,  service  shall  be  made  by  publication  in 
such  manner  as  the  judge  may  direct.  No  further  proceedings,  unless 
the  debtor  appears  and  consents  thereto,  shall  be  had  until  proof  has 
been  given,  to  the  satisfaction  of  the  court,  of  such  serv'ice  or  publica- 
tion ;  and  if  such  proof  is  not  given  on  the  return  day  of  such  order, 
the  proceedings  shall  be  adjourned  and  an  order  made  that  the  notice 
be  forthwith  so  serv'ed  or  published. 

Proceedings  on  return  day.  Sec.  5026.  On  sucli  return  day  or  ad- 
journed day,  if  the  notice  has  been  duly  served  or  published,  or  is 
waived  by  the  appearance  and  consent  of  tlie  debtor,  the  court  shall 
proceed  summarily  to  hear  the  allegations  of  the  petitioner  and  debtor, 
and  may  adjourn  the  proceedings  from  time  to  time,  on  good  cause 
shown,  and  shall,  if  the  debtor  on  the  same  day  so  demands,  in  writ- 


12 IS  THK  LAW  oi'  1 86 7. 

iiiiT.  order  a  trial  hv  jur}-  at  the  first  tenn  of  the  court  at  which  a  jury 
shall  be  in  attendance,  to  ascertain  the  fact  of  the  alleged  bankruptcy. 
If  the  petitioning  creditor  does  not  appear  and  proceed  on  the  return 
day,  or  adjourned  day,  the  court  may  upon  the  petition  of  any  other 
creditor,  to  the  required  amount,  proceed  to  adjudicate  on  such  peti- 
tion, without  requiring  a  new  service  or  publication  of  notice  to  the 
debtor. 

Costs  at  trial.  Sec.  5027.  If  upon  such  hearing  or  trial  the  debtor 
proves  to  the  satisfaction  of  the  court  or  of  the  jury,  as  the  case  may 
be,  that  the  facts  set  forth  in  the  petition  are  not  true,  or  that  the 
debtor  has  paid  and  satisfied  all  liens  upon  his  property,  in  case  the 
existence  of  such  liens  was  the  sole  ground  of  the  proceeding,  the 
proceedings  shall  be  dismissed  and  the  respondent  shall  recover  costs. 

"Warrant.  vSec.  5028.  If  upon  the  hearing  or  trial  the  facts  set 
forth  in  the  petition  are  found  to  be  true,  or  if  upon  default  made  by 
the  debtor  to  appear  pursuant  to  the  order,  due  proof  of  service  thereof 
is  made,  the  court  shall  adjudge  the  debtor  to  be  a  bankrupt,  and 
shall  forthwith  issue  a  warrant  to  take  possession  of  his  estate. 

Distribution  of  property  of  debtor.  Sec.  5029.  The  warrant  shall  be 
directed,  and  the  property  of  the  debtor  shall  be  taken  thereon,  and 
shall  be  assigned  and  distributed  in  the  same  manner  and  with  simi- 
lar proceedings  to  those  \Jiereinbefore\  [hereinafter]  provided  for  the 
taking  possession,  assignment,  and  distribution  of  the  property  of 
the  debtor  upon  his  own  petition. 

Schedule  and  inventory.  Sec.  5030.  The  order  of  adjudication  of 
bankruptcy  shall  require  the  bankrupt  forthwith,  or  within  such  num- 
ber of  days  not  exceeding  five  after  the  date  of  the  order  or  notice 
thereof,  as  shall  by  the  order  be  prescribed,  to  make  and  deliver,  or 
transmit  hy  mail,  postpaid,  to  the  messenger,  a  schedule  of  the  cred- 
itors and  an  inventory'  of  his  estate  in  the  form  and  verified  in  the 
manner  required  of  a  petitioning  debtor. 

Proceedings  when  debtor  is  absent.  Sec.  5031.  If  the  debtor  has 
failed  to  ajjjjear  in  person,  or  by  attorney,  a  certified  copy  of  the  adju- 
dication shall  be  forthwith  .served  on  him  by  delivery  or  publication 
in  the  manner  provided  for  the  service  of  the  order  to  show  cause;  and 
if  the  bankrupt  is  absent  or  can  not  be  found,  such  schedule  and  in- 
ventory shall  be  prepared  by  the  mes.senger  and  the  assignee  from 
the  best  information  they  can  obtain. 

CHAPTER  FOUR. 

proceedings   to   realize   the   E.STATE    EOR   CREDITORS. 

Contents  of  notice  to  creditors.  Sec  5032.  The  notice  to  creditors 
under  warrant  shall  state  : 

Fir.st.  That  a  warrant  in  bankruptcj^  has  been  issued  against  the 
estate  of  the  debtor. 


THE    LAW   OF    1867.  1219 

Second.  That  the  payment  of  any  debts  and  the  delivery  of  any 
property  belonging  to  such  debtor  to  him  or  for  his  use,  and  the  trans- 
fer of  any  property  by  him,  are  forbidden  by  law. 

Third.  That  a  meeting  of  the  creditors  of  the  debtor,  giving  the 
names,  residences,  and  amounts,  so  far  as  known,  to  prove  their  debts 
and  choose  one  or  more  assignees  of  his  estate,  will  be  held  at  a  court 
of  bankruptcy,  to  be  holden  at  a  time  and  place  designated  in  the 
warrant,  not  less  than  ten  nor  more  than  ninet}^  days  after  the  issuing 
of  the  same. 

Marshal's  return.  Sec.  5033.  At  the  meeting  held  in  pursuance  of 
the  notice,  one  of  the  registers  of  the  court  shall  preside,  and  the  mes- 
senger shall  make  return  of  the  warrant  and  of  his  doings  thereon  ; 
and  if  it  appears  that  the  notice  to  the  creditors  has  not  been  given  as 
required  in  the  warrant,  the  meeting  shall  forthwith  be  adjourned, 
and  a  new  notice  given  as  required. 

Choice  of  assignee.  Sec.  5034.  The  creditors  shall,  at  the  first  meet- 
ing held  after  due  notice  from  the  messenger  in  presence  of  the  regis- 
ter designated  by  the  court,  choose  one  or  more  assignees  of  the  estate 
of  the  debtor  ;  the  choice  to  be  made  by  the  greater  part  in  value  and 
in  number  of  the  creditors  who  have  proved  their  debts.  If  no  choice 
is  made  by  the  creditors  at  the  meeting,  the  judge,  or  if  there  be  no 
opposing  interest,  the  register,  shall  appoint  one  or  more  assignees. 
If  an  assignee,  so  chosen  or  appointed,  fails  within  five  days  to  ex- 
press in  writing  his  acceptance  of  the  trust,  the  judge  or  register  may 
fill  the  vacancy.  All  elections  or  appointments  of  assignees  shall  be 
subject  to  the  approval  of  the  judge  ;  and  when  in  his  judgment  it  is 
for  any  cause  needful  or  expedient,  he  may  appoint  additional  assign- 
ees, or  order  a  new  election. 

Who  are  disqualified.  Sec.  5035.  No  person  who  has  received  any 
preference  contrary  to  the  provisions  of  this  Title  shall  vote  for  or  be 
eligible  as  assignee  ;  but  no  title  to  property,  real  or  personal,  sold, 
transferred,  or  convened  by  an  assignee,  shall  be  affected  or  impaired 
by  reason  of  his  ineligibility. 

Bond  of  assignee.  Sec.  5036.  The  district  judge  at  any  time  may, 
and  upon  the  request  in  writing  of  any  creditor  who  has  proved  his 
claim  vShall,  require  the  assignee  to  give  good  and  sufficient  bond  to 
the  United  States,  with  a  condition  for  the  faithful  jjerformance  and 
discharge  of  his  duties  ;  the  bond  shall  be  approved  by  the  judge  or 
register  by  his  indorsement  thereon,  shall  be  filed  with  the  record  of 
the  ca.se,  and  inure  to  the  benefit  of  all  creditors  proving  their  claims, 
and  may  be  pro.secuted  in  the  name  and  for  the  benefit  of  any  injured 
party.  If  the  assignee  fails  to  give  the  bond  within  sucli  time  as  the 
judge  or  register  orders,  nc)t  exceeding  ten  days  after  notice  to  him 
of  such  order,  the  judge  shall  remove  him  and  appoint  another  in  his 
place. 

Assignee  liable  for  contempt.  Sec.  5037.  Any  assignee  who  refuses 
or  unreasonably  neglects  to  execute  an  instrument  when  lawfully  re- 


-J-J-JO  THIv    LAW    OK    1S67. 

quirod  by  the  court,  or  disobeys  a  lawful  order  or  decree  of  the  court 
in  tlie  premises,  may  be  punished  as  for  a  contempt  of  court. 

Resignation  of  the  trust.  Si:c.  5038.  An  assignee  may,  with  the 
cotisent  of  the  judi;e,  resign  his  trust  and  be  discharged  therefrom. 

Removal  of  assignee.  Skc.  5039.  The  court,  after  due  notice  and 
hearing:,  ma}-  lemove  an  assignee  for  any  cause  which,  in  its  judgment, 
renders  such  removal  necessary  or  expedient.  At  a  meeting  called  for 
tlie  purpose  by  order  of  the  court,  in  its  discretion,  or  called  upon  the 
application  of  a  majority  of  the  creditors  in  number  and  value,  the 
creditors  may,  with  consent  of  the  court,  remove  any  assignee  by  such 
a  vote  as  is  provided  for  the  choice  of  assignee. 

Effect  of  resignation  or  removal.  Sec.  50.40.  The  resignation  or  re- 
moval of  an  assignee  shall  in  no  way  release  him  from  performing  all 
things  requisite  on  his  part  for  the  proper  closing  up  of  his  trust  and 
the  transmission  thereof  to  his  successors,  nor  shall  it  affect  the  liabil- 
ity of  the  principal  or  surety  on  the  bond  given  by  the  assignee. 

Filling  vacancies.  Sec.  5041.  Vacancies  caused  by  death  or  other- 
wise in  the  office  of  assignee  may  be  filled  by  appointment  of  the 
court,  or  at  its  discretion  by  an  election  by  the  creditors,  in  the  same 
manner  as  in  the  original  choice  of  an  assignee,  at  a  regular  meeting, 
or  at  a  meeting  called  for  the  purpose,  with  such  notice  thereof  in 
writing  to  all  known  creditors,  and  by  such  person  as  the  court  shall 
direct. 

Vesting  estate  in  remaining  assignee.  Sec.  5042.  When,  by  death 
or  otherwise,  the  number  of  assignees  is  reduced,  the  estate  of  the 
debtor  not  lawfully  disposed  of  shall  vest  in  the  remaining  assignee 
or  assignees,  and  in  the  persons  selected  to  fill  vacancies,  if  any,  with 
the  same  powers  and  duties  relative  thereto  as  if  they  were  originally 
chosen. 

Former  assignee  to  execute  instruments.  Sec.  5043.  Any  former  as- 
signee, his  executors  and  administrators,  upon  request,  and  at  the  ex- 
pense of  the  estate,  shall  make  and  execute  to  the  new  assignee  all 
deeds,  conveyances,  and  assurances,  and  do  all  other  lawful  acts 
requisite  to  e'nable  him  to  recover  and  receive  all  the  estate.  And  the 
court  may  make  all  orders  which  it  may  deem  expedient  to  secure  the 
proper  fulfillment  of  the  duties  of  any  former  assignee,  and  the  rights 
and  interests  of  all  persons  interested  in  the  estate. 

Assignment.  Sec.  5044.  As  soon  as  an  assignee  is  appointed  and 
qualified,  the  judge,  or  where  there  is  no  opposing  interest,  the  regis- 
ter, shall  by  an  instrument  under  his  hand,  assign  and  convey  to  the 
assignee  all  the  estate,  real  and  personal,  of  the  bankrupt,  with  all 
his  deeds,  books,  and  papers  relating  thereto,  and  such  assignment 
shall  relate  back  to  the  commencement  of  the  proceedings  in  bank- 
ruptcy, and  by  operation  of  law  shall  vest  the  title  to  all  such  prop- 
erty and  estate,  both  real  and  personal,  in  the  assignee,  although  the 
same  is  then  attached  on  mesne  process  as  the  property  of  the  debtor, 


THE   LAW   OF    1 867.  1221 

and  shall  dissolve  any  such  attachment  made  within  four  months 
next  preceding  the  commencement  of  the  bankruptcy'  proceedings. 

Exemptions.     Sec.  5045.  There  shall  be  exempted  from  the  oper- 
ation of  the  conveyance  the  necessary  household  and  kitchen  furni- 
ture, and  such  other  articles  and  necessaries  of  the  bankrupt  as  the 
assignee  shall  designate  and  set  apart,  having  reference  in  the  amount 
to  the  famih-,  condition,   and  circumstances  of  the  bankrupt,-  but 
altogether  not  to  exceed  in  value,  in  an^^  case,  the  sum  of  five  hun- 
dred dollars  ;  also  the  wearing  apparel  of  the  bankrupt,  and  that  of 
his  wife  and  children,  and  the  uniform,  arms,  and  equipments  of  any 
person  who  is  or  has  been  a  soldier  in  the  militia,  or  in  the  sendee  of 
the  United  States  ;  and  such  other  property  as  now  is,  or  hereafter 
shall  be,  exempted  from  attachment,  or  seizure,  or  levy  on  execution 
by  laws  of  the  United  States,  and  such  other  property  not  included 
in  the  foregoing  exceptions  as  is  exempted  from  levy  and  sale  upon 
execution  or  other  process  or  order  of  any  court  by  the  laws  of  the 
State  in  which  the  bankrupt  has  his  domicile  at  the  time  of  the  com- 
mencement of  the  proceedings  in  bankruptcy,  to  an  amount  allowed 
by  the  constitution  and  laws  in  each  State,  as  existing  in  the  year 
eighteen  hundred  and  seventy -one ;   and  such  exemptions  shall  be 
valid  against  debts  contracted  before  the  adoption  and  passage  of  such 
State  constitution  and  laws,   as  well  as  those  contracted  after  the 
same,  and  against  liens  by  judgment  or  decree  of  any  State  court, 
any  decision  of  any  such  court  rendered  since  the  adoption  and  pas- 
sage of  such  constitution  and  laws  to  the  contrary-  notwithstanding. 
These  exceptions  shall  operate  as  a  limitation  upon  the  conveyance 
of  the  property  of  the  bankrupt  to  his  assignee  ;  and  in  no  case  shall 
the  property  hereby  excepted  pass  to  the  assignee,  or  the  title  of  the 
bankrupt  thereto  be  impaired  or  affected  by  any  of  the  provisions  of 
this  Title  ;  and  the  determination  of  the  assignee  in  the  matter  shall, 
on  exception  taken,  be  subject  to  the  final  decision  of  the  said  court. 
What  property  vests  in  assignee.     Sec.  5046.    All  property  con- 
veyed by  the  bankrupt  in  fraud  of  his  creditors  ;  all  rights  in  equity, 
choses  in  action,  patent-rights,  and  copy-rights;  all  debts  due  him, 
or  any  person  for  his  use,  and  all  liens  and  securities  therefor ;  and 
all  his  rights  of  action  for  property  or  estate,  real  or  personal;  and 
for  any  cause  of  action  which  he  had  against  any  person  arising  from 
contract  or  from  the  unlawful  taking  or  detention,   or  injury  to  the 
property  of  the  bankrupt ;  and  all  his  rights  of  redeeming  such  prop- 
erty or  estate  ;  together  with  the  like  right,  title,  power  and  authority 
to  sell,  manage,  dispose  of,  sue  for,  and  recover  or  defend  the  same, 
as  the  bankrupt  might  have  had  if  no  assignment  had  been  made, 
shall,  in  virtue  of  the  adjudication  of  bankruptcy  and  the  appoint- 
ment of  his  assignee,  but  subject  to  the  exceptions  stated  in  the  pre- 
ceding section,  be  at  once  vested  in  such  assignee. 

Right  of  action  of  assignee.     Shc.  5047.    The  assignee  shall   have 
the  like  remedy  to  recover  all  the  estate,  debts,  and  effects  in  his  own 


1222  "^^^  LAW  OF   1867. 

name,  as  the  debtor  might  have  had  if  the  decree  in  bankruptcy  had 
not  been  rendered  and  no  avSsignment  had  been  made.  If  at  the  time 
of  the  commencement  of  the  proceedings  in  bankrni)tcy,  an  action  is 
pending  in  the  name  of  the  debtor  for  the  recovery  of  a  debt  or  other 
thing  which  might  or  ought  to  pass  to  the  assignee  by  the  assign- 
ment, the  assignee  shall,  if  he  requires  it,  be  admitted  to  prosecute 
the  action  in  his  own  name,  in  like  manner  and  with  like  eflect  as  if 
it  had  been  originally  commenced  by  him.  And  if  any  suit  at  law  or 
in  equity,  in  which  the  bankrupt  is  a  party  in  his  own  name,  is  pend- 
ing at  the  time  of  the  adjudication  of  bankruptcy,  the  assignee  may 
defend  the  same  in  the  same  manner  and  with  the  like  :;ffect  as  it 
might  have  been  defended  by  the  bankrupt. 

No  abatement  by  death  or  removal.  Sec.  5048.  No  suit  pending  in 
the  name  of  the  assignee  shall  be  abated  by  his  death  or  removal  ; 
but  upon  the  motion  of  the  surviving  or  remaining  or  new  assignee, 
as  the  case  may  be,  he  shall  be  admitted  to  prosecute  the  suit  in  like 
manner  and  with  like  effect  as  if  it  had  been  originally  commenced 
by  him. 

Copy  of  assignment  conclusive  evidence  of  title.  Sec.  5049.  A  copy 
duly  certified  by  the  clerk  of  the  court,  under  the  seal  thereof,  of 
the  assignment,  shall  be  conclusive  evidence  of  the  title  of  the  as- 
signee to  take,  hold,  sue  for,  and  recover  the  property  of  the  bank- 
rupt. 

Bankrupt's  books  of  account.  Sec.  5050.  No  person  shall  be  en- 
titled, as  against  the  assignee,  to  withhold  from  him  possession  of 
any  books  of  account  of  the  bankrupt,  or  claim  any  lien  thereon. 

Debtor  must  execute  instruments.  Sec.  5051.  The  debtor  shall,  at 
the  request  of  the  assignee  and  at  the  expense  of  the  estate,  make 
and  execute  any  instruments,  deeds,  and  writings  which  may  be 
proper  to  enable  the  assignee  to  possess  himself  fully  of  all  the  as- 
sets of  the  bankrupt. 

Chattel  mortgages.  Sec.  5052.  No  mortgage  of  any  vessel  or  of 
any  other  goods  or  chattels,  made  as  security  for  any  debt,  in  good 
faith  and  for  a  present  consideration  and  otherwise  valid,  and  duly 
recorded  pursuant  to  any  statute  of  the  United  States  or  of  any  State, 
shall  be  invalidated  or  affected  by  an  assignment  in  bankruptcy. 

Trust  property.  Sec.  5053.  No  property  held  by  the  bankrupt  in 
trust  shall  pass  by  the  assignment. 

Notice  of  appointment  of  assignee  and  record  of  assignment.  Sec. 
5054.  The  assignee  shall  immediately  give  notice  of  his  appointment, 
b}-  publication  at  least  once  a  week  for  three  consecutive  weeks  in 
such  newspapers  as  shall  for  that  purpose  be  designated  by  the  court, 
due  regard  being  had  to  their  general  circulation  in  the  district  or 
in  that  portion  of  the  district  in  which  the  bankrupt  and  his  credi- 
tors shall  reside,  and  shall,  within  six  months,  cause  the  assignment 
to  him  to  be  recorded  in  every  registry  of  deeds  or  other  office  within 
the  United  States  where  a  conveyance  of  any  lands  owned  by  the 


THE    LAW    OP    1867.  1223 

bankrupt  ought  by  law  to  be  recorded.  [And  the  record  of  such  as- 
signment, or  of  a  duly  certified  copy  thereof,  shall  be  evidence 
thereof  in  all  courts.] 

Assignee  to  demand  and  receive  all  assigned  estate.  Sec.  5055.  The 
assignee  shall  demand  and  receive,  from  all  persons  holding  the  same, 
all  the  estate  assigned  or  intended  to  be  assigned. 

Notice  prior  to  suit  against  assignee.  Skc.  5056.  No  person  shall 
be  entitled  to  maintain  an  action  against  an  assignee  in  bankruptcy 
for  anything  done  by  him  as  such  assignee,  without  previously  giv- 
ing him  twenty  days'  notice  of  such  action,  specifying  the  cause 
thereof,  to  the  end  that  such  assignee  may  have  an  opportunity  of 
tendering  amends,  should  he  see  fit  to  do  so. 

Time  of  commencing  suits.  Sec.  5057.  No  suit,  either  at  law  or  in 
equity,  shall  be  maintainable  in  any  court  between  an  assignee  in 
bankruptcy  and  a  person  claiming  an  adverse  interest,  touching  any 
property  or  rights  of  property  transferable  to  or  vested  in  such  as- 
signee, unless  brought  within  two  years  from  the  time  when  the 
cause  of  action  accrued  for  or  against  such  assignee.  And  this  pro- 
vision shall  not  in  any  case  revive  a  right  of  action  barred  at  the  time 
when  an  assignee  is  appointed. 

Assignee's  accounts  of  money  received.  Sec.  5058.  The  assignee 
shall  keep  a  regular  account  of  all  money  received  by  him  as  assignee, 
to  which  every  creditor  shall,  at  reasonable  times,  have  free  resort. 

Assignee  to  keep  money  and  goods  separate.  Sec.  5059.  The  as- 
signee shall,  as  soon  as  may  be  after  receiving  any  money  belonging 
to  the  estate,  deposit  the  same  in  some  bank  in  his  name  as  assignee, 
or  otherwise  keep  it  distinct  from  all  other  money  in  his  possession; 
and  shall,  as  far  as  practicable,  keep  all  goods  and  effects  belonging 
to  the  estate  separate  from  all  other  goods  in  his  possession,  or  desig- 
nated by  appropriate  marks,  so  that  they  may  be  easily  and  clearly 
distinguished,  and  may  not  be  liable  to  be  taken  as  his  property  or 
for  the  payment  of  his  debts. 

Temporary  investment  of  money.  Sec.  5060.  When  it  appears  that 
the  distribution  of  the  estate  may  be  delayed  by  litigation  or  other 
cause,  the  court  may  direct  the  temporary  investment  of  the  money 
belonging  to  such  estate  in  securities  to  be  approved  by  the  judge  or 
register,  or  may  authorize  it  to  be  deposited  in  any  convenient  bank, 
upon  such  interest,  not  to  exceed  the  legal  rate,  as  the  bank  may  con- 
tract with  the  assignee  to  pay  thereon. 

Arbitration.  Sec.  5061.  The  assignee,  under  the  direction  of  the 
court,  may  submit  any  controversy  arising  in  the  settlement  of  de- 
mands against  the  estate,  or  of  debts  due  to  it,  to  the  determination 
of  arbitrators  to  be  chosen  by  him  and  the  other  party  to  tlie  contro- 
versy, and,  under  such  direction,  may  compound  and  settle  any  such 
controversy,  by  agreement  with  the  other  party,  as  he  thinks  proper 
and  most  for  the  interest  of  the  creditors. 

Assif^.ee  to  sell  property.     Sec.  5062.  The  assignee  sliall  sell  alJ 


'[•2-2  {  THE   LAW   OI^    1867. 

such  unincumbered  estate,  real  and  personal,  which  comes  into  his 
hands,  on  such  terms  as  he  thinks  most  for  the  interest  of  the  credit- 
ors; but  upon  petition  of  any  person  interested,  and  for  cause  shown, 
the  court  may  make  such  order  concerning  the  time,  place,  and  man- 
ner of  sale  as  will,  in  its  opinion,  prove  to  the  interest  of  the  creditors. 
Sale  of  disputed  property.  Si:c.  5063.  Whenever  it  appears  to  the 
satisfaction  of  the  court  that  the  title  to  any  portion  of  an  estate,  real 
or  personal,  which  has  come  into  possession  of  the  assignee,  or  which 
is  claimed  by  him,  is  in  dispute,  the  court  may,  upon  the  petition  of 
the  assignee,  and  after  such  notice  to  the  claimant,  his  agent  or  attor- 
ney, as  the  court  shall  deem  reasonable,  order  it  to  be  sold,  under  the 
direction  of  the  assignee,  who  shall  hold  the  funds  received  in  place 
of  the  estate  disposed  of;  and  the  proceeds  of  the  sale  shall  be  consid- 
ered the  measure  of  the  value  of  the  property  in  any  suit  or  contro- 
.versy  between  the  parties  in  any  court.  But  this  provision  shall  not 
prevent  the  recovery  of  the  property  from  the  possession  of  the  as- 
si"-nee  by  anj-  proper  action  commenced  at  any  time  before  the  court  • 
orders  the  sale. 

Sale  of  uncoUectable  assets.  Sec.  5064.  The  assignee  may  sell  and 
assign,  under  the  direction  of  the  court  and  in  such  manner  as  the 
court  shall  order,  any  outstanding  claims  or  other  property  in  his 
hands,  due  or  belonging  to  the  estate,  which  can  not  be  collected  and 
received  by  him  without  unreasonable  or  inconvenient  delay  or  expense. 
Sale  of  perishable  property.  Sec.  5065.  When  it  appears  to  the  sat- 
isfaction of  the  court  that  the  estate  of  the  debtor,  or  any  part  thereof, 
is  of  a  perishable  nature,  or  liable  to  deteriorate  in  value,  the  court 
may  order  the  same  to  be  sold,  in  such  manner  as  may  be  deemed 
most  expedient,  under  the  direction  of  the  messenger  or  assignee,  as 
the  case  may  be,  who  shall  hold  the  funds  received  in  place  of  the 
estate  disposed  of. 

Discharge  of  liens.  Sec.  5066.  The  assignee  shall  have  authority, 
under  the  order  and  direction  of  the  court,  to  redeem  or  discharge 
any  mortgage  or  conditional  contract,  or  pledge  or  deposit,  or  lien 
upon  any  property,  real  or  personal,  whenever  payable,  and  to  tender 
due  performance  of  the  condition  thereof,  or  to  sell  the  same  subject 
to  such  mortgage,  lien,  or  other  incumbrance. 

Provable  debts.  Sec.  5067.  All  debts  due  and  payable  from  the 
bankrupt  at  the  time  of  the  commencement  of  proceedings  in  bank- 
ruptcy, and  all  debts  then  existing  but  not  payable  until  a  future 
day,  a  rebate  of  interest  being  made  when  no  interest  is  payable  by 
the  terms  of  the  contract,  may  be  proved  against  the  estate  of  the 
bankrupt.  All  demands  against  the  bankrupt  for  or  on  account  of 
any  goods  or  chattels  wrongfully  taken,  converted,  or  withheld  by 
him  may  be  proved  and  allowed  as  debts  to  the  amount  of  the  value 
of  the  property  so  taken  or  withheld,  with  interest.  When  the  bank- 
rupit  is  liable  for  unliquidated  damages  arising  out  of  any  contract  or 
promise,  or  on  account  of  any  goods  or  chattels  wrongfully  taken, 


THE   LAW   OF    1 867.  1225 

converted,  or  withheld,  the  court  ma}^  cause  such  damages  to  be  as- 
sessed in  such  mode  as  it  may  deem  best,  and  the  sum  so  assessed 
may  be  proved  againt  the  estate. 

Contingent  debts.  Sec.  506S.  In  all  cases  of  contingent  debts  and 
contingent  liabilities  contracted  by  the  bankrupt,  and  not  herein 
otherwise  provided  for,  the  creditor  may  make  claim  therefor,  and 
have  his  claim  allowed,  with  the  right  to  share  in  the  dividends,  if 
the  contingency  happens  before  the  order  for  the  final  dividend  ;  or  he 
maj',  at- any  time,  apply  to  the  court  to  have  the  present  value  of  the 
debt  or  liability  ascertained  and  liquidated,  which  shall  then  be  done 
in  such  manner  as  the  court  shall  order,  and  he  shall  be  allowed  to 
prove  for  the  amount  so  ascertained. 

Liability  of  bankrupt  as  surety.  Sec.  5069.  When  the  bankrupt  is 
bound  as  drawer,  indorser,  surety,  bail,  or  guarantor  upon  any  bill, 
bond,  note,  or  any  other  specialty  or  contract,  or  for  any  debt  of  an- 
other person,  but  his  liability  does  not  become  absolute  until  after 
the  adjudication  of  bankruptcy,  the  creditor  ma}'  prove  the  same  after 
such  liabilit}'  becomes  fixed,  and  before  the  final  dividend  is  declared. 

Sureties  for  bankrupt.  Sec.  5079.  Any  person  liable  as  bail, 
suret}-,  guarantor,  or  otherwise  for  the  bankrupt,  who  shall  have  paid 
the  debt,  or  any  part  thereof,  in  discharge  of  the  whole,  shall  be  en- 
titled to  prove  such  debt  or  to  stand  in  the  place  of  the  creditor  if 
the  creditor  has  proved  the  same,  although  such  payments  shall 
have  been  made  after  the  proceedings  in  bankruptcy  were  commenced. 
And  any  person  so  liable  for  the  Ixinkrupt,  and  who  has  not  paid  the 
whole  of  such  debt,  but  is  still  liable  for  the  same  or  any  part  thereof, 
ma}',  if  the  creditor  fails  or  omits  to  prove  such  debt,  prove  the  same 
either  in  the  name  of  the  creditor  or  otherwise,  as  may  be  provided 
by  the  general  orders,  and  subject  to  such  regulations  and  limitations 
as  may  be  established  by  such  general  orders. 

Debts  falling  due  at  stated  periods.  Sec.  5071.  Where  the  bank- 
rupt is  liable  to  pay  rent  or  other  debt  falling  due  at  fixed  and  stated 
periods,  the  creditor  may  prove  for  a  proportionate  part  thereof  up  to 
the  time  of  the  bankruptcy,  as  if  the  same  grew  due  from  day  to  day, 
and  not  at  such  fixed  and  stated  periods. 

No  other  debts  provable.  Sec.  5072.  No  debts  other  than  tliose 
specified  in  the  five  preceding  sections  shall  be  proved  or  allowed 
against  the  estate. 

Set-offs.  Sec.  5073.  In  all  cases  of  mutual  debts  or  mutual  credits 
between  the  parties,  the  account  between  them  shall  be  staled,  and. 
one  debt  set  off  against  the  other,  and  the  balance  only  shall  be  al- 
lowed or  paid;  but  no  set-off  shall  be  allowed  in  favor  of  any  debtor 
to  the  bankrupt  of  a  claim  in  its  nature  not  provable  a^^ainst  the  e.5- 
tate,  or  of  a  claim  purchased  by  or  transferred  to  him  after  tlie  filing 
of  the  petition. 

Distinct  liabilities.  Sec.  5074.  When  the  bankrupt,  at  the  time  of 
adjudication,  is  liable  upon  any  bill  of  e.xchangc,  j)romiss(jry  n<jte,  or 


12'2r)  THK    I.AW    Ol'    1867. 

Other  obligation  in  respect  of  distinct  contracts  as  a  member  of  two 
or  more  firms  carrj-ing  on  separate  and  distinct  trades,  and  having 
distinct  estates  to  be  wound  up  in  bankruptcy,  or  as  a  sole  trader  and 
also  a  member  of  a  firm,  the  circumstance  that  such  firms  are  in  whole 
or  in  part  composed  of  the  same  individuals,  or  that  the  sole  con- 
tractor is  also  one  of  the  joint  contractors,  shall  not  prevent  proof  and 
receipt  of  dividend  in  respect  of  such  distinct  contracts  against  the 
estates  respectively  liable  upon  such  contracts. 

Secured  debts.  Skc.  5075.  When  a  creditor  has  a  mortgage  or 
pledge  of  real  or  personal  property  of  the  bankrupt,  or  a  lien  thereon 
for  securing  the  payment  of  a  debt  owing  to  him  from  the  bankrupt, 
he  shall  be  admitted  as  a  creditor  only  for  the  balance  of  the  debt 
after  deducting  the  value  of  such  property,  to  be  ascertained  by 
agreement  between  him  and  the  assignee,  or  by  a  sale  thereof,  to  be 
made  in  such  manner  as  the  court  shall  direct;  or  the  creditor  mfty 
release  or  convey  his  claim  to  the  assignee  upon  such  property,  and 
be  admitted  to  prove  his  whole  debt.  If  the  value  of  the  property 
exceeds  the  sum  for  which  it  is  so  held  as  security,  the  assignee  may 
release  to  the  creditor  the  bankrupt's  right  of  redemption  therein  on 
receiving  such  excess;  or  he  may  sell  the  property  subject  to  the  claim 
of  the  creditor  thereon  ;  and  in  either  case  the  assignee  and  creditor, 
respectively,  shall  execute  all  deeds  and  writings  necessary  or  proper 
to  consummate  the  transaction.  If  the  property  is  not  so  sold  or  re- 
leased and  delivered  up,  the  creditor  shall  not  be  allowed  to  prove 
any  part  of  his  debt. 

Proof  of  debt.  Sec.  5076.  Creditors  residing  within  the  judicial 
district  where  the  proceedings  in  bankruptcy  are  pending  shall  prove 
their  debts  before  one  of  the  registers  of  the  court,  or  before  a  com- 
missioner of  the  circuit  court,  within  the  said  district.  Creditors  re- 
siding without  the  district,  but  within  the  United  States,  may  prove 
their  debts  before  a  register  in  bankruptcy,  or  a  commissioner  of  a 
circuit  court,  in  the  judicial  district  where  such  creditor,  or  either 
one  of  joint  creditors,  reside ;  but  proof  taken  before  a  commissioner, 
shall  be  subject  to  revision  by  the  register  of  the  court. 

Creditor's  oath.  Sec.  5077.  To  entitle  a  claimant  against  the  es- 
tate of  a  bankrupt  to  have  his  demand  allowed,  it  must  be  verified  by  a 
deposition  in  writing,  under  oath,  and  signed  by  the  deponent,  set- 
ting forth  the  demand,  the  consideration  thereof,  whether  any  and 
what  securities  are  held  therefor,  and  whether  any  and  what  pay- 
ments have  been  made  thereon  ;  that  the  sum  claimed  is  justly  due 
from  the  bankrupt  to  the  claimant ;  that  the  claimant  has  not,  nor 
has  any  other  person,  for  his  use,  received  any  security  or  satisfac- 
tion whatever  other  than  that  by  him  set  forth  ;  that  the  claim  was 
not  procured  for  the  purpose  of  influencing  the  proceedings  in  bank- 
ruptcy ;  and  that  no  bargain  or  agreement,  express  or  implied,  has 
been  made  or  entered  into,  by  or  on  behalf  of  such  creditor,  to  sell, 
transfer,  or  dispose  of  the  claim,   or  any  part  thereof,  cr  to  take  or 


THE   LAW   OF    1867.  1227 

receive,  directly  or  indirectly,  any  money,  property,  or  consideration 
whatever,  whereby  the  vote  of  such  creditor  for  assignee,  or  any  ac- 
tion on  the  part  of  such  creditor,  or  any  other  person  in  the  proceed- 
ings, is  or  shall  be  in  any  way  affected,  influenced  or  controlled.  No 
claim  shall  be  allowed  unless  all  the  statements  set  forth  in  such 
deposition  shall  appear  to  be  true. 

Oath,  by  whom  made.  Sec.  5078.  Such  oath  shall  be  made  by  the 
claimant,  testifying  of  his  own  knowledge,  unless  he  is  absent  from 
the  United  States  or  prevented  by  some  other  good  cause  from  testi- 
fying, in  which  case  the  demand  may  be  verified  by  the  attorney  or 
authorized  agent  of  the  claimant,  testifying  to  the  best  of  his  knowl- 
edge, information,  and  belief,  and  setting  forth  his  means  of  knowl- 
edge. Corporations  may  verif}'  their  claims  by  the  oath  of  their 
president,  cashier,  or  treasurer.  The  court  may  require  or  receive 
further  pertinent  evidence  either  for  or  against  the  admission  of  any 
claim. 

Oath,  before  whom  taken;  proof  sent  to  register.  Sec.  5079.  Such 
oath  may  be  taken  in  any  district  before  any  register  or  any  commis- 
sioner of  the  circuit  court  authorized  to  administer  oaths  ;  or,  if  the 
creditor  is  in  a  foreign  countr}',  before  any  minister,  consul,  or  vice- 
consul  of  the  United  States.  When  the  proof  is  so  made  it  shall  be 
delivered  or  sent  by  mail  to  the  register  having  charge  of  the  same. 

Proof  to  be  sent  to  assignee.  Sec.  5080.  If  the  proof  is  satisfactory 
to  the  register  it  shall  be  delivered  or  sent  by  mail  to  the  assignee, 
who  shall  examine  the  same  and  compare  it  with  the  books  and  ac- 
counts of  the  bankrupt,  and  shall  register,  in  a  book  to  be  kept  by 
him  for  that  purpose,  the  names  of  creditors  who  have  proved  their 
claims,  in  the  order  in  which  such  proof  is  received,  stating  the  time 
of  receipt  of  such  proof,  and  the  amount  and  nature  of  the  debts. 
Such  books  shall  be  open  to  the  inspection  of  all  the  creditors.  The 
court  may  require  or  receive  further  pertinent  evidence  eitlier  for  or 
against  the  admission  of  any  claim. 

Examination  by  court  into  proof  of  claims.  vSec.  5081.  The  court 
may,  on  application  of  the  assignee,  or  of  any  creditor,  or  of  the 
bankrupt,  or  without  any  application,  examine  upon  oath  the  bank- 
rupt, or  any  person  tendering  or  who  has  made  proof  of  a  claim,  and 
may  summon  any  person  capable  of  giving  evidence  concerning  such 
proof,  or  concerning  the  debt  sought  to  be  proved,  and  shall  reject  all 
claims  not  duly  proved,  or  where  the  proof  shows  the  claim  to  l>e 
founded  in  fraud,  ille;^ality  or  mistake. 

"Withdrawal  of  papers.  Src.  5082.  A  bill  of  exchange,  promissory 
note,  or  other  instrument,  used  in  evidence  upon  the  proof  of  a  chiim, 
and  left  in  court  or  deposited  in  the  clerk's  office,  may  be  delivered, 
by  the  register  or  clerk  having  the  custf)dy  thereof,  to  the  person 
who  used  it,  upon  his  filing  a  cojjy  thereof,  attested  by  tlie  clerk  of 
the  court,  who  shall  indorse  upon  it  the  name  of  the  party  against 


1228  THE   LAW   OF    1867. 

whoso  estate  it  has  been  pnned,  and  the  date  and  amount  of  an> 
dividend  declared  thereon. 

Postponement  of  proof.  Si;c.  5083.  When  a  claim  is  presented  for 
proof  before  the  election  of  the  assignee,  and  the  judge  or  register 
entertains  doubts  of  its  validity  or  of  the  right  of  the  creditor  to 
prove  it,  and  is  of  the  opinion  that  such  validity  or  right  ought  to  be 
investigated  by  the  assignee,  he  may  postpone  the  proof  of  the  claim 
until  the  assignee  is  chosen. 

Surrender  of  preferences.  Sicc.  50S4.  Any  person  who,  since  the 
second  day  of  IMarcli,  eighteen  hundred  and  sixty -seven,  has  ac- 
cepted any  preference,  having  reasonable  cause  to  believe  that  the 
same  was  made  or  given  by  the  debtor,  contrary  to  any  provisions  of 
the  act  of  March  two,  eighteen  hundred  and  sixty-seven,  chapter 
one  hundred  and  seventy-six,  to  establish  a  uniform  system  of  bank- 
ruptcy-, or  to  any  provisions  of  this  Title,  shall  not  prove  the  debt  or 
claim  on  account  of  which  the  preference  is  made  or  given,  nor  shall 
he  receive  any  dividend  therefrom  until  he  shall  first  surrender  to 
the  assignee  all  property,  money,  benefit,  or  advantage  received  by 
him  under  such  preference. 

Allowance  and  list  of  debts.  Sec.  5085.  The  court  shall  allow  all 
debts  duly  proved,  and  shall  cause  a  list  thereof  to  be  made  and  cer- 
tified by  one  of  the  registers. 

Examination  of  bankrupt.  Sec.  5086.  The  court  may,  on  the  ap- 
plication of  the  assignee,  or  of  any  creditor,  or  without  any  applica- 
tion, at  all  times  require  the  bankrupt,  upon  reasonable  notice,  to  a1<- 
tend  and  submit  to  an  examination,  on  oath,  upon  all  matters  relat- 
ing to  the  disposal  or  condition  of  his  property,  to  his  trade  and 
dealings  with  others,  to  his  accounts  concerning  the  same,  to  ai!l 
debts  due  to  or  claimed  from  him,  and  to  all  other  matters  concerning 
his  property  and  estate  and  the  due  settlement  thereof  according  to 
law.  Such  examination  shall  be  in  writing,  and  shall  be  signed  by 
the  bankrupt  and  filed  with  the  other  proceedings. 

Examination  of  witness.  Sec.  5087.  The  court  may,  in  like  man- 
ner, require  the  attendance  of  any  other  person  as  a  witness,  and  if 
such  person  fails  to  attend,  on  being  summoned  thereto,  the  court 
may  compel  his  attendance  by  warrant  directed  to  the  inarshal,  com- 
manding him  to  arrest  such  person  and  bring  him  forthwith  before 
the  court,  or  before  a  register  in  bankruptcy,  for  examination  as  a 
witness. 

Examination  of  bankrupt's  wife.  Sec.  5088.  For  good  cause  shown, 
the  wife  of  any  bankrupt  may  be  required  to  attend  before  the  court 
to  the  end  that  she  may  be  examined  as  a  witness  ;  and  if  she  does 
not  attend  at  the  time  and  place  specified  in  the  order,  the  bankrupt 
shall  not  be  entitled  to  a  discharge  unless  he  proves  to  the  satisfaction 
of  the  court  that  he  was  unable  to  procure  her  attendance. 

Examination  of  imprisoned  or  disabled  bankrupt.  Sec.  5089.  If  the 
bankrupt   is   imprisoned,  absent,   or  disabled   from   attendance,   the 


THE   LAW   OF    1 867.  1229 

court  may  order  him  to  be  produced  by  the  jailer,  or  any  officer  in 
whose  custody  he  may  be,  or  maj'  direct  the  examination  to  be  had, 
taken,  and  certified  at  such  time  and  place  and  in  such  manner  as  the 
court  may  deem  proper,  and  with  like  effect  as  if  such  examination 
had  been  had  in  court. 

No  abatement  upon  death  of  debtor.  Sec.  5090.  If  the  debtor  dies 
after  the  issuing  of  the  warrant,  the  proceedings  may  be  continued 
and  concluded  in  like  manner  as  if  he  had  lived. 

Distribution  of  bankrupt's  estate.  Sec.  5091.  All  creditors  whose 
debts  are  duly  proved  and  allowed  shall  be  entitled  to  share  in  the 
bankrupt's  property  and  estate,  pro  rata,  without  any  priority  or 
preference  whatever,  except  as  allowed  by  section  fifty-one  hundred 
and  one.  No  debt  proved  by  any  person  liable,  as  bail,  surety, 
guarantor,  or  otherwise,  for  the  bankrupt,  shall  be  paid  to  the  person 
so  proving  the  same  until  satisfactory  evidence  shall  be  produced  of 
the  payment  of  such  debt  by  such  person  so  liable,  and  the  share  to 
which  such  debt  would  be  entitled  may  be  paid  into  court,  or  other- 
wise held  for  the  benefit  of  the  party  entitled  thereto,  as  the  court 
may  direct. 

Second  meeting  of  creditors.  Sec.  5092.  At  the  expiration  of  three 
months  from  the  date  of  the  adjudication  of  bankruptcy  in  any  case, 
or  as  much  earlier  as  the  court  may  direct,  the  court,  upon  request  of 
the  assignee,  shall  call  a  general  meeting  of  the  creditors,  of  which 
due  notice  shall  be  given,  and  the  assignee  shall  then  report,  and 
exhibit  to  the  court  and  to  the  creditors  just  and  true  accounts  of  all 
his  receipts  and  payments,  verified  by  his  oath,  and  he  shall  also 
produce  and  file  vouchers  for  all  payments  for  which  vouchers  are 
required  by  any  rule  of  the  court ;  he  shall  also  submit  the  schedule 
of  the  bankrupt's  creditors  and  property  as  amended,  duly  verified 
by  the  bankrupt,  and  a  statement  of  the  whole  estate  of  the  bankrupt 
as  then  ascertained,  of  the  property  recovered  and  the  property  out- 
standing, specifying  the  cause  of  its  being  outstanding,  and  showing 
what  debts  or  claims  are  yet  undetermined,  and  what  sum  remains  in 
his  hands.  The  majority  in  value  of  the  creditors  present  shall 
determine  whether  any  and  what  part  of  the  net  proceeds  of  the  estate, 
after  deducting  and  retaining  a  sum  sufficient  to  provide  for  all  undeter- 
mined claims  which,  by  reason  of  the  distant  residence  of  the  creditor, 
or  for  other  sufficient  reason,  have  not  been  proved,  and  for  other 
expenses  and  contingencies,  shall  be  divided  among  the  creditors  ;  but 
unless  at  least  one-half  in  value  of  the  creditors  attend  the  meeting, 
either  in  person  or  by  attorney,  it  shall  be  tlie  duty  of  the  assignee  so 
to  determine. 

Third  meeting  of  creditors.  Sr.c.  5093.  Like  proceedings  sliall  be 
had  at  the  expiration  of  the  next  three  months,  or  earlier,  if  practica- 
ble, and  a  third  meeting  of  creditors  shall  then  be  called  by  the  court, 
and  a  final  dividend  then  declared,  unless  any  suit  at  law  or  in  equity 
is  pending,  or  unless  some  other  estate  or  effects  of  the  debtor  after- 


;iO;^^)  THE   LAW   OF    1867. 

ward  come  to  the  hands  of  the  assignee  in  the  case  of  the  assignee 
shall,  as  soon  as  may  be,  convert  such  estate  and  effects  into  money, 
and  within  two  months  after  the  same  are  so  converted  they  shall  be 
divided  in  manner  aforesaid.  Further  dividends  shall  be  made  in  like 
manner  as  often  as  occasion  requires,  and  after  the  third  meeting  of 
creditors  no  further  meeting  shall  be  called,  iinless  ordered  by  the 
court. 

Notice  of  meetings.  Sec.  5094.  The  assignee  shall  give  such 
notice  to  all  known  creditors,  by  mail  or  otherwise,  of  all  meetings, 
after  the  first,  as  ma}'  be  ordered  by  the  court. 

Creditor  may  act  by  attorney.  Sec.  5095.  Any  creditor  may  act 
at  all  meetings  by  his  duly  constituted  attomej^  the  same  as  though 
personally  present. 

Set-xement  of  assignee's  account.  Sec.  5096.  Preparatory  to  the 
final  dividend,  the  assignee  shall  submit  his  account  to  the  court  and 
file  the  same,  and  give  notice  to  the  creditors  of  such  filing,  and  shall 
also  give  notice  that  he  will  apply  for  a  settlement  of  his  account,  and 
for  a  discharge  from  all  liability  as  assignee,  at  a  time  to  be  specified 
in  such  notice,  and  at  such  time  the  court  shall  audit  and  pass  the 
accounts  of  the  assignee,  and  the  assignee  shall,  if  required  by  the 
court,  be  examined  as  to  the  truth  of  his  account,  and  if  it  is  found 
correct  he  shall  thereby  be  discharged  from  all  liability  as  assignee  to 
any  creditor  of  the  bankrupt.  The  court  shall  thereupon  order  a 
dividend  of  the  estate  and  effects,  or  of  such  part  thereof  as  it  sees  fit, 
among  such  of  the  creditors  as  have  proved  their  claims,  in  proportion 
to  the  respective  amount  of  their  debts. 

Dividend  not  to  be  disturbed.  Sec.  5097.  No  dividend  already 
declared  shall  be  disturbed  by  reason  of  debts  being  subsequently 
proved,  but  the  creditors  proving  such  debts  shall  be  entitled  to  a 
dividend  equal  to  those  already  received  by  the  other  creditors  before 
any  further  payment  is  made  to  the  latter. 

Omission  of  assignee  to  call  meetings.  Sec.  5098.  If  by  accident, 
mistake,  or  other  cause,  without  fault  of  the  assignee,  either  or  both 
of  the  second  or  third  meetings  should  not  be  held  within  the  times 
limited,  the  court  may,  upon  motion  of  an  interested  party,  order  such 
meetings,  with  like  effect  as  to  the  validity  of  the  proceedings  as  if 
meeting  had  been  dul}'  held. 

Compensation  of  assignee.  Sec.  5099.  The  assignee  shall  be  allowed, 
and  may  retain  out  of  money  in  his  hands,  all  the  necessary  disburse- 
ments made  by  him  in  the  discharge  of  his  duty,  and  a  reasonable 
compensation  for  his  services,  in  the  discretion  of  the  court. 

Commissioners.  Sec.  5100.  In  addition  to  all  expenses  necessarily 
incurred  by  him  in  the  execution  of  his  trust,  in  any  case,  the 
assignee  shall  be  entitled  to  an  allowance  for  his  services  in  such  case 
on  all  moneys  received  and  paid  out  by  him  therein,  for  any  sum  not 
exceeding  one  thousand  dollars,  five  per  centum  thereon;  for  any 
larger  sum,  not  exceeding  five  thousand  dollars,  two  and  a  half  per 


THE   LAW    OK    1867.  1231 

centum  on  the  excess  of  over  one  thousand  dollars;  and  for  any  larger 
sum,  one  per  centum  on  the  excess  over  five  thousand  dollars.  If,  at 
any  time,  there  is  not  in  his  hands  a  sufficient  amount  of  money  to 
defray  the  necessary  expenses  required  for  the  further  execution  of 
his  trust,  he  shall  not  be  obliged  to  proceed  therein  until  the  necessary 
funds  are  advanced  or  satisfactorily  secured  to  him. 

Debts  entitled  to  priority.  Sec.  5101.  In  the  order  for  a  dividend, 
the  following  claims  shall  be  entitled  to  priority,  and  to  be  first  paid 
in  full  in  the  following  order: 

First.  The  fees,  costs,  and  expenses  of  suits,  and  of  the  several 
proceedings  in  bankruptcy  under  this  Title,  and  for  the  custody  of 
propert}',  as  herein  provided. 

Second.  All  debts  due  to  the  United  States,  and  all  taxes  and 
assessments  under  the  laws  thereof. 

Third.  All  debts  due  to  the  State  in  which  the  proceedings  in 
bankruptcy  are  pending,  and  all  taxes  and  assessments  made  under 
the  laws  thereof. 

Fourth.  Wages  due  to  any  operative,  clerk,  or  house-ser\'ant,  to 
an  amount  not  exceeding  fifty  dollars,  for  la])or  performed  within  six 
months  next  preceding  the  first  publication  of  the  notice  of  the  pro- 
ceedings in  bankruptc\'. 

Fifth.  All  debts  due  to  any  person  who,  by  the  laws  of  the  United 
States,  are,  or  may  be,  entitled  to  a  priority,  in  like  manner  as  if  the 
provisions  of  this  Title  had  not  been  adopted.  But  nothing  contained 
in  this  Title  shall  interfere  with  the  assessment  and  collection  of  taxes 
bj'  the  authority  of  the  United  States  or  any  State. 

Notice  of  dividend  to  each  creditor.  Sec.  5102.  Whenever  a  divi- 
dend is  ordered,  the  register  shall,  within  ten  days  after  the  meetmg, 
prepare  a  list  of  creditors  entitled  to  dividend,  and  shall  calculate  and 
set  opposite  to  the  name  of  each  creditor  who  has  proved  his  claim 
the  dividend  to  which  he  is  entitled  out  of  the  net  proceeds  of  the 
estate  set  apart  for  dividend,  and  shall  forward,  by  mail,  to  every 
creditor  a  statement  of  the  dividend  to  which  he  is  entitled,  and  such 
creditors  shall  be  paid  by  the  assignee  in  such  manner  as  the  court 
maj-  direct. 

Settlement  of  bankrupt  estates  by  trustees.  Composition  with  credi- 
tors. Sec.  5103.  If  at  the  first  meeting  of  creditors,  or  at  any  meet- 
ing of  creditors  specially  called  for  that  purpose,  and  of  wliich 
previous  notice  shall  have  been  given  for  such  length  of  time  and  in 
.such  manner  as  the  court  may  direct,  three-fourths  in  value  of  the 
creditors  whose  claims  have  been  proved  shall  resolve  that  it  is  for 
the  interest  of  the  general  body  of  the  creditors  that  the  estate  of  the 
bankrupt  shall  be  settled  by  trustees,  under  the  inspection  and  direc- 
tion of  a  committee  of  the  creditors,  the  creditors  may  certify  and 
report  such  resolution  to  the  court,  and  may  nominate  one  or  more 
trustees  to  take  and  hold  and  distribute  the  estate,  under  the  direction 
of  such  committee.      If  it  appears,  after  hearing  the   bankrupt    and 


y>\]2  THE   LAW   OF    1867. 

such  creditors  as  desire  to  be  heard,  that  the  resolution  was  duly- 
passed,  and  that  the  interest  of  the  creditors  will  be  promoted  thereby, 
the  court  shall  confinu  it;  and  upon  the  execution  and  filing,  by  or 
on  behalf  of  three-fourths  in  value  of  all  the  creditors  whose  claims 
have  been  proved,  of  a  consent  that  the  estate  of  the  bankrupt  shall 
be  wound  up  and  settled  by  trustees,  according  to  the  terms  of  such 
resolution,  the  bankrupt,  or,  if  an  assignee  has  been  appointed,  the 
assignee,  shall,  under  the  direction  of  the  court,  and  under  oath, 
conve}',  transfer,  and  deliver  all  the  property  and  estate  of  the  bank- 
rupt to  the  trustees,  who  .shall,  upon  such  conveyance  and  transfer, 
have  and  hold  the  same  in  the  same  manner,  and  with  the  same 
powers  and  rights,  in  all  respects,  as  the  bankrupt  would  have  had 
or  held  the  same  if  no  proceedings  in  bankruptcy  had  been  taken,  or 
as  the  assignee  in  bankruptcy  would  have  done,  had  such  resolution 
not  been  passed.  Such  consent  and  the  proceedings  under  it  shall  be 
as  binding  in  all  respects  on  any  creditor  whose  debt  is  provable,  who 
has  not  signed  the  same,  as  if  he  had  signed  it,  and  on  any  creditor 
whose  debt,  *if  provable,  is  not  proved,  as  if  he  had  proved  it.  The 
court,  by  order,  shall  direct  all  acts  and  things  needful  to  be  done  to 
carry  into  effect  such  resolution  of  the  creditors,  and  the  trustees 
shall  proceed  to  wind  up  and  settle  the  estate  under  the  direction 
and  inspection  of  such  committee  of  the  creditors,  for  the  equal  ben- 
efit of  all  such  creditors;  and  the  winding  up  and  settlement  of  any 
estate  under  the  provisions  of  this  section  shall  be  deemed  to  be  pro- 
ceedings in  bankruptcy;  and  the  trustees  shall  have  all  the  rights 
and  powers  of  assignees  in  bankruptcy.  The  court,  on  the  applica- 
tion of  such  trustees,  shall  have  the  power  to  summon  and  examine, 
on  oath  or  otherwise,  the  bankrupt,  or  any  creditor,  or  any  person 
indebted  to  the  estate,  or  known  or  suspected  of  having  any  of  the 
estate  in  his  possession,  or  any  other  person  whose  examination  may 
be  material  or  necessary  to  a.id  the  trustees  in  the  execution  of  their 
trust,  and  to  compel  the  attendance  of  such  persons  and  the  produc- 
tion of  books  and  papers  in  the  same  manner  as  in  other  proceedings 
in  bankruptcy;  and  the  bankrupt  shall  have  the  like  right  to  apply 
for  and  obtain  a  discharge  after  the  passage  of  such  resolution  and 
the  appointment  of  such  trustees  as  if  such  resolution  had  not  been 
passed,  and  as  if  all  the  proceedings  had  continued  in  the  manner 
provided  in  the  preceding  sections  of  this  Title.  If  the  resolution  is 
not  duly  reported,  or  the  consent  of  the  creditors  is  not  duly  filed,  or 
if,  upon  its  filing,  the  court  does  not  think  fit  to  approve  thereof,  the 
bankruptcy  shall  proceed  as  if  no  resolution  had  been  passed,  and  the 
court  may  make  all  necessary  orders  for  resuming  the  proceedings. 
And  the  period  of  time  which  shall  have  elapsed  between  the  date  of 
the  resolution  and  the  date  of  the  order  for  resuming  proceedings 
shall  not  be  reckoned  in  calculating  periods  of  time  prescribed  by 
this  Title. 


THE    LAW   OF    1867.  1233 

CHAPTER  FIVE. 

PROTECTION    AND    DISCHARGE    OF   BANKRUPTS. 

Bankrupt  subject  to  orders  of  court.  Sec.  5104.  The  bankrupt 
shall  at  all  times,  until  his  discharge,  be  subject  to  the  order  of  the 
court,  and  shall,  at  the  expense  of  the  estate,  execute  all  proper 
writings  and  instruments,  and  do  all  acts  required  by  the  court  touch- 
ing the  assigned  property  or  estate,  and  to  enable  the  assignee  to 
demand,  recover,  and  receive  all  the  property  and  estate  assigned, 
wherever  situated.  For  neglect  or  refusal  to  obey  any  order  of  the 
court,  the  bankrupt  may  be  committed  and  punished  as  for  a  contempt 
of  court.  If  the  bankrupt  is  without  the  district,  and  unable  to  return 
and  personally  attend  at  any  of  the  times  or  do  any  of  the  acts  which 
may  be  required  pursuant  to  this  section,  and  it  appears  that  such 
absence  was  not  caused  by  willful  default,  and  if,  as  soon  as  may 
be  after  the  removal  of  such  impediment,  he  offers  to  attend  and  sub- 
mit to  the  order  of  the  court  in  all  respects,  he  shall  be  permitted  so 
to  do,  with  like  effect  as  if  he  had  not  been  in  default. 

Waiver  of  suit  by  proof  of  debt.  Sec.  5105.  No  creditor  proving 
his  debt  or  claim  shall  be  allowed  to  maintain  any  suit  at  law  or  in 
equity  therefor  against  the  bankrupt,  but  shall  be  deemed  to  have 
waived  all  right  of  action  against  him ;  and  all  proceedings  already 
commenced  or  unsatisfied  judgments  already  obtained  thereon  against 
the  bankrupt  shall  be  deemed  to  be  discharged  and  surrendered 
thereby. 

Stay  of  suits.  Sec.  5106.  No  creditor  whose  debt  is  provable 
shall  be  allowed  to  prosecute  to  final  judgment  any  suit  at  law  or  in 
equity  therefor  against  the  bankrupt,  until  the  question  of  the  debt- 
or's discharge  shall  have  been  determined  ;  and  any  such  suit  or  pro- 
ceedings shall,  upon  the  application  of  the  bankrupt,  be  staj'-ed  to 
await  the  determination  of  the  court  in  bankruptcy  on  the  question 
of  the  discharge,  provided  there  is  no  unreasonable  delay  on  the  part 
of  the  bankrupt  in  endeavoring  to  obtain  his  discharge,  and  provided, 
also,  that  if  the  amount  due  the  creditor  is  in  dispute,  the  suit,  by 
leave  of  the  court  in  bankruptcy,  may  proceed  to  judgment  for  the 
purpose  of  ascertaining  the  amount  due,  which  amount  may  be 
proved  in  bankruptcy,  but  execution  shall  be  stayed. 

Exemption  from  arrest.  Sec.  5107.  No  bankrupt  shall  be  liable 
during  the  pendency  of  the  proceedings  in  bankruptcy  to  arrest  in  any 
civil  action,  unless  the  same  is  founded  on  some  debt  or  claim  from 
which  his  discharge  in  bankruptcy  would  not  release  him. 

Application  for  discharge.  Sec.  5  ioS.  (///  any  time  after  the  expir- 
ation of  six  months  from  the  adjudtcation  of  bankniptcy,  or  if  110  debts 
have  been  proved  against  the  banknipt,  or  if  no  assets  have  come  to  the 
hands  of  the  assignee,  at  any  time  after  the  expiration  of  sixty  days, 
and  within  one  year  from  the  adjudication  of  bankruptcy,  the  bankrupt 


\-^;\J^  THK    LAW    OK    1867. 

may  apply  to  the  court  for  a  discharge  from  his  debts.)  (At  any  time 
after  the  expiration  of  six  months  from  the  adjudication  of  bank- 
ruptc}-,  or  if  no  debts  have  been  proved  aj^ainst  the  bankrupt,  or  if  no 
assets  have  come  to  the  hands  of  the  assignee,  at  any  time  after  the 
expiration  of  sixty  days,  and  before  the  final  disposition  of  the  cause, 
the  bankrupt  may  apply  to  the  court  for  a  discharge  from  his  debts. 
This  section  shall  apply  in  all  cases  heretofore  or  hereafter  com- 
menced.) 

Notice  to  creditors.  Sec.  5109.  Upon  application  for  a  discharge 
being  made  the  court  shall  order  notice  to  be  given  by  mail  to  all  cred- 
itors who  have  proved  their  debts,  and  by  publication  at  least  once  a 
week  in  such  newspapers  as  the  court  shall  designate,  due  regard  be- 
ing had  to  the  general  circulation  of  the  same  in  the  district,  or  in 
that  portion  of  the  district  in  which  the  bankrupt  and  his  creditors 
shall  reside  to  appear  on  a  day  appointed  for  that  purpose,  and  show 
cause  why  a  discharge  should  not  be  granted  to  the  bankrupt. 

Grounds  for  opposing  discharge.  Sec.  51 10.  No  discharge  shall  be 
granted,  or,  if  granted,  shall  be  valid,  in  any  of  the  following  cases : 

First.  If  the  bankrupt  has  willfully  sworn  falsely  in  his  affidavit 
annexed  to  his  petition,  schedule,  or  inventory,  or  upon  any  examina- 
tion in  the  course  of  the  proceedings  in  bankruptcy,  in  relation  to  any 
material  fact. 

Second.  If  the  bankrupt  has  concealed  any  part  of  his  estate  or 
effects,  or  any  books  or  writings  relating  thereto,  or  has  been  guilty 
of  any  fraud  or  negligence  in  the  care,  custody,  or  delivery  to  the 
assignee  of  the  property  belonging  to  him  at  the  time  of  the  presen- 
tation of  his  petition  and  inventory,  excepting  such  property  as 
he  is  permitted  to  retain  under  the  provisions  of  this  Title,  or  if  he 
has  caused,  permitted,  or  suffered  any  loss,  waste,  or  destruction 
thereof. 

Third.  If,  within  four  months  before  the  commencement  of  such 
proceedings,  the  bankrupt  has  procured  his  lands,  goods,  money,  or 
chattels  to  be  attached,  sequestered,  or  seized  on  execution. 

Fourth.  If,  at  any  time  after  the  second  day  of  March,  eighteen 
hundred  and  sixty-seven,  the  bankrupt  has  destroyed,  mutilated,  al- 
tered, or  falsified  any  of  his  books,  documents,  papers,  writings,  or 
securities,  or  has  made  or  been  privy  to  making  of  any  false  or  fraud- 
ulent entry  in  any  book  of  account  or  other  document,  with  intent  to 
defraud  his  creditors  ;  or  has  removed  or  caused  to  be  removed  any 
part  of  his  property  from  the  district,  with  intent  to  defraud  his 
creditors. 

Fifth.  If  the  bankrupt  has  given  any  fraudulent  preferences  con- 
trary to  the  provisions  of  the  act  of  March  two,  eighteen  hundred  and 
sixty -seven,  to  establish,  a  uniform  system  of  bankruptcy,  or  to  the 
provisions  of  this  Title,  or  has  made  any  fraudulent  payment,  gift, 
transfer,  conveyance,   or  assignment  of  any  part  of  his  property,  or 


THE    LAW    OF    1867.  12;35 

has  lost  any  part  thereof  in  gaming,  or  has  admitted  a  false  or  ficti- 
tious debt  against  his  estate. 

Sixth.  If  the  bankrupt,  having  knowledge  that  any  person  has 
proved  such  false  and  fictitious  debt,  has  not  disclosed  the  same  to 
his  assignee  within  one  month  after  such  knowledge. 

Seventh.  If  the  bankrupt,  being  a  merchant  or  tradesman,  has 
not,  at  all  times  after  the  second  day  of  March,  eighteen  hundred  and 
sixtj'-seven,  kept  proper  books  of  account. 

Eighth.  If  the  bankrupt,  or  any  person  in  his  behalf,  has  pro- 
cured the  assent  of  any  creditor  to  the  discharge,  or  influenced  the 
action  of  any  creditor  at  any  stage  of  the  proceedings,  by  any  pecu- 
niarj'  consideration  or  obligation. 

Ninth.  If  the  bankrupt  has,  in  contemplation  of  becoming  bank- 
rupt, made  any  pledge,  payment,  transfer,  assignment,  or  conveyance 
of  any  part  of  his  property,  directly  or  indirectly,  absolutely  or  con- 
ditionally, for  the  purpose  of  preferring  any  creditor  or  person  having 
a  claim  against  him,  or  who  is  or  may  be  under  liability  for  him,  or 
for  the  purpose  of  preventing  the  property  from  coming  into  the 
hands  of  the  assignee,  or  of  being  distributed  in  satisfaction  of  his 
debts. 

Tenth.  If  the  bankrupt  has  been  convicted  of  any  misdemeanor 
under  this  Title. 

Specification  of  grounds  of  opposition.  Sec.  511  i.  Any  creditor 
opposing  the  discharge  of  any  bankrupt  may  file  a  specification  in 
writing  of  the  grounds  of  his  opposition,  and  the  court  may  in  its 
discretion  order  any  question  of  fact  so  presented  to  be  tried  at  a 
stated  session  of  the  district  court. 

Assets  equal  to  fifty  per  cent,  required.  Sec.  51 12.  In  all  proceed- 
ings in  bankruptcy  coninienced  after  the  first  day  of  January,  eighteen 
hundred  and  sixty-nine,  no  discharge  shall  be  granted  to  a  debtor 
whose  assets  shall  not  be  equal  to  fifty  per  centum  of  the  claims 
proved  against  his  estate  upon  which  he  shall  be  liable  as  the  prin- 
cipal debtor,  unless  the  assent  in  writing  of  a  majority  in  nunilier  and 
value  of  his  creditors  to  whom  he  ehall  have  become  liable  as  princi- 
pal debtor,  and  who  shall  have  proved  their  claims,  as  filed  in  the 
case  at  or  before  the  time  of  the  hearing  of  the  ajiplication  for  dis- 
charge; but  this  provision  shall  not  apply  to  tliose  debts  from  which 
the  bankrupt  seeks  a  discharge  which  were  contracted  prior  to  the 
first  day  of  January,  eighteen  hundred  and  sixty-nine. 

Final  oath  of  bankrupt.  Sec.  51 13.  Before  any  discharge  is  granted, 
the  bankrupt  must  take  and  subscribe  an  oath  to  the  efiect  that  he 
has  not  done,  suflered,  or  been  privy  to  any  act,  matter,  or  thing 
specified  as  a  ground  for  withholding  such  discharge,  or  as  invalidat- 
ing such  discharge  if  granted. 

Discharge  of  bankrupt.  Sec.  51 14.  If  it  shall  appear  to  the  court 
that  the  bankrupt  has  in  all  things  conformed  to  his  duty  under  this 
Title,  and  that  he  is  entitled,  under  the  provisions  thereof,  to  receive 


li'2'AG  THE   LAW    OF    1867. 

a  discharge,  the  court  shall  j;rant  him  a  discharge  from  all  his  debt» 
except  as  hereinafter  provided,  and  shall  give  him  a  certificate  thereof 
under  the  seal  of  the  court. 

Form  of  certificate  of  discharge.     Sec.   51 15.     The  certificate  of  a 
discharge  in  bankruptcy  shall  be  in  substance  in  the  following  form  : 
District  court  of  the  United  States,  district  of 

Whereas  has  been  duly  adjudged  a  bankrupt  under 

the  Revised  Statutes  of  the  United  States,  Title  "  Bankruptcy,  "  and 
appears   to   have  conformed  to   all  the  requirements  of  law  in  that 
behalf,  it  is  therefore  ordered  by  the  court  that  said 
be  forever  discharged  from  all  debts  and  claims  which  by  said  Title 
are  made  provable  against  his  estate,  and  which  existed  on  the 
day  of  ,  on  which  day  the  petition   for  adjudication  was  filed 

by  (or  against)  him ;  excepting  such  debts,  if  any,  as  are  by  law 
excepted  from  the  operation  of  a  discharge  in  bankruptcy.  Given 
under  my  hand   and   the  seal   of  the  court  at  ,  in  the  vSaid 

district,  this  day  of  , 

(Seal.)  ,  Judge. 

Second  bankruptcy.  Sec.  51 16.  No  person  who  has  been  discharged, 
and  aftervvards  becomes  bankrupt  on  his  own  application,  shall  be 
again  entitled  to  a  discharge  whose  estate  is  insufficient  to  pay 
seventy  per  centum  of  the  debts  proved  against  it,  unless  the  assent 
in  writing  of  three-fourths  in  value  of  his  creditors  who  have  proved 
their  claims  is  filed  at  or  before  the  time  of  application  for  discharge  ; 
but  a  bankrupt  who  proves  to  the  satisfaction  of  the  court  that  he 
has  paid  all  the  debts  owing  by  him  at  the  time  of  any  previous 
bankruptcy,  or  who  has  been  voluntarily  released  therefrom  by  his 
creditors,  shall  be  entitled  to  a  discharge  in  the  same  manner  and 
with  the  same  effect  as  if  he  had  not  previously  been  bankrupt. 

Certain  debts  not  released.  Sec.  51 17.  No  debt  created  by  the 
fraud  or  embezzlement  of  the  bankrupt,  or  by  his  defalcation  as  a 
public  officer,  or  while  acting  in  any  fiduciary  character,  shall  be  dis- 
charged by  proceedings  in  bankruptcy;  but  the  debt  may  be  proved, 
and  tlie  dividend  thereon  shall  be  a  payment  on  account  of  such  debt. 

Liability  of  other  persons  not  released.  Sec.  51 18.  No  discharge 
shall  release,  discharge,  or  affect  any  person  liable  for  the  same  debt 
for  or  with  the  bankrupt,  either  as  partner,  joint  contractor,  indorser, 
suret}-,  or  otherwise. 

Effect  of  discharge.  Sec.  5 119.  A  discharge  in  bankruptcy  duly 
granted  shall,  subject  to  the  limitations  imposed  by  the  two  preceding 
sections,  release  the  bankrupt  from  all  debts,  claims,  liabilities,  and 
demands  which  were  or  might  have  been  proved  against  his  estate  in 
bankruptcy.  It  may  be  pleaded  by  a  simple  averment  that  on  the 
day  of  its  date  such  discharge  was  granted  to  the  bankrupt,  setting  a 
full  copy  of  the  same  forth  in  its  terms  as  a  full  and  complete  bar  to  all 
suits  brought  on  any  such  debts,  claims,  liabilities,  or  demands.     The 


THE   LAW   OF    1867.  1237 

certificate  shall  be  conclusive  evidence  in  favor  of  such  bankrupt  of 
the  fact  and  the  regularity  of  such  discharge. 

Application  to  anniil  discharge.  Sec.  5120.  An}-  creditor  of  a 
bankrupt,  whose  debt  was  pro\-ed  or  provable  against  the  estate  in 
bankruptc}',  who  desires  to  contest  the  validit}^  of  the  discharge  on 
the  ground  that  it  was  fraudulently  obtained,  may,  at  anj' time  within 
two  3'ears  after  the  date  thereof,  apply  to  the  court  which  granted  it 
to  annul  the  same.  Tlie  application  shall  be  in  writing,  and  shall 
specify  which,  in  particular,  of  the  several  acts  mentioned  in  section 
fifty-one  hundred  and  ten  it  is  intended  to  prove  against  the  bankrupt, 
and  set  forth  the  grounds  of  avoidance;  and  r.o  evidence  shall  be 
admitted  as  to  any  other  such  acts ;  but  the  application  shall  be  sub- 
ject to  amendment  at  the  discretion  of  the  court.  The  court  shall 
cause  reasonable  notice  of  the  application  to  be  given  to  the  bankrupt, 
and  order  him  to  appear  and  answer  the  same,  within  such  time  as  to 
the  court  shall  seem  proper.  If,  upon  the  hearing  of  the  parties,  the 
court  finds  that  the  fraudulent  acts,  or  any  of  them,  set  forth  by  the 
creditor  against  the  bankrupt,  are  proved,  and  that  the  creditor  had 
no  knowledge  of  the  same  until  after  the  granting  of  the  discharge, 
judgment  shall  be  given  in  favor  of  the  creditor,  and  the  discharge 
of  the  bankrupt  shall  be  annulled.  But  if  the  court  finds  that  the 
fraudulent  acts  and  all  of  them  so  set  forth  are  not  proved,  or  that 
they  were  known  to  the  creditors  before  the  granting  of  the  discharge, 
judgment  shall  be  rendered  in  favor  of  the  bankrupt,  and  the  validity 
of  his  discharge  shall  not  be  affected  by  the  proceedings. 


CHAPTER  SIX. 

PROCEEDINGS   PECULIAR   TO   PARTNERSHIPS   AND   CORPORATIONS. 

Bankruptcy  of  partnerships.  Sec.  5 121.  Where  two  or  more  per- 
sons who  are  partners  in  trade  are  adjudged  bankrupts,  either  on  the 
petition  of  such  partners  or  of  any  one  of  them,  or  on  the  petition  of 
any  creditor  of  the  partners,  a  warrant  shall  issue,  in  the  manner 
provided  by  this  Title,  upon  which  all  the  joint  stf)ck  and  i)roperty  of 
the  copartnership,  and  also  all  the  sej^arate  estate  of  each  of  the 
partners,  shall  be  taken,  excepting  such  parts  thereof  as  are  herein- 
before excepted.  All  the  creditors  of  the  company,  and  the  separate 
creditors  of  each  partner,  may  prove  their  respective  debts.  The 
assignee  shall  be  chosen  by  the  creditors  of  tlie  companj-.  He  shall 
keep  separate  accounts  of  the  joint  stock  or  property  of  tlie  copart- 
nership and  of  the  separate  estate  of  each  member  thereof;  and  after 
deducting  out  of  the  whole  amount  received  by  the  a.ssignee  the 
whole  of  the  expenses  and  disbursements,  the  net  proceeds  of  the 
joint  stock  shall  Ije  appropriated  to  pay  the  creditors  of  the  copart- 
nership, and  the  net  proceeds  of  the  separate  estate  of  each  partner 
shall  be  appropriated  to  pay  his  separate  creditors.     If  there  is  any 


l'J;^8  THE    l.AAV    OK    1867. 

balance  of  the  separate  estate  of  any  partner,  after  the  payment  of 
his  separate  debts,  such  balance  shall  be  added  to  the  joint  stock  for 
the  pa^'iuent  of  the  joint  creditors;  and  if  there  is  any  balance  of  the 
joint  stock  after  pa^'ment  of  the  joint  debts,  such  balance  shall  be 
appropriated  to  and  divided  among  the  separate  estates  of  the  sever:;! 
partners  according  to  their  respective  right  and  interest  therein,  a::d 
as  it  would  have  been  if  the  partnership  had  been  dissolved  without 
any  bankruptc}-;  and  the  sum  so  appropriated  to  the  separate  estr.te 
of  each  partner  shall  be  applied  to  the  paj-nient  of  his  separate  debts. 
The  certificate  of  discharge  shall  be  granted  or  refused  to  each  part- 
ner as  the  same  would  or  ought  to  be  if  the  proceedings  had  been 
against  him  alone.  In  all  other  respects  the  proceedings  against 
partners  shall  be  conducted  in  the  like  manner  as  if  they  had  been 
commenced  and  prosecuted  against  one  person  alone.  If  such  co- 
partners reside  in  different  districts,  that  court  in  which  the  petition 
is  first  filed  sliall  retain  exclusive  jurisdiction  over  the  case. 

Of  corporations  and  joint-stock  companies.  Sec.  5122.  The  pro- 
visions of  this  Title  shall  apply  to  all  moneyed  business  or  commercial 
corporations  and  joint-stock  companies,  and  upon  the  petition  of  any 
officer  of  any  such  corporation  or  company,  duly  authorized  by  a  vote 
of  a  majority  of  the  corporators  at  any  legal  meeting  called  for  the  pur- 
pose, or  upon  the  petition  of  any  creditor  of  such  corporation  or  com- 
panj%  made  and  presented  in  the  manner  provided  in  respect  to 
debtors,  the  like  proceedings  shall  be  had  and  taken  as  are  provided 
in  the  case  of  debtors.  All  the  provisions  of  this  Title  which  apply  to 
the  debtor,  or  set  forth  his  duties  in  regard  to  furnishing  schedules 
and  inventories,  executing  papers,  submitting  to  examinations,  dis- 
closing, making  over,  secreting,  concealing,  convejang,  assigning,  or 
pa3Mng  away  his  money  or  property,  shall  in  like  manner,  and  with 
like  force,  effect,  and  penalties,  apply  to  each  and  every  officer  of  such 
corporations  or  company  in  relation  to  the  same  matters  concerning 
the  corporation  or  compan}-,  and  the  money  and  property  thereof.  All 
payments,  conveyances,  and  assignments  declared  fraudulent  and  void 
b}'  this  Title  when  made  by  a  debtor,  shall  in  like  manner,  and  to  the 
like  extent,  and  with  like  remedies,  be  fraudulent  and  void  when 
made  by  a  corporation  or  company.  Whenever  any  corporation  by 
proceedings  under  this  Title  is  declared  bankrupt,  all  its  property  and 
assets  shall  be  distributed  to  the  creditors  of  such  corporations  in  the 
manner  provided  in  this  Title  in  respect  to  natural  persons.  But  no 
allowance  or  discharge  shall  be  granted  to  any  corporation  or  joint- 
stock  company,  or  to  any  person  or  officer  or  member  thereof 

Authority  of  State  courts  in  proceedings  against  corporations,  &c. 
Sec.  5123.  Whenever  a  corporation  created  by  the  laws  of  any  State, 
whose  business  is  carried  on  wholly  within  the  State  creating  the 
same,  and  also  any  insurance  company  so  created,  whether  all  its 
business  shall  be  carried  on  in  such  State  or  not,  has  had  proceedings 
duly   commenced   against  such   corporation  or   company  before  the 


THE   LAW   OF    1 867.  r">89 

courts  of  such  State  for  the  purpose  of  Avinding-  up  the  affairs  of  such 
corporation  or  company  and  dividing  its  assets  ratably  among  its 
creditors  and  lawfully  among  those  entitled  thereto  prior  to  proceedings 
having  been  commenced  against  such  corporation  or  company  under 
the  bankrupt  laws  of  the  United  States,  any  order  made,  or  that  shall 
be  made,  bA'Such  court  agreeabh- to  the  State  law  for  the  ratable  distri- 
bution or  payment  of  any  dividend  ot  assets  to  the  creditors  of  such 
corporation  or  compan}-  while  such  State  court  shall  remain  actually 
or  constructively  in  possession  or  control  of  the  assets  of  such  cor- 
poration or  company  shall  be  deemed  valid  notwithstanding  proceed- 
ings in  bankruptcy  may  have  been  commenced  and  be  pending  against 
such  corporation  or  company. 


CHAPTER  SEVEN. 

FEES   AND    COSTS. 

Fees.  Sec.  5124.  In  each  case  there  shall  be  allowed  and  paid, 
in  addition  to  the  fees  of  the  clerk  of  the  court  as  now  established  by 
law,  or  as  may  be  established  by  general  order  for  fees  in  bankruptcy, 
the  following  fees,  which  shall  be  applied  to  paying  for  the  services 
of  the  registers  : 

First.     For  issuing  every  warrant,  two  dollars. 

Second.     For  each  day  in  which  a  meeting  is  held,  three  dollars. 

Third.     For  each  order  for  a  dividend,  three  dollars. 

Fourth.  For  every  order  substituting  an  arrangement  by  trust- 
deed  for  bankruptc}',  two  dollars. 

Fifth.     For  every  bond  with  sureties,  two  dollars. 

Sixth.  For  every  application  for  any  meeting  in  any  matter  iinder 
this  [ar/,]  [Title,]  one  dollar. 

Seventh.  For  even>'  day's  service  while  actually  employed  under  a 
special  order  of  the  court,  a  sum  not  exceeding  five  dollars,  to  be 
allowed  by  the  court. 

Eighth.     For  taking  depositions,  the  fees  now  allowed  by  law. 

Ninth.  For  every  discharge  when  there  is  no  opposition,  two 
dollars. 

Such  fees  shall  have  priority  of  payment  over  all  other  claims  out 
of  the  estate,  and,  before  a  warrant  issues,  the  petitioner  shall  deposit 
with  the  clerk  of  the  court  fifty  dollars  as  security  for  the  payment 
thereof;  and  if  there  are  not  sufficient  assets  for  the  payment  of  the 
fees,  the  person  upon  whose  petition  the  warrant  is  issued  shall  pay 
the  same,  and  the  court  may  issue  an  execution  against  him  to  compel 
payment  to  the  register. 

Traveling  and  incidental  expenses.  Sec.  5125.  The  traveling  and 
incidental  exjicnses  of  the  register,  and  of  any  clerk  or  other  officer 
attending  him,  shall  be  settled  by  the  court  in  accordance  with  the 
rules  prescribed  by  the  justices  of  the  Supreme  Court,  and  paid  out  of 


1-J40  THE   LAW   OK    1867. 

the  assets  of  the  eetate  in  respect  of  which  such  register  has  acted; 
or  if  there  are  no  such  assets,  or  if  the  assets  are  insufficient,  such 
expenses  shall  form  a  part  of  the  costs  in  the  case  in  which  the 
register  acts,  to  be  apportioned  by  the  judge. 

Marshal's  fees.  Sec.  5126.  Before  any  dividend  is  ordered,  the 
assignee  shall  pay  out  of  the  estate  to  the  messenger  the  following 
fees,  and  no  more  : 

First.     For  ser\'ice  of  warrant,  two  dollars. 

Second.  For  all  necessary  travel,  at  the  rate  of  five  cents  a  mile 
each  way. 

Third.  For  each  written  note  to  creditor  named  in  the  schedule, 
ten  cents. 

Fourth.  For  custody  of  property,  publication  of  notices,  and 
other  services,  his  actual  and  necessary  expenses  upon  returning  the 
same  in  specific  items,  and  making  oath  that  they  have  been  actually 
incurred  and  paid  by  him,  and  are  just  and  reasonable,  the  same  to  be 
taxed  or  adjusted  by  the  court,  and  the  oath  of  the  messenger  shall 
not  be  conclusive  as  to  the  necessity  of  such  expenses. 

For  cause  shown,  and  upon  hearing  thereon,  such  further  allow- 
ance ma}^  be  made  as  the  court,  in  its  discretion,  may  determine. 

Justices  of  Supreme  Court  may  change  tariff  of  fees.  Sec.  5127. 
The  enumeration  of  the  foregoing  fees  shall  not  prevent  the  justices 
of  the  Supreme  Court  from  prescribing  a  tariff  of  fees  for  all  other 
ser\nces  or  the  officers  of  courts  of  bankruptcy,  or  from  reducing  the 
fees  prescribed  in  the  three  preceding  sections,  in  classes  of  cases  to 
be  named  in  their  general  orders. 

CHAPTER  BIGHT. 

PROHIBITED   AND   FRAUDULENT   TRANSFERS. 

Preferences  by  insolvent.  Sec.  5128.  If  any  person,  being  insol- 
vent, or  in  contemplation  of  insolvency,  within  four  months  before 
the  filing  of  the  petition  by  or  against  him,  with  a  view  to  give  a 
preference  to  any  creditor  or  person  having  a  claim  against  him,  or 
who  is  under  any  liability  for  him,  procures  or  suffers  any  part  of  his 
property  to  be  attached,  sequestered,  or  seized  on  execution,  or  makes 
any  payment,  pledge,  assignment,  transfer,  or  conveyance  of  any 
part  of  his  property,  either  directly  or  indirectly,  absolutely  or  con- 
ditionally, the  person  receiving  such  payment,  pledge,  assignment, 
transfer,  or  conveyance,  or  to  be  benefited  thereby,  or  by  such  attach- 
ment, having  reasonable  cause  to  believe  such  person  is  insolvent,  and 
that  such  attachment,  payment,  pledge,  assignment,  or  conveyance  is 
made  in  fraud  of  the  provisions  of  this  Title,  the  same  shall  be  void, 
and  the  assignee  may  recover  the  propert3%  or  the  value  of  it,  from 
the  person  so  receiving  it,  or  so  to  be  benefited. 


THE   LAW   OF    1867.  1241 

Fraudulent  transfers  of  property.  Sec.  5129.  If  any  person,  being- 
insolvent,  or  in  contemplation  of  insolvencj-  or  bankruptcy,  within 
six  months  before  the  filing  of  the  petition  by  or  against  him,  makes 
any  pa\-ment,  sale,  assignment,  transfer,  conveyance,  or  other  dispo- 
sition of  any  part  of  his  property  to  any  person  who  then  has  reason- 
able cause  to  believe  him  to  be  insolvent,  or  to  be  acting  in  contem- 
plation of  insolvency,  and  that  such  payment,  sale,  assignment, 
transfer,  or  other  conveyance  is  made  with  a  view  to  prevent  his 
property'  from  coming  to  his  assignee  in  bankniptc}-,  or  to  prevent  the 
same  from  being  distributed  under  this  \_aci^  [Title,]  or  to  defeat  the 
object  of,  or  in  any  way  impair,  hinder,  impede,  or  dela3^the  operation 
and  effect  of,  or  to  evade  any  of  the  provisions  of  this  Title,  the  sale, 
assignment,  transfer,  or  conveyance  shall  be  void,  and  the  assignee 
may  recover  the  property,  or  the  value  thereof,  as  assets  of  the  bank- 
rupt. 

Presumptive  evidence  of  fraud.  Sec.  5130.  The  fact  that  such  a 
payment,  pledge,  sale,  assignment,  transfer,  conveyance,  or  other 
disposition  of  a  debtor's  property  as  is  prescribed  in  the  two  preceding 
sections,  is  not  made  in  the  usual  and  ordinarN'  course  of  business  of 
the  debtor,  shall  be  prima  facie  evidence  of  fraud. 

Fraudulent  agreements.  Sec.  5 131.  Any  contract,  covenant,  or 
security  made  or  given  by  a  bankrupt  or  other  person  with,  or  in 
trust  for,  anj'  creditor,  for  securing  the  payment  of  any  money  as  a 
consideration  for  or  with  intent  to  induce  the  creditor  to  forbear 
opposing  the  application  for  a  discharge  of  the  bankrupt,  shall  be 
void;  and  any  creditor  who  obtains  any  sum  of  mone}'  or  other  goods, 
chattels,  or  security  from  any  person  as  an  inducement  for  forbearing 
to  oppose,  or  consenting  to  such  application  for  discharge,  shall 
forfeit  all  right  to  any  share  or  dividend  in  the  estate  of  the  bankrupt, 
and  shall  also  forfeit  double  the  value  or  amount  of  such  money, 
goods,  chattels,  or  security  so  obtained,  to  be  recovered  by  the  assignee 
for  the  benefit  of  the  estate. 

Penalties  against  fraudulent  bankrupt.  Sec.  5132.  Every  person' 
respecting  whom  jjroceedings  in  bankruptcy  are  commenced,  either 
upon  his  own  petition  or  upon  that  of  a  creditor: 

First.  Who  secretes  or  conceals  any  property  belonging  to  his 
estate;  or. 

Second.  Who  parts  with,  conceals,  destroys,  alters,  mutilates,  or 
falsifies,  or  causes  to  be  concealed,  destroyed,  altered,  mutilated,  ov 
falsified,  any  book,  deed,  document,  or  writing  relating  thereto;  or, 

Third.  Who  removes  or  causes  to  be  removed  any  such  property 
or  book,  deed,  document,  or  writing  out  of  the  district,  or  otherwise 
disposes  of  any  part  thereof,  with  intent  to  prevent  it  from  coming 
into  the  possession  of  the  assignee  in  bankruptcy,  or  to  hinder, 
impede,  or  delay  him  in  recovering  or  receiving  the  same;  or, 

Fourth.     Who  makes  any  payment,  gift,  sale,  assignment,   trans- 


1-242  THE    LAW    Ol'    1S67. 

fer,  or  conveyance  of  any  property  belonj^^ing^  to  his  estate  with  the 
like  intent;  or, 

Fifth.  Who  spends  any  property  belong^ing^  to  lus  estate  in  gam- 
ine:; or, 

Sixth.  Who,  with  intent  to  defraud,  wilfully  and  fraudulently  con- 
ceals from  his  assignee  or  omits  from  his  inventory  any  property  or 
effects  required  by  this  Title  to  be  described  therein;  or, 

Seventh.  Who,  having  reason  to  suspect  that  any  other  person 
has  proved  a  false  or  fictitious  debt  against  his  estate,  fails  to  disclose 
the  same  to  his  assignee  within  one  month  after  coming  to  the  knowl- 
edge or  belief  thereof;  or, 

Eighth.  Who  attempts  to  account  for  any  of  his  property  by 
fictitious  losses  or  expenses;  or. 

Ninth.  Who,  within  three  months  before  the  commencement  of 
proceedings  in  bankruptcy,  under  the  false  color  and  pretense  of 
carr\-ing  on  business  and  dealing  in  the  ordinary  course  of  trade, 
obtains  on  credit  from  any  person  any  goods  or  chattels  with  intent 
to  defraud;  or. 

Tenth.  Who,  within  three  months  next  before  the  commencement 
cf  proceedings  in  bankruptcy,  with  intent  to  defraud  his  creditors, 
pawns,  pledges,  or  disposes  of,  otherwise  than  by  transactions  made 
in  good  faith  in  the  ordinary  way  of  his  trade,  any  of  his  goods  or 
chattels  which  have  been  obtained  on  credit  and  remain  unpaid  for, 

Shall  be  punishable  by  imprisonment,  with  or  without  hard  labor, 
for  not  more  than  three  years. 


TABLE  OF  CASES 


'243 


TABLE  OF  CASES. 


References  are  to  pages. 


Abbe,  In  re  (2  N.  B.  R.  75),  265, 

270,  571,  751. 
Abbott   V.   Hicks    (5   Bing.,   N.  C, 

578),   315,   816. 
Abendroth  v.  Van  Dolsen   (131  U. 

S.,   66),  777,  783. 
Ableman  v.  Booth   (21  How.  506), 

837. 
Ablowich,  In  re  (99  Fed.  Rep.  81), 

658,  750. 
Abraham,    In    re    (93    Fed.    Rep. 

767),  139,  241,  812,  814. 
Abraham    v.    Plestoro    (3    Wend., 

N.  Y.,  538),  377. 
Abrahams,    In    re     (5   Law    Rep. 

328),  201. 
Abraham   Steers   Co.,   In  re    (112 

Fed.  Rep.  406),  332,  333. 

587,   588,   811. 
Abram,  In  re  (103  Fed.  Rep.  272), 

135,   138,   354. 
Adams,  In  re   (3  Ben.  7),  612. 
Adams,  In  re  (29  Fed.  Rep.  843), 

263,  785. 
Adams,  In  re  (104  Fed.  Rep.  72), 

657,  659. 
Adams  v.  Collier  (122  U.  S.  382), 

384,  575. 
Adams    v.    Low     (16    How.    148), 

830. 
Adams   v.    Meyers    (1    Saw.    306), 

373. 
Adams  v.  Nat.  Bank  (2  Fed.  Rep. 

174),  599. 
Adams    v.    Terrell    (4    Fed.    Rep. 

802),   143,  247. 
Adams  Sartorial  Co.,  In  re   (101 

Fed.  Rep.  215),  13?,  133. 
Adler,  In  re  (2  Woods  571),  357. 
Adler,  In  re  (103  Fed.  Rep.  444), 

818. 
Adler    v.    Jones     (109    Fed.    Rep. 

967),  680,  087,  688. 
Akins    V.    Stradley    (51    la.    414), 

75. 
Alabama  &  C.  R.  Co.  v.  Jones   (7 

X.  v..  n.  145),  182,  81:;. 

Alabama  &  C.  R.  Co.  v.  Jones   (5 

N.  B.  R.  97),  815. 
Albany  Exch.  Bank  v.  Johnson  (5 

Law  Rep.   313),  10,   247. 
Albrecht,    In    re    (104    Fed.    Rep. 

974),  742. 


Alcott  V.  Avery   (1  Barb.  Ch.,  N. 

Y.,  347),  784. 
Alden    Electric    Co.,    In    re    (123 
Fed  Rep.  415),  820,  821,  836, 
837,  838. 
Alder  v.  Keighly(15  M.  &  W.  325). 

Oil. 
Alderdice      v.      State      Bank      (1 

Hughes  47),  388,  590. 
Alderson,    In    re    (98    Fed.    Rep. 

588),  290,  724,  765. 
Aldred  v.  Constable  (4  Ad.  &  El. 

N.  S.  674),  571. 
Alexander,    In   re    (1    Low.    470) 

163. 
Alexander,  In  re   (102  Fed.  Rep. 

464),   575. 
Alexander,    In    re     (Chase    295), 

810,  812. 
Alexander    v.    Gait    (9    Fed.    Rep. 

149),  573,  581. 
Alexander  v.  McCullough  (32  Leg. 

Int.   336),   367. 
Alexander     v.     Union     Surety     & 

Guaranty  Co.    (11   Am.  B.   R. 

32),  361. 
Allen,  In  re  (13  Blatch.  271),  667. 
Allen,  In  re   (96   Fed.  Rep.  512), 

285,  301,  725,  729. 
Allen   V.   Ferguson    (18   Wall.   1), 

780,  781. 
Allen    V.    Hartley    (4    Doug.    20), 

152,  249. 
Allen   V.   Massey    (17   Wall.   351), 

382,  393. 
Allen    V.    Montgomery    (48    Miss. 

101),  382,  383,  606. 
Allen  V.  Thompson   (10  Fed.  Rep. 

116).  170,  785. 
-Mien  V.  Whittemore  (8  Ben.  485), 

307. 
Ailing  V.  Egan  vH  Rob.,  La.,  244), 

70.',. 
Alloway   v.    Steere    (10   Q.    U.    D. 

22),  314. 
Alsagar   v.    Currie    (12    M.    &   W. 

751),  311. 
Alsberg,  In  re  (10  N.  B.  R.  110). 

639,  644.  645. 
Alston  V.  Roblnett    (37  Tex.   50), 

785. 
Altenberg  v.  Grant  (S3  F(  d.  Rep. 

980),  821.  831.  832,  837. 

124S 


JiMC) 


TAISI.K    OK    CASKS. 


References  are  to  pages. 


Altman,  In  re  (95  Fed.  Rep.  2G3), 

250. 
Am.  Bell.  Tel.  Co.  v.  Pan  Electric 

Tel.   Co.    (28   Fed.   Rep.   625), 

210. 
American  Brewing  Co.,  In  re  (112 

Fed.  Rep.  752),  234,  237. 
American     Coostruction     Co.     v. 

Jacksonville  Ry.   Co.    (148  U. 

S.  380),  798,  800,  802,  803. 
American     Construction     Co.      v. 

Railroad    Co.     (52    Fed.    Rep. 

937),  671,  672. 
American  File  Co.  v.  Garrett  (110 

U.  S.  295),  372,  405,  406,  417. 
Ames,    Ex    parte    (1    Low.    561), 

395,  402.  593. 
Ames    V.    Moir    (138    U.    S.    311) 

769,  770,  775. 
Amory  v.  Lawrence  (3  Clif.  523), 

372. 
Amory  &  Leeds,  In  re   (No.  336a 

Fed.  Cas.),  788. 
Amoskeag  Mfg.  Co.  v.  Barnes  (49 

N.  H.  312),  774. 
Amsinck  v.  Bean   (22  Wall.  403), 

243,  245,  413. 
Amy    V.    Watertown     (130    U.    S. 

320),  361. 
Anderson,    In    re    (23    Fed.    Rep. 

482),   79,   207,  221,   321. 
Anderson,    In   re    (103    Fed.   Rep. 

854),  139. 
Anderson,   In   re    (110   Fed.    Rep. 

131),  481,  482. 
Anderson,   Ex   parte    (4   Q.   B.    D. 

606),  290. 
Anderson,  Ex  parte   (14  Q.  B.  D. 

606),  292. 
Anderson    v.    Anderson     (65    Ga. 

518),  293. 
Anderson  v.  Hampton  (1  B.  &  Aid. 

308),  637. 
Anderson  v.  Miller  (15  Smedes  & 

M.,  Miss.,  286),  414. 
Andrews  v.  Nat.  Foundry  &  Pipe 

Works     (77    Fed.    Rep.    774), 

805. 
Anderson    v.    Wheeler    (25    Conn. 

603),  759. 
Andrae  Co.,  In  re   (117  Fed.  Rep. 

561),  600. 
Andrews  v.  Graves    (1  Dill.  108), 

389. 
Andrews  v.   Thum    (64   Fed.  Rep. 

149),  837. 
Andrews  v.   Thum    (72  Fed.  Rep. 

290),  842. 
Andrews  Bros.  Co.  v.  Youngstown 

Coke  Co.    (86  Fed.  Rep.  585), 

147. 


Angler,  In  re    (4   N.   B.  R.   619), 

376,  396,  438. 
Anibal    v.    Heacuck    (2   Fed.   Rep. 

169),  386,  673. 
Ankeny   (100  Fed.  Rep.  614),  294, 

324,  345. 
Anon  (1  Atk.  262),  763. 
Anon  (13  ves.  590),  145. 
Anon    (1   N.   B.   R.  122),  180,  280, 

349. 
Anon   (1  N.  B.  R.  216),  178,  198, 

276. 
Anonymous    (No.  466  Fed.  Cas.), 

160. 
Ausell  V.  Robson   (2  Cromp.  &  J. 

610),  397,  399,  400. 
Anson,  In  re  (101  Fed.  Rep.  698) 

727. 
Anson,  Bangs  &  Co.  v.  Blue  Ridge 

R.   R.   Co.    (23   How.   1),   828. 
Antigo  Screen  Door  Co.,  In  re  (123 

Fed  Rep.  249),  100. 
Appel,  In  re   (103  Fed  Rep.  931), 

201,  209. 
Apperson    v.     Stewart     (27     Ark. 

619),  779. 
Apple   V.    Crawford    (105    Pa.    St. 

300),  108. 
Appold,  In  re    (1  N.   B.  R.   621), 

285,  398, 
Archenbrown    (12    N.    B.    R.    17), 

148. 
Archer  v.  Duval  (1  Fla.  219),  361. 
Arlington  v.  Arlington  (10  Am.  B. 

R.  103),  290. 
Armour    Packing    Co.    v.    Brown 

(Minn.,  79  N.  W.  Rep.   522), 

3L 
Armstrong  v.  Chemical  Nat.  Bank 

(41  Fed.  Rep.  234),  590. 
Arnett,  In  re  (112  Fed.  Rep.  770), 

352,  667. 
Arnold  v.  Leonard  (20  Miss.  258), 

713. 
Arnold  v.  Maynard  (2  Story  349), 

751. 
Arnstein,    In    re    (101    Fed.    Rep. 

706),  305,  306,  397,  401. 
Arrington,  In  re    (113  Fed.  Rep. 

498),  687. 
Ashby  v.  Steere    (2  Woodb.  &  M. 

347),  571,  751. 
Ashcroft  v.  Walworth   (1  Holmes 

152),  378. 
Ashley  v,  Kell  (2  Stra.  1207),  415. 
Ashuelot  Sav.  Bank  v.  Frost    (19 

Fed.  Rep.  237),  591. 
Ashworth,  Ex  parte  (18  L.  R.  Eq. 

705),   240. 
Aspinall   v.    Pickford    (3   B.   &   P. 

44n),  600. 


TABLK    OF    CASES. 


1247 


References  are  to  pages. 


Aspinwall,    In   re    (7    Ben.    433), 

627,  628. 
Asten,  In  re  (8  Ben.  350),  693. 
Atkins   V.  Wilcox    {105   Fed.   Rep. 

595),  305,  306,  340,  397. 
Atkinson,  In  re  (7  N.  B.  R.  143), 

374. 
Atkinson  v.  Brindell    (2  Bing.,  N. 

C,  225),   571,  751. 
Atkinson  v.  Elliott  (7  T.  R.  378), 

311. 
Atkinson      v.      Farmers'      Bank, 

(Crabbe  529;,  10,  751. 
Atkinson  v.  Fortinberry  (15  Miss. 

302),  782. 
Atkinson  v.  Purdy    (Crabbe  551), 

106. 
Atlantic   Co.   v.   Dittman    (9   Fed. 

Rep.  317),  P32,  669. 
Audubon   v.    Shufsldt    (181   U.    S. 

575),    93,    284,    290,    318,    765, 

795. 
Auffm'ordt   v.   Raisin    (102   U.    S. 

620),  584,  592. 
Augenstein,  In  re    (2  MacArthur, 

D.  C,  322),  787. 

Auriol  V.  Mills   (4  T.  R.  60),  401. 
Ay  rs.  In  re  (123  U.  S.  456),  673. 

B. 

Baber,  In  re  (119  Fed.  Rep.  520), 

354. 
Babbitt  v.  Burgess    (2  Dill.  169), 

205. 
Babbitt   v.   Kelley    (9    Am.   B.   R. 

335),  580,  582. 
Babbitt  v.   V/alb/un    (6   N.    B.   R. 

350),  104. 
Bachman  v.  Packard  (2  Saw.  264), 

105. 
Backhouse  v.  Jett   (1  Brock  500), 

419. 
Bacon  v.  Hart   (\  Black  39),  832. 
Badger  v.  Gilmore  (33  N.  H.  361). 

779. 
Badham    v.    Mee    (7    Bing.    695), 

380. 
Baer  v.  Grell   (6  Am.  B.  R.  428). 

762. 
Baerncopf,   In  re    (117   Fed.   Rep. 

975).  743,  714,  752. 
Bagnall  v.  Ableman  (4  Wis.  184). 

649,  653. 
Bagnsll    V.    Villar     (12    Ch.    Div. 

812),  402. 
Bailey,  In  re  (1  Woohv.  422),  649. 
Bailev  v.  Finch  (7  L.  R.  Q.  B.  34). 

314. 
Baily  V.  Weir  (21   V/all.  342).  361. 
Baird.  In  re  (8  Am.  B.  R.  649),  74. 


Baird,  In  re  (112  Fed.  Rep.  960), 

354. 
Bainten  v.  Ward  (7  Ves.  503),  381. 
Baker,  In  re    (96  Fed.  Rep.  954), 

284,  291,  765. 
Baker,  In  re  (104  Fed.  Rep.  287), 

813,  815. 
Baker-Ricketson    Co.,    In    re    (97 
Fed.  Rep.  489),  160,  168,  170. 
Balance  v.  Forsyth  (21  How.  389), 

823. 
Baldwin,    In    re    (119    Fed.    Reu. 

796),  743. 
Baldwin  v.  Bank  of  Newberry   (1 

Wall.  234),  23,  759. 
Baldwin    v.    Hale    (1   Wall.    228). 

19,   20,   22,  23,   759. 
Baldwin  v.  Rosseau   (1  N.  Y.  Leg. 

Obs.  391),  10,  163. 
Balfour  v.  Wheeler  (18  Fed.  Rep. 

893),  570. 
Ball,  In  re    (118   Fed.  Rep.   672), 

88    92 
Ball,  in  re   (123  Fed.   Rep.   164), 

323,   331,   596. 
Ballantine  v.  Golding  (Cook's  Bk. 

Law   419).   757. 
Ballin  v.  Ferst   (55  Ga.  546),  256. 
Bank    v.   Cooper    (20   Wall.    171), 

105,   810,   813. 
Bank  v.  Franciscus    (10  Mo.  27), 

784. 
Bank  v.  Hatch  (57  N.  H.  460).  637. 
Bank  v.   Herbert    (8  Cranch  36), 

599.   002. 
Bank  v.  Massey   (192  U.  S.  138), 

312. 
Dank  V.  Onion   (16  Vt.  470).  784. 
I3ank  V.  Sherman  (101  U.  S.  403), 

70,  361,  3G0,  584. 
Dank  of  Augusta  v.  Earl  (13  Pet. 

5S5),  425. 
Bank  of  Commerce  v.   Elliott    (6 

Am.  B.  R.  409),  564.  569. 
Bank  of  Commerce  v.  Ru.sseU    (2 

Dill.  215).  413. 
Bank  of  Holdridge  v.  Johnson  (10 

Am.  B.  R.  208).  595. 
Bank  of  Leavenworth  v.  Hunt  (11 

Wall.  301).  393,  595. 
Bank  of  Madison,  In  re  (5  r.li.s.s. 

515),  413. 
Banks   v.   Manchester    (128   U.   S. 

244),  230. 
Banks  v.  0:;den  (2  Wall.  57),  395. 
Banning  v.  Bhakley  (27  La.  Ann. 

257).  772. 
Banque  -  Franco  -  Egyptienne        v. 
Brown  (24  Fed.  Rep.  lOG),  95, 
783. 


1248 


TART-E    OF    CASES. 


References  are  to  pages. 


Barber,  In  re  (97  Fed.  Rep.  547), 

126,  363. 
Barbour   v.    Colt    (US    Fed.    Rep. 

272).  835. 
Barbour  v.  Priest  (103  U.  S.  293), 

570,  G09. 
Bard,  In  re   (108  Fed.  Rep.  208), 

023,  630. 
Barden,  In  re  (101  Fed.  Rep.  553), 

1S3,   252,   254. 
Bardes    v.    Hawarden    Bauk    (178 

U.  S.  524),  72,  75,  80,  84,  85, 

607. 
Bardes    v.    Hawarden    Bank    (175 

U.   S.   526),   790,   791. 
Barker,  In  re  (111  Fed.  Rep.  501), 

126,   127. 
Barkley  v.  Barkley  (184  111.  375), 

765. 
Barman,  In  re  (14  N.  B.  R.  125), 

592. 
Barned's  Banking  Co.,  In  re   (10 

L.  R.  Ch.  App.  198),  339. 
Barnes,  In  re  (18  Fed.  Rep.  158), 

725. 
Barnes  v.  Rettew    (No.  1019  Fed. 

Gas.),  391. 
Barnes  v.  United  States  (12  N.  B. 

R.  526),  293. 
Barnett,  In  re  (3  Pitts.  Rep.  559), 

402. 
Barnett,    In    re     (No.    1024    Fed. 

Gas.),  415,  416. 
Barnett    v.    Pool    (23    Tex.    517), 

367,  376,  395,  634. 
Barrett,    In   re    (2    Hughes    444), 

349. 
Barrett  v.  United  States    (169  U. 

S.   218),   57. 
Barron  v.  Benedict   (44  Vt.  518), 

779. 
Barron  v.  Newberry  (1  Biss.  149), 

395,    710. 
Barrow,  In  re   (1  N.  B.  R.  481), 

370. 
Barrow,  In  re  (98  Fed.  Rep.  582), 

402,  416. 
Barstow  v.  Hansen  (2  Hun.,  N.  Y., 

Supr.,  333),  784. 
Bartenbach,   In  re    (11    N.   B.    R. 

61),   289,   300,  438,   439. 
Bartholomew   v.    Bean    (18    Wall. 

635),  387,  580,  586. 
Bartholomew    v.     West     (2     Dill. 

290),  434,  436. 
Bartlett  v.  Peck  (5  La.  Ann.  669), 

781. 
Bartlett    v.    United    States     (106 

Fed.  Rep.  884),  661,  065. 
Bart"i  V.  Pettit   (7  Cranch  288), 

798; 


Barton    v.    Tower    (5    Law    Rep. 

214),  10. 
Bartusch,    In    re    (97    Fed.    Rep. 

761),  89,  770,  772. 
Bashinski    v.    Talbott     (119    Fed. 

Rtp.   337),   428,   436,   461,   810. 
Bassett,  In  re   (8  Fed.  Rep.  266), 

148. 
Batchelder  v.    Low    (43   Vt.    662), 

785. 
Bates,  In  re   (27  Fed.  Rep.  604), 

788. 
Bates,  In  re  (100  Fed.  Rep.  263), 

256. 
Bates  V.   Tappan    (99  Mass.  376), 

564,  755,  756. 
Bates  Machine  Co.,  In  re  (91  Fed. 

Rep.  625),  170,  219. 
Batt  V.  Proctor  (45  Fed.  Rep.  515), 

209. 
Baudouine,   In   re    (96   Fed.    Reo. 

536),  395. 
Baum,   In   re    (1   Ben.    274),   740. 
Bauman  v.   Feist    (107  Fed.   Rep. 

83),  660,  661. 
Baumann,    In    re    (96    Fed.    Rep. 

946),  156,  230. 
Bauserman    v.    Blunt    (147    U.    S. 

652),  319. 
Baxter,   Ex   -parte    (12    Fed.    Rep. 

72),  339. 
Baxter,  In  re  (25  Fed.  Rep.  703), 

570. 
Baxter,  In  re  (28  Fed.  Rep.  452), 

588. 
Baxter,  In  re    (18   N.   B.   R.    62), 

263. 
Bayly  v.  University  (106  U.  S.  11), 

694. 
Bayne  v.  United  States   (93  U.  S. 

642),  764. 
Beach  v.  Macon  Grocery  Go.   (120 

Fed.  Rep.  736),  142,  199,  811, 

813. 
Beach  v.  Macon  Gro.  Co.  (116  Fed. 

Rep.  143),  213,  215. 
Beach  v.  Mosgrove   (16  Fed.  Rep. 

305),  209. 
Beal,  In  re  (1  Low.  323),  373. 
Reals,  In  re   (8  Am.  B.  R.   639), 

468,  569. 
Bean,  In  re   (100  Fed.  Rep.  262), 

408,  435,  442,   542. 
Bean  v.   Brookmire    (1   Dill.   25), 

386,   389,   582. 
Bear,  In  re  (5  Fed.  Rep.  53),  201. 
Bear  v.  Chase  (99  Fed.  Rep.  920), 

88,  90,  92. 
Beardsley,  In  re  (1  N.  B.  R.  304), 

743. 


TABLE    OF    CASES. 


1249 


References  axe  to  pages. 


Beardsley  v.  Hall  (36  Conn.  270), 

785. 
Beattie  v.  Gardner   (4  Ben.  479), 

575,  580. 
Beauchamp,  l7i  re   (101  Fed.  Rep. 

106),  443,  480. 
Beaver  Coal  Co.,  In  re   (107  Fed. 

Rep.  98),  285,  725,  728. 
Beaver  Coal  Co.,  In  re   (110  Fed. 

Rep.  630),  564,  569. 
Beaver  Coal  Co.,  In  re   (113  Fed. 

Rep.  889),  04,  812. 
Beck,  In  re    (31   Fed.   Rep.   554), 

786. 
Beck,  In  re    (92   Fed.  Rep.   889), 

136,  137,  139. 
Beck,  In  re   (110  Fed.  Rep.  140), 

270. 
Beck,  In  re  (1  N.  B.  R.  588),  581. 
Becker,  In  re  (98  Fed.  Rep.  407), 

213,  407,  702,  712. 
Becker,  In  re  (106  Fed.  Rep.  54), 

409,  657. 
Beckerford,  In  re  (1  Dill.  45),  19, 

394,  426,  602. 
Beckham  v.  Drake  (2  H.  L.  579), 

418,  419. 
Becket,  In  re  (2  Woods  173),  688, 

694. 
Bedingfield,  In  re    (96   Fed.   Rep. 

190),  202,  219,  220,  240. 
Beebe,  In  re   (116  Fed.  Rop.  48), 

656,  660. 
Beecher    v.    Bininger    (7    Blatch. 

170),  105. 
Beerman,    In    re    (112    Fed.    Rep. 

663),  574. 
Beers    v.    Hanlin    (99    Fed.    Rep. 

695),   155,    160,   189,   226,   318. 
Beisenthal,  In  re  (14  Blatch.  146), 

27. 
Belcher    v.     Burnett     (126    Mass. 

230),  395. 
Belden,  In  re    (4   N.  B.   R.   194), 

619. 
Belden,  In  re    (4   Ben.  225),  739. 
Belden,  In  re  (120  Fed.  Rep.  524), 

714. 
Belfast,  The   (7  Wall.  624),  603. 
Bell  V.  Leggett    (3  Selden,  N.  Y., 

178),   662. 
Bellah,  In  re   (116  Fed.  Rep.  69), 

142.  199. 
Bell  is.    In   re    (3    B?n.    386),    627, 

628. 
Bellis,  In  re  (4  Ben.  53),  748.  749. 

754. 
Bellows,  In  re  (3  Story  428),  564. 
Belton   v.   Hodges    (9   Bing.   365), 
144. 


Bemis.  In  re  (104  Fed.  Rep.  672), 

657,  750. 
Benedict,  In  re  (8  Am.  B.  R.  463), 

5G7,  769,  770,  771,  772,  776. 
Benham,   In  re    (8  N.   B.   R.  94), 
■       223. 
Bennet  v.  Avant  (2  Sneed.,  Tenn., 

152),  641. 
Bennett,    Ex    'parte    (1    Pa.    Law 

Jour.  145),  187. 
Bennett,  In  re   (2  N.  B.  R.  181), 

408. 
Bennett,  In  re  (8  Ben.  561),  690. 
Bennett  v.  Everett   (3  R.  I.  152), 

781. 
Benson,  In  re   (8  Biss.  116),  415, 

416. 
Bentley  v.  Wells  (61  111.  59),  710. 
Berriam,  In  re  (6  Ben.  297),  261. 
Berry  v.    Jackson    (8   Am.    B.    R. 

485),   756. 
Betts    V.    Bagley    (12    Pick.    572), 

293. 
Bidwell,  In  re   (2  N.  B.  R.  229), 

266. 
Bielby,    Ex    parte    (13    Ves.    17), 

339. 
Bigelow,  In  re  (2  Ben.  480),  332. 
Bigler  v.  Waller    (12  Wall.  142), 

828,  830,  832. 
Big  Meadows  Gas  Co.,  In  re  (113 

Fed.  Rep.  974),  1S9,  226,  281. 
Bilborough    v.    Holmes    (5    Chan. 

Div.  255),  264. 
Bimberg,    In    re    (121    Fed.    Ren. 

942),  34,  730,  785. 
Bingham,    In    re    (.94    Fed.    Rep. 

796),  296,  297,  298,  282,  311. 
Bin:;ham  v.  Morris  (7  Cranch  99), 

837. 
Bininger,  In  re    (7   Blatch.   262), 

237. 
r.iuns.  In  re   (4  Ben.  152).  216. 
Bishop    V.    Church    (3    Atk.    691), 

313. 
Bissell     Carpet     Sweeper    Co.     v. 

Goshen  Sweeper  Co.   (72  Fed. 

Rep.  519),  842. 
Black.  In  re  (104  Fed.  Rep.  289), 

434.  528. 
Black.   In   re    (17   N.   B.   R.   599), 

336. 
Black,    hi   re    (2    Ben.    196).    609. 

751. 
Black    V.    Blazo    (117    Mass.    17), 

785. 
Black  V.  McClelland    (12  N.  B.  R. 

481).  290. 
Black  V.   Zacherle    (3   How.   483). 

10. 


1260 


TAKhK    i)V    ('AUKS. 


References  are  to  pages. 


Blackburn    v.    Stannard     (5    Law 

Rep.  250).  215. 
Blackman,    Jn    re     (6    Chi.    Lej;. 

News  18),  726. 
Blackmore,   In   re    (11    Fed.   Rep. 

412),  694. 
Blagden,  Ex  parte   (19  Ves.   465), 

314. 
Blain,    Ex   parte    (12    Chan.    Div. 

528),   144,   152. 
Blair,   In   re    (99    Fed.    Rep.    70), 

157,   238,   247,   250,   251. 
Blair,  In  re   (102  Fed.  Rep.  987), 

72,  85,  98,  388,  609. 
Blair,  In  re   (106  Fed.  Rep.  662), 

808. 
Blair,  In  re   (108  Fed.  Rep.  529), 

503,  564,  566.  509. 
Blair  v.  Turtle  (5  Fed.  Rep.  394), 

206. 
Blake,  Ex  parte  (11  Ch.  Div.  572), 

401. 
Blake    v.    Bigelow     (5    Ga.    437), 

704. 
Blake  v.  Williams  (6  Pick.,  Mass., 

280),  377. 
Blake,  Moffitt  &  Towne  v.  Francis- 
Valentine   Co     (89    Fed.    Rep. 

691),   24,   09,   88,  215. 
Blalock,  In  re  (118  Fed.  Rep.  679), 

056,  660,  744  750. 
Blanc    V.    Banks     (10    Rob.,    La., 

115),  779. 
Blanchard  v.  Russell  (13  Mass.  1), 

20,   22,   23,   20,   377. 
Blanford  v.  Foote   (1  Cowp.  138), 

293. 
BlankfLin,    In    re    (97    Fed.    Rep. 

191),  209. 
Blankfein  &  Deitz,  In  re  (2  N.  B. 

N.  40).  135. 
Blanks  v.  Klein   (49  Fed.  Rep.  1>, 

834. 
Blasdel  v.  Fowle  (120  Mass.  447), 

095. 
Blease  v.  Garlington  (92  U.  S.  1), 

834. 
Blennerhassatt   v.    Sherman    (105 

U.  S.  100),  170,  584,  595. 
Blight's   Estate,   In  re    (1   Pa.   L. 

J.  225),  733. 
Blight  V.  Fisher   (Pet.  C.  C.  41), 

666. 
Blin  V.  Pierce  (20  Vt.  25),  412. 
Blitz    V.    Brown     (7    Wall.    693), 

834. 
Bloch,  In  re  (109  Fed.  Rep.  790), 

156,  157,  158,  161,  103. 
Blodgett,  In  re   (5  N.  B.  R.  472^, 


Bloss,  In  re  (4  N.  B.  R.  427),  215, 

216,  335,  340. 
Hlue    Ridge    Packing    Co.,    In    re 

(125  Fed.  Rep.  619),  270,  328, 

330,  349. 
Blum  V.  Ellis   (73  N.  C.  293),  755. 
Blum  V.  Ricks   (39  Tex.  112),  709. 
Blumberg,    In    re    (94    Fed.    Rep, 

47C),  503,  707,  709. 
Blumer,  In  re  (12  Fed.  Rep.  489), 

250,   257,   295. 
Boardman,  In  re    (103   Fed.  Rep. 

783),  409,  410. 
Boas   V.   Hctzel    (3   Pa.   298),   783. 
Boasberg,  In  re  (1  N.  B.  N.  133), 

753. 
Boatman's  Sav.  Bank  v.  State  Sav. 

Ass'n  (114  U.  S.  265),  794. 
Boese  V.  King  (108  U.  S.  379),  26, 

30,  392,   710. 
Bogart    V.    Supply    Co.     (27    Fed. 

Rep.  722),  667,  675. 
Bolinger,    In    re    (108    Fed.    Rep. 

374),  434,  442,  528. 
Bolland  v.  Nash   (8  B.  &  C.  105), 

313. 
Bolton,   Ex   parte    (2    Rose    389), 

339. 
Bonesteel,  In  re  (2  N.  B.  R.  330), 

624. 
Bonnet,  In  re   (1  N.  Y.  Leg.  Obs. 

310),  10. 
Book,  In  re   (3  McLean  317),  145, 

739. 
Booneville    Nat.    Bank    v.    Blakey 

(107  Fed.   Rep.  891),  72,   212, 

213,  790,  820. 
Boorstin,    In    re    (114    Fed.    Rep. 

690),  431,  461,  402. 
Booth,  In  re   (90  Fed.  Rep.  943), 

92,   121,   709. 
Booth  V.  Hutchinson  (15  L.  R.  Eq. 

30),  310. 
Boothroyd,    In    re    (14    N.    B.    R. 

223),  443,  444. 
Boestick  v.  Jordan  (7  Tenn.  370), 

396. 
Boston  Dry  Goods  Co.,  In  re  (125 

Fed.  Rep.  220),  814. 
Boston,    etc.,    R.    Co.,    In    re    (9 

Blatch.  409),  228,  233. 
Bostwick    V.    Burnett    (74    N.    Y. 

317),  25,  27. 
Cotts  V.  Hammond    (99  Fed.  Rep. 

916),  508. 
Bourne,   Ex   parte    (2   Glyn.    &   J. 

137),   240. 
Blodgett,  In  re  (10  N.  B.  R.  145), 

443. 
Bloomingdale   v.    Empire    Rubber 

Co.   (114  Fed.  Rep.  1016),  375. 


TABLE    OV    CASES. 


1251 


References  axe  to  pages. 


Bousfield  &  Poole  Mfg.  Co.,  In  re 

(17   N.   B.   R.   173),   325. 
Boutelle,  In  re   (2  N.  B.  R.  129), 

739. 
Bowden    v.    Johnson    (107    U.    S. 

251),  836. 
Bowen  v.  Christian   (16  Fed.  Reo. 

730),  210. 
Bowers,    Ex   parte    (2    Deac.    99), 

148. 
Bowerv   Sav.  Bank  v.  Clinton    (2 

Sandf.,  N.  Y.,  113),  770. 
Bowes    V.    Howe    (5    Taunt.    30), 

408. 
Bowie,   In  re    (1    N.    B.   R.    628), 

104,  710. 
Bowman  v.  Harding  (56  Me.  559), 

564,   755,   756. 
Bowyer's  Appeal  (21  Pa.  St.  210), 

434. 
Boyd  V.  Glucklich   (116  Fed.  Rep. 

131),    70,    666,    669,    671,    673, 

676. 
Boyd  V.   Lemon  &  Gale  Co.    (114 

Fed.  Rep.   647),   159,  163. 
Boylan,  In  re   (1  Ben.   266),  245. 
Boyl9    V.    Zacherie    (6    Pet.    348). 

22,   759. 
Boynton,    In    re     (10    Fed.    Rep. 

277),  143. 
Bovnton  v.  Bali    (121  U.  S.  466), 

95,  293,  359,  766,  783. 
Bracken  v.  Milner  (104  Fed.  Rep. 

522),  769,  770,  771,  772,  776. 
Bracken  v.  Union  Pac.  Ry.  Co.  (56 

Fed.  Rep.  477),  209. 
Brack? tt   v.   Watkins    (21   Wend, 

N.  Y.,  68),  434,  443. 
Bradhury,  In  re  (14  C.  B.  15),  623. 
Bradford  v.  Rice  (102  Mass.  472), 

293. 
Bradley,  Ex  parte   (7  Wall.  372), 

675. 
Bradley,  In  re  (2  Biss.  515),  263. 
Bradley  Timber  Co.  v.  White  (121 

Fed.   Rep.   779),  160,  167,  200. 
Bradshaw  v.  Jones  (20  L.  T.  781), 

399. 
Bradshaw  v.   Klein    (2   Biss.   20), 

104,   352,   382. 
Bragg,  In  re    (5   Law   Rep.   323), 

620. 
Bragasa,    In    re     (103    Fed.    Rep. 

936),  658. 
Bragasa    v.    St.    Louis    Cycle    Co. 

(107  Fed.  Rep.  77),  127,  657, 
Brand,    In    re     (2    Hughes    334), 

.33.5 
Brandies  v.   Cochrane    (105   U.   S. 

262),  822. 


Brandon  v.  Pate  (2  H.  Black.  308), 

418. 
Brandon  v.  Sands  (2  Ves.  Jr.  514), 

418. 
Brandt,   In   re    (2   N.   B.   R.   215  \ 

618,  624. 
Bray  v.  Cobb   (91  Fed.  Rep.  102), 

107,    109,    114,    130,    196,    205, 

230. 
Bray  v.  Cobb  (100  Fed.  Rep.  270), 

288,    302,    303,    305,    306,    320, 

325,  397,  398. 
Breck,  In  re  (8  Ben.  93),  402. 
Breneman,    In    re    (Crabbe    456), 

29. 
Breslauer,  In   re    (10   Am.   B.    R. 

33),  72,  567. 
Brett  V.  Brown  (i3  Abb.  Pr.  N.  S.. 

N.  Y.,  295),  1:06. 
Brewer  v.  Dew  (11  M.  &  W,  625), 

421. 
Brewster  v.  Wakefield    (22    How, 

118),  826. 
Brice,  In  re   (93  Fed.  Rep.  942), 

145,  175,  176. 
Brice,  In  re   (102  Fed.  Rep.  114), 

750. 
Brick,   In  re    (4    Fed.   Rep.   804), 

252,  265,  270,  421. 
Bridges  v.   Sheldon    (7   Fed.   Rep. 

45),  632,  6G7. 
Bridgman,  In  re  (2  N.  B.  R.  252), 

731. 
Briggs,    Ex    parte    (2    Low.    389), 

787. 
Briggs    V.     McCullough     (36    Cal. 

542),  423. 
Brinckmann    (103   Fed.   Rep.   65), 

155,  189,  226,  318. 
Brinlman,  In  re  (6  N.  B.  R.  541), 

710. 
Bristol    V.    Sandford    (12    Blatch. 

341),  352. 
Briswalter  v.  Long  (14  Fed.  Rep. 

153),   247,   248. 
Broach  v.  Powell   (79  Ga.  79),  75. 
Broadnax    v.    Bradford     (50    Ala. 

270),  770,  771. 
Brobst    V.    Brobst     (2    Wall.    96), 

828. 
Brock  V.  Hoppock   (2  N.  B.  R.  7), 

231. 
Brock  V.  Terrill   (2  N.  B.  R.  613). 

370. 
Brockett     v.     Brockett     (2     How. 

238),  822.  828  830. 
Brorkway,    In    rr    (12    Fed.    Rep. 

(•,<)).  748.  749. 
Brockway.    In    re    (23    Fed.    Rep. 

583).   738. 


1252 


TABLK    OK    CASES. 


References  are  to  pages. 


Brodbine,    In    re    (93    Fed.    Rep. 

G4o),  407. 
Bromley,  In  re   (3  N.  B.  R.  286), 

G18. 
Bromley   v.   Smith    (2   Biss.   511  ■), 

3G8,  418. 
Broo.ie,  In  re  (100  Fed.  Rep.  432), 

113,  276,  349. 
Brooke   v.    Hewitt    (3    Ves.    253), 

418. 
Brooke  v.  McCracken  (10  N.  B.  R. 

401),  104,  105. 
Brooks,  In  re  (91  Fed.  Rep.  508), 

101,  370. 
Brooks   V.    Farwell    (4    Fed.   Rep. 

167),   206. 
Brooks    V.    Scroggins    (11    B.    R. 

258),  388,  403,  583. 
Broom,  In  re  (123  Fed.  Rep.  639), 

724. 
Broome  v.  Robinson  (7  East  339), 

399. 
Brown,  In  re  (91  Fed.  Rep.  358), 

403. 
Brown,  In  re  (100  Fed.  Rep.  441), 

442,  528. 
Brovrn,  In  re  (111  Fed.  Rep.  979), 

190. 
Brown,  In  re  (112  Fed.  Rep.  49), 

744. 
Brown,  In  re  (123  Fed.  Rep.  336), 

326,  696. 
Brown,  In  re   (19  N.  B.  R.  312), 

786. 
Brown,  In  re    (3   N.   B.   R.   250), 

431,  441. 
Brown,  In  re   (5  Law  Rep.  121), 

181. 
Brown,  In  re   (5  Ben.  1),  293. 
Brown  v.  Case  (6  Am.  B.  R.  744), 

566,  567. 
Brown   v.   Cuming    (2   Caines,   N. 

Y.,  33),  310. 
Brown     v.     Farmers'     Bank      (6 

Bush.,  Ky.,   198),  318. 
Brown  v.  Heathcote  (1  Atk.  160), 

368,  731. 
Brown    v.    Gibbons    (37    la.    654), 

710. 
Brown  v.  Guichard   (7  Am.  B.  R. 

515),  388,  578,  609. 
Brown    v.    McConnell    (124    U.    S. 

489),  822,  827. 
Brown    v.    New    Bedford    Savings 

Inst.   (137  Mass.  262),  313. 
Brown   v.   Roach    (52   Miss.   536), 

770. 
Browne,    In   re    (104    Fed.    Rep.), 

762).  94,  598. 
Brownsville  Mfg.  Co.  v.  Lockwood 
(11  Fed.  Rep.   705),   695. 


Bruce,   In   re    (6    Ben.    515),   291, 

294. 
Brummelkamp,    In    re    (95    Fed. 

Rep.  814),  134,  187. 
Brundase,   In   re    (100   Fed.    Rep. 

613),  624. 
Brundin,    In    re    (112    Fed.    Rep. 

306),   137. 
Brunquest,    In   re    (7    Biss.    208), 

320,   599,   602. 
Bruss-Ritter  Co.,  In  re    (90   Fed. 

Rep.   651),  17,  23,  24,  27. 
Bryan,  Ex  parte   (2  Hughes  273), 

714. 
Bryan,   In  re    (3   N.    B.   R.    110), 

601. 
Bryan  v.  Bornheimer    (181  U.   S. 

188),  30,  31,  32,  71,  72,  74,  81, 

84,  86,  90,  98,   392. 
Bryant,  In  re  (104  Fed.  Rep.  789), 

659. 
Bryant   v.    Small    (35   Wis.    205), 

602. 
Buchan  v.   Sumner    (2   Barb.   Ch. 

165),   258. 
Buchanan  v.   Alexander    (4   How. 

20)   732. 
Buchanan    v.     Smith     (16    Wall. 

277),   387,   388,   570,   577,   581. 
Bucher  v.  Cheshire  R.  R.  Co.  (125 

U.  S.   582),  423. 
Buckingham,  In  re  (102  Fed.  Rep. 

972),  438. 
Buckingham    v.    McLean    (3    Mc- 
Lean 185),  352. 
Buckingham  v.  McLean   (13  How, 

150),  571,  751,  832. 
Buckland  v.  Papillon  (1  L.  R.  Eq. 

477),  401. 
Buckner  v.  Calcote  (28  Miss.  432), 

256. 
Buckner  v.  Jewell   (2  Woods  220), 

285,   398. 
Bucyrus  Machine  Co.,  In  re  (5  N. 

B.  R.  303),  L'61,  262. 
Buder  v.  Columbia  Distilling  Co., 

(9  Am.  B.  R.  331),  609. 
Buerk  v.  Imhaeuser   (8  Fed.  Rep. 

457),  205. 
Buelow,  In  re   (98  Fed.  Rep.  86). 

410,  424,  549,  551. 
Eugbee,  In  re    (9   N.  B.  R.   25S), 

394. 
Bullock,  In  re  (116  Fed.  Rep.  667), 

333. 
Bullock  Mfg.  Co.  V.  Westinghouse 

Mfg.  Co.    (127  Fed.  Rep.  — ), 

676. 
Bull  winkle,  In  re  (111  Fed.  Rep. 

364),   658. 


TABLE    OF   CASES.  1253 

References  are  to  pages. 

Bullymore   v.    Cooper    (46    N.    Y".  l  Bush   v.    Crawford    (7   N.    B.    R. 

236),   428.  299),  260. 


Bur  bank    v.    Bigelow     (92    U.    S. 

179),  76,  80,  87,  104,  105,  106, 

608. 
Burchell,  In  re  (4  Fed.  Rep.  406), 

295,    694. 
Burdett  v.  Willett,  411. 
Burdock  v.  Jackson   (15  N.  B.  R. 

318)     593 
Burk,    In    re    (Deady    425),    739, 

743,  752. 
Burk  V.  Winters  (28  Ark.  6),  367. 
Burka,  In  re  (104  Fed.  Rep.  326), 

283,  394,  403.  416. 
Burka,  In  re  (107  Fed.  Rep.  674), 

146,  653. 
Burkholder  v.  Stump  (4  N.  B.  R. 

597),   610. 
Burkhardt,  In  re    (33   Fed.   Rep. 

25),  648,  652. 
Burkle,  In  re  (116  Fed.  Rep.  766), 

375. 
Burleigh  v.  Foreman   (11  Am.  B. 

R.   74),   790. 
Burlington  Malting  Co.,  In  re  (109 

Fed.  Rep.   777),  190,  194. 
Burnham  v.  Pidcock  (5  Am.  B.  R. 

590),  291,  769. 
Burnham    v.    Street    Ry.    Co.    (87 

Fed.  Rep.  168),  834. 
Burnhisel    v.    Firman     (22    Wall. 

170),  413,  593. 
Burns,   In   re    (1   N.    B.    R.    174), 

291. 
Burns    v.    Allen    (67    N.    C.    140), 

444. 
Burnside    v.    Brigham    (49    Mass. 

75),  769. 
Burpee  v.  National  Bank  (5  Biss. 

405),  570. 
Burr   V.    Hopkins    (6    Biss,    345), 

336,  605. 
Burr  V.   Kimback    (20   Fed.  Reo. 

432),  632,  609. 
Burrell,  In  re  (123  Fed,  Rep.  414), 

168. 
Burrows  v.  Jemino  (2  Stra.  733), 

757. 
Burrus,  In  re  (97  Fed.  Rep.  926), 

137,  139. 
Burt,   In  re    (27   Fed.   Rep.   548), 

353. 
Burton  v.   Lockett    (9  Ark.   411), 

377. 
Busby,  In  re  (124  Fed.  Rt-p.  469), 

''32    345 
Bush."  In   re    (6    N.    B.    R.    179), 

235. 
Bush    V.    Cooper    (18    How.    82), 
761. 


Bush  V.  Lester   (55  Ga.  579),  427. 
Bushnell  v.  Crooke  Min.  &  Smelt- 
ing  Co.    (150    U.   S.   83),   840. 
Buskirk,  Ex  parte   (72  Fed.  Rep. 

14),  669. 
Butcher,  Ex  parte  (13  Chan.  Div. 

465),   264. 
Butcher  v.  Forman  (6  Hill,  N.  Y, 

583),  285. 
Butler,  In  re  (120  Fed.  Rep.  100), 

435,  461. 
Butler,  In  re    (6   N.   B.  R.   501), 

397. 
Butler  V.  Fayerweather   (91  Fed. 

Rep.  458),  676. 
Butler  V.  Goreley  (146  U.  S.  303), 

20,  23. 
Butterfield,  In  re    (5  Biss.   120), 

473. 
Butterworth    v.    Hill    (114    U.    S. 

128),  205.  208. 
Butts,  In  re  (120  Fed.  Rep.  966), 

88,  93,  770.  775,  776. 
Buxbaum,  In  re   (2  Hughes  339), 

740. 
Bybee.  In  re  (124  Fed.  Rep.  1011), 

762. 
Byers  v.  McAuley  (149  U.  S.  608), 

97. 
Byrne,  In  re   (97  Fed.  Rep.  762), 

728. 
Byrne,   In  re    (1    N.   B.   R.    464), 

257,  259. 
Byrne.  In  re   (1    Am.  B.  R.  444), 

707. 

c. 

Cadogan    v.     Kennett     (2     Cowp. 

434),  383,   391. 
Cadwell,  In  re  (17  Fed.  Rep.  693), 

336. 
Cady   V.   Whaling    (7   Biss.   430), 

382. 
Cake  V.' Lewis  (8  Penn.  493),  297. 
Calahan  v.  Bank  of  Kentucky  (82 

Ky.  231).  408. 
California  Pac.  R.   Co..  In  re    (3 

Saw.    240).    17,    18,    69,    226, 

238. 
Callan  v.  Wilson   (127  U.  S.  540), 

650. 
Cambridge  In.st.  v.  Llttlefleld   (60 

M!uss.  2111),  7Sl. 
Camden  Rolling  Mill  Co.,  In  re  (3 

N.  B.  R.  590),  240. 
Cameron,  etc.,  Ins.  Co..  In  re   (96 

Fed.  Rpp.  756).  151. 
Camp.  In  re   (91  Fed.  Rep.  745), 

42S    429,   430.   434.   444.  461. 


l-ioi 


TAKJ>K    OK    CASKS. 


References  are  to  pages. 


Camp   V.   Giffard    (7   Hill.   N.   Y., 

l«i)).  77S. 
Campbell,    In    re    (102    Fed.    Rep. 

tiSO),  726. 
Campbell,    In    re    (124    Fed.    Rep. 

417).   435,   440,  545,   546. 
Campbell,   7/1   re    (1    Abb.,   U.    S., 

185)    291    570. 
Campbell's  Case  (1  N.  B.  R.  165), 

69. 
Campbell  v.  Foster  (35  N.  Y.  361), 

414. 
Campbell    v.    Perkins     (8    N.    Y. 

430),  769. 
Canfield,  In  re  (5  Law  Rep.  415), 

173. 
Cannon,    In    re    (121    Fed.    Rep. 

5S2),    596. 
Cannon  v.   Dexter,   etc.,   Co.    (120 

Fed.   Rep.    657),   435.   530. 
Cannon    v.    Wellford     (22    Grat., 

Va.,    195),    377. 
Capelle   v.    M.    E.   Church    (11   N. 

B.  R.  536),  302. 
Capot,    Ex    parte    (1    Atk.    218), 

339. 
Capper,    Ex    parte    (4    Chan.    D. 

724),    294. 
Carey    v.    Hess    (112    Ind.    398), 

695. 
Carey    v.    Nagel     (2    Biss.    244), 

418. 
Carleton,    In    re    (115    Fed.    Rep. 

246),   141,   .184,   250,   253. 
Carlev,  In  re  (106  Fed.  Rep.  862), 
343,    616,    624,    626,    627,    629, 
630. 
Carley,  In  re  (117  Fed.  Rep.  130), 

743,  744,   811. 
Carlin    v.    Carlin    (8    Bush.,    Ky., 

141),  773. 
Carling  v.    Seymour   Lumber   Co. 
(113  Fed.  Rep.  483),  367,  811. 
Carmen    v.     Emerson     (71     Fed. 

Rep.   264),  667. 
Carmichael,  In  re    (96  Fed.  Rep. 

594),   262,   750. 
Carmichael,  In  re   (108  Fed.  Rep. 

789),    475. 
Carolina  Cooperage  Co.,  In  re  (96 
Fed.  Rep.  950)    120,  138.  139. 
241.  303,  363,  726. 
Carow,  In  re  (41  How.  Prac.  112), 

118. 
Carpenter,  In  re  (1  N.  B.  R.  299), 

632,  667. 
Carpenter,  In  re    (125   Fed.   Rep. 

831),  375. 
Carpenter  v.  Mamell    (3  B.  &  P. 
40),  411. 


Carpenter  Bros.  v.  O'Connor   (16 
O.  C.  C.  526),  89,  99,  100,  365, 
366,  371. 
Carr,  In  re   (116  Fed.  Rep.  555), 

73,   718,   732. 
Carr,  In  re    (117   Fed.  Rep.   572), 

137,   138,   139,   353,   717. 
Carr  v.  Gale    (2  Ware  330),   104, 

105,  419. 
Carr    v.    Hilton    (1    Curtis    230), 

75L 
Carrier,  In  re  (47  Fed.  Rep.  438), 

748. 
Carroll    Co.    v.    Young    (119    Fed. 

Rep.  576).  702,  705,  707. 
Carson    v.    Osborn    (10    B.    Mon., 

Ky.,  155).  779,  782. 
Carter  v.  Goodrich  (1  How.  Prac, 

N,  Y.,  239),  784. 
Carter    v.    Hobbs    (92    Fed.    Rep. 

594),   709. 
Carter    v.    Hobbs    (94    Fed.    Reo. 

108),   577. 
Carter  v.   People's  Nat.   Bank    (4 

Am.  B.  R.  211),  89. 
Carter   v.    Warne    (4    Carr.    &    P. 

191),  397,  400. 
Carver  &  Co.,  In  re  (113  Fed.  Rep. 

138),  32,  85,  120,  121. 
Carver  v.  Mf.  Co.    (2  Story  432), 

285. 
Cary,  In  re    (10   Fed.  Rep.   622), 

669. 
Cary  Mfg.  Co.  v.  Acme  Co.    (108 

Fed.  Rep.   873),   676. 
Case  V.  Dunmore  (23  Pa.  St.  93), 

434. 
Casey,  In  re  (10  Blatch.  376),  814. 
Casey  v.  Cavaroc   (96  U.  S.  467), 

597,  599. 
Casey  v.  La  Societe,  etc.  (2  Woods 

77),  590. 
Cashman,    In   re    (103    Fed.    Rep. 

67),   658,  750. 
Castle  V.  Lee   (11  B.  R.  80),  571, 

580. 
Caswell,  Ex  parte    (1   Atk.    559^, 

381 
Cpthcart,  In  re,  335,  339,  340. 
Catlin    V.    Foster     (1     Saw.    37), 

310,  311. 
Catlin  V.  Hoffman    (2  Saw.   486), 

59L 
Cavaima   v.   Basset    (3   Fed.   Rep. 

21.^),  OSS. 
Caylus,  In  re   (1  Low.  550),  310. 
Central   Trust  Co.   v.   Continental 
Trust  Co.  (86  Fed.  Rep.  517), 

Chace'v.  Chapin   (130  Mass.  128), 
367. 


TABLE    OP    CASES. 
References  are  to  pages. 


1255 


Chadwick    t.     Starrett     (27     Me. 

138),  783. 
Chamberlain,  In  re  (125  Fed.  Rep. 

629),  748,  753. 
Chamberlain    v.    Perkins    (51    N. 

H.  340),  24,  27. 
Chamberlin,  In  re    (9   Ben.   149) 

678,  684. 
Chambers   Calder  Co.,   In   re    (98 

Fed,    Rep.    865),    76,    82,    89, 

93,    100,    101,    360,    372,    374, 

397,  398. 
Chambers    v.    Neal    (13    B.    Mon., 

Ky.,  256),  784. 
Chambers  v.  Prince  (75  Fed.  Rep. 

176),   174. 
Champion,    In   re    (7    Am.    B.    R. 

560),  588. 
Chandler    v.    Windship    (6    Mass. 

310),  282. 
Chapman,    In    re     (9    Ben.    311), 

150. 
Chapnian,    In    re    (99    Fed.    Rep. 

395),  107. 
Chapman,    In   re    (105    Fed.    Rep. 

901),  323. 
Chapman    v.    Brewer    (114    U.    5. 

158),   89,   234. 
Chapman     v.     Forsyth     (2     How. 

202),    10,   772,   775. 
Chapman  v.  Pickersgill  (2  Wilson 

145),  241. 
Chappell,    In    re    (113    Fed.    Rep. 

545),    158,    575. 
Chappell  V.  United  States  (160  U. 

S.  499),  805. 
Chase,  In  re  (124  Fed.  Rep.  753), 

138,  729. 
Chase   v.   Cannon    (47    Fed.   Rep. 

674),  98. 
Chateaugay  Ore  &  Iron  Co.,  In  re 

(35   Fed.  Rep.   804),  828,  832. 
Chatfield    v.    O'Dwyer    (101    Fed. 

Rep.  797),  819.  823,  824. 
Chatt.    Nat.    Bank   v.    Rome    Iron 

Co.    (102  Fed.  Rep.  755),  368, 

562,  592,  597,  599. 
Chauncey  v.  Dyke  Bros.  (119  Fed. 

Rep.  1),  71,  76.  603,  702,  705, 

706,   707.   709. 
Cheney,  In  re    (5   Law  Rep.    19) 

637. 
Cheney,  In  ,-p  (19  N.  B.  R.  16),  082. 
Chequas.sat     Lumber    Co.,    In    re 

(112   I'^ed.   Rep.   56),   134,  201. 
Chesapeak<'  Oyster  &  Fish  Co.,  In 

re    (112   Fed.   Rep.   960),   143, 

149,   150. 
Chesapeake   Shoe   Co.    v.   Seldner 

(122  Fed.  R-p.  593).  369.  404, 

582.  600.  808. 


Chetwood,  In  re   (165  U.   S.  443) 

798. 
Chieago-Joplin   Lead   &   Zinc   Co., 

In  re  (104  Fed.  Rep.  67),  149. 
Chicago  &  Northwestern  Ry.   Co. 

V.   Osborne    !  146   U.    S.    354), 

800,  802. 
Chicago  &  P.  R.  Co.  v.  Blair  (100 

U.    S.    661),    831,    832. 
Chicago  Title  &  Trust  Co.  v.  Roeb- 

ling  (107  Fed.  Rep.  71),  156, 

165,  567,  575. 
Chiles,  In  re  (22  Wall.  157),  669, 

670. 
Chilton  V.  Cabiness  (14  Ala.  447), 

417,  419. 
Chisholm    (4  Fed.  Rep.  526),  731. 
Chism   V.    Bank  of   Friar's    Poiut 

(5  Am.  B.  R.   56),  609. 
Chittenden  v.   Barton    (5  Am.    B. 

R.  775),  388. 
Christensen,  In  re   (101  Fed.  Rep. 

243),  157.  231. 
Christensen.  In  re  (101  P"'ed.  Rep. 

802).  317. 
Christy,  Ex  parte    (3   How.  292), 

9L 
Christy,  Ex  parte  (2  Dea.  &  Chit. 

155),   265. 
Chubb  V.    Upton    (95   U.   S.    665), 

352),  406. 
Church     V.     Winkley     (73     Mass. 

400),    780,   781. 
Citizens  Bank  v.  Ober    (1  Woods 

80).  713. 
Citizens   Nat.    Bank   v.    De    Pauw 

Co.   (105  Fed.  Rep.  926),  160. 
City  Bank,   Petitioner    (153  U.  3. 

246),    842. 
City  Bank,  In  re  (6  N.  B.  R.  71), 

312,  316. 
City  Bank  v.  Walton  (5  Rob..  La., 

158).  755. 
City   Bank    of   New    Orleans.    Ex 

parte   (3  How.  292).  10. 
City    Nat.    Bank    v.    Bruce     (109 

Fed.   Rep.  69),  592. 
City  Nat.  Bank  of  Dallas  v.  Doo- 

little     (107    Fed.    Rep.    236)', 

085,   698. 
City    Nat.    Bank    v.    Hunter    (r!9 

U.  S.  557).  826.  842. 
City  Trust   Co.,   In   re    (121    Vvx\. 

Rep.  706).  727. 
Claff,  In  re   (111  Fed.  Rep.  506), 

738.    762. 
Claflin  V.  Cogan    (48  N.   H.   411), 

778. 
Claflin    V.    Houseman     (93    U.    S. 

130),   76,   106,   359. 


1L>56 


TABLK    OF   CASES. 


References  are  to  pages. 


Claiborne,   In  re    (109    Fed.    Rep. 

74),  G37,  64G,  G7G. 
Clairmont,  In  re  (1  N.  B.  R.  276), 

349. 
Clapp  V.  Thomas   (5  Allen,  Mass., 

15S),  434. 
Clarion  Bank  t.  Jones   (21  Wall. 

325),  573,  575,  611. 
Clark,   In   re    (4    N.    B.   R.    237), 

624. 
Clark,    In   re    (4    Ben.    88),    260, 

634. 
Clark,    In  re     (4    Ben.    88),  260, 

814,  732. 
Clark,  In  re  (9  Blatch.  379),  732, 

814. 
Clark  V.  American  Mfg.,  etc.,  Co. 

(101  Fed.  Rep.  962),  236. 
Clark     V.     Binninger     (38     How. 

Prac.  341),  69,  634. 
Clark  V.   Calvert    (8  Taunt.   742), 

417. 
Clark    V.    Clark    (17    How.    315), 

105,  420,  714. 
Clark  V.  Dougherty   (10  N.  B.  R. 

21),  5S1. 
Clark  V.  Ewing  (3  Fed.  Rep.  83), 

76. 
Clark  V.  Hume  (Ryan  &  M.  207), 

397    399    400. 
Clark    V.    Iselin    (21    Wall.    360), 

163,    373,    413,    570,    586,    598, 

599. 
Clark  V.  Rowling   (3  N.  Y.  216), 

293. 
Clark  V.  Sparhawk  (No.  2836  Fed. 

Cas.),    311. 
Clark  Thread  Co.  v.  Willimantic 

Linen    Co.    (140    U.    S.    481), 

834. 
Clarke   v.    Larremore    (188   U.    S. 

486),    71,    72,    85,    88,    92,    98, 

563,  567,  568,  569,  802. 
Clarke    v.    Shaw    (28    Fed.    Rep. 

356),  732. 
Claster   v.    Soble    (10   Am.   B.   R. 

446),   288. 
Clay,  Ex  parte  (6  Ves.  813a),  256. 
Clay  V.  Smith  (3  Pet.  411),  23,  79, 

207. 
Cleveland     v.      Chamberlain      (1 

Black  419),  823. 
Cleveland   Ins.   Co.   v.   Globe   Ins. 

Co.   (98  U.  S.  366),  27. 
Cleveland  Ins.  Co.,  In  re  (22  Fed. 

Rep.    204),   321. 
Clemnts  V.  Hall    (2   De  G.   &  J. 

172),    258. 
Clements  v.  Moore  (6  Wall.  312), 

383. 


Cliffe,  In  re    (94  Fed.  Rep.  354), 

200,  224,   238. 
Cliffe,  In  re   (97  Fed.  Rep.  540), 

622,   624,   626. 
Clifford,  In  re  (2  Saw.  428),  403. 
Clifton  V.  Foster  (103  Mass.  233), 

602,  709. 
Clisdell,  In    re     (101    Fed.    Rep. 

246),   746. 
Clopton  V.  Spratt  (52  Miss.  251), 

770. 
Clothier,    In    re    (108    Fed.    Rep. 

199),  742. 
Coan  &  Ten  Broeke  Mfg.  Co.,  In 

re   (6  Biss.  315),  413. 
Cobb,  In  re    (7  Am.  B.  R.   104), 

621. 
Cobb.  In  re    (96  Fed.  Rep.   821), 

307,   3C8,   5G2,    585. 
Cobb,  In  re   (112  Fed.  Rep.  655), 

353,  717,  732. 
Cobb  V.  Bray  (91  Fed.  Rep.  102), 

125. 
Cobb  V.  Overman    (109  Fed.  Rep. 

65),   287,  288. 
Cobb  v.  Overman   (109  Fed.  Rep. 

324),  303. 
Cobb  v.  Symonds  (5  B.  &  A.  516), 

149. 
Cocks,  In  re    (3   Ben.   260),   148. 
Coddington,  In  re   (118  Fed.  Rep. 

281),  156,  225. 
Coe-Powers  Co.,  In  re    (109  Fed. 

Rep.  550),  601. 
Coffman,  In  re  (93  Fed.  Rep.  422), 

402,  424,  536. 
Cogley,  In  re  (107  Fed.  Rep.  73), 

120,  372,  595,  704,  706,  709. 
Cogswell,  In  re  (1  Ben.  388),  273, 

349. 
Cohn,   In  re    (6   N.   B.   R.   379), 

610. 
Colby  v.  Coates    (6  Cush.,  Mass., 

558),  731. 
Cole,  In  re   (106  Fed.  Rep.  837), 

88    93 
Cole  v!  Duncan  (58  111.  176),  709, 

710. 
Coleman,  In  re  (2  N.  B.  R.  562), 

581. 
Coleman  v.  Davies   (45  Ga.  489), 

773. 
Coller,  In  re  (111  Fed.  Rep.  503), 

424,   481,   483. 
Collier,  In  re  (93  Fed.  Rep.  191), 

183,  435. 
Collier,  In  re   (12  N.  B.  R.  266), 

SAi,    257,    264. 
Collins,  In  re   (3  Biss.  415),  146. 
Collins  V.  Hood   (4  McLean  186), 

243,   259,   590,   751. 


TABLE   OF   CASES. 
References  axe  to  pages. 


1257 


Collins  V.  Jones  (10  B.  &  C.  777) 

313. 
Collins  V.  Marshall  (10  Rob.,  La., 

112),   360. 
Collumb  V.  Read   (24  N.  Y.  505), 

258. 
Colton   Export   &    Import   Co.,    fn 
re    (121   Fed.   Rep.   663),   5S5. 
Columbia  Iron  Wks.  v.  Nat.  Lead 
Co.    (127   Fed    Rep.   99),   147, 
148,  821,  822,  831. 
Columbia  Real   Estate  Co.,  In  re 
(101   Fed.    Rep.    965),   33,    71, 
207,  222,  233,  234,  235. 
Columbia  Real    Eptate  Co.,  In  '-e 
(112  Fed.  Rep.  G43),  220,  816, 
817,  824. 
Columbian   Ins.   Co.,  Ex  parte   (2 

Low.   5),   290. 
Columbus   Watch    Co.   v.   Robbins 

(148   U.   S.   266),   805,  806. 
Colvin  V.  Jacksonville   (158  U.  S. 

457),  805. 
Colwell   V.   Tinker    (6   Am.    B.    R. 

434),   291,   765. 
Comegys  v.  McCord  (11  Ala.  932), 

3G1. 
Comegys    v.    Vasse    (1    Pet.    193), 

420. 
Comfort  V.  Eisenbeis  (11  Pa.  13), 

781. 

Comingor,    Ex    pa7\te    (107    Fed. 

Rep.   898),  32,  74,  81,  83,  84, 

85,  669. 

Comly  V.  Fisher  (Taney  121),  611. 

Comm.   V.   Erisman    (21   Pitts.   L. 

J.    69),    284,    765. 
Commercial  Bank  v.  Buckner  (20 

How.  108),  785. 
Commonwealth  v.  Hutchinson  (10 

Pa.  St.  466),  764. 
Commonwealth  v    Shoe  Insurance 

Co.  (112  Mass.  131),  312. 
Commonwealth    v.    Walker     (108 

Ma.ss.    309),   623,    655. 
Compton  V.  Jessup   (68  Fed.  Rep. 

2C3),  97,  806. 
Comstock,    In    re    (22    Vt.    642). 

764. 
Comstock,    In    re    (3    Saw.    517), 

344,  620. 
Comstock    V.     Bechtel     (63     Wis. 

656),  443. 
Comstock  V.  Grout    (17  Vt.   512). 

643,    764. 
Conant,   Ex   parte    (77   Me.    275), 

149. 
C&nant,    In    re     (No.     .^085     Fp'1. 
Cas.).  714. 
'^Conger's   Case    (4   Atty.   Gen.    Oj). 
317),  676. 


Conhaim,    In    re    (97    Fed.    Rep. 

923),   576. 
Conhaim,    In    re    (100    Fed.    Rep. 

268),  723. 
Conley,  In  re  (120  Fed.  Rep.  42), 

749. 
Connecticut  v.  Shelton    (47  Conn. 

400),  764. 
Conn,  In  re   (108  Fed.  Rep.  525), 

659. 
Connell,    Ex    parte    (Deac.    201). 

258. 
Connell    Sons,    In    re    (120    Fed. 

Rep.  846),  137,  139. 
Conner,  In  re   (1  Low.  532),  594, 

604. 
Connor  v.  Long   (104   U.  S.  228), 

365. 
Connor  v.  Scott  (4  Dill.  242),  106. 
Connolly,    In    re    (100    Fed.    Rep. 

620),  81. 
Conqueror,  The    (166   U.   S.   110), 

801. 
Conrad.    In    re     (6    Am.    L.    Rev. 

385),  300. 
Conrad  v.   Insurance  Co.    (6   Pet. 

274),   611. 
Conrader,    In   re    (118    Fed.    Rep. 

676),  257. 
Conro   V.    Crane    (94    U.    S.    441), 

816. 
Continental    Nat.    Bank    v.    Katz 
(1  Am.  B.  R.  19),  77,  88.  i9, 
93. 
Cook,  Ex  parte   (2  P.  Wms.  500), 

243. 
Cook,   In   re    (3    Biss.    122),    152, 

153.   249.    603.   709. 
Cook    V.    Farrington     (104    Mass, 

212),  335. 
Cook  V.  Moffat   (5  How.  295),  19, 

22. 
Cook   V.    Rogers    (31    Mich.    391), 

27. 
Cook    V.    Tullis     (18    Wall.    332), 

36,8.   373.   413.  562.   5.S4.   731. 
Cook  V.  Whipple   (55  N.  Y.  l.-.O), 

76. 
Cooke,  In  re    (30  Leg.   Int.   404), 

211. 
Cooke,   In  re    (3   Biss.   122),   259. 
Cooke.  In  re  (109  Fed.  Rep.  631), 

630. 
Cooke  V.  Scovll  (53  Atl.  Rep.  692). 

85. 
Cooper,  Ex  parte   (39  L.  T.  260), 

371. 
C;)opor    V.    Slight    (27    L.    R.    Ch. 

Dlv.    565).    3S0. 
^:ofinland  v.  Stephens    (1   B.  &   4. 
393),   398. 


1258 


TATU^K    OF    (^ASKS, 


References  are  to  pages. 


Corbett.    In    re    (104    Fed.    Rep. 

S72),    82,    100,    101,    360,    3GG, 

374,  586. 
Corbett,  In  re  (5  Am.  B.  R.  224), 

76. 
Corbett,  In  re   (5  Saw.  206),  413, 

444. 
Corey  v.  Ripley   (57  Me.  69),  785. 
Corn,  In  re   (106  Fed.  Rep.   143), 

660,  749. 
C!orn   Exchange   Bank,  In  re    (15 

N.  B.  R.  216),  322. 
Cornell,  In  re  (97  Fed.  Rep.  29), 

656. 
Cornell  v.  Dakin    (38  N.  Y.  253), 

784. 
Cornwall,  In  re    (9   Blatch.   114), 

226,   227,   319. 
Corwin,  In  re   (1  Fed.  Rep.  847), 

787. 
Cosgrove  v.  Cosby  (86  Ind.  511), 

311,  315. 
Cotton,  In  re   (2  N.  Y.  Leg.  Obs. 

370),   284,   765. 
Cotton,    In    re     (No.    3269    Fed. 

Cas.),  145. 
Cotton  V.   James   (M.  &   M.   273), 

152. 
Counselmaa  v.  Hitchcock  (142  U. 

S.    562),    625. 
County  of  Worcester,  In  re   (102 

Fed.  Rep.  808),  808. 
Courier-Journal   Job  Printing  Co. 

V.  Brewing  Co.  (101  Fed.  Rep. 

699),  810,  830. 
Courtney   v.   Beaie    (84  Va.   692), 

774. 
Cove   V.   Purcell    (56    N.   Y.    649), 

367. 
Covell  V.  Heyman  (111  U.  S.  176), 

97. 
Covington,  In  re    (110  Fed.  Rep. 

143),  121. 
Covington   Stock  Yards   v.    Keith 

(121  U.  S.  248),  830. 
Cowen,    Ex    parte    (2    L.    R.    Ch. 

App.   563),   688. 
Cox  V.   Wilder    (2   Dill.   45),   396, 

435,  436,  439. 

Cox  v.  Wilder   (5  N.  B.  R.  443), 

436,  439. 

Coxe    V.    Hale    (10    Blatch.    56), 

591. 
'Crabb,  Ex  parte  (8  De  Gex,  Mac. 

&   G.   277),   149. 
Craft,    In   re    (2    Ben.    214),    237, 

571,  751. 
Crafts   V.    Mott    (5    Barb.,    N.    Y., 

305)     207. 
Crafts  v.'Mott   (4  N.  Y.  606),  298. 


Cragen    v.    Carmichael     (2     Dill. 

519),    104. 
Cragin  v.  Thompson  (2  Dill.  513), 

391,   610. 
Craig,    In    re    (4    N.    B.    R.    50), 

624. 
Cram,   In   re    (1    Hask.    89),    271. 
Crandall  v.  Nevada   (6  Wall.  35), 

835. 
Crane  v.  Penny  (2  Fed.  Rep.  187), 

368,   609,   731. 
Crapo    v.    Kelly    (16    Wall.    610), 

630),  21,  376,  377. 
Craufurd  v.  Attorney  General    (7 

Price  5),   763. 
Craven,   Ex   parte    (10  L.   R.    Bq. 

648),   390. 
Crawford,  In  re  (3  N.  B.  R.  698), 

293. 
Crawford,  In  re  (5  M.  B.  R.  301), 

295. 
Crawford  v.  Dunbar  (52  Cal.  36), 

108. 
Credit   Co.    v.    Ark.    Cent.    R.    Co. 

(128  U.  S.  258),  821,  823. 
Creditors  v.  Cozzens    (3  N.  B.  R. 

281),   215,   671. 
Creditors    v.    Williams    (4    N.    3. 

R.  579),  740,  741,  742. 
Crisfield    v.    State    (55    Md.    192), 

773. 
Crist,  In  re  (116  Fed.  Rep.  1007), 

656.  740. 
Crittenden  v.  Barton  (5  Am.  B.  R. 

775),  578. 
Crockett,  In  re  (2  Ben.  514),  247, 

421. 
Croft,  In  re   (8  Biss.  188),  443. 
Crofton  V.  Poole  (1  B.  &  Ad.  568), 

415. 
Cronan     v.     Cotting     (104     Mass. 

245),  772. 
Cronin,  In  re  (98  Fed.  Rep.  584), 

240. 
Crooks  V.   People's  Nat.   Bank    (3 

Am.  B.  R.  238),  57G,  585,  609. 
Crooks    V.    Stuart     (7    Fed.    Rep 

800),  355,  383,  595. 
Crouch  V.  Gridley   (6  Hill,  N.  Y., 

250),  290,  765. 
Crosbie  v.  Tooke  (1  M.  &  K.  421), 

401. 
Crosby   v.    Wentworth    (48    Mass. 

10),  755. 
Cross    V.    Evans    (167    U.    S.    60), 

806. 
Crow,  In  re  (116  Fed.  Rep.  110), 

728. 
Crystal    Springs    Bottling   Co.,   In 

re  (100  Fed.  Rep.  265),  311. 


TABLE    OF    CASKS. 


1259 


References  are  to  pages. 


Cuddy,  Petitioner  (131  U.  S.  281), 

674,   676. 
Cullen  V.   Dawson   (24  Minn.  66), 

416. 
Gumming  v.  Clegg    (52  Ga.  605), 

431. 
Cunningham,  In  re   (19  N.  B.  R. 

276),  731. 
Cunningham  v.  German  Insurance 

Bank     (101    Fed.    Rep.    977), 

303,  819. 
Cunningham  v.  German  Nat.  Bank 

(103  Fed.  Rep.  932),  119,  810. 

833.    834. 
Curran  v.  Hunger  (6  N.  B.  R.  33), 

163. 
Curry  v.  McCauley   (20  Fed.  Rep. 

583),  592. 
Curtis,  In  re   (91  Fed.  Rep.  737), 

24,  27. 
Curtis,  In  re   (94  Fed.  Rep.  630), 

191.   192. 
Curtis,  In  re  (100  Fed.  Rep.  784), 

137,    139,   818. 
Curtis  V.  Slosson  (6  Pa.  265),  784. 
Cushman,  In  re  (7  Ben.  482),  180. 
Cutter  V.   Evans    (115  Mass.   27), 

293. 
Cutter  V.  Folsom   (17  N.  H.  139), 

18,  144. 
Cuxon  V.  Chadley  (I.  C.  &  P.  174), 

315. 


D. 

Daggett,  In  re  (8  N.  B.  R.  433), 

143. 
Daggett  V.  Cook    (37  Conn.   341), 

564. 
Dailey   v.    State    (8    Blackf.,    Ind., 

329),  108. 
Dalby,    Ex    parte    (1    Low.    431), 

367. 
Dallas    V.    Flues    (No.    3544    Fed. 

Cas  )     345. 
Dally    V.    Smith    (4    Burr.    2148), 

148. 
Damhman      v.     White      (48     Cal. 

439),    367. 
Damon,  In  re  (104  Fed.  Rep.  775), 

Dana,   In   re   (68  Fed.   Rep.   886), 

648,  650,  652. 
Danforth,    In    re    (1    Pa.    Law    J. 

148),  627. 
Daniel    v.    Lazarus    (65  Fed.   Rep. 

718)     99 
Danioll.    Ex    parte    (7    .Tur.    334), 

MS. 
Daniels,  In  re  (110  Fed.  Rep.  745), 

728.  729. 


Daniels  v.  Palmer  (35  Minn.  347), 

148. 
Danville  v.  Brown  (128  U.  S.  503), 

830. 
Danville   Rolling   Mill   Co.,   In   re 

(10  Am.  B.  R.  327).  304. 
Darling   v.    Berry    (13    Fed.    Rep. 

668),  19,  394,  426,  602. 
Darwin,  In  re  (117  Fed.  Rep.  407), 

564,  565,  566,   568. 
Daubenny,    Ex  parte    (3   Mont.   & 

Ayr.  16),  149. 
Daubner,  In  re  (96  Fed.  Rep.  805), 

402. 
Dauchy.  In  re  (122  Fed.  Rep.  688), 

656. 
Davenport,  Ex  parte  (1  Low.  384), 

324. 
Davenport,  In  re  (3  N.  B.  R.  77), 

715. 
Davenport   v.    Fletcher    (16   How. 

142).  828. 
Davenport    v.    Tilton     (51    Mass. 

320),  564. 
David  V.  Ellice   (5  B.  &  C.   196), 

264. 
Davidson  v.  Lanier  (4  Wall.  447), 

830. 
Davis,  In  re  (112  Fed.  Rep.  294), 

375. 
Davis,  in  re  (2  N.  B.  R.  391),  321, 

709. 
Davis   V.    Anderson    (6    N.    B.    R. 

145),  321,  611. 
Davis  V.  Bohle  (92  Fed.  Rep.  325), 

32.  812. 
Davis   V.    Friedlander    (104   U.    S. 

570),  359,  562,  564. 
Davis  V.  Geissler  (162  U.  S.  290), 

805. 
Davis  V.  Ham  (3  Mass.  33),  286. 
Davis  V.  R.  R.  Co.  (1  Woods.  661), 

714. 
Davis   V.   Stevens    (104   Fed.   Rep. 

235),  143.  157,  246,  247.  250. 
Davis    V.    Stewart    (8    Fed.    Rep. 

803),  375. 
Davis  V.  Wakelee  (156  U.  S.  684), 

829. 
Davis,  etc.  Co.  v.  Barber  (157  U.  S. 

673).  804. 
Davy,  Et  parte  (Rldg.  289).  265. 
Dawes  v.  Boylston   (9  Mass.  337), 

377. 
Dawlpy.  In  re  (94  Fed.  Rep.  795), 

542. 
Dawson    v.    Hartsfleld    (79    N.    C. 

334).  293. 
Day  V.  Bardoll  (97  Mass.  246),  24. 
Day  V.  BorU  &  Grepi:  H.irdw.  Co. 

(114   Fed.  Rop.  834).   168.  196. 
Day  V.  Laflin   (17  Mass.  280).  360. 


1200 


TABLE    OP    CASKS. 


References  are  to  pages. 


Day   V.    Superior  Court    (61   Cal. 

4S0),  415. 
Dayton  v.  Lash  (94  U.  S.  112),  832. 
Dayton   Nat.    Bank   v.    Merchants 

Nat.  Bank  (37  O.  S.  208),  598. 
Dayville  Woolen  Co.,  In  re    (114 

Fed.  Rep.  674),  113,  276,  348. 
Deacon    v.    Sewing    Machine    Co. 

(No.  3694a  Fed.  Cas.).  205. 
Dean,  In  re  (3  N.  B.  R.  768),  713. 
Dean  v.  Plane   (195  111.  495),  582. 
Deane  v.  Caldwell  (127  Mass.  244), 

286. 
Dearing   v.    Moffitt    (6    Ala.   776), 

780,  781. 
Deckert,   In   re    (2   Hughes   183), 

426. 
Deeze,  Ex  parte  (1  Atk.  228),  309. 

600. 
De  Forest,  In  re  (9  N.  B.  R.  278), 

233,  234. 
Deland  v.  Miller  &  Chaney  Bank 

(93  N.  W.  Rep.  304),  592,  609. 
De  Lany  &  Co.,  In  re   (124  Fed. 

Rep.  280),  88. 
Delavergue  v.  Farrand    (1   Mich., 

N.  P.,  90),  89. 
Dell,  In  re  (5  Saw.  344),  262. 
Delling,  In  re  (124  Fed.  Rep.  852), 

333. 
Del  Vaile  v.  Harrison    (93   U.   S. 

233),  821. 
Demarest,   In   re    (110    Fed.   Rep. 

638),  443,  507. 
DeMetz,    In    re     (No.    3781    Fed. 

Cas.),  328. 
Dennett  v.  Mitchell   (6  Law  Rep. 

16),  751. 
Denning,    In   re    (114    Fed.    Rep. 

219),  256. 
Denny  v.  Bennett  (128  U.  S.  489), 

21. 
Denny  v.  Pironi   (141  U.  S.  121), 

836. 
Denver  First  Nat.  Bank  v.  Klug 

186  U.  S.  203),  791,  799. 
Derby,   In  re    (6    Ben.   232),   144, 

145,   227,   235. 
Desmare  v.  United  States  (93  U.  S. 

610),  425. 
Desobry   v.    Morange    (18    Johns., 

N.  Y.,  336),  766. 
Detert,  In  re    (11  N.  B.  R.  293), 

336,  385.  396,  436. 
Devoe,  In  re    (1   Low.   251),   639, 

644,  770. 
Devoe  Mfg.  Co.,  Ex  parte  (108  U. 

S.  401),  34. 
Devries    v.    Shanahan    (122    Fed. 

Rep.   629),   833,   835. 
Diack,  In  re  (100  Fed.  Rep.  770), 

409,  410. 


Dial  V.  Reynolds    (96  U.  S.  340), 

87. 
Dibblee,  In  re   (3  Ben.  283),  163, 

586. 
Dibblee,  In  re   (3  Ben.  354),  700, 

716. 
Dick  V.  Powell    (2   Swan.,  Tenn., 

632),  293,  782. 
Dickson  v.  Wyman  (111  Fed.  Rep. 
726),  332,   333,   575,  587,  588.   808, 

811,   817. 
Dickenson  v.  Lockyer  (4  Ves.  36), 

264. 
Dickinson   v.    Central   Nat.    Bank 

(129  Mass.  279),  405. 
Dickinson  v.   Security  Bank    (110 

Fed.  Rep.  353),  585. 
Dietz,  In  re   (97  Fed.  Rep.  563), 

754. 
Biggies,  In  re  (8  Ben.  36),  697. 
Dillard,  In  re  (2  Hughes  190),  423, 

424. 
Dillard  v.  Collins   (25  Grat.,  Va», 

343),  421. 
Diller,  In  re  (100  Fed.  Rep.  931), 

442,  450,  453. 
Dillon,  In  re  (100  Fed.  Rep.  627), 

262,  315,  720,  766. 
Dimock  v.  Revere  Copper  Co.  (117 

U.  S.,  565),  359,  766,  782,  784, 

794. 
Dingee  v.  Becker  (9  N.  B.  R.  503), 

755. 
Dinglehoef,  In  re  (109  Fed.  Rep. 

866),  515. 
Dinsdale  v.  Fames  (4  Moore  350) v 

293. 
Distler  v.  McCauley  (6  Am.  B.  El 

491),  291,  765. 
Dixon's   Case    (3    Atty.   Gen.    Ou 

622),  676. 
Dixon,  In  re  (114  Fed.  Rep.  675), 

127. 
Doan  v.  Compton  (2  N.  B.  R.  607), 

164. 
Docker-Foster  &  Co.,  In  re    (123 

Fed.  Rep.,  190),  158,  333,  342. 
Dodge,    In    re     (No.    3946a    Fed. 

Cas.),  181. 
Dodge  V.  Knowles  (114  U.  S.  430). 

821,  822,  828. 
Doe  V.  Brittain  (2  B.  &  Aid.  93), 

380. 
Doe  V.   Childress    (21  Wall.  642), 

562,  563,  756. 
Doe  V.  Mining  Co.    (70  Fed.  Rep. 

455),  838. 
Doig,   In   re    (4    Fed.   Rep.    193), 

650. 
Dole,  In  re  (11  Blatch.  499),  613, 

636. 


TABLE    OF    CASES. 


1261 


References  are  to  pages. 


Donaldson    v.    Farwell    (93    U.    S. 

631),  373,  375,  367,  368,  731. 
Donnell  v.   Saving  Bank    (80  Mo. 

165),  408. 
Donnelly,  In  re  (5  Fed.  Rep.  783), 

200,  238. 
Dormire  v.  Cogly  (8  Blackf.,  Ind., 

177),  360. 
Dorsey  v.  Kyle  (30  Md.  512),  174. 
Doscher,    In    re     (120    Fed.    Rep. 

408),  157. 
Dos    Hermanos,    The    (10    Wheat. 

306),  821,  822,  828. 
Doty,  In  re  (16  N.  B.  R.  202),  319. 
Dougherty,   In  re    (109   Fed.  Rep. 

480),  570. 
Douglass,  In  re  (11  Fed.  Rep.  403), 

787,  788. 
Douglass  V.  Vogeler   (6  Fed.  Rep. 

52),  593,  594. 
Douglass  V.  Zinc  Co.  (50  Mo.  388') , 

602. 
Dow's  Estate,  In  re  (105  Fed.  Rep. 

889),  OGO,  746. 
Dow  V.   Sargent    (15   N.   H.   115), 

592. 
Dowell  V.  Dew   (1  W.  &  C.  Chan. 

3G5),  401. 
Downer    v.    Chamberlin     (21    Vt. 

414),  783. 
Downer  v.  Dana  (22  Vt.  337),  709. 
Downing,  In  re   (1  Dill.  33),  257, 

2C4,  265,  270. 
Downing  v.  Traders  Bank  (2  Dill. 

136),  298. 
Dowler  v.  Cushwa   (27  Md.   354), 

598. 
Downs,  Ex  parte  (1  Rose  96),  335. 
Doyle  V.  Heath  (22  R.  I.  213),  564. 
Doyle  V.   Sharpe   (74  N.  Y.  154), 

217. 
Dral:e,  In  re  (114  Fed  Rep.  229), 

143. 
Drake  v.  Rollo  (3  Biss.  273),  312. 
Dreeben,    In    re    (101    Fed.    Rep. 

110),  135,  136,  341. 
DressGl  v.  North  State  Lumber  Co. 

(107  Fed.  Rep.  255),  197. 
Dressel    v.    North    State    Lumbor 

Co.   (119  Fed.  Rep.  531),  120, 

126,  344,  587,  588. 
Dresser,  In  re   (3  N.  B.  R.  557), 

371,  623. 
Dresser,  In  re  (124  Fed.  Rep.  915), 

635,  640. 
Dresser  v.  Brooks   (3  Barb.  429), 

293. 
Dressier,    Ex    "parte    (9    Ch.    Dlv. 

252),  398. 
Dreyer,  In  re    (2  N.   B.   R.   212), 

743. 


Driggs  V.   Moore    (1   Abb.,   U.   S., 

440),  594. 
Driggs  V.  Russell  (3  N.  B.  R.  161), 

419. 
Drisko,  In  re   (2  Low.  430),   174, 

762. 
Drummond,  In  re  (1  N.  B.  R.  231), 

160,   162,   163,  200. 
Drummond,  In  re    (4   Biss.   149), 

336,  590. 
Duble,  In  re  (117  Fed.  Rep.  794), 

728. 
Dudley's   Case    (1   Pa.   Law   Jour. 

302),  187. 
Dudley  v.  Easton   (104  U.  S.  99), 

351,  383,  562,  604,  606,  608. 
Duerson,  In  re  (  13  N.  B.  R.  183), 

426. 
Duff,  In  re  (4  Fed.  Rep.  519),  148. 
Duffy,  In  re  (118  Fed.  Rep.  926), 

431,  528. 
Dufour    V.    Lang    (54    Fed.    Rep. 

913),  827. 
Dugan  V.  Nichols   (125  Mass.  45), 

367,  375. 
Duguid,  In  re  (100  Fed.  Rep.  274), 

145,  153,  245,  248,  249,  254,  404, 

444,  515,  516. 
Duigman,  Ex  parte   (11  L.  R.  Eq. 

604),  688. 
Dumahaut,  In  re  (15  Blatch.  20), 

631. 
Dumont,  In  re  (96  Fed.  Rep.  542), 

(4  N.  B.  R.  17),  715. 
Dunavent,    In    re    (96    Fed.    Rep. 

542),  395,  404,  580. 
Dunbar  v.  Dunbar  (190  U.  S.  340), 

93,  282,  284,  286,  287,  288.  290, 

291,  303,  304.  318,  765,  794. 
Duncan,  In  re  (8  Ben.  356),  235. 
Duncan  v.  Hargrove  (22  Ala.  150), 

7C4. 
Duncan  v.  Landis  (106  Fed.  Rep. 

839),  156,  158,  820. 
Dundas,  In  re  (7  Am.  B.  R.  129), 

572,  577,  586. 
Dunham,  In  re  (2  Ben.  488),  163, 

1G9,   229. 
Dunham,  In  re  (27  Leg.  Int.  404), 

2S5.  397. 
Dunkerson,   In   re    (4   Biss.    227), 

2r,6. 
nunl<s  V.  Cray  (3  Fed.  Rep.  86S). 

668,  669. 
Dunlr>.p  V.  Rogers   (47  N.  H.  2S1). 

7.-9. 
Dunn.  In  re  (12  Blatch.  42),  233, 

234. 
Dunnigan,    In    re    (95    Fed.    Rep. 

428),  115,  218. 
Dunning.  /?;  re  (94  Fed.  IV'm  7^0), 

822,  827. 


1262 


TABLE  OP  CASK8. 


References  are  to  pages. 


Dunning  v.  Perkins  (2  Biss.  421), 

5S0. 
Dupee.  In  re  (2  Low.  18),  786,  787, 

788. 
Duplan    V.    Silk    Co.    (191    U.    S. 

526),  796. 
Dupree,  In  re   (97  Fed.  Rep.  28), 

201,  203. 
Durham,    In    re    (104    Fed.    Rep. 

231),  427,  442,  448,  449. 
Durham,    In    re    (114    Fed.    Rep. 

750),  80,  81,  592. 
Durham    Paper    Co.    v.    Seaboard 

Knitting   Co.    (121    Fed.   Rep. 

179),  191. 
Dusenburv  v.  Hoyt  (52  N.  Y.  521), 

779,   782,   785. 
DuShane  v.  Beall  (161  U.  S.  513), 

372. 
Dutcher  v.  Wright  (94  U.  S.  553), 

171,  203,  317,  387,   390,   584. 
Dutton   V.   Cloar    (65    S.   W.   Rep. 

70),  609. 
Dutton  V.  Morrison  (17  Ves.  193), 

169. 
Dvorak,  In  re  (107  Fed.  Rep.  76), 

737. 
Dwight   V.    Merritt    (4    Fed.    Rep. 

614),  208. 
Dwyer  v.   Garlough    (31  Ohio   St. 

158),  438. 
Dyer   V.    Cleveland    (18  Vt.    241), 

778,   783. 

E. 

Eagles,  In  re  (99  Fed.  Rep.  695), 

135,  255,  269,  270,  271,  273,  274. 

275,  348. 
Eames,  Ex  parte  (2  Story  322),  20, 

23,  26,  29. 
Easum  v.  Cato  (5  B.  &  Aid.  861), 

310. 
Eaton,  In  re   (51  Fed.  Rep.  804), 

C32,  609,  676. 
Eaton,  In  re  (110  Fed.  Rep.  731), 

OCl. 
Economical    Printing    Co.,    In    re 

(106  Fed.  Rep.  839).  813. 
Eckler    v.     Galbraith     (12     Bush, 

Ky..  71),  779. 
Edith,  The  (94  U.  S.  518),  603. 
Edmeads  v.  Newman    (1  B.  &  C. 

418),  312. 
Edmonson  v.  Hyde  (2  Saw.  205), 

293    433. 
Eecles,  '  In    re     (No.     4302     Fed. 

Cas.),  148. 
Egbert  v.  McMichael    (9  B.  Mon., 

Ky.,  44),  779,  782. 
Eggert,  In  re  (102  Fed.  Rep.  735), 

387,    388,    574,    578,    579,    580, 

809. 


Eidemiller,  In  re   (105  Fed.  Rep. 

595),  145. 
Eidom,  In  re  (3  N.  B.  R.  106),  740, 

743. 
Eisenberg,   In   re    (117   Fed.   Rep. 

786),  145,  654. 
Elder,  In  re  (1  Saw.  73),  328,  338, 

345. 
Eldred,   In  re   (3   N.   B.   R.   256), 

419. 
Eldred  v.  Michigan  Ins.  Bank  (17 

Wall.  545),  79,  221. 
Eldridge,  In   re    (2   Hughes  256), 

320. 
Elk  Park  Min.  &  Mill.  Co.,  In  re 

(101  Fed.  Rep.  422),  149. 
Ellerbe,  In  re  (13  Fed.  Rep.  530), 

667. 
Ellerhorst,  In  re  (5  N.  B.  R.  144), 

296,   298. 
Ellerhorst,   In   re    (2    Saw.    218), 

711. 
Elliott,   In  re    (2   N.   B.   R.   350), 

246,  250,  267. 
Elliott  V.  Higgins  (83  N.  C.  459), 

773. 
Elliott  V.  Keith  (32  Mo.  App.  585), 

641. 
Elliott    V.    Toeppner    (187    U.    S. 

327),    75,    155,    158,    196,    230, 

231,  792,  809,  817,  820. 
Ellis,  In  re  (1  N.  B.  R.  555),  441. 
Ellis,  In  re  (5  Ben.  421),  256. 
Ellis  V.   Ham    (28  Me.   385),   286', 

293,  298. 
Ellis  V.  McHenry   (6  L.  R.  C.   P. 

234),  757,  758. 
Ellithorpe,   In  re    (111  Fed.   Rep 

163),  512,  514. 
Ells,  In  re  (98  Fed.  Rep.  967),  304, 

305,  306,  397,  401. 

Elmira  Steel  Co.,  In  re  (109  Fed. 

Rep.456),  147,  164,  198,  228. 
Emery    v.    Canal    Nat.    Bank     (3 

Cliff.  507),  263. 
Emison,  In  re   (2  N.  B.  R.  595), 

330,  338,  339. 
Empire  Metallic  Bedstead  Co.,  In 

re    (98    Fed.    Rep.   981),    153, 

107,  1C8. 
Emslie,  In  re  (102  Fed.  Rep.  291), 

70,  82,  89,  90,  92,  100,  101,  360, 

374,   507,   601. 
Engle,  In  re  (105  Fed.  Rep.  893), 

306,  567. 

EngliEh,  In  re  (122  Fed.  Rep.  113), 
308,  502,  504,  566,  599,  600. 

Epstein  In  re  (109  Fed.  Rep.  878), 
303. 

Epstein,  In  re  (6  Am.  B.  R.  60), 
375. 


TABLK    OF    (lASES. 


]2(53 


References  are  to  pages. 


Equitable  L.  L  T.  Co.  v.  Moss  & 

Co.  (125  Fed.  Rep.  609),  1.04. 
Erbens  Case,  4o8. 
Erwin  v.  United  States   (97  U.  S. 

392),  420. 
Eschwege  &  Cohn.  I?i   re    (8   Am. 

B.  R.  282),  1?A\. 
Esdaile  v.  Sowerbv  (11  East  114), 

408. 
Estbo  V.  Lear  (7  Pet.  130),  835. 
Etheridge  Furniture  Co.,  In  re  (92 

Fed.   Rep.   329),   30,  212,  222, 

225. 
Ethier,  In  re  (118  Fed.  Rep.  107), 

714. 
Eureka   Ins.   Co.,   In   re    (1   Low. 

500),  304. 
Evans,  In  re  (116  Fed  Rep.  909), 

135,  428,  43G,  515. 
Evans,  In  re  (3  N.  B.  R.  261),  604. 
Evans  v.  Carey  (29  Ala.  99),  780, 

781. 
Evans  v.  Hamrick  &    Co.  (61  Pa. 

St.  19),  395. 
Evans  v.  Lincoln  Co.   (204  Pa.  St. 

448),  30G. 
Evans   v.    State   Bank    (134   U.   S. 

330),  821,   831,  837. 
Everett    v.    Stone    (3    Story   446), 

751. 
Everitt,  In  re  (9  N.  B.  R.  90),  423, 

42G. 
Ewing,  In  re  (115  Fed.  Rep.  707), 

161,  200. 
Exchange  Bank  v.  Moore  (2  Bond 

170),   300. 
Eyster  v.  Gaff   (91   U.  S.  521).  75, 

359,  305,  608. 


F. 


Factors,  etc.,    Ins.   Co.   v.  Murphy 

(111  U.  S.  738),  795. 
Fairbanks  v.  Amoskeag  Bank   (38 

Fed.   Rep.   630),   698. 
Falco   V.    Kaupisch   Creamery   Co. 

(70   Pac.   Rep.   286),   383,   606. 
Falconer,    In    re    (110    Fed.    Rop. 

111).   428,   433,   436,   439,   448. 

449. 
Falls   City    Shirt   Mfg  Co..   In   re 

(98   Fed.   Rep   592).   335.   339. 

601.  728. 
Falter  v.  Reinhard   (104  Fed.  Rep. 

292).   348. 
Fanshawe  v.  Tracy   (4  BIss.  490), 

672,  673. 
Fanv,   In    re    (116   Fp(].   Rep.   239). 

738. 
Farham.  In  re  (2  Chan.  Div.,  1895, 

805),  145. 


Parish.   In   re    (2   N.   B.   R.    168), 

422,  431. 
Farley.  In  re  (115  Fed.  Rep.  359), 

252,    254. 
Farlev  v.  Danks  (4  El.  &  Bl.  493), 

241. 
Farmer.    In    re     (116     Fed.    Rep. 

763),  291. 
Farmers  Loan  &  Trust  Co.  v.  Chi- 
cago.  N.   P.   R.    Co.    (73   Fed. 

Rep.  314),  837. 
Farmers  Loan  &  Trust  Co.  v.  Wa- 
terman (106  U.  S.  265),  823. 
Farmers    &     Mechanics     Bank     v. 

Smith  (6  TNTieat.  130).  20.  21. 
Farnum.  In  re   (6  Law  Rep.  21), 

263. 
Farr  v.  Pearce  (3  Madd.  74).  403. 
Farrar    v.    Churchill     (135    U.    S. 

609).  823. 
Farrin   v.   Crawford    (2   N.    B.   R. 

602).  810. 
Farrund,  Williams  &  Clark  v.  Mil- 
burn    &    Co.     (not    reported), 

102. 
Faxon.    Ex    parte    (1    Low.    404), 

400. 
Faxon  v.  Folvey   (110  Mass.  392), 

412. 
Fay.  In  re  (3  Ben.  660),  626. 
Foatherstonhaugh  v.  Fenwick   (17 

Ves.  308).  258.  250. 
Federhen,  In  re    (No.   4713a  Fed. 

Cas.).  583.  591. 
Fehlev    v.    Barr    (66    Penn.    196). 

428,   432. 
Feigenbaum.  In  re  (121  Fed.  Rep. 

69),  738.  755.  811. 
Feinberg.  In  re  (3  Ben.  162),  620. 
Felb,   In   re    (91   Fed.   Rep.    107), 

271. 
Felch  v.  Bugbee   (48  Me.  9).  759. 
Feldstein.    In    re    (115    Fed.    Rep. 

259).  748.  750,  818. 
Felker  v.  Crane  (77  Ga.  484).  427. 
Fellows  V.   Freudenthal    (102  Fed. 

Rep.  731).   127.  404,  405,  659. 
['Vllows   V.   Hall    (3    McLean    2S1), 

7,S4. 
iVlsen.  In  re  (124  Fed.  Rep.  2SS). 

633,   669. 
Fendley.  In  re   (10  N.  B.  R.  250), 

215. 
Foredav  v.  Wighfwirk   (1   H.  &  M. 

49).  258. 
Ferguson.    In    re    (9.'i    Fed.    Rep. 

429).  166. 
Ferris.  In  re  (105  Fed.  Rep.  356), 

660. 
Fetter  v.  Cirode   (4   B    Mon  ,  Ky., 
482),  756. 


llV.l 


TABLK    OF    CASKS. 


References  are  to  pages. 


Feuerlicht.   In   re    (8    Am.    B.    R. 

550).  587. 
Fidelitv   Trust  &   Saf.   Vt.   Co.   v. 

Mobile  St.  R.  R.  Co.   (53  Fed. 

Rep.   850),   20(5,   210. 
Fidgeon    E.r    parte    (4    Dea.    417), 

294. 
Field   V.    Baker    (12   Blatch.   4.38). 

165,  3G8. 
Fielding.  In  re  (96  Fed.  Rep.  800), 

126.  363. 
Fields    V.    Karter    (115   Fed.   Rep. 

950),  659. 
Fife,  In  re    (109   Fed.  Rep.   880), 

290,  292. 
Filer,  In  re    (5   Am.   B.   R.   332), 

154,  160.  197,  425. 
Filer,  In  re   (125  Fed.  Rep.  262), 

303,  319. 
Filley,  In  re   (2  Cent.  L.  J.  419), 

741. 
Fillingin     v.     Thornton     (49     Ga. 

384),  173. 
Finklestein,  In  re   (101  Fed.  Rep. 

418),  658. 
Finlay,  In  re  (5  Biss.  480),  225. 
Finnegan   v.   Hall    (6   Am.    B.   R. 

648),   290. 
Firemen's  Ins.  Co.,  In  re  (3  Biss. 

462),  302. 
First  Nat.  Bank  v.  Haire   (36  la. 

443),  592. 
First  Nat.  Bank  v.  Penn.  Trust  Co. 

(124  Fed.  Rep.  96S),  368,  562, 

599. 
Firth  Co.  v.  Loan  &  Trust  Co.  (122 

Fed.  Rep.   569),  598. 
Fischer  v.  Hays  (6  Fed.  Rep.  70), 

675. 
Fisher,  In  re    (98  Fed.  Rep.   89), 

407. 
Fisher.  In  re  (103  Fed.  Rep.  860), 

808,  812. 
Fisher  v.  Currier    (7  Met.,  Mass., 

424),  174,  415. 
Fisher    et    al   v.    Currier    (5    Law 

Rep.  217),  10. 
Fisher  v.  Cushman  (103  Fed.  Rep. 

867),  73,  79,  82,  101,  361,  374, 

816. 
Fisher  v.    Syfers    (109   Ind.   514), 

258 
Fisk,  Ex  parte    (113   U.   S.     713), 

232,  344,  676. 
Fitchard,    In    re    (103    Fed.    Rep. 

742),  656,  660. 
Fitzgerald   v.   Phillips    (4   Martin, 

La.,  O.  S.  292),  2. 
Fitzgerald  Co.  v.   Fitzgerald    (137 

U.  S.  98),  204. 
Fixen,  In  re   (96  Fed.  Rep.  748), 

212,  213,  616,  627. 


Fixen,  In  re  (102  Fed.  Rep.  295), 

576. 
Flagg  V.  Tyler   (6  Mass.  33),  778. 
Flana.gan,  In  re  (5  Saw.  312),  173. 
Flanagan,   In    re    (117    Fed.   Rep. 

695),    536. 
Flanagan  v.  Pearson   (42  Tex.  1), 

774,  767,  768. 
Flanders,    In    re    (121    Fed.    Rep. 

936),   95. 
Fleishman,  In  re   (120  Fed.  Rep. 

960),  745. 
Fleitas    v.    Mellen    (39    Fed.    Rep. 

129),  783. 
Fleitas   v.   Richardson    (147  U.   S. 

550),  783. 
Fleming  v.  Andrews  (3  Fed.  Rep. 

632),  313,  590. 
Fleming    v.    Buchanan     (3    DeG., 

M.  &  G.   976),  381. 
Fletcher  v.  Manning  (12  M.  &  W. 

571),  294. 
Fletcher  v.  Morey   (2  Story  555), 

369,  731. 
Fletcher  v.  Neally  (20  N.  H.  464), 

779. 
Fletcher  v.   Peck    (6   Cranch   87), 

836. 
Flick,  In  re   (105  Fed.  Rep.  503), 

345,  726. 
Florcken,    In    re    (107    Fed.    Rep- 

241),  72,  212. 
Florida  v.  Charlotte  Harbor  Pho£>- 

phate  Co.   (70  Fed.  Rep.  883), 

837,  838. 
Flower    v.    Greenebaum     (2    Fed. 

Rep.   987).  694. 
Fly,  In  re  (110  Fed.  Rep.  141),  450, 

452. 
Foerst,  In  re   (93  Fed.  Rep.  190), 

624,   627. 
Fogarty  v.  Gerrity   (1  Saw.  233), 

235. 
Foley    V.    Shriver    (81    Va.    568), 

732. 
Foot,  In  re  (11  Blatch.  530),  375. 
Forbes  v.  Howe    (102  Mass.  427), 

571,  577. 
Ford  V.   Belmont    (7   Rob.,  N.  Y., 

97),  380. 
Foreman    v.    Burleigh    (109    Fed. 

Rep.   313),   819,   823. 
Forgay  v.   Conrad    (6   How.  201), 

826. 
Fornsworth,   In  re    (5   Biss.   223), 

312. 
Forsaith  v.  Merritt  (1  Low.  336), 

583,    591. 
Forster  v.    Wilson    (12    M.    &   W. 

203),  308. 
Forsyth,  In  re   (7  N.  B.  R.  174), 

580. 


TABLE    OF   CASES. 


1265 


References  are  to  pages. 


Forsyth  v.   Hammond    (1G6  U.   S. 

513),  SOO,  802. 
Forsyth   v.   Vehmeyer    (177   U.   S. 

177),  770. 
Forsyth  v.  Woods  (11  Wall.  484), 

304,  311,  315. 
Fort  V.  McCully   (59  Barb.,  N.  Y., 

87),  311. 
Ft.  Wayne  Elec.  Corp.,  In  re   (94 

Fed.  Rep.  109),  12G,  3G3. 
Ft.  Wayne  Elec.  Corp.,  In  re   (95 

Fed.  Rep.  264),  309. 
Fortune,  In  re  (1  Low.  306),  285. 

301. 
Fortune,  In  re  (1  Low.  384),  330. 
Foster,  In  re  (3  Ben.  386),  247. 
Foster,  In  re  (11  Am.  B.  R.  131), 

161. 
Foster,   In   re    (18   N.    B.    R.   64), 

163,  590. 
Foster  v.  Ames  (1  Low.  313),  702. 
Foster  v.  Hackley  (2  N.  B.  R.  406), 

570,  573,  577,  590. 
Foster   v.    Lowell    (4    Mass.    307), 

418. 
Fourth   Nat.    Bank   v.    Francklyn, 

(120  U.  S.  747),  282. 
Fowler,  In  re   (1  Low.  161),  185, 

251. 
Fowler,  In  re  (2  Low.  122),  787. 
Fowler,  In  re  (93  Fed.  Rep.  417), 

404,   615. 
Fowler  v.  Hart  (13  How.  373),  605, 

707. 
Fowler  v.  Kendall    (44  Me.   448), 

774. 
Fowler  v.   Lindsey    (3  Dall.  411), 

798 
Fowler  v.   Wood    (26    S.   C.    169), 

431. 
Fox    V.    Adams     (5    Greenl.,    Me., 

245),  377. 
Fox  V.  Eckstein   (4  N.  B.  R.  373), 

160. 
Fox    V.    Gardner    (21    Wall.    475), 

586. 
Fox  V.  Paine  (10  Ala.  523),  769. 
Fox   V.    Woodruff    (9    Barb.    498), 

293. 
Foxall   V.    Levy    (1    Cranch    C.   C. 

139),  637. 
Foye,  In  re  (2  Low.  399),  283. 
Francis  v.  Ogden  (22  N.  L.  J.  210), 

784. 
Francis-Valentine   Co.,    In   re    (93 

Fed.  Rep.  953).  388. 
Fraley  v.  Kelly  (67  N.  C.  78).  770. 

780,  781. 
Frank,   In   re    (5   Ben.    164).   270, 

324. 
Frank  v.   Musliner   (9   Am.   B.  R. 

229),  611. 


Franklin,  In  re  (8  Ben.  233),  159, 

160,  390. 
Franklin,    In    re    (106    Fed.    Rep. 

666),  93. 
Franklin  v.  Hosier    (4  B.  &  Aid. 

341),  600. 
Franklin    Sav.    Fund    Soc.    Estate 

of   (No.  5058  Fed.  Cas.),  716. 
Franklin    Syndicate,    In    re    (114 

Fed.  Rep.  205),  625. 
Frank,  In  re   (95  Fed.  Rep.  635), 

388. 
Frazier,  In  re  (117  Fed.  Rep.  746), 

591. 
Frazier  v.  Banks  (11  La.  Ann.  31), 

783. 
Frazier  v.   Southern  L.   &  T.   Co. 

(99  Fed.  Rep.  707),  31,  94,  96, 

97,  564. 
Frear,  In  re   (2  Ben.  467).  262. 
Frear,  In  re   (10  Am.  B.  R.  199), 

678,  679,  681,  682,  692. 
Freche.  In  re   (109  Fed.  Rep.  720), 

639,  646,  676,  765,  768. 
Fredenberg,   In  re    (2    Ben.   133), 

620. 
Freeman.  In  re  (4  Ben.  245),  751. 
Freeman    v.    Clay    (48    Fed.    Rep. 

849),  828,  832. 
Freeman  v.  Howe   (24  How.  450), 

76,   97,   370. 
French  v.  Andrade  (6  T.  R.  582), 

315. 
French  v.   Carr    (7   111.   664).  420. 
French    v.    Shoemaker    (12    Wall. 

100),  829,  830. 
Freund,  In  re   (98  Fed.  Rep.  81), 

659,  660. 
Freudenfels.  In  re  (No.  51120  Fed. 

Cas.),  238. 
Frey,    In    re    (9    Fed.    Rep.    376), 

748,   753,   754. 
Frey  v.  Torrey  (8  Am.  B.  R.  106), 

770,  771,  775. 
Frice,   In  re    (96   Fed.   Rep.   611). 

739,   744. 
Frick.  In  re    (1   Am.   B.   R.  719), 

70S,  723.  730. 
Friedlander  v.  Holloman  (0  R.  R. 

331).  361. 
Friedrich,    In    re    (100    Fed.    Rep. 

284),   428,   429,    439.   444.   554, 

557. 
Fiisl)Pe.    In   re    (14    Blatch.    1S5), 

391. 
I'  ishpp.   hi  re   (4   T^aw  Rep.  483), 

181. 
Frisbie.  In  re   (13   N.   B.  R.  349), 

612.  616. 
Frlzelle,  In  re   (5   N.   R.   R.   122), 

612,  613,  616,  741. 


I'iCC) 


TAIU-K    OV    CArtKS. 


References  are  to  pages. 


Frothingham    v.    Haley    (3    Mass. 

C.S),   286. 
Fuller.    Ex   parte    (2    Story    327), 

395. 
Fulton  Club.  In  re  (113  Fed.  Rep. 

997),    150. 
Fulwood  V.  Bushfield  (14  Penn  St. 

90),  29G.  297. 
Funk.  Ill  re   (101  Fed.  Rep.  244), 

145. 
Funkenstein,  Iti  re   (3  Saw.  G05), 

235. 
Furth  V.  Stahl  (10  Am.  B.  R.  442), 

586. 

G. 

Gage  &  Co.  v.  Bell   (124  Fed.  Rep. 

371),  190,  203,  227. 
Gaines   v.   Rugg    (148   U.   S.   228), 

843. 
Gainev.   In   re    (2   N.    B.   R.   525), 

422.   431. 
Galbraith,  Ex  parte  (1  N.  Y.  Leg. 

Cbs.n  5),  10. 
Gallagher,  In  re  (16  Blatch.  410), 

407. 
Gallimore,  Ex  parte  (2  Rose  424), 

149. 
Gal  linger.    In    re    (1    Saw.    224), 

907    2''8 
Gallison,  In  re  (2  Low  72),  293. 
Gait,  In  re    (120  Fed.  Rep.  443), 

3G9. 
Galveston  Ry.  v.  Gonzales  (151  U. 

S.  49G),  206. 
Gammon,    In    re    (109    Fed.    Rep. 

312),  G57. 
Gans    V.    Ellison    (114    Fed.    Rep. 

734),  333,   576,  587. 
Garcewich,  In  re    (115   Fed.  Rep. 

3G9),  375,  404,  599,  811. 
Garden.  In  re  (93  Fed.  Rep.  423), 

430,   445,   446. 
Gardner,    In    re    (103    Fed.    Rep. 

922),  126. 
Gardner  v.  Houghton    (2  B.  &  S. 

743),  758. 
Garlington,  In  re   (115  Fed.  Rep. 

999),    283,    288,    289. 
Garneau  v.  Dozier  (100  U.  S.    7), 

834. 
Garner,  In  re  (115  Fed.  Rep.  200), 

545,  434,  437. 
Garrett,    In    re    (2    Hughes    235), 

765. 
Garrett    v.    Sayles     (1    Fed.    Rep. 

371),   282. 
Garrison,  In  re  (5  Ben.  430),  148. 
Garrison   v.   Markley    (7  N.   B.   R. 

246),  105,  626. 
Gasser,  In  re  (104  Fed.  Rep.  537), 
135. 


Gassett  et   al   v.   Morse    (3   N.   Y. 

Leg.   Obs.   350),   10. 
Gassett    v.    Grout    (4    Net.,    Mass., 

486),  732. 
Gates  V.  Goodloe  (101  U.  S.  612), 

836. 
Gattman   v.   Honea    (12   N.    B.   R. 

493),  388,  593. 
Gauss   V.   Schrader    (48  Fed.  Rep. 

816),  260. 
Gay,    In    re    (98    Fed.    Rep.    870), 

183,  252,  254,   265. 
Gay,  In  re   (2  N.  B.  R.  358),  748, 

749. 
Gay   V.    Farran    (2    Cin.    Sup.    Ct. 

426).  772. 
Gay  V.   Kingsley    (93   Mass.   345). 

407. 
Gay  V.   Parpart    (101   U.   S.,  391), 

828,  829. 
Gayle   v.    Randall    (71    Ala.    469), 

434. 
Gaylord,  In  re  (106  Fed.  Rep.  833), 

660. 
Gaylord,  In  re  (111  Fed.  Rep.  717), 

406. 
Gaylord,  In  re  (112  Fed.  Rep.  668), 

746,  818. 
Gaylord,    In    re    (113    Fed.    Rep. 

131),  323. 
Geillinger   v.    Philippi    (133   U.    S. 

246),  21. 
Geister,  In  re  (97  Fed.  Rep.  322), 

89. 
George,  In  re   (1  Low.  409),  267, 

753. 
Georie  V.  Clagett    (7  T.  R.   359), 

315. 
Georgia    Handle    Co.,    In    re    (109 

Fed.  Rep.  632),  602. 
Gerry,  In  re  (112  Fed.  Rep.  957), 

005,  702,   705,  708. 
Gerdes,  In  re  (102  Fed.  Rep.  318), 

77,  90,  92,  95,  359,  605. 
Gerson,  In  re  (105  Fed.  Rep.  891), 

289,  294. 
Gerson,  In  re  (107  Fed.  Rep.  897), 

295,  303,  30^. 
Gerstel,  In  re  (10  Am.  B.  R.  411), 

668,  674. 
Ghiglione,    In    re    (93    Fed.    Rep. 

186).    139,   241. 
Gibbs,  In  re   (109  Fed.  Rep.  627), 

428,  430,  704,  706,  709. 
Gioson  V.  Boutts   (4  M.  &  G.  169). 

571. 
Gibson    v.    Boutts    (3    Scott  229), 

751. 
Gibson  v.  Carruthers   (8  M.  &  W. 

326),  417,  418,  419. 
Gibson  v.  King  (10  M.  &  W.  667), 

148. 


TABLE    OF   CASES. 


1267 


References  are  to  pages. 


Gibson  v.  Lewis  (11  N.  B.  R.  247), 

282. 
Gibson  v.  Muskett  (4  M.  &  G.  160), 

571. 
Gibson  v.  Warden   (14  Wall.  244), 

170,    368.    386,    389,    584.    605, 

731. 
Gilbert,  In  re  (1  Low.  340).  612. 
Gilbert,  In   re    (2   N.   B.   R.   378), 

614. 
Gilbert,  In  re  (112  Fed.  Rep.  951), 

158.  161,  162.  1C8. 
Gilbert    v.    Quinby    (1    Fed.    Rep. 

111).  731. 
Gile.  In  re  (5  Law  Rep.,  224),  187. 
Gill,    In    re    (100    Fed.    Rep.    57), 

348. 
Gillette,  In  re  (104  Fed.  Rep.  769), 

190,  222,  580, 
Gilman     v.     Lockwood     (4     Wall. 

409),  23.  759. 
Githens  v.  Shiffler   (112  Fed.  Rep. 

505),  159,  163. 
Glaser,   In   re    (2    Ben.    180),   635, 

039,   642,    O-fa. 
Glass.  In  re   (119  Fed.  Rep.  391), 

134. 
Glass.  In  re   (119  Fed.  Rep.  509), 

742,  743.  744. 
Gladding,    In    re'  (120    Fed.    Rep. 

709),  726. 
Glenn  v.  Howard  (65  Md.  40),  372, 

761. 
Glenn  v.  .Johnson  (18  Wall.  476 ), 

419. 
Glenny  v.  Langdon  (98  U.  S.  20), 

352,  372,   383,  384.   417.   606. 
Globe  Cycle  Wlcs.,  7m  re  (2  Am.  B. 

R.  447),  709. 
Globe    Ins.    Co.    v.    Cleveland    Ins. 

Co.    (14  N.  B.  R.  311),  25,  20, 

27,  29,  391. 
Glover  v.  Love   (2G  Coop.  Sup  Ct. 

Rep.  657),  405. 
Glovor   Gromry   Co.    v.    Dome    (8 

Am.  B.  R.  702),  694. 
Godd^.rd  v.  Ordway  (94  U.  S.  672), 

820. 
Godd:i-rl  v.  Weaver  (1  Woods  257), 

368,  731. 
Godding  v.  Rosenthal    (180  Mass. 

4.']),  286. 
Goldberg,    In    re    (117    Fed.    Rep. 

692),  88,  90.  92. 
Goldberg  v.  Harlan  (07  N.  E.  Rep. 

707).  609. 
Golden  v.  Prince    (2  Wash.  C.  C. 

313).  20. 
Goldey  v.   Morning  News   (150   TT. 

S.   518),   200. 
Goldman,    In    re    (102    Fed.    Rep. 

122),  396. 


Goldman   v.  Smith    (93  Fed.  Rep. 

182),    103,   220,   222.    230. 
Goldman,  Bettman  &  Co.  v.  Smith 

(41  W.  L.  Bui.  4),  218. 
Goldschmidt.  In  re    (3   Ben.   379), 

751. 
Goldsmith,   In  re    (118   Fed.   Rep. 

703),   120,    368,   052,    599,   703, 

704,  706,  707,  710. 
Goldville   Mining  Co..   In  re   (123 

Fed.  Rep.  579),  126,  136. 
Golson   V.   Niehoff    (2    Biss.    434), 

581. 
Good,  In  re  (78  Cal.  399).  148. 
Good,  In  re    (99    Fed.  Rep.   389), 

809,  813,   817.  820. 
Goodale.  In  re  (109  Fed.  Rep.  783), 

656,  660,  743,  740,  752. 
Goodall  V.  Tuttle  (3  Biss.  219),  19, 

87,  423. 
Goodfellow,   In   re    (1    Low.   510), 

143,  170,  185. 
Goodier  v.  Barnes    (91   Fed.  Rep. 

798),  103,  008. 
Goodman,  In  re  (5  Biss.  401).  146, 

227. 
Goodman    v.    Brenner    (109    Fed. 

Rep.  481),  816,  817. 
Goodman  Shoe  Co..  In  re  (96  Fed. 

Rep.  949),  314. 
Goodrich     v.     Dobson    (43    Conn. 

576),  310.  313. 
Goodridge,  In  re  (2  N.  B.  R.  324), 

659. 
Goodwin.    In    re    (122    Fed.    Rep. 

111).  688. 
Goodwin  v.  Noble  (8  El.  &  B.  587), 

397,  400. 
Goodwin  v.  Stark  (15  N.  H.  218), 

778. 
Goodyear    v.    Mullee     (5     Blatch. 

429),   632.   609. 
Gordon.  Ex  parte   (1  Black.  503), 

708. 
Gordon,  In  re  (115  Fed.  Rep.  415), 

542. 
Gordon    v.    Anthony     (10    Blatch. 

453).   378. 
Gormley    v.    Bunyan    (138    U.    S., 

623),  361. 
Gottardi,  In  re  (7  Am.  B.  R.  723), 

121. 
Gould   v.   Sessions    (76   Fed.   Rep. 

163).  076. 
Grady.  In  re  (3  N.  B.  R.  227).  20fi. 
Graff,  In  re    (8   Am.    B.   R.   744). 

282. 
Graff.  In  re   (117  Fed.   Rop.   343), 

308.    .502,    599. 
Graff  V.  Bonnett  (31  N.  Y.  9).  414. 
Graham.  K.r  parte  (3  Wash.  C.  C. 

450),  048. 


12(58 


TAHLK    OF   CASKS. 


References  are  to  pages. 


Graham,  In  re  (2  Biss|  449).  436. 
Graham  v.  Boston  H.  &  E.  R.  Co. 

(lis  U.  S.  llil),  234. 
Graham  v.  Pierson  (6  Hill,  N.  Y., 

247).  290.  301.  784. 
Graham  v.  Stark  (3  N.  B.  R.  357), 

573.   575. 
Graham    v.    Stark    (3    Ben.    520), 

571,   575.   577,  578,  580.  592. 
Graham  v.  Van  Dieman's  Land  Co. 

(11  Exch.  101),  372,  405. 
Graham  v.  Whichelo   (1  Cr.  &  M. 

ISG),  264. 
Granger,  In  re    (8  N.   B.  R.   30), 

335. 
Grant.  In  re    (2   Story  312),   415, 

419. 
Grant,  In  re   (106  Fed.  Rep  496), 

153,    163,    200,    245,    247,    249, 

254. 
Grant  v.  First  Nat.  Bank  (97  U.  S. 

SO),  570,  578,  592. 
Grant  Bros.,  In  re  (118  Fed.  Rep. 

73).   121. 
Grant  Shoe  Co.,  In  re    (125  Fed. 

Rep.   576),   189. 
Graver  v.  Faurot  (162  U.  S.  435), 

806. 
Graves,  In  re   (9  Fed.  Rep.  816), 

320,  336. 
Graves,  In  re  (24  Fed.  Rep.  550), 

743. 
Graves,  In  re   (29  Fed.  Rep.  60), 

670. 
Graves,  In  re    (2  Ben.  100),  699, 

716. 
Graves    v.    Dolphin    (1    Sim.    66), 

414. 
Gray,  In  re  (3  Am.  B.  R.  647),  382, 

383,  391,  392,  606. 
Gray  v.    Bennett    (3   Met.,   Mass., 

526),  284,  418. 
Gray   v.    Chicago,    etc.    R.    R.    Co. 

(Woolw.  63),   672. 
Gray    v.    Chiswell    (9    Ves.    118), 

243. 
Gray  v.  Rollo  (18  Wall.  629),  311, 

312,   315. 
Great  Western  Telegraph  Co.,  In 

re  (5  Biss.  359),  234,  810. 
Greater  American   Exposition,  In 

re  (102  Fed.  Rep.  986),  94. 
Greaves,   Ex  parte    (5   L.   R.    Ch. 

App.  326),  688. 
Green,  In  re  (106  Fed.  Rep.  313), 

1G9. 
Green,  In  re  (116  Fed.  Rep.  118), 

257,  724. 
Green  v.  Bank  of  England  (3  Y.  & 

C.  722),  405. 
Green  v.  Blunt  (50  la.  79),  434. 


Green  v.  Elbert    (137  U.   S.  615), 

821. 
Green  v.  Sarmiento  (3  Wash.  C.  C. 

17),  759. 
Green  v.  Spicer   (1  K.  &  M.  395), 

414. 
Green     River     Deposit     Bank     v. 

Craig    (110    Fed.    Rep.    137), 

142,  168,  199,  224,  249. 
Greenberg,   In   re    (106   Fed.   Rep. 

496),   633,   638. 
Greenberg,  In   re    (114   Fed.   Rep. 

773),  658,  659,   750. 
Greenebaiim,   In   re    (1   Chi.   Law 

Jour.    599),   687,   693. 
Greenewald,  In  re    (99  Fed.  Rep. 

705),  726. 
Greening,  Ex  parte  (13  Ves.  206), 

407. 
Greensfedler  v.  Corbett    (3  N.   B. 

R.  825),  404. 
Greenwald     v.     Appell     (17     Fed. 

Rep.  140),  755. 
Grefe,    In    re    (2    N.    B.    R.    329), 

742. 
Gregg.  In  re   (1  Hask.  173),  366, 

402. 
Gregg,  In  re  (4  N.  B.  R.  456),  388, 

591. 
Gregory    v.    Pike-    (70    Fed.    Rep. 

520),  210. 
Gretchell,  In  re  (8  Ben.  256),  234. 
Greth,  In  re  (112  Fed.  Rep.  978), 

336. 
Grether  v.  Wright    (75  Fed.  Rep. 

742),   230. 
Griel    v.    Solomon    (82    Ala.    85), 

780.      . 
Griffin    v.    Sutherland    (14    Barb., 

N.  Y.,  456),  423. 
Grigsbv  v.  Purcell  (99  U.  S.  505), 

8.37. 
Grimes,  In  re  (94  Fed.  Rep.  800), 

424,  426,  444,  515,  516. 
Grimes,  In  re  (96  Fed.  Rep.  529), 

398,   441,    515. 
Griswold  v.  Pratt  (9  Met.  16),  20, 

23,  24,  25,  26,  29. 
Grossman,   In   re    (111   Fed.   Rep. 

507),  127,  658,  750. 
Groves    v.   Kilgore    (72   Me.   489), 

148. 
Grubbs-Wiley   Grocery   Co.,   In   re 

96  Fed.  Rep.  183),  303.  726. 
Guise  V.  State   (41  Ark.  249),  423. 
Gumble  v.  Pitkin  (124  U.  S.  131), 

97,  99. 
Gunn  'v.    Barry    (15    Wall.    621), 

423. 
Gurev/itz,    In   re    (121    Fed.    Rep.J 

982),   726. 


TABLE    OF    CASES. 


1269 


References  are  to  pages. 


Gutman,    In    re     (114    Fed.    Rep. 

1009),  89,  93. 
Gutwillig,    In    re    (90    Fed.    Rep. 

475),   23,   32,   88.   93,   167,   215, 

391,  392. 
Gutwillig,    In    re    (92    Fed.    Rep. 

337),  89,  812. 

H. 

Haake,  In  re    (2   Saw.   231),  289, 

300,   435. 
Hackney    v.    Raymond    Bros.    Co. 

(10  Am.  B.  R.  213),  388,  574, 

578,  579,  580,  610. 
Hadley,  In  re   (12  N.  B.  R.  366), 

199,  641. 
Haensell,  In  re  (91  Fed.  Rep.  355), 

420,  421. 
Hagan,  In  re  (6  Ben.  407),  722. 
Haggerty    v.     Morrison     (59    Mo. 

324),  784. 
Haines    v.    Carpenter    (91    U.    S. 

254),  87. 
Haines  v.   Stauffer    (13   Pa.   541), 

781. 
Haldame  v.  United  States  (69  Fed. 

Rep.  819),  828. 
Hale,  In  re   (107  Fed.  Rep.  432), 

254,  267. 
Halford,   Ex  parte    (19  L.  R.  Eq. 

436),  695. 
Haliburton  v.  Carter  (55  Mo.  435), 

773. 
Hall,    Ex    parte    (No.    5919    Fed. 

Cas.),  176. 
Hall,  In  re    (2  Hughes  411),  441. 
Hall  V.  Fowler  (6  Hill,  N.  Y.,  630), 

778,   783. 
Hall  V.  Scovel   (10  N.  B.  R.  295), 

601. 
Hambright,  In  re  (2  N.  B.  R.  498). 

715. 
Hamburger,   In   re    (12   N.   B.    R. 

277),   285,   398. 
Hamilton,  In  re  (1  Fed.  Rep.  800), 

262. 
Hamilton,   In   re    (102    Fed.    Rep. 

(■,9,?.),  728. 
Hamilton,  In  re  (4  Am.  B.  R.  747), 

213. 
Hamilton    v.    Reynolds     (88     Ind. 

101  ),   763,   771. 
Hamlin,   Ex  parte    (2   Low.   571), 

697. 
Hamlin,  In  re   (8  Biss.   122),  240. 
Hammer    v.    Freese    (19    Pa.    St. 

255),  434. 
Hammond,    Ex    parte    (21     Wkly. 

Rep.  865),  266. 
Hammond,    In    re    (98    Fed.    Rep. 

845),  404. 


Hammond.   In    re    (1    Low.    381) 

748.    749. 
Hampton  v.  Rouse  (22  Wall.  263) 

365. 
Handlin,  In  re  (3  Dill.  290),  443 
Hankey  v.    Smith    (3   T.   R.   507) 

312. 
Hanna,  In  re  (105  Fed.  Rep.  587) 

368,  562,  599. 
Hanna,  In  re  (5  Ben.  5),  271. 
Hannahs,  In  re   (8  Ben.  533),  691 
Hanover  Nat.  Bank  v.  Moyses  (186 

U.  S.  181),  18,  20,  426. 
Hansen.  In  re  (107  Fed.  Rep.  252) 

659. 
Hansen,  In  re   (2  N.  B.  R.   211) 

743. 
Hanson,  Ex  parte    (12  Ves.   346) 

315. 
Hanson  v.  Stevenson  (1  B.  &  Aid 

303),  397,  399,  400. 
Hapgood,  In  re  (2  Low.  200),  164 

588. 
Harcourt,  Ex  parte  (2  Rose  203) 

240. 
Harddin,  In  re    (IN.  B.  R.  395) 

ISO. 
Hardee  v.  Wilson  (146  U.  S.  149) 

821. 
Hardin,  In  re  (1  Hask.  163).  319 
Hardv  v.  Carter  (8  Hump.,  Tenn. 

153),  297. 
Hardy  v.  Clark  (3  N.  B.  R.  385) 

233. 
Hare,  In  re  (119  Fed.  Rep.  246) 

113,    276,    277,    349. 
Hargardine-McKittriclv  Dry  Goods 

Co.  V.  Hudson   (122  Fed.  Rep 

232),  319,  334,  757.  7f"0.  770. 
Harper,  In  re  (105  Fed.  Rep.  900) 

166,  167. 
Harper  Bros.,  In  re  (100  Fed.  Rep 

266),  160,  167,  16S. 
Harpke,  In  re  (116  Fed.  Rep.  295) 

576. 
Harrel  v.  Real  (17  Wall.  590),  384 
Harrington.  In  re   (90   Fed.   Rep 

300),  536. 
Harrington  v.  McNaughton  (20  Vt 

293).  293. 
Harris.    Ex    parte    (2    Low.    568) 

606. 
Harris.  In  re  (108  Fed.  Rep.  517) 

251. 
Harris,  In  re  (117  F'>d  Rpp.  575) 

684,  696. 
Harris,  In  re  (6  Ben.  375).  235. 
Harris.  In  rv   (3  N.  Y.,  Leg.  Obs 

152).  187,  632. 
Harris  v.  Barber  (129  U.  S.  308) 

800. 


1270 


TAULK    OK    ("A8KS. 


References  are  to  pages 
Collins    (lo    Ala.    388), 


Harris 

;Uil. 
Harris   v.   Farwell    (15   Beav.   31), 

2(i4. 
Harris  v.  Peck  (1  R.  I.  262).  781. 
Harrison  v.  Gamble  (69  Mich.  96), 

694. 
Harrison  Mercantile  Co.,  In  re  (95 

Fed.  Rep.  123).  137.  139,  241. 
Harrison  v.  Sterry  (5  Cranch  289), 

243.  325,  377.  729.  764. 
Hart  V.  Smith  (4  L.  R.  Q.  B.  61), 

688. 
Harter  v.  Harlan  (2  N.  B.  R.  238), 

639. 
Harthill,  In  re  (4  Ben.  448),  217, 

219. 
Harthorn.  In  re  (4  N.  B.  R.  103), 

726. 
Hartman,  In  re  (96  Fed.  Rep.  593), 

246,  267. 
Hartman.    In    re    (121    Fed.    Rep. 

940),    607. 
Harvev.    In    re     (122    Fed.    Rep. 

745),   325,  702,  723. 
Harvey's  Estate,  In  re   (13  L.  R. 

Ch.  Div.  216),  381. 
Harvev  v.  Crane  (5  N.  B.  R.  218), 

393,  606. 
Harvey  v.  Richmond,   etc.  R.   Co. 

(64  Fed.  Rep.  19),  206. 
Har\\'ood  v.  Dlekerhoff  (117  U.  S. 

200),  829,  830. 
Haskell,  In  re   (11  N.  B.  R.  164), 

688. 
Haskell  v.   Equitable   Life   Assur. 

Society   (181  Mass.  341),  410. 
Haskell  v.  Ingalls    (1  Hask.  341), 

571. 
Haskin,  In  re  (109  Fed.  Rep.  789), 

441,  528. 
Haskins  v.  R.   R.   Co.    (109   U.   S. 

106),  828. 
Hasseltine  v.  Prince  (95  Fed.  Rep. 

802),  3D5,  39G. 
Hassenbusch,  I:i  re  (108  Fed.  Rep. 

35),  614,  640,  C4C,  812. 
Hastings    v.    Wilson    (Holt    290), 

397.  400. 
Hatch,  In  re  (102  Fed.  Rep.  280), 

428,  442,  4C9. 
Hatch  V.  Seely  (13  N.  B.  R.  383), 

335. 
Hatcher    v.    Jones    (53    Ga.    208). 

431. 
Hatje,  In  re  (6  Biss.  43G).  304. 
Haughey  v.  Albion,  2  Bond  244). 

104,  105,  570. 
Haughton,  In  re  (1  N.  B.  R.  460), 

2.",7. 
Hausrnan,    In   re    (121    Fed.   Rep. 

984),  669. 


Havens,   In   re    (1    N.   B.   R.   485), 

349. 
Havens,  In  re  (8  Ben.  309),  219. 
Havens    &    Geddes    Co.    v.    Pierek 

120  Fed.  Rep.  244),  81,   100. 
Hawk,  In  re  (114  Fed.  Rep.  916), 

811. 
Hawk    v.    Hawk    (102    Fed.    Rep. 

679),  404. 
Hawkeye   Smelting  Co.,  In  re    (8 

N.  B.  R.  385),  229. 
Hawkins,    Ex    parte    (4    Ves.    Jr. 

691).  206. 
Hawkins,    In    re    (125    Fed.    Rep. 

633),  712. 
Hawkins  v.  Hawkins   (1  Q.  B.  D. 

25),  290. 
Hawley,  In  re  (116  Fed.  Rep.  428), 

119. 
Hawley,  In  re  (117  Fed.  Rep.  364), 

713. 
Haworth  v.  Travis    (67   III.   301), 

431. 
Hayes  v.  Flowers  (25  Miss.  169), 

782 
Haynes,  In  re   (2  N.  B.  R.   227), 

276,  721,  733. 
Haynes  &  Sons,  In  re     (122  Fed. 

Rep.  660),  752. 
Hays,  In  re   (117  Fed.  Rep.  879), 

397. 
Hays   V.   Fisher    (102    U.    S.    122), 

670. 
Hays,   Foster  &  Ward   Co.,  In  re 

(117  Fed.  Rep.  879),  305,  306. 
Hazleton    v.    Valentine     (1    Low. 

270),  637,  643. 
Headley,  In  re  (97  Fed.  Rep.  765), 

323 
Heaney  v.  Birch  (1  Rose  356),  149. 
Heard  v.  Jones   (15  N.  B.  R.  402), 

335. 
Heath.  In  re  (7  N.  B.  R.  448),  613. 
Heath  v.   Percival    (1   P.  W.   682), 

264. 
Heath    v.    Shaffer    (93    Fed.    Rep. 

647),   77,   92. 
Hebbert,    In    re    (104    Fed.    Rep. 

322),  188. 
Heffren    v.    Jayne    (39    Ind.    463), 

774. 
Heffren   v.    Leroy    (39    Ind.    471), 

774. 
Heinsfurter,  In  re   (97  Fed.  Rep. 

198),  318. 
Heller,  In  re  (41  How.  Prac.  213), 

187. 
Ilelmbold    v.    Helmbold    Mfg.    Co. 

(53   How.   Prac.   453),   378. 
Hemby-Hutchinson  Pub.  Co.,  In  re 
(105  Fed.  Rep.  909),  81. 


TABLE    OK    CASKS. 


1271 


References  are  to  pages. 


Henderson,    In    re    (9    Fed.    Rep. 

196),  238. 
Henderson  v.  Carbondale  Co.   (140 

U.   S.   25),  205. 
Hendrie  v.  Sayles   (98  U.  S.  546), 

379. 
Hendry    v.    Ocean    Steamship    Co. 

(164   U.   S.   707),  802. 
Hendryx   v.    Fitzpatrick    (19   Fed. 

Rep.   810),  GG9,  670,  676.  , 

Henkel,  In  re     (2  Saw.  305),  443. 
Henly  v.   Lanier    (75   N.   C.   172),  { 

427. 
Hennequin   v.   Clewes    (111    U.    S.  , 

676),  772.  775,  794. 
Hennocksburgh,    In    re     (6    Ben. 

150),  318. 
Henrich,    In   re    (5    Blatch.    414), 

647. 
Henry,  In  re     (9  Ben.  449),  693. 
Henschel,    In    re    (109    Fed.    Rep. 

861),  113,  276,  348. 
Henschel,    In   re    (113    Fed.    Rep. 

443),  277. 
Hercules  Mut.   Ins.   Co.,  In  re   (6 

Ben.  35),  150. 
Herdic,  In  re   (1  Fed.  Rep.  242), 

753. 
Herdon   v.   Givens    (16   Ala.   261), 

779. 
Hemdon    v.    Davenport    (75    Tex. 

402),  369. 
Herndon  v.  Howard  (9  Wall.  664), 

359,   360,   367. 
Herndon    v.    Ridgway    et    al     (17 

How.  424),  205. 
Herrick,  In  re   (13  N.  B.  R.  312), 

261. 
Herrman,  In  re  (4  Ben.  126),  272. 
Herscy    v.    Elliott    (67    Me.    526), 

407. 
Kersey  v.  Fosdick   (20  Fed.  Rep. 

44),  722. 
Herzberg,    In   re      (25    Fed.    Rep. 

690),  95. 
Herzikopf,   In  re    (118    Fed.   Rej). 

101).  134,  201. 
Herzikopf,   In  re    (121    Fed.   Rep. 

544),  157,  226,  231. 
Hester,  In  re  (5  N.  B.  R.  285).  396. 

427,    428. 
Hewcs  V.  Parkman  (20  Pick.  Mass. 

90),  434. 
Hewitt  V.  Filbert  (116  U.  S.  142), 

821. 
Hewett    V.    Norton     (Woods    68), 

370. 
Hey  man.  In  re  (95  Fed.  Rep.  800), 

296.   297.   298. 
Hey  man.    In    re    (104    Fod.    Rep. 

677).    659. 


Heyman,    In    re    (108    Fed.    Rep. 

207),  698. 
Hicks.  In   re    (2   Fed.   Rep.   851), 

115. 
Hicks,  In  re  (107  Fed.  Rep.  910), 

240,  654. 
Hicks   V.    Hotchkiss    (7    John   Ch. 

N.  Y.  297),  759. 
Hicks   V.   Knost    (178   U.    S.    541), 

80,  85,  607,  792. 
Hicks  V.  Langhorst   (6  Am.  B.  R. 

178),    577,   609. 
Higgins  Case  (6  Coke  344),  265. 
Hilborn,  In  re  (104  Fed.  Rep.  866), 

275,  679,  682. 
Hildebrant,  In  re   (10   Am.   B.  R. 

184),  303,  304,  319. 
Hill,   In   re    (96    Fed.    Rep.    185), 

428,  429,  430.  439,  461,  462. 
Hill,  In  re  (1  Ben.  321),  179,  180, 

181. 
Hill,  In  re  (2  Ben.  136),  743. 
Hill,  In  re  (7  Ben.  378),  233. 
Hill   V.    Bowers    (4    Heisk.    Tenn. 

272),  396. 
Hill  V.  Cowery  (25  L.  J.  Ex.  285), 

169. 
Hill  V.  Dobie  (8  Taunt.  325),  397, 

400. 
Hill  V.  Dobie  (2  Moore  342),  397, 

400. 
Hill  V.  Gordon   (45  Fed.  Rep.  278), 

208. 
Hill  V.  Harding   (107  U.  S.  631), 

359,  795. 
Hill  V.   Harding   (130   U.   S.   699), 

784. 
Hill   V.   Lew    (98    Fed.    Rep.    94), 

226,   232. 
Hill    V.    Robbins    (1    Mich.    N.    P. 

305).  7(;o. 
Hill    V.    Robbins    (22    Mich.    474), 

779. 
Hill  V.  Thompson    (94  U.  S.  322). 

816. 
Hills  V.  Alden  (2  Hask.  299).  712, 

713.  714. 
Hilton.  In  re  (104  Fed.  Rep.  981), 

762. 
Hilton.  In  re  (4  Am.  B.  R.  774), 

88.  92  . 
Hinckel    Brewing  Co.   In   re    (123 

Fed.  Rep.   942).  305.  307.  343. 
llinfkPl  Brew.  Co..  In  re  (124  Fed. 

Kep.   702).  363. 
Hinckley    v.    Morton     (103    V.    S. 

764).   843. 
Hindman,    In    re    (104    Fed.    Rep. 

331).  450.  453. 
Hinds.  Et  parte  (3  DeG.  &  S.  613). 

258. 
Hinds.  In  re  (3  N.  B    U.  351),  2'fi. 


]'J7 


TABLK    OK    OASKi-^. 


References  are  to  pages. 


Hines.  Iti  re  (117  Fed.  Rep.  790), 

4:55. 
Hinsdale,    In    re    (111    Fed.    Rep. 

502),  369. 
Hirsch.   In  re    (2    Ben.    493),    79, 

205. 
Hirsch,  In  re  (96  Fed.  Rep.  468), 

744. 
Hirsch.  In  re  (97  Fed.  Rep.  571), 

244,  245. 
Hirschman,  In  re  (104  Fed.  Rep. 

09),  282,  303,  318,  319. 
Hiscock   V.    Jaycox    (12    N.   B.    R. 

507),  258,  396. 
Hitchcock  V.  Rollo   (3  Biss.  276), 

Hitz,   Ex  parte    (111   U.    S.    766), 

798 
Hixon,  In  re   (93  Fed.  Rep.  440), 

744. 
Hoadley,  In  re   (2  N.  B.  R.  704), 

395. 
Hoag,  in  re    (97  Fed.  Rep.   543), 

554. 
Hoagland  v.  Crum   (113  111.  365), 

305. 
Hobbs,    Ex   parte    (2    Low.    491), 

413. 
Hobou2:h  v.  Murphy   (114  Pa.   St. 

358),  779. 
Hoe  V.  Kahler  (27  Fed.  Rep.  145), 

834. 
Hoffman,    In    re    (102    Fed.    Rep. 

979),  658. 
Holbrook,  In  re  (2  Low.  259),  2G0. 
Holbrook  v.   Coney    (25   111.   447), 

377. 
Holden,  In  re  (114  Fed.  Rep.  650), 

411,  425,  810. 
Holden  v.  Stratton  (191  U.  S.  115), 

796. 
Holsate,  In  re  (8  Ben.  247),  788. 
Holland  v.  Fuller    (13   Ind.   195), 

413. 
Holland  v.  Withers   (76  Ga.  667), 

422. 
Hollister,  In  re  (3  Fed.  Rep.  452), 

296,  298. 
Holloway,    In    re    (93    Fed.    Rep. 

638),  92,  710. 
Holman,  In  re  (92  Fed.  Rep.  512), 

744. 
Hoist,  In  re    (11  Fed.  Rep.  856), 

753. 
Holstein,    In    re    (114    Fed.    Rep. 

794),  658. 
Holyoke  v.  Adams  (59  N.  Y.  233), 

784. 
Home   Ins.  Co.  v.   Hollis    (53  Ga. 

659),  359. 
Hood  V.  Karper  (5  N.  B.  R.  358), 

581. 


Hood  V.  Spencer  (4  McLean  168), 

769. 
Hoole,  In  re    (3   Fed.   Rep.   496), 

700,  716. 
Hooson,    Ex   parte    (L.    R.    8    Ch. 

App.  251),  83. 
Hoover,  In  re  (105  Fed.  Rep.  354), 

788. 
Hoover,  In  re  (113  Fed.  Rep.  136), 

528. 
Hoover   v.    Wise    (91    U.    S.    308), 

570,  580,  588. 
Hopkins,    In    re    (103    Fed.    Rep. 

781),  542. 
Hopkinson  v.  Lovering   (11  L.  R. 

Q.  B.  Div.  92),  400. 
Horgan,  In  re  (98  Fed.  Rep.  414), 

612,  624. 
Horner  v.  Speed  (2  Patt.  &  H.  Va. 

616),  779,  781,  782. 
Horner  v.   Spelman    (78  111.  206), 

782. 
Horner  v.  United  States  (44  Fed. 

Rep.  677),  650,  652. 
Hornthal  v.  McRae  (67  N.  C.  21), 

781. 
Horton,  In  re  (102  Fed.  Rep.  986), 

77. 
Hornstein,   In  re    (122   Fed.   Rep. 

2eC),    93,    97,    190,    333,    334, 

761. 
Hosie,  In  re   (7  B.  R.  G'^l),  413. 
Hoskins,  In  re  (CraTjbe  4(7(7),  GST. 
Hosmer   v.   Jewett    (6   Ben.   208), 

412,  413. 
Hough  V.  Natiom.l  Bank  (4  Biss. 

349),   588. 
Houghton,    In   re    (2    Low.    328), 

741. 
Houghton,  In  re  (10  N.  B.  R.  337), 

754. 
House,  In  re   (1  N.  Y.  Leg.  Obs. 

348),    10,   163,   590. 
House   V.    National   Bank    (43    O. 

S.  346),  408. 
Houston,  In  re  (94  Fed.  Rep.  119), 

765. 
Houston    V.    City    Bank    (6    How. 

486),   605. 
Houston  V.  City  Bank    (107  Fed. 

Rep.  73),  706,  707. 
Hovey,  In  re   (5  Fed.  Rep.  356), 

722. 
Hovey  v.  Home  Insurance  Co.  (10 

N.  B.  R.   224),  316. 
How,   In   re    (18    N.    B.    R.    565), 

371,   623. 
Howard,  In  re  (95  Fed.  Rep.  415), 

GIG,  C17,  619,  622,  667. 
Howard,    In    re     (100    Fed.    Rep. 

G.30),  345. 


TABLE    OP   CASES. 


1273 


References  are  to  pages. 


Howard,  In  re   (4  N.  B.  R.  571), 

295. 
Howard  Nat.   Bank,  Ex  parte    (2 

Low.   487),   696. 
Howden,    In    re    (111    Fed.    Rep. 

723),   659,  660,  744. 
Howell,    In    re     (105    Fed.    Rep 

594),   656. 
Howland.    In    re    (109    Fed.    Rep. 

869),  375. 
Howland,  In  re  (2  N.  B.  R.  357), 

146,  227,  239. 
Hoyt,  In  re   (3  N.  B.  R.  55),  719, 

733. 
Hubbard,  In  re  (1  Low.  190),  339. 
Hubbard,    In    re    (98    Fed.    Rep, 

710),  284,  291,  765. 
Hubbard  v.  Tod   (171  U.  S.  474), 

803. 
Hubbell  V.  Cramp  (11  Paige  310), 

769. 
Hudgins  v.  Kemp  (18  How.  538), 

829,  830,  835. 
Hudgins  v.  Lane  (2  Hughes  361), 

270. 
Hudson    V.     Guestier     (7    Cranch 

1),  840. 
Huenergardt      v.      Brittaip      Dry- 
Goods  Co.  (116  Fed.  Rep.  31), 

435,   443. 
Hufnagel,  In  re  (12  N.  B.  R.  554), 

285,  397. 
Hugewitter  v.  Von  Sacks  (4  Ben. 

167),  413. 
Hughes,  In  re  (8  Biss.  107),  444. 
Hughes   V.   Nelson    (29   N.   J.   Eq. 

547),  407. 
Hughes  V.  Oliver   (8  Pa.  St.  426), 

770. 
Hull,  In  re   (115  Fed.  Rep.  858), 

369,  393,  596,  600. 
Humbert,    In    re    (100    Fed.    Rep. 

439),  170,  222.  233. 
Humphreys     v.     Blight     (4     Dall. 

370),  316,  317. 
Hunt,  In  re  (5  N.  B.  R.  433),  190. 
Hunt,  In  re  (5  N.  B.  R.  493),  427. 
Hunt,   In   re    (17    N.    B.   R.    20.'), 

271. 
Hunt.  In  re   (26   Fed.  Rep.  739), 

7.-.O. 
Hunt,  In  re   (118  Fed.  Rep.  282), 

134,   201. 
Hunt   V.   Oliver    (109   U.    S.    177). 

830. 
Hunter,    In    re    (3    McLean    297), 

786. 
Hurst.  In  re  (4  Dall.  387).  646. 
HutEt.  In  rr    (\    Flipp.   162).   684, 

69.'.. 
Hussev  V.   Danforth   (77  Me.  17), 

637. 


Hussman,  In  re  (2  N.  B.  R.  437), 

IGO. 
Hutchins  v.   Taylor    (5  Law  Rep. 

289),  10,  751. 
Hutchinson    v.    Campbell    (25   Pa. 

St.   273),   434. 
Hutchinson    v.    LeRoy    (113    Fed. 

Rep.  202),  808,  811,  816,  839. 
Hutchinson  v.  Otis  (115  Fed.  Rep. 

937),   562,   839. 
Hutchinson  v.  Otis  (123  Fed.  Rep. 

14),  796. 
Hutchinson    v.    Otis     (190    U.    S. 

552),  320,  326,  338,  339,  819. 
Hutto,  In  re  (3  N.  B  R.  787),  601. 
Hyde,   In   re    (6    Fed.   Rep.    587), 

714. 
Hyde  v.  Corrigan  (9  N.  B.  R.  466), 

581. 
Hyde  v.  Sontag  (1  Saw.  249),  382. 
Hyde  v.  Tufts   (45  N.  Y.  Sup.  Ct. 

56),  420. 
Hyde   V.    Woods    (94    U.    S.    523), 

406. 
Hyde  &  Gload  Mfg.  Co.,  In  re  (103 

Fed.  Rep.  617),  239. 
Hyman,  In  re  (97  Fed.  Rep.  195), 

658. 
Hyman    v.    Chales    (12    Fed.   Rep. 

955),    205. 
Hyslop  V.  Hoppock    (5   Ben.  447), 

207. 


Idaho   &    Ore.    Land    Imp.    Co.    v. 

Bradbury     (132    U.    S.    509). 

835. 
Idzall,  In  re   (96  Fed.  Rep.  314), 

750. 
Illinois  Cent.  Rd.  v.  Illinois   (146 

U.  S.  387),  835. 
Illinois  Trust  &  Sav.  Bank  v.  Na- 
tional   Bank    (15    Fed.    Rpp. 

858),  413. 
Imlay  v.  Carpentler  (14  Cal.  17"), 

293. 
Independent      Ins.      Co.,      In      re 

Holmes    103).    27,    150. 
Independent    Ins.    Co..    In    re    (2 

Low.    1S7).   302. 
Independent    Thread    Co.,    In    re 

(113    Fed.   Rep.    998),    190. 
Indianapolis,    etc.,    R.    Co.,    In   re 

(5  Blss.  287).  240. 
Tnpralls  v.  Savage  (4  Pa.  221).  782. 
Inglehart  v.  Stansbury  (151  U.  S. 

68).    825. 
Inplis     V.     McDouRal      (1     J.     B. 
Mooro   196).    401. 
Iiigraham  v.  Govor  (13  Mn.sn.  1  16), 

377. 
Ingraham     v.     Phillips     (1     Day, 

Conn.  117).  564,  755,  756. 


I'JTl 


TAHKK    OK    (^VSIW. 


References  are  to  pages. 


Ingram  v.  Wilson    (125  Fed.  Rep. 

913),  429. 
Insley  v.  Garside    (121   Fed.  Rep. 

G99).    286,    296. 
Insurance    Co.    v.    Comstock    (16 

Wall.  258),  158,  820. 
Interstate   Com.   Com.    v.   Ry.   Co. 
(57   Fed.   Rep.   948),   206. 
Iowa  Barb   Wire  Co.   v.   Southern 

Co.    (30   Fed.   Rep.   615),    669. 
Iron     Mountain     Co.,     In    re     (9 

Blatch.   320),   710. 
Ironsides,   The    (4    Biss.   518),   87, 

603. 
Irvin,  In  re   (120  Fed.  Rep.  733), 

423,  435,  443,  448.  810. 
Irving  V.  Hughes  (2  N.  B.  N.  61), 

89,    215. 
Irwin  V.  Williar  (110  U.  S.  507), 

232. 
Irwine,  In  re  (1  Penn.  L.  J.  291), 

17,  18. 
Isaacs,  In  re   (3  Saw.  35),  265. 
Isidor,   In   re    (2    Ben.    123),   612, 

616. 
Ives,  In  re    (113   Fed.   Rep.   911), 

34,   184,   185,   809,   812. 
Ives,  In  re   (18  N.  B  R.  28),  285, 

398 
Ives,  In  re  (5  Dill.  146),  234,  746. 
Ives   V.   Tregent    (29   Mich.    390), 

713. 

J. 

Jackson,  In  re   (2  N.  B.  R.  508), 

422,    431. 
Jackson.  In  re  (7  Biss.  280),  272, 

273,   341. 
Jackson,    In    re     (94    Fed.    Rep. 

797),   93. 
Jackson,  In  re  (116-  Fed.  Rep.  46), 

528. 
Jackson   v.   Allen    (30   Ark.   110), 

431. 
Jackson  v.  Burke  (4  Heisk,  Tenn., 

G14),    641. 
Jackson  v.  Cummins    (5  M.  &  W. 

342),   600. 
Jackson  Iron  Mfg.  Co.,  In  re   (15 

N.  B.  R.  438),  593. 
Jacobs,  In  re   (99  Fed.  Rep.  539), 

809. 
Jacobs,  In  re   (5  Saw.  548),  742. 
Jacobs,  In  re    (18  N.  B.  R.  48), 

690. 
Jacobs,  In  re   (1  Am.  B.  R.  518), 

577. 
Jacobs  V.  George  (150  U.  S.  415), 

831. 
Jacobs    V.    Van    Sickle    (123    Fed. 

Rep.    340),    577. 


Jacoby  v.  Distilling  Co.  (41  Minn. 

227).    443. 
Jaffrey    v.    Brown    (29    Fed.    Rep. 

476),    375. 
James,    In   re    (2   N.    B.   R.    227), 

721,   733. 
James  v.  Atlantic  Delaine  Co.   (11 

N.   B.  R.  390),  282. 
Jamieson,    In   re    (120    Fed.    Rep. 

697),  744. 
Janeway,  In  re   (4  N.  B.  R.  100), 

413. 
Jaquith  v.  Alden    (189  U.  S.  78), 

333,  572,  576,  587,  796. 
Jaquith  v.  Rowley  (188  U.  S.  620), 

74,  80,  83,  84,  85,  93,  608. 
Jarecki    Mfg.    Co.    v.    McEilwaine 

(107  Fed.  Rep.  249),  245,  246, 

265,   266. 
Jaycox,  In  re    (8   N.   B.   R.   241), 

338. 
Jefferson,    In    re    (93    Fed.    Rep. 

948),  305,  306,  397. 
Jefferson,    In    re     (96    Fed.    Rep. 

826),    615. 
Jeffries  v.  Bartlett    (20  Fed.  Rep. 

495),   429. 
Jeffries   v.    Laurie    (27    Fed.   Rep. 

198),  667,  675. 
Jeffs  V.   Wood    (2   P.   Wms.    128), 

285. 
Jehu,   In   re    (94   Fed.   Rep.    638), 

184,   616,   817. 
Jelsh,  In  re  (9  N.  B.  R.  412),  233. 
Jemison     Mercantile     Co.,    In    re 

(112  Fed.  Rep.  966),  240,  812. 
Jenkins  v.  Armour  (6  Biss.  312), 

312. 
Jenkins     v.     International     Bank 

(127  W.   S.   484),   794. 
Jenks  v.  0pp.    (43  Ind.  108),  778, 

782. 
Jerome  v.  McCarter  (94  U.  S.  734). 

3G8,   502,   597,   59S,  605,  731. 
Jerome  v.  McCarter  (21  Wall.  17), 

829,   830. 
Jersey    City    Ins.    Co.    v.    Archer 

(122  N.  Y.  376),  780. 
Jervey  v.   The  Carolina    (66   Fed. 

Rep.  1013),  99. 
Jewett,   Ex    parte    (2    Low.    393), 

CS3,   686,   687,   688,   690. 
Jewett,  In  re    (3  Fed.  Rep.  503), 

748,  753. 
Jewett.   In  re    (1   N.   B.   R.   491), 

2.^7. 
Jewett   V.    Preston    (27   Me.   400), 

.177. 
Jobbins  v.  Montague    (6  N.   B.  R. 

509),  176. 
Jobbins  v.  Montague  (5  Ben.  425), 

79,    205. 


TABLE    OF    CASES. 


1275 


References  are  to  pages. 


Johnson,  In  re  (2  Low.  129),  583, 

59U. 
Johnson,    In    re    (118    Fed.    Rep. 

312),    471. 
Johnson    v.     Collins     (116     Mass. 

392),  564. 
Johnson  v.  Fitzhugh  (3  Barb.  Ch. 

360),   293. 
Johnson   v.   Rogers    (15   N.    B.    R. 

1),  739,  753. 
Johnson    v.     Spiller     (1     Douglas 

168),   319. 
Johnson    v.    Wald    (93    Fed.   Rep. 

640),   162.   163. 
Johnson  v.  Waters  (108  U.  S.  4), 

829.  830. 
Johnson    v.    Waters     (111    U.    S. 

673),   204. 
Johnson   Steel  Co.  v.  N.  B.   Steel 

Co.    (48    Fed.   Rep.   191),   667. 
Johnston,    In    re    (25    Pitts.    Leg. 

J.   141),   715. 
Johnston  v.  Straus  (26  Fed.  Rep. 

57),  591. 
Jones,  In  re   (97  Fed.  Rep.  773), 

405,   424.   554,  555. 
Jones,  In  re  (100  Fed.  Rep.  781), 

260. 


Jones    V.    Stevens    (94    Me.    582), 

584. 
Jordan,  In  re   (2  Fed.  Rep.  319), 

302. 
Jordan,  In  re  (8  N.  B.  R.  180),  17, 

19,  394,  426,  602. 
Jordan,  In  re   (10  N.   B.   R.   427), 

394,  426,  602. 
Jorev,  In  re  (2  Bond  336),  750. 
Joseph.  In  re  (24  Fed.  Rep.  137), 

680. 
Josephson,   In   re    (116   Fed.   Rep. 

404),   592,    595. 
Josephson,   In  re    (121   Fed.    Rep. 

142).    410.    411. 
Judd   V.   Cushing    (1   Cush.   Mass. 

531),  144. 
Judson,  In  re   (2   Ben.   210),  621. 
Judson  V.  The  Courier  Co.  (8  Fed. 

Rep.   422),   387,   589,   739.   753. 
Judson    V.    Courier    Co.    (25    Fed. 

Rep.    705),    592. 
Judson  V.  Etheridge   (1  Cr.  &  M. 

743),  600. 

K. 

Kahlev,  In  re   (2  Biss.  383),  258, 
259. 


Jones,  In  re  (116  Fed.  Rep.  431),      Kohn.  In  re   (9   Am.   B.   R.   107), 


262. 
Jones,  In  re  (118  Fed.  Rep.  673), 

597. 
Jones,  In  re    (4  Am.   B.  R.  563), 

587. 


694. 
Kaiser,  In  re   (99  Fed.  Rep.  689), 

656,  660,  744. 
Kaiser,  In  re  (112  Fed.  Rep.  955), 

363. 


Jones,   In    re    (2    Dill.    343),    431,     Kaldenberg,  In  re  (105  Fed.  Rep. 


441. 
Jones,  In  re   (3  Chan.  Div.  457), 

148. 
Jones  V.  Clifton    (101  U.  S.  225), 

379. 
Jones  V.  Emerson  (1  Caines  N.  Y. 

487),    013. 
Jones  V.  Kinnev  (.5  Ben.  529),  610. 
Jones  V.   Knox    (40   Ala.   53),  774. 
Jones  V.  Leach    (1  N.  B.  N.  595), 

89,  370. 
Jones  V.  Lellyett  (30  Ga.  64),  755. 
Jones     V.     MacKenzie     (122    Fed. 

Rep.  390),  83. 
Jones  V.  Mann   (72  Fed.  Rep.  85), 

Jones    V.    Newsom    (7    Biss.    321), 

413. 
Jones    V.    Russell     (44    Ga.,   460) 

778. 
Jones    V.    Sleeper    (2    N.    Y.    Leg. 

Obs.    131),    10,    164,    391,    5S8, 

751. 
Jones    V.    Smith     (38    Fed.    Rep. 

380),  383. 
Jones    V.    Stevens    (5    Am.    B.    R. 

571).  563,  567. 


232),  341. 
Kallish,  In  re   (Deady   575),   180. 
Kane   v.   Haywood    (66   N.   C.    1), 

669. 
Kane  v.   Rice    (10  N.   B.   R.   469), 

505. 
Kansas   Citv   Stone  Co.,   In   re    (9 

N.  B.  R.  76).  584. 
Kanter,  lure  (117  Fed.  Rep.  356), 

025. 
Kanter  &  Cohen.  In  re   (121   Fed. 

Rep.  9S4).  810. 
Karr    v.    Whit  taker    (5    N.    B.    R. 

123),    235. 
Kauffman    v.    Kennedy     (25    Fed. 

Rep.    7S5),    200. 
Kean.  In  re   (2  Hughes  322).  19. 

304.   426,   434,  602. 
Kearney,  Er  parte  (7  Wheat.  3S), 

670,    676. 
Keating    v.    Keefer    (5    N.    B.    R. 

133),  385,  4. "in.  610. 
Keegan    v.    King    (06    Fed.    Rep. 

768),    71.    76.   82.    84.    04,    100, 

101,   360.   374. 
Keenan    v.    Shanan    (0    N.    B.    R. 

441),   211. 


1276 


TABLE    OF   CASKS. 


References  are  to  pages. 


Keene  v.  Mould   (16  Ohio  12),  18, 

784. 
Keet,  In  re  (11  Am.  B.  R.  117), 

707. 
Keppel  V.  Tiffin  Sav.  Bank  337. 
Kellar.  In  re  (110  Fed.  Rep.  348), 

5SG.  587. 
Keller,  In  re  109  Fed.  Rep.  118), 

336,    G30,   708. 
Keller  v.   Denmead    (68  Penn.  St. 

449),  602. 
Kellogg,  In  re  (112  Fed.  Rep.  52), 

375. 
Kellogg,    In    re     (113    Fed.    Rep. 

120),   71,   84,   603. 
Kellogg,    In    re     (121    Fed.    Rep. 

333),  100,  368,  385,  708. 
Kellogg     V.     Russell    (11    Blatch. 

519),  105. 
Kellogg  V.   Schuyler    (2  Denio  N. 

Y.  73),  293,  765. 
Kelly,  In  re   (18  Fed.  Rep.  528), 

285. 
Kelly,  In  re   (91  Fed.  Rep.   504), 

200,   216,   218. 
Kelly    V.    Scott    (49    N.    Y.    595), 

367,  369,  731. 
Kelly  V.  Sparks  (54  Fed.  Rep.  70), 

443. 
Kelly  V.  Strange    (3  N.  B.  R.  8), 

433,    438. 
Kelly  Dry  Goods  Co.,  In  re   (102 

Fed.  Rep.  747),  118,  170,  212, 

213. 
Kempner,  In  re  (6  N.  B.  R.  521), 

118,    371. 
Kennedy    v.    Georgia    State    Bank 

(8  How.  610),  33,  836. 
Kennedy  v.  Nat.  Union  Bank  (23 

Hun.,  N.  Y.,  494),  258. 
Kenney,  In  re  (95  Fed.  Rep.  427), 

88,  92,  98,  388. 
Kenney,  In  re  (97  Fed.  Rep.  554), 

195,  388. 
Kenney,    In    re     (105    Fed.    Rep. 

897),  72,  84,  88,  92,  503,  567. 
Kentucky    Nat.    Bank    v.    Carley 

(121  Fed.  Rep.  822),  739,  753, 

811, 
Kenyon,    In    re     (112    Fed.    Rep. 

658),  658,  750,  751. 
Kenvon    v.    Fenton    (6    N.    B.    R. 

238),  163. 
Kerby-Dennis  Co.,  In  re   (95  Fed. 

Rep.    116),    567,    601. 
Kerosene   Oil    Co.,  In  re    (3   Ben. 

35),  370,  374,  709. 
Kerr,  In  re  (2  N.  B.  R.  388),  570. 
Kerr,  In  re  (9  N.  B.  R.  5GG),  424. 
Kerr  v.  Kerr  (2  Q.  B.  439),  290. 
Kersten,    In    re    (110    Fed.    Rep. 

929),   153,   167,   169,   249. 


Ketcham  v.  McNamara  (62  Am.  B. 

R.   160),  27,  28,  30. 
Ketchum,  In  re  (1  Fed.  Rep.  840), 

406. 
Keyes    v.    McKirrow     (190    Mass. 

261),    134. 
Keystone  Coal  Co.,  In  re  (109  Fed. 

Rep.   872),  149. 
Kibbe  v.   Benson    (17  Wall.   624), 

207. 
Kidd  V.  Johnson   (100  U.  S.  617), 

378. 
Kimball,  In  re  (7  Fed.  Rep.  461), 

149. 
Kimball,    In    re    (100    Fed.    Rep. 

777),   134,   330. 
Kimball,  In  re    (2   Ben.  38),  620, 

635,  639,   645,  646. 
Kimball,  In  re   (2  Ben.  554),  636, 

644,  645. 
Kimball,    In    re    (6    Blatch    292), 

636,  772. 

Kimball  v.  Rosenbaum   (114  Fed. 

Rep.    85),   333,   576,   587. 
Kimberling    v.    Hartley     (1    Fed. 

Rep.   571),   359,   372. 
Kindt,  In  re   (98  Fed.  Rep.  867), 

70,  76,   134,   177. 
Kindt,  In  re  (101  Fed.  Rep.  107), 

387,  582,  583,  584,  590. 
King,    In   re    (3    Fed.   Rep.    842), 

714,   715. 
King.    Co.    Henry   C,    In   re    (113 

Fed.  Rep.  110),  573,  587. 
King    V.    Bowman    (24    La.    Ann. 

506),   332,   340. 
King  V.  Central  Bank  (6  Ga.  257), 

776. 
King  V.  Deitz  (12  Penn.  St.  156), 

384,  606. 
King    V.     Remington     (36     Minn. 

15),  369. 
King  V.   Simmons    (1   H.   L.    Cas. 

754),    148. 
Kingley  v.   Cousins    (47   Me.   91), 

780. 
Kingsley,  In  re  (1  Low.  216),  180, 

319. 
Kingsley,  In  re  (6  Ben.  300),  619. 
Kinkead,  In  re  (3  Biss.  405),  146, 

257. 
Kinmouth  v.  Braeutigam    (4  Am. 

B.    R.    344),    5C7. 
Kinne  v.  Lane  (68  Fed.  Rep.  436), 

206. 
Kinsman,  In  re  (1  N.  Y.  Leg.  Obs. 

309),   174,   175. 
Kintzing,  In  re  (3  N.  B.  R.  217), 

392. 
Kip    V.    Bank    of    New   York    (10 

Johns,   N.   Y.    63),   412. 
Kipp,  In  re  (4  N.  B.  R.  493),  604- 


TABLE   OF   CASES. 
References  are  to  pages. 


1277 


Kirby   v.   Garrison    (21   N.    L.    J. 

179),    778. 
Kirkland,  In  re  (2  Am.  Law  Reg. 

300),  603. 
Kirkland,  In  re  (14  N.  B.  R.  157), 

729. 
Kirtland,  In  re   (10  Blatch.  515). 

79,   207,   221,   632,   703. 
Kitchen   v.   Bartsch.    (7  East   53), 

407,  415. 
Kitchen    v.    Randolph    (93    U.    S. 

80),  829,  830. 
Kittle  V.  Hall  (29  Fed.  Rep.  512), 

378,    417. 
Kittredge  v.  Emerson    (15  N.  H. 

227),   564. 
Kittredge    v.    Warren    (14    N.    H. 

509),    564. 
Kittrdege  v.  McLoughlin   (33  Me. 

327),  416. 
Kitzinger,  In  re  (19  N.  B.  R.  152), 

261. 
Kitzinger,  In  re  (19  N.  B.  R.  238), 

722. 
Kitzinger,  In  re  (19  N.  B.  R.  307). 

722. 
Klapholz,    In    re    (113    Fed.    Rep. 

1002),  708. 
Klein,  In  re  (97  Fed.  Rep.  31),  90. 
Klein,  In  re  (116  Fed.  Rep.  523), 

32,  85. 
Klein,  In  re  (1  How.  277),  17,  18. 

26. 
Kleinhans,  In  re    (113   Fed.   Rep. 

107),  101,  213. 
Kleinhans,   In  re    (113   Fed.   Rep. 

537),    89. 
Kletchka,    In    re    (92    Fed.    Rep. 

901),    88. 
Klingaman,  In  re   (101  Fed.  Rep. 

691),   582.   583.   584,   591. 
Knabe  v.   Haves    (71   N.    C.    109), 

709. 
Knapp    V.     Anderson     (71    N.    Y. 

400),   778. 
Knickerbocker,    In    re    (121    Fed. 
Rep.    1004),    72,    85,    98,    607. 
608. 
Knickerbocker  v.  Comstock   (9  N. 
B.  R.  484),  104,  220.  484,  588. 
Knight,  In  re  (125  Fed.  Rep.  35), 
31,   32,   74.   75,  -77,   89,   91,   93, 
97    98    99    17' 
Knight.  In  re   (2  Biss.  518).  257. 

203. 
Knight    V.    Cheney    (5    N.    B.    R. 

305).  814. 
Knott.  In  re  (109  Fed.  Rep.  626), 

303. 
Knott  V.   Putnam    (107   Fed.  Rep. 
907),    93,    636,    646,    770,    772, 
776. 


Knowlton   v.   Moseley    (105   Mass. 

136),   382,   628. 
Knox,  In  re    (3  Am.   B.   R.   371), 

345. 
Knox.    V.    Exch.    Bank    (12    Wall. 

379),   359,   360. 
Kohlsaat,  In  re  (18  N.  B.  R.  570). 

731. 
Kohn.  In  re    (7  Am.   B.  R.   Ill), 

587. 
Kraft,   In   re    (3    Fed.   Rep.   892), 

739,  753. 
Krueger,  In  re   (2  Low.  66),  251, 

627. 
Krinsky,    In    re    (112    Fed.    Rep. 

972),  93,  95. 
Krippendorf  v.   Hvde    (110   U.    S. 

276),    97. 
Krone   v.   Cooper    (43   Ark.    547), 

174. 
Kross.  In  re   (96  Fed.  Rep.  816), 

136.  139. 
Kuffler,  In  re  (97  Fed.  Rep.  187). 

113,   277,   349. 
Kunzler  v.   Kohaiis    (5  Hill   N.  Y. 

317),  17,   18,  784. 
Kurtz,  In  re   (11  Am.  B.  R.  129), 

119. 
Kyle  &  Gunter  v.  Bostick  &  Sher- 

rod    (10    Ala.    589).    296.    297. 
Kyler.  In  re  (2  Ben.  414),  79,  221. 

343,   619,   632. 


Lachemeyer,  In   re    (18   N.   B.   R. 

270),  283. 
Lacy,  In  re  (12  Blatch.  322).  220. 
Lafayette   Ins.  Co.  v.   French    (18 

How.   404).   425. 
Lafleche.    In    re    (109    Fed.    Rep. 

307).    659. 
Lafountain   v.   Savings   Bank    (56 

Vt.  332),  418. 
Laird,  In  re  (109  Fed.  Reji.  550), 

727. 
Lalor  V.  Wattles    (8  111.  225).  18. 
Lake,  In  re   (3  Biss.  204).  366. 
Lake    Superior    Ship    Canal    R.    & 

Iron   Co.,  In  re    (7  N.   B.   R. 

370).    273. 
Lake  Suiiorior  Ship  Canal  R.  K.  & 

Iron  Co..   In  re   (10   N.   B.   R. 

76).   329. 
Lambert,  In  rr   (2  N.  B.   R.  420), 

42S.  431. 
Lamraer,  In  re  (7  Biss.  209),  443. 
Lamoille    County    Nat.     Bank    v. 

Stevens   (107  Fed.  Rep.  245), 

201. 
LampUin   v.    Starkey    (7   Hun.   N. 

Y.   479),    200. 


12TS 


T.Vm.K    OK    t'ASKS. 


References  are  to  pages. 


Lamson  Consol.  Store  Service  Co. 

V.     Boland     (114     Fed.     Rep. 

639).    288.   304.   305,   306,   397. 
Lancaster  v.  Collins   (7  Fed.  Rep. 

338).  589. 
Lang.  1)1  re  (2  N.  B.  R.  480),  171, 

203.  317,  584. 
Langdon,  In  re   (2  Low.  387),  683. 
Lange.  In  re   (91  Fed.  Rep.  361), 

409,  411,  425,  469,  473. 
Lange,  In  re   (97  Fed.  Rep.  197), 

164,  200.   231,  238,  239,  586. 
Langley  v.  Perry  (2  N.  B.  R.  596), 

27,  392,  810. 
Langslow,    In    re    (98    Fed.    Rep. 

869),  183,  252,  254. 
Lane,    In    re    (2    Low.    305),    313, 

262,    583,   591. 
Lane   v.   Nickerson    (99    111.   284), 

384,    606. 
Lanesborough   v.  Jones    (1   P.  W. 

326),   315. 
Lansing  v.   Manton    (14  N.  B.  R. 

127).  211. 
Lansing   Boiler  &   Engine   Works 

V.    Ryerson     (126    Fed.    Rep. 

157.    159. 
Lantzenheimer,    In    re    (124    Fed. 

Rep.  716),  331. 
Lathrop,  In   re    (4   N.   B.  R.   93), 

626. 
Lathrop.  In  re   (3  Ben.  490),  345. 
Lathrop  v.  Drake   (91  U.  S.  516), 

79,   87,   95,  608. 
Lathrop     v.     Stuart     (5     McLean 

1G7),  783. 
La    Tourette    v.    Price    (28    Miss. 

702),  782. 
Lauck's  Appeal    (24  Pa.  St.  426), 

434. 
Laudry  v.  Andrews   (6  Am.  B.  R. 

231),  585. 
Laughlin,    In    re    (96    Fed.    Rep. 

589),  246,  251,  252,  267. 
Lau  Ow  Bew,   Petitioner    (141  U. 

S.  583),  802. 
Lau  Ow  Bew  v.  United  States  (144 

U.  S.   58),  802. 
Lawler,  In  re  (110  Fed.  Rep.  135), 

727. 
Lawrence,  In  re  (10  Ben.  4),  169. 
Lawrence  v.  Knowles  (5  Bing.  N. 

C.  399),  372,  417. 
Lawson,  In  re   (2  N.  B.  R.  396), 

753. 
Lazarus   v.   Hanks    (7  Cin.   Court 

Index  No.   85,  Jan.   13,   1899), 

211. 
Lazoris,  In  re  (120  Fed.  Rep.  716), 

270,    349. 
Lazzari   v.   Havens    (79   N.   Y.    S. 

395),  602. 


Lea   V.    West    Co.    (91    Fed.    Rep. 

237).   88.   89,   93,   235. 
Leachman,  In  re  (1  N.  B.  R.  391), 

620. 
Leather  Cloth  Co.  v.  Cloth  Co.  (11 

H.  L.  523),  378. 
Le  Claire,   In  re    (124   Fed.   Rep. 

654),  376,  469.  470,  657,  659. 
Lee,  In  re  (14  N.  B.  R.  89),  336. 
Lee    V.    Phillips    (6    Hill,    N.    Y. 

246),   784. 
Leeuw.,  In  re  (3  Am.  B.  R.  418), 

657. 
Le  Favour,  In  re  (8  Ben.  43),  237. 
Lefflngwell    v.    Warren    (2    Black 

603),    423. 
Legg,  In  re    (96   Fed.  Rep.   326), 

404. 
Lehigh   Lumber   Co.,   In   re    (101 

Fed.  Rep.  216),  262. 
Leibowitz,    In   re    (108    Fed.   Rep. 

617),   302,   320,    325. 
Leicester   v.    Hoadley    (9    Am.    B. 

R.  318),  768. 
Leidigh    Carriage    Co.    v.    Stengel 

(95  Fed.  Rep.  637),  18,  20,  24, 

30,   31,   32.   72.   74.    84,   86,   98, 

177.  191.  192,  201,  223.  230,  237. 
Leigh,  In  re   (96  Fed.  Rep.  806), 

369.  393. 
Leighton   v.   Kelsey    (57  Me.   85), 

564,  755,  75G. 
Leiter  v.  Payson  (9  N.  B.  R.  205), 

234. 
Leland,  In  re    (5   Ben.   168),   265, 

270. 
Leland,  In  re   (7  Ben.  156),  336, 

604. 
Leland,    In    re    (10    Blatch.    50.3), 

393. 
Lemcke   v.    Booth    (47    Mo.    385), 

772. 
Lemmon,  Gale  Co.,  In  re  (112  Fed. 

Rep.   296),   34,   603,   811. 
Lennox,    Ex   parte    (16    Q.   B.    D. 

315),  292. 
Lentz,  In  re   (97  Fed.  Rep.  486), 

443. 
Leon  V.  Galceran   (11  Wall.  185), 

603. 
Leslie,  In  re  (119  Fed.  Rep.  406), 

624,  658,  660,  746. 
Lessee  of  Waller  v.  Best  (3  How. 

Ill),  10. 
Lesser,  In  re   (99  Fed.  Rep.  913), 

88. 
Lesser,  In  re  (100  Fed.  Rep.  433), 

77,  94,  241,  725. 
Lesser,  In  re  (114  Fed.  Rep.  83), 

657,  658. 


TABLK    OF    (USKS. 


1279 


References  are  to  pages. 


Letchfield,  In  re  (5  Fed.  Rep.  471, 

257. 
Letchworth,  In  re    (19   Fed.   Rep. 

873),  294. 
LeVay,  In  re  (125  Fed.  Rep.  990), 

433. 
Levor  v.  Seiter  (8  Am.  B.  R.  459), 

568,  577,  609. 
Levi,  In  re    (121  Fed.  Rep.   198), 

585. 
Levin,   In   re    (7   Biss.    231),   741. 
Levy,  Ex  parte  (11  L.  R.  Eq.  619), 

688. 
Levy,   In  re    (95   Fed.  Rep.   812), 

247. 
Levy,  In  re   (101  Fed.  Rep.  247), 

183,   184,   349. 
Levy,  In  re    (6  Am.   B.  R.   299), 

682. 
Levy,  In  re  (1  Ben.  496),  416,  620, 

625. 
Lewensohn,  In  re    (98   Fed.   Rep. 

576),    113,   276,   277,   348,   349. 
Lewensohn,   In   re    (99   Fed.   Rep. 

73),  635,  636,  640. 
Lewensohn,  In  re   (121  Fed.  Rep. 

538),  342,  811. 
Lewin,  In  re  (103  Fed.  Rep.  850), 

122,  135. 
Lewis,  In  re   (09  Fed.  Rep.  935), 

301,   725,   728. 
Lewis,   In   re    (8   N.    B.   R.    546), 

261. 
Lewis,  Jn  re  ( 14  17.  B.  R.  144).  C.S:!. 
Lewis,  In  re   (2  Ben.  96),  251. 
Lewis,  In  re   (4  Ben.  67),  627. 
Lewis,  In  re  (2  Hughes  320),  263. 
Lewis  v.  Hawkins  (23  Wall.  119), 

756. 
Lewis  V.  Owen   (4  B.  &  Aid.  654). 

758 
Lewis   V.    Sloan    (68    N.    C.    557), 

234. 
Lewis  V.  United  States   (92  U.  S. 

618),  325,  729,  764. 
Lexan    v.    Wilson    (43    Me.    186), 

419. 
Libby,  In  re   (103  Fed.  Rep.  776), 

542    544. 
Libby  v.  Hopkins  (104  U.  S.  307), 

310,  311,  312,  313. 
Lickman  v.  Wilcox    (1   Dill.   161), 

575. 
Liddell   v.   Wiswell    (50   Vt.   365), 

296. 
Liebke  v.  Thomas  (116  U.  S.  605). 

604. 
Ligon    v.    Allen     (56    Mi.ss.    632), 

603. 
Lincoln    v.    Street    Light   Co.    (59 

Fed.  Rep.  756).  838. 


Lingan  v.  Bayley  (1  Cranch.  C.  C. 

112),  637. 
Linton,  In  re   (7  Am.  B.  R.  676), 

575. 
Linton    v.    Linton     (15    Q.    B.    D. 

239),   290. 
Linton  v.  Stanton  (12  How.  423), 

794. 
Lipman,  In  re  (94  Fed.  Rep.  353), 

291,  319. 
Lipset,  Levittan  &  Co.,  In  re  (119 

Fed.   Rep.   379),   120,   622. 
Liscomb  v.   Grace    (26  Ark.   231), 

296. 
Lissbarger,    In    re    (2    Fed.    Rep. 

153),  695. 
Litchfield,    In    re    (13    Fed.    Rep. 

868),   79,   205,    672. 
Little,  In  re  (110  Fed.  Rep.  621), 

469,  587,  598. 
Little,   In   re    (1    N.    B.    R.    341), 

270. 
Little,  In  re   (2  Ben.  186),  266. 
Little,  In  re   (3  Ben.  25),  175. 
Little  V.  Alexander  (21  Walk  500), 

570. 
Little  Lumber  Co.,  In  re  (101  Fed. 

Rep.  558),  135,  138,  139. 
Little  River  Lumber  Co.,  In  re  (92 

Fed.  Rep.  585),  592. 
Littlefield    v.    Del.   &    Hud.    Canal 

Co.  (3  Clif.  371),  814. 
Livermore    v.     Bagley     (3     Mass. 

487),  160. 
Livingston  v.  Heineman  (120  Fed. 

Rep.   786),   296,   20S,   323,   333, 

585,  586,  819,  823. 
Lizard!    v.    Cohen     (3    Gill,    Md., 

430),  757,  758,  759. 
Lloyd,   In   re    (22   Fed.   Rep.   90), 

256,  264. 
Lloyd  V.  Chapman    (93  Fed.  R  p. 

599).  822.  827. 
Lloyd   V.   Strobridge    (16   N   B.   R. 

197),  503.  504. 
Lloyd    V.    Turner    (5    Saw.    463), 

316. 
Llyni   Coal   Co.,   Ex  parte    (7   Ch. 

App.  28).  40L 
Lobb,  Ex  parte   (7  Ves.  592),  265. 
Lock   V.   Winning    (3   Mass.   325). 

386. 
Locke,  In  re   (1    Lowell   293).  69. 
Locks.  In  re   (104    Vo<\.  Hop.  783). 

650. 
Lockwood.    In    re    (Ud    I'cd.    Hen. 

704).   722. 
Lockwood  V.  Exchange  Bank   (100 

U.    S.    294).    77    03,    427.    429. 

430.    546.   802. 
Lodor.   In  rr    (I    Hon.   125).  328. 


12S0 


TAULi;    (IK    TASKS. 


References  are  to  pages. 


Loder,   In-   re    (4    Ben.    305),    294. 
Lodge  V.  Dicas    (3  B.  &  A.  611), 

204. 
Logan,  In  re  (102  Fed.  Rep.  876), 

740. 
Long.  In  re   (116  Fed.  Rep.  113), 

428,   436,   528. 
Long,    In   re    (7    Ben.    141),    259, 

263.  264. 
Long  V.  Billiard   (117  U.  S.  617), 

562,  593,  604,  794. 
Long  V.   Murpby    (27   Kan.   375), 

443. 
Longley    v.     Swayne     (4     Heisk., 

Tenn.,  50G),  784. 
Lord,   Ex   parte    (.16   Mees.   &  W. 

462),  623. 
Lord,  In  re  (3  N.  B.  R.  243),  621. 
Lord    V.    Hart    (118    Mass.    271), 

378. 
Lord    V.    Veazie     (8    How.    251), 

823. 
Loud  V.  Pierce   (25  Me.  233),  18. 
Louisville,    etc.,    R.    Co.    v.    Pope 

(74  Fed.  Rep.  1),  805. 
Louisville  Trust  Co.  v.  Comingor 

(184  U.  S.  18),  32,  72,  74,  83, 

84,  85,  242,  608,  668,  802,  809, 

811. 
Lount,  In  re    (11  N.   B.   R.   315), 

342,  344. 
Low  V.  Durfee  (5  Fed.  Rep.  256), 

83 
Lowe,  In  re    (19   Fed.  Rep.   589), 

728. 
Lowe,  In  re    (11   N.   B.   R.    221), 

260. 
Lowenstein,  In  re   (106  Fed.  Rep. 

51),   658. 
Lowree,  In  re    (1  Ben.  406),  338. 
Lowry  v.  Morrison   (11  Paige,  N. 

Y.,   327),  756. 
Lucius,  In  re  (124  Fed.  Rep.  455), 

429,  439. 
Lucker    v.    Phoenix   Co.    (66    Fed. 

Rep.  161),  57. 
Luckhardt,  In  re    (101   Fed.  Rep. 

807),  142. 
Ludlow,  In  re  (1  N.  Y.  Leg.  Obs. 

332),  419. 
Ludwig  V.  Highley  (5  Pa.  St.  132), 

412. 
Lumber  Co.  v.  Sawyer,  Minn.,  (78 

N.   W.   Rep.    1038),   31. 
Luxton    V.    North    River    Bridge 

(147  U.  S.  337),  798. 
Lyde  v.  Russell  (1  B.  &  Ad.  394), 

402. 
Lyell  V.  Goodwin  (4  McLean,  29), 

206,  646. 


Lynch,  In  re  (101  Fed.  Rep.  579). 

424,   442,   461. 
Lyon,  In  re   (114  Fed.  Rep.  326), 

585. 
Lyon,  In  re  (121  Fed.  Rep.  723), 

296,  298,  323,  333,  585. 
Lyon  V.  Bertram    (20  How.  149), 

361. 
Lyon    v.    Clark    (129    Mich.    381), 

388,  574,  57S,  579,  580,   609. 
Lyon  V.  Isett  (34  N.  Y.  Supr.  41), 

784. 
Lyons,  In  re  (2  Saw.  524),  146. 

M. 

McAdoo  V.  Lummis  (43  Tex.  227), 

774. 
McAlpine  v.  Tourtelotte   (24  Fed. 

Rep.  69),  789. 
McBachron,  In  re   (116  Fed.  Rep. 

783),   748. 
McBride,  In  re  (19  N.  B.  R.  452), 

729. 
McBrien,  In  re  (2  Ben.  513),  617. 

340,  708,  723,  730. 
McBrien,  In  re  (3  Ben.  481),  624. 
McBryde,    In    re    (99    Fed.    Rep. 

686),  290,  292,  320,  441. 
McCance  v.  Taylor  (10  Grat.,  Va., 

580),  755. 
McCarthy  v.  Goodwin  (8  Mo.  App. 

380),  293. 
McCartney,  In  re   (109  Fed.  Rep. 

621),  569. 
McCarty,    In    re    (111    Fed.    Rep. 

151),  744. 
McCauley,   In   ^e    (101   Fed.   Rep. 

223),  289,  290. 
McClaskey  v.  Barr   (45  Fed.  Rep. 

151),  208. 
McClellan  v.  Pyeatt  (50  Fed.  Rep. 

686),  827. 
McCluskey  v.  McNeely  (8  111.  578), 

434. 
McConnell,  In  re  (9  N.  B.  R.  387), 

723,   340,   708,   730. 
McCormick,  In  re    (97  Fed.   Rep. 

566),  121. 
McCormick  v.  Pickering  (4  N.  Y. 

276),  18. 
McCormick    Harvesting    Machine 

Co.  V.  Aultman   (69  Fed.  Reo. 

371),  806. 
McCulIough    V.    Caldwell    (5   Ark. 

227),  755. 
McCulhim,   In  re    (113   Fed.   Rep. 

393),  71. 
McCutcheon,  In  re  (100  Fed.  Rep. 

779),  424,  441,  530,  531. 


TABLE    OF    CASES. 
References  are  to  pages. 


1281 


McDaniel  v.  Stroud  (106  Fed.  Rep. 

486),  260,  819,  823,  824. 
McDonald    v.    Daskam    (116    Fed. 

Rep.  276),  598,  599. 
McDonald    v.    Davis     (105    N     Y. 

508),  766. 
McDonald  v.  Ingraham    (30  Miss. 

389),  293. 
Macdonald  v.  Moore  (8  Ben.  579), 

27. 
McDonnell,  In  re    (101  Fed.  Rep. 

239),  379,  410,  415. 
McDougall  V.   Reid    (5  Ala.  810), 

784. 
McDowell  V.  Addams    (45  Pa.  St. 

432),  108,  192.- 
McEwen,  In  re  (6  Biss.  294),  257, 

259,  262. 
McFadden,  In  re  (3  N.  B.  R.  104), 

350. 
McFarlan  Carriage  Co.  v.  Solanas 

(106  Fed.  Rep.  145),  103,  104, 

361,   400,    401. 
McFarland,    In    re    (10    N.    B.    R. 

381),   247. 
McFarland    v.    Goodman    (6   Biss. 

Ill),   385,   435,   439,   396. 
McFaun,  In  re  (9G  Fed.  Rep.  592), 

246,  266. 
McGahan   v.   Anderson    (113    Fed. 

Rep.   115),   428,  435,   530,   819. 
McGee,  In  re  (105  Fed.  Rep.  895), 

162. 
McGehee   v.   Hentz    (19   N.   B.    R. 

136),  694. 
McGill,  In  re  (106  Fed.  Rep.  57), 

113,  276.  278,  348,  812. 
McGilton  In  re  (3  Biss.  144).  709. 
McGrath,  In  re  (5  Ben.  183),  398. 
McGregor  v.  Balch    (14  Vt.  428), 

108. 
McGurn,    In    re    (102    Fed.    Rep. 

743),   056. 
McHarry,    In    re    (111    Fed.    Rep. 

498),  395. 
McHenry    v.    Alford     (168    U.    S. 

651),  807. 
McHenry  v.  Soci'te  Francaise  (93 

U.  S.  58),  604,  606. 
Macintire,  In  re  (1  Ben.  277),  617. 
Mclntire,  In  re  2  Ben.  345),  726. 

787. 
Mclnto.sh,  In  re  (2  N.  B.  R.  50C), 

ooo 

Mcintosh   V.   Trotter    (3   M.   &    W. 

184),  402. 
Mclver   v.   Wilson    (1    Cranch.    C. 

C.  423),  316. 
McKay,  In  re    (1   Low.   345),   367. 
McKay  v.  Funk  (37  la.  661),  710. 


McKenna,  In  re  (9  Fed.  Rep.  27) 

371,  394,  395,  396,  433. 
McKenna   v.    Simpson    (129   U.    S. 

506),  794. 
McKercher  &  Pettigrew,  In  re   (8 

N.  B.  R.  409),  422. 
McKey  v.  Lee  (105  Fed.  Rep.  923) 

332,  345. 
McKey   v.    Smith    (105   Fed.    Rep. 

899),  85. 
McKibben,  In  re  (12  N.  B.  R   97) 

160,  200,  641. 
McKinley,  In  re  (7  Ben.  562),  234 

235. 
McKinney,    In    re    (15    Fed.    Rep. 

912),  320. 
McKinney  v.  Reader  (6  Watts  34), 

434. 
McKinsey  v.  Harding  (4  N.  B.  R. 

38),   292,  328. 
McLam,  In  re  (97  Fed.  Rep.  922), 

584,   597,   700. 
McLaren,    In    re    (125    Fed.    Rep. 

935),  233. 
McLaughlin    v.    Swann    (18    How. 

217),  732. 
MacLean,  Ex  parte  (2  Mont.  D.  & 

D.    564),    294. 
McLean,  In  re   (15  N.  B.  R.  333), 

262. 
McLean    v.    Johnson    (3    McLean 

202),  29. 
McLean  v.  Lafayette  Bank  (3  Mc- 
Lean 185),  370,  709. 
McLean   v.   Mayo    (113   Fed.   Rep. 

106),  94.  351.  354,  370. 
McLean  v.  I\Ieline  (3  McLean  199), 

29. 
McLish   V.   Roff    (141   U.    S.   661), 

804. 
McMenomy   v.    Murray    (3    Johns. 

Ch.,  N.  Y.,  435),  757,  758.  750. 
IMcMillan    v.    McNeill     (4    Wheat. 

209),    22,    759. 
McMinn   v.   Allen    (67   N.   C.   131), 

774. 
?.IcMullen    v.    Rank    of    Penn.    (2 

Penn.  St.   243),   2S2.  297. 
McNair.   In  re    (2   N.   B.   R.   343). 

330.  339. 
McNair.   hi   rr    (2   N.   B.   R.   219), 

617. 
McNair  v.  McTntyre  (113  Fed.  Rep. 

113),  594.  707,  715. 
McNamara  v.  Holpna  Coal  Co.   (5 

Am.  B.  R.  48).  149. 
McNeil  V.  Knott  (11  Ga.  142).  204, 

783. 
McVay,  In  re  (13  Fed.  Rep.  443), 

313. 
McVey.    In    re    (2   N.    B.    R.    257), 
740,  742,  752. 


1282 


TAHI.K    OK    ("ASKS. 


Rel'erences  aro  to  pages. 


M.    &    M.    Nat.    Bank    v.    Brady's 

Iron  Co.  (5  N.  B.  R.  491),  211. 
Mace  V.  Wells   (7  How.  272).  29(), 

297. 
Macey  v.   Jordan    (2   Den.,  N.   Y., 

570),   284.   765. 
Machine  Co.  v.  Goddard    (95  Fed. 

Rep.  664),  833. 
Macon  Sash,  Door  &  Lumber  Co., 

In  re  (7  Am.  B.  R.  66),  27,  28, 

30. 
Mack   V.   Winslow    (59    Fed.   Rep. 

316),  98. 
Mackel    v.    Rochester     (102    Fed. 

Rep.  314),  625. 
Mackellar,   In   re    (116   Fed.   Rep. 

547),  113,  276,  277,  278,  349. 
Mackey,  In  re  (110  Fed.  Rep.  355), 

143,  197. 
Mackey  v.  Pattenden   (30  L.  J.  Q. 

B.   225),    400. 
Mackin  v.  United  States   (117     U. 

S.  348),  664. 
Madison  v.  Dunkle  (114  Ind.  262), 

773,   774. 
Magann    v.    Segal    (92    Fed.    Rep. 

252),  714. 
Magle,  In  re  (2  Ben.  369),  175. 
Magoon    v.    Warfield     (3    Greene, 

la.,  293),  769. 
Maher,  In  re,  117.  212. 
Mahler,  In  re  (105  Fed.  Rep.  428), 

306. 
Mahoney  v.  Ward.   (100  Fed.  Rep. 

278),   178,   179,   198,   245. 
Majestic,  The  (69  Fed.  Rep.  844), 

805. 
Malcolm,  In  re  (4  Law  Rep.  488), 

178,  181. 
Malino,  In  re  (118  Fed.  Rep.  368), 

113,   269,  271,   272,  276,  348. 
Mall  V.  Ulrich  (37  Fed.  Rep.  653), 

786. 
Mallory,  In  re  (1  Saw.  88).  89. 
Mallory.   In  re    (4   N.  B.   R.   153). 

350,  356,  357. 
Mallory  Mfg.  Co.  v.  Fox   (20  Fed. 

Rep.  409),  83. 
Melick,    In   re    (4    N.    B.    R.    97), 

243. 
Mammoth  Pine  Lumber  Co.,  In  re 

(109  Fed.  Rep.  308),  219. 
Mammoth  Pine  L.  Co.,  In  re  (116 

Fed.  Rep.  731),  126,  127,  128, 

363. 
Manhattan  Ice  Co.,  In  re  (114  Fed. 

Rep.   399).   189,   226,   282,   304. 
Manning,  In  re  (44  Fed.  Rep.  275), 

647,  648,  670. 
Manning,    In    re    (112    Fed.    Rep. 

948),  422,  428,  440. 


iMannin:,.    In    re    (123    Fed.    Rep. 

180).    32,    442,    593. 
Mansfield,  In  re  (6  N.  B.  R.  388), 

293. 
Manufacturers'  Nat.   Bank,   In   re 

(5   Biss.   499),   143. 
Manwarring    v.    Kouns     (35    Tex. 

171),  782,  783. 
Maples,  In  re  (105  Fed.  Rep.  919), 

141,  172,  291,  765,  768. 
Marcer,  In  re    (6  N.   B.   R.   351), 

190. 
March    v.    Heatoo    (1    Low.    278), 

104,  365.  366. 
Marcus.  In  re  (104  Fed.  Rep.  331), 

301. 
Marcus.  In  re  (105  Fed.  Rep.  907), 

636,  638,  639,  646. 
Marine  Machine  &  Conveying  Co., 

In  re  (91  Fed.  Rep.  630),  170, 

197. 
Marioneaux's  Case  (1  Woods  37), 

788 
Marks,   In   re    (2   N.    B.   R.    575), 

219. 
Marks  v.   Barker    (1   Wash.  C.  C. 

178),  311,  312. 
Markson  v.  Heaney   (1  Dill.  497), 

89,   370,   709. 
Markson  v.  Hobson   (2  Dill.  327), 

574,  580. 
Marlin,  Ex  parte  (2  Bro.  C.  C.  15), 

256. 
Maroin,  In  re  (1  Dill.  178),  227. 
Marquette.   In  re    (103   Fed.   Rep. 

777),  542,  543. 
Marrett  v.  Atteri)ury  (3  Dill.  444), 

345. 
Marrett  v.  Murphy    (11  N.   B.   R. 

131),  258. 
Marsh    v.    Armstrong    (20    Minn. 

81),  219,  384. 
Marsh   v.   Putnam    (3   Gray  551), 

22. 
Marshall  v.  Knox   (16  Wall.  551), 

74,  80,  83,  104,  105,  608,  611. 
Marshall    v.    Tray    (74    111.    379), 

779. 
Marshall    Paper   Co.,    In   re    (102 

Fed.    Rep.    872),   94,   744,   778, 

818. 
T«Tarshall,   Field   &  Co.   v.  Wolf  & 

Bro.   (120  Fed.  Rep.  815),  818, 

824,  826. 
Marston    v.    Stickney    (55    N.    H. 

383),  602. 
Martin,    Ex    parte    (5    Law    Rep. 

158),  608. 
Martin,   Ex  parte   (No.   9149  Fed. 

Cas.),  87. 
Martin.    In    re    (2    Hughes    418), 

431. 


TABLE    OF    CASKS. 
References  axe  to  pages. 


1283 


Martin  v.  Berry  (37  Cal.  208),  20, 

23,  24,  26,  27. 
Martin   v.   Bigelow    (7   Am.   B.   R. 

218),  575. 
Martin    v.    Nightingale    (3    Bing. 

421),  149. 
Marvin,  In  re   (1  Dill.  178),  145. 
Marwick,  In  re  (2  Ware  233),  257. 
Marx,  In  re   (102  Fed.  Rep.  676), 

660.  746,  751. 
Mason.  In  re   (99  Fed.  Rep.  256), 

176,  185,  224,  746. 
Mason    v.    Beebee    (44    Fed.    Rep. 

558),  394. 
Mason  v.  Bogg  (2  Myl.  &  Cr.  446), 

605. 
Mason  v.  Hartford  P.  &  F.  R.  Co. 

(19  Fed.  Rep.  53).  80,  87. 
Mason  v.  Hughart  (9  B.  Mon.,  Ky., 

480),  781. 
Mason  v.  Pewabic  Co.    (153  U.  S. 

361),  843. 
Massachusetts  Brick  Co.,  In  re  (2 

Low.   58),   192. 
Masterson    v.   Hemdon    (10   Wall. 

416),  825. 
Mather  v.  Coe   (92  Fed.  Rep.  333), 

200,  225. 
Matson.  In  re  (123  Fed.  Rep.  743), 

143. 
Mathews.    In    re    (109    Fed.    Rep. 

603),  703,  705,  706,  707,  709. 
Matthews,    In    re    (97    Fed.    Rep. 

772),    136. 
Matthews  v.  Abbott  (2  Hask.  289), 

298,  299. 
Matthews  v.  Puffer  (10  Fed.  Rep. 

606),  206. 
Matthews  v.  TufFts  (87  N.  Y.  568), 

206. 
Matthews    v.    Westphal     (48    Fed. 

Rep.  664),  386,  594. 
Mattocks    V.    Baker    (2   Fed.   Rep. 

445),   368. 
Mattocks  V.  Lovering  (3  Fed.  Rep. 

212),  316. 
Mattocks  V.  Rogers  (1  Hask.  547), 

259. 
Mattoon  Nat.   Bank   v.   First   Nat. 
Bank  (102  Fed.  Rep.  728),  220, 
222,  229,  230. 
Mattot,   In   re    (16  N.   B.   R.   4Sr,). 

163,    586. 
Maundrell,  Ex  parte  (2  Mad.  315). 

401. 
Mawson,  In  re   (1   N.  B.  R.  271), 

613. 
MawKon,  In  re   (2  Ben.  332),  743. 
Maxim    v.    Morse    (8    Mass.    127), 

779,  782. 
Maxwell  v.  McCune  (37  Tex.  51.'')). 
429,  434. 


May,  In  re  (1  Fed.  Rep.  743),  674. 
May.    In    re    (17    N.    B.    R.    192). 

263. 
May,    In   re    (19    N.    B.    R.    101). 

262. 
May,  In  re  (2  Cin.  Law  Bui.  152) 

431. 
May  V.   Courtenay    (47  Ala.   185), 

564. 
May  V.    Le  Claire    (18   Fed.   Rep. 

164),   594. 
Maybin  v.  Raymond  (15  N.  B.  R. 

353),    735. 
Mayer.  In  re   (98  Fed.  Rep.  839), 

121,  673. 
Mayer,  In  re  (101  Fed.  Rep.  227) 

726. 
Mayer,  In  re  (101  Fed.  Rep.  695), 

136,  137,  139. 
Mayer,  In  re  (108  Fed.  Rep.  599), 

371,   427,  428,  554. 
Mayer  v.  Helraan   (91  U.  S.  496), 

25,  26,  29,  30,  168,  393,   581. 
Mayer  v.  Herman  (10  Blatch.  256), 

580. 
Maynard  v.  Hecht  (151  U.  S.  324), 

805. 
Mayor  v.  Ketchum  (67  How.  Prac, 

N.  Y.,  161),  305. 
Mays   V.    Fritton    (20   Wall.   414), 

387,  570,  710. 
Mays  V.  Nat.  Bank  (64  Penn.  74), 

366,  415. 
Mead  v.  National  Bank  (6  Blatch. 

180),   263. 
Meader   v.    Sharpe    (64    Ga.    125), 

772. 
Mechanics     Bank     v.     Hazard     (9 

.Johns.,  N.  Y.,  392),  766. 
Medbury  v.  Swan   (46  N.  Y.  200), 

784. 
Medley,     Petitioner     (134     U.     S. 

160).  664. 
Melick,    In   re    (4    N.    B.    R.    97), 

223. 
Mellen,  In  re   (97  Fed.  Rep.  326), 

612,  625. 
Memphis  v.  Brown  (94  U.  S.  715), 

830. 
Mencke  v.  Rosenberg  (9  Am.  B.  R. 

323).  565,  56S. 
Mendonhall    v.    Hall     (134     V.    S. 

559).  831. 
Mendehiohn.  In  re  (102  Fed.  Rrp. 

119).  6.-.8.  750. 
Mendc!sohn,  In  re    (.'!   Saw.   31L'I. 

169.  302. 
Merchants  Ins.  Co.,  In  re  (6  Biss. 

252).  280,  734. 
Merchants  Ins  Co.,  In  re  (2  Bias. 
162),  1.50,  164,  586. 


12S4 


TAHLK    OF    CASKS. 


References  are  to  pages. 


Merchants  Bank  v.  Comstock   (55 

N.  Y.   24).   :532. 
Merchants'  Bank  v.  Thomas   (121 

Fod.  Rep.  30(;).  288.  289. 
Merchants  Nat.  Bank  v.  Cook  (95 

U.  S.  342).  570.  590. 
Mercur.  In  re  (95  Fed.  Rep.  634), 

189,  202,  219,  220. 
Mercur,  In  re  (122  Fed.  Rep.  384), 

244.  245. 
Meriwether,  In  re   (107  Fed.  Rep. 

102),  422,  423,  444,  448. 
Merrell.  In  re  (19  Fed.  Rep.  874), 

283. 
Merrick's  Estate   (5  Watts.  &  S., 

Penn..  9),  142. 
Merrick,  In  re   (7  N.  B.  R.  459), 

327,  337. 
Merritt.  In  re  (7  Fed.  Rep.  853), 

149. 
Metcalf  V.  Barker  (187  U.  S.  165), 

31.  94,  95,  96,  97,  100,  359,  368, 

562,  563,  564,  566,  599,  792. 
Metcalf   V.    Officer    (5    Dill.    565), 

251. 
Metcalf  V.  Watertown    (128  U.  S. 

586).   836. 
Metropolitan  Nat.  Bank  v.  Rogers 

(53   Fed.   Rep.   776),   3S4. 
Metzger,  In  re   (2  N.  B.  R.  355), 

383. 
Meyer,  In  re   (97  Fed.  Rep.  757), 

246. 
Meyer,  In  re   (98  Fed.  Rep.  976), 

220,  222,  243,  245,  247,  249,  254, 

255,  265,  267,  391,  392,  817,  824. 
Meyer,  Henry  L..  In  re   (106  Fed. 

Rep.   828),  312. 
Meyer,  In  re  (115  Fed.  Rep.  997), 

333,  586. 
Meyer,   In   re    (2   N.   B.    R.   422), 

581. 
Meyer  v.  Pritchard  (23  Law  Coop. 

S.   C.  R.   961),   823. 
Meyers,  In  re   (96  Fed.  Rp.  408), 

246,   266. 
Meyers,  In  re  (97  Fed.  Rep.  757), 

251,   255,  265,  2C6. 
Meyers,  In  re  (99  Fed.  Rep.  691), 

312. 
Meyers,  In  re  (102  Fed.  Rep.  869), 

528. 
Meyers,  In  re  (105  Fed.  Rep.  353), 

6.57,  749,  823,  835. 
Meyers,  In  re    (2  Ben.  424),  383, 

606. 
Meyers  v.  Farrell   (47  Miss.  283), 

641. 
Meyers    v.    Josenhson     (124    Fed. 

Rp.   734),   372,   406. 
Mexican   Ore    Co.   v.   Mexican   Co. 
(47  Fed.  Rep.  353),  674. 


Meymot,   Ex  parte    (1   Atk.    196), 

149. 
Michaels   v.   Post    (21  Wall.  398), 

234,  387. 
Michel,  In  re   (95  Fed.  Rep.  803), 

136. 
Michie,  In  re  (116  Fed.  Rep.  749), 

74,  85. 
Mifflin,  In  re  (1  Penn.  L.  J.  146), 

037,  642. 
Migel,  In  re  (2  N.  B.  R.  481),  636, 

642. 
Miller,  In  re  (104  Fed.  Rep.  764), 

157,  190,  238,  239. 
Miller,  In  re  (118  Fed.  Rep.  360), 

595. 
Miller,  In  re  (6  Biss.  30),  76. 
Miller,  In  re    (1  N.   Y.   Leg.  Obs. 

180),  261,  262,  719. 
Miller  v.   Gillespie    (59  Mo.   220), 

778. 
Miller  v.  Keys    (3  N.  B.  R.  224), 

162.  226. 
Miller  Elec.    Maintenance   Co.,   In 

re  (111  Fed.  Rep.  515),  72. 
Milligan,  Ex  parte   (4  Wall.  110), 

643. 
Mills,  In  re    (95   Fed.   Rep.   269), 

257. 
Mills,  In  re  (11  N.  B.  R.  74),  257, 

262. 
Mills,  In  re  (7  Ben.  452),  280. 
Mills  V.  Bennett   (2  M.  &  S.  556), 

152,  249. 
Milne   v.    Moreton    (6    Binn.,   Pa., 

353)    377. 
Milner   v.   Meek    (95   U.    S.    252), 

84,  826. 
IMilwaukee  v.  Schailer  &  Schnihlau 

Co.  (91  Fed.  Rep.  858),  838. 
Miner.  In  re  (104  Fed.  Rep.  520), 

191,  199. 
Miner,  In  re  (114  Fed.  Rep.  998), 

659,  660. 
Miner  v.  Markham   (26  Fed.  Rep. 

387),  206. 
Mingo  Valley  Creamery  Co.,  In  re 

(100  Fed.  Rep.  282),  170,  202. 
Minon  v.  Van  Nostrand    (1  Low. 

458),  637. 
Mitchel,  In  re  (116  Fed.  Rep.  87), 

307,    368,    401,    561,    562,    599, 

728. 
Mitchell,  In  re  (1  Am.  B.  R.  687), 

138. 
Mitchell  V.  Mnf.  Co.  (2  Story  648), 

19. 
Mitchell  V.  Marker   (62  Fed.  Rep. 

1.19),  827. 
Mitchell    V.    McClure    (178    U.    S. 

539),  80,  85.  607,791. 


TABLE    OF    CASES. 


1285 


References  are  to  pages. 


Mitchell  V.  McKibben   (8  N.  B.  R. 

548),  104,  105. 
Mitchell    V.    Singletary    (19    Ohio 

291),  769. 
Mitchell  V.  United  States  (21  Wall. 

352),  425. 
Mitchell  V.  Winslow  (2  Story  630), 

368,  731. 
Mock  V.  Howell    (101  N.  C.  443). 

773. 
Mock  V.  National  Bank  (107  Fed. 

Rep.  897),  287. 
Mcrebius,    In    re    (116    Fed.    Rep. 

47),  302,  320,  325. 
Moench,  C.  &  Sons  Co.,  In  re  (123 

Fed.    Rep.  965),    169,  191,  192, 

220,  222. 
Moffit   V.    Cruise    (7    Cold.,   Tenn., 

137).  360. 
Moline,   Ex   parte    (19   Ves.   216), 

408. 
Monongahela  Bank  v.  Overholt  (96 

Pa.  St.  327).  418. 
Monroe,  In  re  (114  Fed.  Rep.  398), 

768,  785. 
Monroe  v.  Dewey  (2  N.  B.  R.  840), 

395. 
Monroe  v.  Upton  (50  N.  Y.  593), 

761. 
Montgomery,  In  re   (3  Ben.  565), 

259,  339. 
Montgomery,   In   re    (3   N.   B.    R. 

430),  340. 
Montgomery  v.  Bucyrus  Mach.  Co. 

(92  U.  S.  257),  375. 
Mooney,   In  re    (14    Blatch.   204), 

623. 
Moore,  In  re  (104  Fed.  Rep.  896), 

72,  84,  86,  96. 
Moore,  In  re  (107  Fed.  Rep.  234), 

569. 
Moore,  In  re  (111  Fed.  Rep.  145), 

284,  290,  7G5. 
Moore,  In  re  (112  Fed.  Rep.  289), 

445,  446. 
Moore.    In   re    (5    Biss.    79),    250. 

251. 
Moore  v.  Jones    (23  Vt.  739),  87, 

368,  418. 
Moore  v.  Stanwood    (98  111.  605). 

694. 
Moore  v.  Waller   (1  A.  K.  Marsh, 

Ky.,  488).  776.  779. 
Morales,    In    re     (105    Fed.    Rep. 

761),  189,  226,  318. 
Moran,  In  re  (105  Fed.  Rep.  901), 

439. 
Moran    v.    King    (111    Fed.    Rep. 

7301.433.  545. 
Moran  v.  Sturges  (154  U.  S.  256), 

374. 


Morgan,     In    re     (10     Fed.     Rep. 

982),  658.  744,  750. 
Morgan  v.  Allen   (103  U.  S.  498), 

314. 
Morgan  v.  Bain    (L.  R.    10  C.  P. 

15),  417. 
Morgan  v.  Brundrett  (5  B.  &  Ad. 

296),  571.  751. 
Morgan's  L.  &  T.  R.  &  S.  S.  Co. 

V.   Texas   Cent.   Ry.   Co.    (137 

U.  S.  171),  374. 
Morgan    v.    Mastick    (2   N.    B.   R. 

521),  163. 
Morgan  v.  Rhodes  (1  M.  &  K.  435), 

401. 
Morgan  v.  Thornhill  (11  Wall.  65), 

104,   105.    753,    816. 
Morgan    v.    Wordell     (178    Mass. 

350),  286,  296,  298,  315. 
Morier,  Ex  parte    (12  Chan.   Div. 

491),  314. 
Morley  v.  Lakeshore  Ry.  Co.  (146 

U.  S.  162),  423. 
Morrill,  In  re  (2  Saw.  356),  606. 
Morris,    Ex   parte    (2    Low.    424), 

298. 
Morris,  In  re  (Crabbe  70),  09. 
Morris,  In  re  (102  Fed.  Rep.  1004), 

147,  148,  149,  150. 
Morris,  In  re  (125  Fed.  Rep.  841), 

137. 
Morris  v.   Brush    (2  Woods   354), 

593. 
Morris  v.  Gilmer  (129  U.  S.  328). 

425. 
Morris   Arc  Lamp  Co..  In  re    (10 

Am.   B.  R.   569  >.   406. 
Morrison,    In    re    (110    Fed.    Rep. 

734),  448. 
Morrison  v.  Savage  (56  Md.  142), 

773. 
Morrison    v.    Woolson    (23    N.    H. 

11),  783. 
Morrow,   Ex  parte    (1    Ix)w.   386), 

402. 
Morrow,  In  re  (07  Fed.  Rep.  574), 

657. 
Morrow,  In  re   (2  Saw.  356),  298. 
Morse.    In    re    (7    N.    B.    R.    56), 

356,  357. 
Morse,   In  re    (11    N.    B.   R.   482), 

260. 
Morse,  In  re    (13  N.   B.   R.   376), 

257. 
Morse  v.   Cloyes    (1!    lUirh..   N.   Y. 

100).  783. 
Morse   v.   Godfrey    (3   Stnrv   3J6), 

751. 
Morse  v.  Hovev  (7  N.  Y.  Ch.  Rep.. 

1  Sandf..  186).  IS.  296.  297. 
Mor.se    v.     Hutchins     (102     Mass. 

439),  770. 


1-28C) 


TABliK    OK    CASKS. 


References  are  to  pages. 


Morse  v.   Lowell    (48  Mass.   152), 

774. 
Morse  v.  Presby    (25  N.  H.  299), 

7G9. 
Morse  v.  Sewing  Machine  Co.   )38 

Fed.  Rep.  482),  669. 
Morton,  In  re  (118  Fed.  Rep.  908). 

276,   348,   719. 
Morton    Boarding    Stables,    In   re 

(108  Fed.  Rep.  791),  149. 
Mosby  V.  Steele  &  Metcalfe  (7  Ala. 

299),  415,   417. 
Moses,  In   re    (1    Fed.   Rep.   845). 

373. 
Moses  V.  Pond  (4  Am.  B.  R.  655). 

97.  245,  248. 
Moses  V.   St.  Paul    (67  Ala.   168), 

598. 
Mosier,  In  re  (112  Fed.  Rep.  138), 

395    443    542. 
Moss,   in   re    (19    N.    B.   R.    132), 

149. 
Motor  Co.,  In  re   (119  Fed.  Rep. 

441),  778. 
Mott,  In  re   (No.  9878  Fed.  Cas.), 

714. 
Mount  V.  Manhattan  Co.  (41  N.  J. 

Eq.  211),  234. 
Mowbray,    Ex   parte    (1    J.    &   W. 

428),  407. 
Moyer,  In  re   (15  Fed.  Rep.  598). 

434. 
Moyer,  In  re  (93  Fed.  Rep.  188), 

167. 
Moyer  v.  Dewey   (103  U.  S.  301), 

383,  606,  783. 
Mudd.  In  re  (105  Fed.  Rep.  348), 

744. 
Mueller  v.  Bruss   (112  Wis.  406), 

G09. 
Mueller  v.  Nugent   (184  U.  S.  1), 

70,  71,  72,  74,  76,  84,  96.  100, 

110,  3C6,  370,  371,  667,  668,  676, 

802,  809,  810,  811,  812. 
Mublhauser,  In  re  (121  Fed.  Rep. 

669),  713. 
Muldaur,  In  re   (8  Ben.  65),  138. 
Mullen,  In  re  (101  Fed.  Rep.  413), 

384. 
Muller,    In    re    (Deady    513),    69, 

200,  215,  216,  219. 
Mulliner  v.   Florence    (3  Q.  B.  D. 

484),  600. 
Munn,  In  re  {?,  Biss.  442),  163. 
Murdock,  In  re  (1  Low.  362),  324, 

739. 
Murphy's    Case    (1    Schoale    8    L. 

44),  285. 
Murphy,  In  re   (10  N.  B.  R.  48), 

227. 
Murphy  v.  Crawford    (114  Pa.  St. 

496),    779. 


Murphy    v.    Manning    (134    Mass. 

488),    759. 
Murray,  In  re  (98  Fed.  Rep.  600), 

209,  246,  250,  251,  253. 
Murray,    In    re    (14    Blaitch.    43). 

786. 
Murray    v.    Jones    (50    Ga.    109), 

384. 
Murray  v.   Murray    (2  Johns.  Ch. 

60),  243. 
Murray  v.  Riggs  (15  John.,  N.  Y., 

571),  309. 
Murray  v.  De  Rotteham   (6  John. 

Ch.,  N.  Y.,  52),  761. 
Murrill  v.  Neill  (8  How.  414),  243. 
Mussey,  In  re   (99  Fed.  Rep.  71), 

760. 
Mutual  Mercantile  Agency,  In  re 

(111  Fed.  Rep.  152),  150,  170. 
Myers,  In  re   (99  Fed.  Rep.  691), 

338. 
Myers,  In  re  (102  Fed.  Rep.  869), 

424. 
Myers  v.  Callaghan    (5  Fed.  Rep. 

726),  365. 
Myrick,  In  r«    (3  N.   B.  R.   156), 

339. 

N. 

Nachman,    In   re    (114    Fed.    Rep. 

995),  625. 
Nash    V.    Simpson    (78    Me.    142), 

372. 
Nashua  &  Lowell  R.  Corp.  v.  Bos- 
ton &  Lowell  R.  Corp.  (61  Fed. 

Rep.  237),  834,  837,  843. 
Nassau  v.  Parker   (2  Penn.  L.  J. 

298).  284.  765. 
Nathan,  In  re  (92  Fed.  Rep.  590), 

92,  93. 
National  Bank  v.  Gish's  Assignee 

(72  Penn.  13).  368. 
Nat.  Bank  v.  Hobbs  (9  Am.  B.  R. 

190),    564. 
Nat'l    Bank   v.   Omaha    (96    U.    S. 

737),    828. 
Nat.   Bank  v.   Sprague    (20   N.   J. 

Eq.  13),  258. 
National  Bank  v.  State  Bank  (10 

Bush,  Ky.,  367),   372. 
Nat.    Bank   v.   Taylor    (120   Mass. 

124),  782,  784. 
Nat.   Bank   v.    Warren    (96   U.    S. 

539),  570. 
National   Deposit  Bank.  Ex  parte 

(20  W.  R.  624),  148. 
National  Exch.  Bank  v.  Moore  (2 

Bond  170),  226. 
National     Mercantile     Bank,     Ex 

parte  (16  Ch.  Div.  104),  402. 
National    Distilling   Co.    v.    Seidel 

(79  N.  W.  R.  744),  359. 


TABLE    OF    CASES. 


1287 


Refereaces  are  to  pages. 


Nations  v.  Johnson  (24  How.  195), 

832. 
Neal  V.  Clark   (95  U.  S.  704).  769, 

772,  775,  794. 
Neely,  In  re   (108  Fed.  Rep.  371), 

100. 
Neely.  In  re   (113  Fed.  Rep.  210), 

812. 
Neilson,  In  re   (7  N.  B.  R.   505), 

234. 
Nelman,    In    re    (109    Fed.    R^ep. 

113),   323. 
Neimann,    In   re    (124    Fed.    Rep. 

738),   406,   554,    556. 
Nelson,  In  re   (98  Fed.  Rep.  76), 

134,  167,  177,  200,  201,  238. 
Nelson  v.  Garland    (1  How.  265), 

10. 
Neustadter  v.  Dry  Goods  Co.    (96 

Fed.  Rep.  830),  222,  240. 
New  Bedford  Inst.  v.  Fair  Haven 

Bank    (9    Allen,    Mass.,    178), 

299,  339. 
New  Brunswick  Carpet  Co.,  In  re 

(4  Fed.  Rep.  514),  289,  294. 
Newcomer,  In  re  (18  N.  B.  R.  85). 

336. 
New    England    Piano    Co.,    In    re 

(122  Fed.  Rep.  937).  71. 
Newhall,  Ex  parte  (2  Story  360), 

403,  415. 
Newland,  In  re  (6  Ben.  342),  332. 
Newman,  In  re  (3  Ben.  20),  148. 
New  Orleans  v.  Steamship  Co.  (20 

Wall.  393),  670. 
New    Orleans,    etc.,    R.    R.    Co.    v. 

Delamore   (114  U.  S.  506),  27, 

150. 
New  Quebrada  Co.  v.  Carr   (4  L. 

R.  C.  P.  051).  309. 
Newton,  In  re  (107  Fed.  Rep.  439). 

73. 
New    York    Economical    Printing 

Co.,  In  re  (110  Fed.  Rep.  514), 

3C9,  404,  596,  599,  600. 
New  York  &  W.  Water  Co.,  In  re 

(98   Fed.   Rep.   711),   147.  149, 

150. 
Nice  &  Schreiber,  In  re  (123  Fed. 

Rep.  987).  113,  277. 
Nicholas.    In    re    (122    Fed.    Rep. 

299),  368.  562.   509. 
Nicholas  v.  Murray  (5  Saw.  320), 

230,  325. 
Nichols   V.   Bellows    (22  Vt.    581), 

368. 
Nichols   V.   Eaton    (91   U.   S.  716). 

368,   394,  414,   415. 
Nichols    V.    Levy    (5    Wall.    433), 

394,  414. 
Nichols    V.    Nixey    (29    L.    R.    Ch. 

Div.  1005).  380. 


Nicholson  v.  Gouthit  (2  H.  Black. 

609),  408. 
Nickodemus.    In   re    (3    N.    B.    R. 

230),  223. 
Nisbit  V.  Macon  Co.  (12  Fed.  Rep. 

686),  580. 
Msbet  V.  Quinn  (7  Fed.  Rep.  760), 

590. 
Noble  V.  Hammond  (129  U.  S.  65), 

769,   770.   775. 
Noesen.   In  re    (6   Blss.   443).  319. 
Nooman.  In  re   (3  N.  B.  R.  267). 

753. 
Noonan.  In  re  (10  N.  B.  R.  330), 

266.  270. 
Noonan,  In  re   (3  Biss.  491).  247. 
Noonan  v.  Chester  Park   Athletic 

Co.    (93   Fed.   Rep.    576),   822. 
Noonan   v.   Orton    (34   Wis.    259). 

421. 
Norcross    v.    Mercantile    Co.    (101 

Fed.  Rep.  796).  820.  822. 
Norris'  Case   (4  N.  B.  R.  35).  33. 
Norris.   In  re    (2  Hask.   19),   260, 

264. 
Norris  v.  Beach   (2  Johns.,  N.  Y., 

294),  206. 
Norris   v.   Hassler    (23   Fed.   Rep. 

581),  667. 
North  V.  House   (6  N.  B.  R.  365), 

581. 
North  V.  Taylor  (6  Am.  B.  R.  233), 

574. 
Northern   Iron  Co.,   In  re   (14   N. 

B.  R.  356),  270,  273.  341. 
Norton.   In  re    (6   N.   B.  R.   297). 

275. 
Norton    v.    Billings    (4    Fed.    Rep. 

623).  590. 
Norton  v.  Switzer  (93  U.  S.  355), 

359. 
Norton    v.    Walker    (3    Ex.    480), 

646. 
Norwood.  Ex  parte   (3  Biss.  504), 

324. 
Novak.  In  re  (101  Fed.  Rep.  300), 

ISO.  199. 
Novak.  In  re  (111  Fed.  Rep.  161), 

395. 
Nowlan.  Ex  parte  (6  Durn.  &  East. 

58),  623. 
Nudd  V.  Barrows    (91   V.  S.  426), 

590. 
Nugent  V.  Boyd   (3  How.  426),  10. 

0. 

Oakley  v.   Bennett    (11   How.   33), 

367.  376.  394,  395. 
Oakley  V.  Corry  (10  La.  Ann.  502), 

366. 
Oakley   v.    Gardiner    (2    La.    Ann. 

1(J05).  372. 


12S8 


TAKLK    OF    CASES. 
References  are  to  pages. 


Gates    V.    Parish     (47    Ala.    157). 

7S5. 
O'Brien,  In  re   (1  N.  B.  R.  176), 

146. 
O'Brien   v.   WeM    (92    U.    S.    81), 

794. 
Ocean  Nat.  Bank  v.  Olcott  (46  N. 

V    12)    785 
Oconee    Milling    Co.,    In    re    (109 

Fed.  Rep.  866),  708. 
O'Connell,  In  re  (98  Fed.  Rep.  83), 

136. 
O'Connor,   In   re    (112   Fed.   Rep. 

666),  375. 
Odell.  In  re  (9  Ben.  209),  149. 
Odell,  In  re   (9  Ben.  247),  680. 
Oderkirk,    In    re    (103    Fed.    Rep. 

779),  268,  542. 
Odwin  V.  Forbes   (Buch.  57),  758. 
O'Donnell  v.  Segar  (25  Midi.  366), 

443 
O'Donohoe.  In  re  (3  N.  B.  R.  245), 

627,  628. 
O'Dowd  V.  Russell  (14  Wall.  404), 

825. 
O'Gara,  In  re  (97  Fed.  Rep.  932), 

658.  „    ^ 

Ogden  V.  Cowley  (2  Johns.,  N.  Y., 

274),  312. 
Ogden  V.  Jackson  (1  John.,  N.  Y., 

370)    599. 
Ogden    V.    Saunders     (12    Wheat. 

213),   20,   22.   26,  759. 
Ogilvie  V.  Knox  Ins.  Co.  (22  How. 

380),  406. 
Ogles,  In  re   (93  Fed.  Rep.  426), 

200 
G'Halloran,   In   re    (8    Ben.    128), 

220. 
O'Hara    v.    McConnell    (91    U.    S. 

151),  205. 
Ohlemacher  v.  Broek  (44  Up.  Can. 

Rep.  366),  758. 
Okell,  In  re  (2  Ben.  144),  617. 
Okell.    In   re    (2    N.    B.    R.    105), 

753. 
Okey   V.    Bennett    (11    How.    33), 

634. 
Olcott  V.  McLean   (50  How.  Prac. 

455),  573. 
Oleson,  In  re  (110  Fed.  Rep.  796), 

416,  786. 
Oliver  v.  Sanborn  (60  Mich.  346), 

Olewine,    In    re    (125    Fed.    Rep. 

840),  407. 
O'Mara,     In    re     (4     Biss.     406), 

642. 
G'Neil,    Ex   parte    (1    Low.    163), 

290,  292,  301,  328. 
G'Neil  V.  Dougherty  (46  Cal.  575), 

360. 


G'Neil    V.    Glover    (5    Gray    159), 

160. 
Ontario   Bank   v.   Mumford    (5  N. 

Y.  Chan.  Rep.  616),  412. 
Oregon  Bulletin  Print.  &  Pub.  Co., 
In  re   (13  N.  B.  R.  503),  162, 
163,  231,  586. 
O'Reilly   v.    Edrington    (96    U.    S. 

724),   828. 
Orem  v.  Harley  (3  N.  B.  R.  263), 

200,  223. 
Oriental  Society,  In  re   (104  Fed. 

Rep.  975),  148. 
Orne,    In    re    (1    Ben.    361).    272. 

300,  310. 
Orne,  In  re  (1  Ben.  420),  180. 
Osage,    etc.,   R.    Co.,   In   re    (9    N. 

B.  R.  281).  227. 
Osborn,  In  re  (104  Fed.  Rep.  780), 

424,  434,   439,  442,  512,  514. 
Osborn  v.  McBride   (3  Saw.  590), 

259. 
Osborn  v.  Perkins   (112  Fed.  Rep. 

127),  658. 
Osborne,  In  re  (115  Fed.  Rep.  1), 

833 
Osgood  v.  Maguire  (61  N.  Y.  529), 

377. 
Cstrander  v.  Meunch  (12  Fed.  Rep. 

562),    25. 
Otis  V.  Gazlin    (31  Me.  567),  780. 
Otis   V.   Hadley    (112   Mass.   100), 

571,  575,  577. 
Ott,  In  re  (95  Fed.  Rep.  274),  724. 
Otto,  In  re    (115  Fed.  Rep.  860), 

658. 
Ouimette,  In  re   (1  Saw.  47),  225, 

226,  227. 
Owen    V.    Brown    (120    Fed.    Rep. 

812),   165,   167   170. 
Owens,  In  re  (6  Biss.  432),  431. 
Owens    V.    Bruce    (109    Fed.   Rep. 

72),  715. 
Owings,  In  re  (109  Fed.  Rep.  623), 

336. 
Owsley    V.    Cobin     (15    N.    B.    R. 
489),  772. 

P. 

Pacific  Coast  Warehouse  Co.,  In  re 

(123  Fed.  Rep.  749).  150. 
Pacific  R.  Co.  V.  Ketchum   (95  U. 

S.    1),    835. 
Pacific  Railroad  v.  Missouri  Pacific 

Railway     Co.     (3     Fed.     Rep. 

772),   205.   210. 
Pack  V.  Bathhurst    (3  Atk.   269), 

381. 
Paddock,  In  re   (6  N.  B.  R.  132), 

619. 
Paddock,  In  re   (6  N.  B.  R.  396), 

343. 


TABLE    OF   CASES. 
References  are  to  pages. 


1289 


Paddock    v.    Fish    (10    Fed.    Rep. 

125),  573,  592. 
Page  V.  Broom   (3  Brav.  36),  401. 
Page  V.   Godden    (2  Starkie  309), 

397,  400. 
Page  V.  Edmonds  (187  U.  S.  596), 

406,  796. 
Paige.  In  re    (99  Fed.  Rep.  538), 

224. 
Paine  v.  Caldwell   (1  Hask.  452), 

79,    205. 
Paliser.    In    re    (136    U.    S.    261), 

650. 
Palmer,  In  re    (3  N.   B.   R.   283), 

581. 
Palmer    v.    Day,    1895,    (2    Q.    B. 

618),  310. 
Palmer  v.  Hussey  (119  U.  S.  96), 

769.  772,  773,  775,  794. 
Palmer   v.    Preston    (45   Vt.    154), 

767. 
Paper  Co.,   In   re    (102   Fed.   Rep. 

872),   756. 
Paret    v.    Ticknor    (4    Dill.    Ill), 

695. 
Parish,  In  re  (122  Fed.  Rep.  553), 

657,  743,  752. 
Park,  In  re   (102  Fed.  Rep.  602), 

436,  439,  442,  448. 
Park  V.  Casey  (35  Tex.  536),  782, 

783. 
Parker,  In  re   (11  Fed.  Rep.  397), 

594. 
Parker,  In  re   (4   Biss.  401),   657. 
Parker,  In  re  (5  Saw.  58),  443. 
Parker  v.  Atwood   (52  N.  H.  181), 

785. 
Parker  v.  Hotchkiss    (1  Wall.  .Ir. 

269),  206. 
Parker    v.    Muggridge     (2     Story 

334),   368,   731. 
Parker  v.   Norton    (6  T.  R.   695), 

319. 
Parkes,   In  re    (10   N.   B.   R.   82), 

271.  338,  339. 
Parkinson    v.    United    States    (121 

U.  S.  281),  664. 
Parks.   In   re    (9    N.    B.    R.    270), 

444. 
Parmelee  Library,  In  re  (120  Fed. 

Rep.  235),  150. 
Parmenter   Mfg.    Co.    v.    Hamilton 

(51  N.  E.  529).  17.  23.  24.  26. 

27.  30. 
Parmenter  Mfg.  Co.  v.  Stoever  (97 

Fed.  Rep.  3.30),  166,  167,  170, 

202,  817. 
Pa.scal.  In  re   (10  Wall.  491).  667. 
Pattern    v.    Carley    (S    Am.    B.    R. 

482),    600. 
Patterson,  In  re  (1  Ben.  448).  325. 
622. 


Patterson,  In  re  (1  Ben.  496),  416, 

625. 
Patterson,  In  re  (2  Ben.  155),  636, 

639,  645. 
Patterson     v.     United     States     (2 

Wheat.  221),  798. 
Patterson  &  Co.,  In   re   (125  Fed 

Rep.   562),  375. 
Pattison  &  Co.  v.  Oliver  (10  R.  I 

448),    769. 
Pattison  v.  Wilbur  (10  R.  I.  448), 

756. 
Patty-Joiner    &     Embank     Co.     v. 

Cummins   (4  Am.   B.  R.  269), 

30. 
Pauly,  In  re   (2   Am.   B.  R.  333), 

242. 
Payne  v.  Able  (7  Bush,  Ky.,  344), 

756,  769,  776. 
Payne   v.    Solomon    (14    N.    B     R. 

162),  163,  586. 
Payson  v.  Brooke  (No.  10857  Fed. 

Cas.),   406. 
Payson  v.  Dietz  (2  Dill.  504).  106. 
Payson   v.   Stoever    (2    Dill.   427), 

406. 
Payson  v.  Withers   (5  Biss.  209), 

406. 
Peacock,    In    re    (101    Fed.    Rep. 

560),  745. 
Pearce,  In  re  (21  Vt.  611),  657. 
Pearsall  v.  Smith  (149  U.  S.  231), 

382. 
Pearson.  In  re  (95  Fed.  Rep.  425), 

164,  586. 
Pease,  In  re   (29  Fed.  Rep.   595), 

79,   207,  221,  619. 
Pease,   In   re    (6    N.    B.    R.    173), 

345. 
Pease,   In   re    (13   N.    B.   R.    168), 

264. 
Peaslee   v.    Haberstro    (15    Rlatch. 

472),  208. 
Peck,  In  re   (120  Fed.  Rep.  972), 

743,  744,  752. 
Peck  V.  Connell   (6  Am.  T!.  li.  93), 

568. 
Feck  V.  Connell  (8  Am.  B.  Ji.  5(t(i), 

609. 
Peck  V.  Hibbard   (26  Vt.  698).  758. 

759. 
Peck    V.    .lenness    (7    How.    625), 

87.  97.  562,  563.  755. 
Peckham    v.     Burrows     (3     Story 

544).    570.    578. 
Peiper  v.   Harraor   (5   B.   R.   252), 

361. 
Peiaer.  In  re  (115  Fed.  Rpp.  199), 

87.   60S. 
Pekin   Plow   Co..   In    rr    fTT2   Ffd. 
Rep.  308).  596.  811. 


1200 


TABLB    OF    CASKS. 


References  are  to  pages. 


Peltasohn.  In  re  (4  Dill.  107),  371. 

668,  670. 
Pence    v.    Cochran    (6    Fed.    Rep. 

269).  728. 
Pender  v.   Brown    (120   Fed.   Rep. 

496),   836.   837. 
Penfield  v.  C.  &  O.  R.  R.  Co.    (29 

Fed.  Rep.  494).  174. 
Penn,  In  re  (4  Ben.  99).  176. 
Penn  Co.  v.  Ry.  Co.  (55  Fed.  Rep. 

131),  834. 
Pennell  v.  Percival    (13  Pa.  197), 

783. 
Pennewell,  In   re    (119   Fed.   Rep. 

139),    283,    288,   289,   304.   305, 

306.    397. 
Pennington   v.    Sale    (1   N.    B.   R. 

572),  370. 
Penny  v.  Taylor  (10  N.  B.  R.  200), 

436. 
People  V.   Duncan    (41   Cal.   508), 

407. 
People    V.    Palmer    (46    111.    398), 

434. 
People  V.  Spaulding  (10  Paige,  N. 

Y.,   284),   765. 
People  V.  Whitman    (10  Cal.  38), 

108. 
People's  Bank  v.  Brown  (112  Fed. 

Rep.   652).   624,   626,   627,  628. 
People's  Mail  Steamship  Co.,  In  re 

(3  Ben.  22G),  37,  370,  374. 
Perdue,   In   re    (2  N.  B.  R.   183), 

432,  601. 
Perkins,   Ex  parte    (5   Biss.   254), 

356,  812. 
Perkins   v.    Fourniquet    (14   How. 

313),  842. 
Perley  v.  Dole   (38  Me.  558),  366. 
Perley  v.  Mason  (64  N.  H.  6),  23. 
Perrin.  In   re    (7   N.    B.   R.    283), 

592. 
Perry  v.  Aldrich    (13  N.  H.  343), 

305. 
Perry  v.  Langley  (1  N.  B.  R.  559), 

192. 
Perry   v.    Somerly    (57    Me.    552), 

564. 
Peter  Paul  Book   Co.,  In  re    (104 

Fed.  Rep.  786),  170,  286,  323, 

725,   729. 
Petersen,  In  re  (95  Fed.  Rep.  417), 

424,  450,  453. 
Peterson  v.  Nash    (112  Fed.  Rep. 

311),  587,  820,  821. 
Pettis,    In    re    (7    Am.    Law    Reg. 

695),  639. 
Petrie,  In  re   (5  Ben.  110),  312. 
Peugh   V.   Davis    (110   U.    S.   227), 

821,  822. 
Pevear,  In  re   (17  N.  B.  R.  461), 

727. 


Pfronim.   In  re   (S  N.  B.  R.  357), 

275. 
Phelan,  In  re  (62  Fed.  Rep.  817), 

673. 
Phelan  v.  Iron  Mountain  Bank  (4 

Dill.  88),  413. 
Phelps,   In   re    (1   N.    B.   R.    525), 

275. 
Phelps  V.  Borland  (103  N.  Y.  406), 

758,  759. 
Phelps  V.  McDonald  (99  U.  S.  298), 

420. 
Phelps  V.  Sellick  (8  N.  B.  R.  390), 

710. 
Philadelphia  &  Lewes  Transp.  Co., 

In  re  (114  Fed.  Rep.  403),  149, 

150. 
Philips  V.  Turner   (114  Fed.  Rep. 

726),  80. 
Phillips    V.    Allen    (8    B.    &    Aid. 

477).  758. 
Phillips  V.   Dreher  Shoe  Co.    (112 

Fed.   Rep.   404),   282,   296. 
Philips  V.  Eyre  (L.  R.  6  Q.  B.  1), 

758. 
Phillips  V.  Solomon   (42  Ga.  192), 

776. 
Phoenix  Bessemer  Steel  Co.,  In  re 

(4  Ch.   Div.  108),   417. 
Phoenix  Ins.  Co.  v.  Wulf   (1  Fed. 

Rep.  775),  207,  208. 
Phosphate    Co.    v.     Edwards     (70 

Fed.  Rep.  728),  828,  822. 
Pickens   v.    Dent    (106    Fed.   Rep. 

657),  31,  77,  81.  365. 
Picl-^^ns  V.   Roy    (187   U.    S.   177), 

31,    94,    95,   96,    359,    365,    563, 

564. 
Pickett  V.  McGavick  (14  N.  B.  R. 

236).  786. 
Pierce.  In  re  (102  Fed.  Rep.  977), 

97,  247,  248. 
Pierce,  In  re   (103  Fed.  Rep.  64), 

656,  660.  744,   754. 
Pierce,  In  re  (111  Fed.  Rep.  516), 

115,  116,  127,  355. 
Pierce  v.   Evans    (61   Penn.   415), 

575. 
Pierce  v.  O'Brien  (129  Mass.  314), 

759. 
Pierce  v.  Wilcox  (40  Ind.  70),  710, 

755. 
Piercy  v.  Roberts  (1  Myl.  &  K.  4), 

414. 
Pierson,  In  re   (10  N.  B.  R.  107), 

648,  736. 
Pike  V.  Lowell   (32  Me.  245),  361. 
Pike   V.  McDonald    (32   Me.   418), 

293. 
Pilger,  In  re  (118  Fed.  Rep.  206), 

142. 


TABLE    OF    0ASK8. 


1291 


References  are  to  pages. 


Pingrey  v.  National  Ins.  Co.   (144 

Mass.  374),  410. 
Pioneer  Paper  Co.,  In  re   (7  Ben. 

250),  622,  626. 
Pirie  v.  Chicago  Title  &  Trust  Co. 

(182  U.  S.  438),  332,  345,  572, 

576,   585,   796. 
Pitt,  In  re   (8  Ben.  389),  239. 
Pittlekow,    In    re    (92    Fed.    Rep. 

901),  92.  707,  709. 
Pittman,  In  re  (1  Curtis  186),  667, 

674. 
Pittock,  In  re   (2  Saw.  416),  300. 
Pitts,    In    re    (19    N.    B.    R.    63), 

767. 
Piatt  V.  Johnson  (168  Pa.  47),  305. 
Piatt  V.  Oreston  (19  N.  B.  R.  241), 

25. 
Piatt  V.  Preston  (19  N.  B.  R.  241), 

27. 
Plimpton,    In    re    (103    Fed.   Rep. 

775),  112,  184. 
Plimpton  V.  Winslow  (9  Fed.  Rep. 

365),    206. 
Plotke,  In  re  (104  Fed*.  Rep.  964), 

197. 
Poillon    V.    Lawrence    (77    N.    Y. 

20S).   785. 
Poland    V.    Glyn     (4    Blng.    22n), 

751. 
Poleraan,  In  re  (5  Biss.  526),  436, 

4^7. 
Polleys  V.  River  Ins.  Co.    (113   T^ 

S.  81).  821. 
Pollock    V.    Jones    (124   Fed.   Rep. 

163),  388,  597. 
Pond  V.  Kimball   (101  Mass.  105), 

434,   444. 
Pond    V.    New    York    Exch.    Bank 

(124   Fed.   Rep.   992),  82,  360, 

607,  608,  609,  710. 
Ponsford  v.  Walton   (3  L.  J.  C.  P. 

Cas.   1G7).   169. 
Pool    V.    McDonald    (15    N.    B.    R. 

560),  679,  681,  698. 
Pope,   In  re    (98    Fed.    Rep.   722), 

423,  469. 
Port  Huron  Dry   Dock  Co.,  In  re 

(14  N.  B.  R.  253),  327. 
Porter,  In  re  (109  Feci.  Rep.  Ill), 

92    709. 
Porter' V.   Lazear    (190  U.  S.   84). 

373,    376,    396,    419,    438,    439, 

604,  761. 
Porter  v.  Porter  (31  Me.  169),  781. 
Porter   v.   Sabin    (149   U.   S.    473). 

76,   370. 
Post   V.   Corbln    (5   N.    B.    R.    ID. 

581,   590. 
Post,    Adm.,    V.    Losey   et   al    (111 

Ind.  74),  296. 


Postal   Telegraph    Co.,   In   re    (85 

Fed.  Rep.  853),  842. 
Potts,  Ex  parte,  Crabbe  (469),  10. 

163,  200,  390. 
Potter  V.  Brown  (5  East  130),  757, 

758. 
Potter  V.  Couch    (141    U.   S.  319), 

414. 
Powell,  In  re  (2  N.  B.  R.  45),  349, 

356. 
Powell  V.  Lloyd   (1  Y.  &  J.  427), 

401. 
Powles   V.   Hargreaves    (3   DeGex, 

A.    M.   &   G.    445),    339. 
Prankard,  In  re  (1  N.  B.  R.  297). 

250,  251. 
Pratt,  In  re  (2  Low.  96),  145,  227. 
Pratt,  In  re  (1  Flip.  353),  432. 
Pratt  V.  Burr  (5  Biss.  36),  443. 
Pratt  V.  Curtis   (2   Low.  87),  383. 
Pratt  V.   Russell    (61   Mass.   462), 

780,  781,  782. 
Prescott,  Ex  parte    (1   Atk.   230), 

311. 
Prescott,  In  re  (5  Biss.  523),  300. 
Preston  v.  Simons    (1  Rich.  S.  C. 

262),   783. 
Prewett    v.    Caruthers     (20    Miss. 

491),  781. 
Price,  In  re    (91   Fed.   Rep.   635). 

612,  613,   615,   624. 
Price    In  re    (92   Fed.   Rep.  987), 

96,  97,  352. 
Price,  In  re  (6  N.  B.  R.  400),  443. 
Price,  In  rf?  (8  N.  B.  R.  514),  231. 
Price  V.  Moulton    (10  C.  B.   561). 

265. 
Price  V.  Price  (48  Fed.  Rep.  823), 

359. 
Prichard    v.    Budd    (76   Fed.    Rep. 

710),  828. 
Prime    v.    Brandon    Mfg.    Co.    (IS 

Blatch.  453),  378. 
Proctor,  In  re  (6  Am.  B.  R.  660) 

587. 
Producers  Bank  v.  Farnum   (5  Al 

Ion.    M.-iss.    10).   759. 
Protector,  The   (11   Wall.  82).  835 
Proudfoot,  Ex  parte  (1  Atk.  252) 

415. 
Prouty,  In  re   (24  Fed.  Rep.  554) 

356. 
Providence   County    Sav.    Bank    v 

Frost    (8   Bon.   293).  300. 
Providence    &    Stonington    Stoam 

.shii)  Co.   v.   Ins.   Co.    (11    Fed 

Rep.   2S4).  732. 
Provident  In.ntitution  v.  Massachu 

setts    (6   Wall.    630),   423. 
Public  Schools  v.  Walker  (9  Wall 

603),  840. 


1292 


TAKLK    OF    CASES. 


References  are  to  pages. 


Pugh  V.  Arton  L.  R.   (S  Eq.  62G). 

402. 
Pullman  Palace  Car  Co.  v.  Central 

Transportation  Co.   (171  U.  S. 

13S).    800,   805. 
Pullman's  Car  Co.  v.  Pennsylvania 

(141  U.  S.  18).  21,  22. 
Pulsifer,  In  re  (14  Fed.  Rep.  247), 

295. 
Pulsifer  v.  Hussey    (97  Me.  434), 

410,   411,   425. 
Punnett,    Ex   parte    (IG    Ch.    Div. 

226),  402. 
Pupke  V.  Churchill    (91   Mo.   81), 

695. 
Purcell,  In  re   (18  N.  B.  R.  447), 

695. 
Purple    V.    Farrington     (119    Ind. 

164),  258. 
Pursell,  In  re  (114  Fed.  Rep.  371), 

615. 
Purvine,  In  re  (96  Fed.  Rep.  192), 

633,  668,  673,  810,  812. 
Purvis,  In   re    (1   N.   B.   R.   163), 

270,  277. 
Pusey,  In  re  (6  N.  B.  R.  40),  368, 

731. 
Pusey.  In  re  (7  N.  B.  R.  45),  159, 

390. 
Putnam  v.  Story  (132  Mass.  205), 

395. 

Q. 

Quackenbush.  In  re  (102  Fed.  Rep. 

282),  657,  658. 
Quelin  v.  Moisson  (1  Knapp  265n), 

758. 
Quimby  Freight  Forwarding  Co., 

In    re    (121    Fed.    Rep.    139), 

149,   150. 

R.    ■ 

Randall,  In  re  Deady   (557),  223, 

392. 
Randall,  In  re   (1   Saw.  56),  366, 

584. 
Randall,  In  re  (5  Law  Rep.  115), 

187. 
Randall  v.  Brigham  (7  Wall.  540), 

G74. 
Randall   v.   Rich    (11  Mass.   494), 

305. 
Radford  v.  Folsom  (123  U.  S.  725), 

821,  832. 
RaCferty,  In  re  (7  Am.  B.  R.  415), 

469. 
Rahilly   v.   Wilson    (3   Dill.    420), 

Railroad  Co.  v.  Bradleys  (7  Wal!. 

575),  822.  827.  830. 
Railroad  Co.  v.  Ellsworth  (77  Fed. 

Rep.  GG4),  837. 


Railroad  Equipment  Co.  v.  South- 
ern  Ry.   Co.   Sol. 
Railroad   Co.   v.   Reeder    (76   Fed. 

Rep.   550),  838. 
Railroad  Co.  v.  Shutte  (100  U.  S. 

644),  830,  834. 
Railway  Co.  v.  Stewart   (95  U.  S. 

279),    834. 
Rainsford,  In  re  (5  N.  B.  R.  381), 

787. 
Randolph   v.    Scruggs    (190   U.    S. 

533),    29.    30,    31,    32,    93,    138, 

139,    168,    242,    286,    323,    391, 

392,  729,  792.  818. 
Rank.  In  re  Crabbe  (493),  637. 
Rankin  v.  National  Bank  (14  N.  B. 

R.  4),  580. 
Ransom    v.    Geer    (12    Fed.    Rep. 

607),  695. 
Rathbone.  In  re  (2  Ben.  138),  743. 
Rathbone  v.  Ayer  (82  N.  Y.  Supp. 

235),  406. 
Ray,  In  re  (2  Ben.  33),  180,  319. 
Ray    V.    Norseworthy     (23    Wall. 

128),  706,  707. 
Raymond    v.    Merchant    (3    Cow.. 

147),  293. 
Raynor,  In  re  (11  Blatch  43),  200. 
Read  &  Knight.  In  re  (7  Am.  B.  R. 

Ill),  576,  587. 
Reakirt,  In  re    (7  N.  B.  R.  329). 

622. 
Real  Estate  Trust  Co.  v.  Thomp' 

son  (7  Am.  B.  R.  520),  80. 
Redfield,  In  re  (2  Ben.  71),  180. 
Redmond.  In  re  (9  N.  B.  R.  408), 

152,  200,  249. 
Reed,  In  re  (3  Fed.  Rep.  798),  336, 
Reed,  In  re  (6  Biss.  250),  319. 
Reed  v.  Bullington  (49  Miss.  223), 

755,  785. 
Reed  v.  Equitable  Trust  (8  Am.  B. 

R.  242),  75,  77,  89,  94,  95,  359, 

567. 
Reed  v.  Mclntyre  (98  U.  S.  507), 

26,  565. 
Reed  v.  Vaughn  (15  Mo.  137),  18. 
Reed  Bros.  &  Co.  v.  Taylor  (32  la. 

209),  25,  27. 
Reese,  In  re  (115  Fed.  Rep.  993), 

440. 
Reg.  v.  Boyd  (5  Cox  Cr.  Cac.  502), 

665. 
Reg  v.  Ewington  (41  E.  C.  L.  148), 

665. 
Reg.  v.  Lands  (33  Eng.  Law  &  Eq. 

536),  665. 
Regan  v.  Zeeb  (28  Ohio  St.  483), 

432. 
Reichman,    In    re    (91    Fed.    Rep. 

024),    164,    166. 


TABLE    OF    CASES. 


1293 


References  are  to  pages. 


Reid,  Murdock  &  Co.  v.  Cross   (1 

Am.  B.  R.  34),  77.  89. 
Reiley  v.  Lamar   (2  Cranch  344), 

822. 
Reiman,  In  re  (7  Ben.  455),  17,  18. 

683,   686.   688. 
Reiman,   In   re    (12    Blatch    562), 

678,  G93. 
Reitz  V.  The  People  (72  111.  435). 

774. 
Rekerdres,   In   re    (108    Fed    Rep. 

206),  113,  276,  348. 
Reliance  Storage  &  Warehouse  Co., 

In  re  (100  Fed.  Rep.  619),  119. 

212,   213,   214,   345. 
Remington  Auto  &  Motor  Co.,  In 

re    (119    Fed.    Rep.    441),    94, 

756. 
Republic   Ins.  Co.,  In  re   (3  Biss. 

452),  406. 
Republic  Iron  Co.,  In  re  (8  N.  B. 

R.  197),  324. 
Repplier  v.  Bloodgood  (1  Sweeney, 

N.  Y.  Sup.  Ct.  34),  588. 
Resler,  In  re   (95  Fed.  Rep.  804), 

319. 
Retzer  v.   Wood    (109  U.   S.   187), 

361. 
Revell.  Ex  parte  (13  Q.  B.  D.  720), 

292. 
Rex  V.   Jones    (24   E.   C.   L.   156), 

665. 
Rex  V.  Pixley,  Bunbury  202),  763. 
Reynolds.  In  re   (9  N.  B.  R.  50), 

23,  26,  27. 
Reynolds  v.  Hanna  (55  Fed.  Rep. 

795),  394. 
Rhodes.  Jw  re  (105  Fed.  Rep.  231), 

302,  320. 
Rhodes,  In  re  (109  Fed.  Rep.  117), 

441,  520,  521. 
Rhodes    v.    Farish    (IG    Mo.    App. 

434),  174. 
Rice,  In  re  (9  N.  B.  R.  373).  257, 

264. 
Rice  V.  Grafton   Mills    (117  Mass. 

228),  573,  589. 
Rice   V.   Maxwell    (21    Miss.    289), 

662. 
Rice  V.  Melenuy  (41  la.  395),  589. 
Richard,  In  re  (94  Fed.  Rep.  633), 

30,   291,   323,   3150.    442.   515. 
Richard,    In    re     (104     Fed.    Rep. 

792),  412. 
Richards,    In    re     (96    Fed.     Rep. 

935),  566,   568,   812,   813.  81  t. 
Richards,    In    re    (103    Fed.    Rep. 

849),    113,    135,    269,    279. 
Richards,  In  re  (4  Ben.  303).  626, 
Richards    v.    Nixon    (20    Fa.    19T, 

784. 


Richardson,   In   re    (2    Ben.    517), 

95. 
Richardson,   In   re    (11   N.    B.    R. 

114),  444. 
Richardson   v.    Green    (130    U.    S. 

104),   821,   831,    832. 
Richardson     v.     Woodward     (104 

Fed.  Rep.  873),  422,  545. 
Richmond,  The  (9  Fed.  Rep.  863), 

103. 
Richmond  v.  Brown  (66  Me.  373), 

774. 
Richter's    Estate,    In    re    (1    Dill. 

544),    336. 
Riddle's  Sons,  In  re  (122  Fed.  Rep. 

559),   587. 
Rider,  In  re    (96  Fed.  Rep.  808), 

679,  681,  323,  341,  678. 
Ridgeway  v.  Clare  (19  Beav.  Ill), 

243. 
Riggin  V.  Magwire  (15  Wall.  549), 

286,  287,  761. 
Riggs  V.  Roberts   (85  N.  C.   151), 

779. 
Riggs  V.   White    (4   Heisk,   Tenn., 

503),    784. 
Riker,  In  re   (5  Am.   B.   R.  720), 

93. 
Riordan,  In  re  (14  N.  B.  R.  332). 

336. 
Ripon  Knitting  Wks.  v.  Schrieber 

(101  Fed.  Rep.  810),  633,  668. 

673,   675. 
Rison  V.  Knapp  (1  Dill.  187),  573, 

590.   751. 
Rix  V.  Capitol  Bank  (2  Dill.  367), 

428.  431,  437.  593. 
Risteen.  In  re  (122  Fed.  Rep.  732). 

207. 
Roalswick,   In   re    (110   Fed.   Rep. 

639),  375. 
Robarts    v.    Bree    (8    Chan.    Div. 

198),  316. 
Roberts    v.    Wood    (38    Wis.    60), 

755. 
Robinson,  Ex  parte  (19  Wall  510). 

666.   675. 
Robinson,    In    re    (123    Fed.    Rep. 

844),  743,  752. 
Robinson.  In   re    (6  Blatch.   253), 

644. 
Robinson,  In  rr  (8  Ben.  406).  344. 
Robinson  v.  Denny   (57  Ala.  402), 

395. 
Robinson  v.  Elliott  (22  Wall.  513), 

595. 
Robinson  v.  Hall  (8  Ben.  61).  365. 
Robin.son  v.  Ins.  Co.  Bank  (9  piss. 

117).  58S. 
Robinson  v.  Soule  (56  Miss.  519). 

694. 


121)4 


TABLE    OF   CASES. 


References  are  to  pages. 


Kofhe.  In  re  (101  Fed.  Rep.  956), 

i;?7.  140.  818.  819,  823. 
Kochford.    In    re    (124    Fed.    Rep. 

182),  70,  71,  84.  707,  709. 
Rockett,  Ex  parte    (2   Low.   522), 

72(!. 
Rockwood,    In    re    (91    Fed.    Rep. 

393).   217. 
Roddin,   In  re    (6  Blss.  377),   261. 
Roden  v.  Jaco   (17  Ala.  344),  293. 
Rodger,  In  re   (18  N.  B.  R.  381), 

G93. 
Rodgers,    In    re    (125    Fed.    Rep. 

169),    100,    101,   212,   213,   355. 
Roeber,  In  re  (121  Fed.  Rep.  449), 

602. 
Roeller  v.   Ames    (33  Minn.   132), 

732. 
Rogers,   In  re    (2   N.   B.   R.   307), 

163. 
Rogers    v.    Ins.    Co.    (1    La.    Ann. 

161).  293. 
Rogers  v.  Palmer  (102  U.  S.  263), 

570,   580. 
Rogers  v.  Riessner   (31  Fed.  Rep. 

591),  210. 
Rogers    v.    Spence    (13    M.    &    W. 

571),   417.   421. 
Rogers    v.    Stevenson     (16    Minn. 

68).  367. 
Rogers  v.  Winsor  (6  N.  B.  R.  246), 

378. 
Rogers  Milling  Co.,  In  re  (102  Fed. 

Rep.  687).   190. 
Rohde    V.    Proctor    (4    B.   &   Cres. 

517),    408. 
Rollins  V.  Twitchell  (2  Hask.  66), 

317. 
Rollins  Gold  &  Silver  Min.  Co.,  In 

re  (102  Fed.  Rep.  982),  149. 
Romaine    v.    Union    Ins.    Co.    (28 

Fed.  Rep.  634).  205.  209. 
Romanow,    In    re    (92    Fed.    Rep. 

510).  30.  191.  202.  219.  220. 
Rome  Planing  Mills.  In  re  (96  Fed. 

Rep.   812).   158.   161,   164,   166. 

202.   225.    231. 
Ronk.  In  re   (111   Fed.  Rep.  154). 

593.   596. 
Rooney.    In    re     (109    Fed.    Rep. 

601),    402,    404. 
Roosa.  In  re  (119  Fed.  Rep.  542). 

658.  787. 
Rose  v.  Hart   (8  Taunt.  506),  309. 

312.  313. 
Rosenbaum.    In    re    (1    N.    B.    R. 

541),  247,  260. 
Rosenberg,  In  re  (3  Ben.  14),  9.1. 

760. 
Rosenberg,  In  re  (3  Ben.  366),  611. 


Rosenberg,   In  re    (116   Fed.   Rep. 

402).  630,  702,  705.  706,  707. 
Rosenfield,  In  re  (1  N.  B.  R.  319), 

416. 
Rosenfield.  In  re  (2  N.  B.  R.  116), 

752.   753,   754. 
Rosenfields,    In   re    (11    N.    B.    R. 

86).  238. 
Rosenthal.   In  re    (108    Fed.   Rep, 

368).  95. 
Rosenthal    v.    Lehman    (120    Fed. 

Rep.    848),    137. 
Rosenthal    v.    Walker    (111    U.    S. 

185),  609. 
Rosey,  In  re  (6  Ben.  507),  730. 
Ross,   Ex  parte    (Buck   125),   311, 

315. 
Ross  V.  Jordan   (62  Ga.  298),  779. 
Ross  V.   Saunders    (105  Fed.  Rep. 

915),   685,   693.   818,   826. 
Rosser.  In  re  (96  Fed.  Rep.  305), 

625. 
Rosser.  In  re  (101  Fed.  Rep.  562), 

71.   96,   371,   633,   668. 
Ross-Meehan      Foundry      Co.      v. 

Southern  Car  &  Foundry  Co. 

(124   Fed.  Rep.   403).   87,   213. 
Rouse,  hi  re  (40  Law  Bui.,  Ohio, 

220),   282,   303. 
Rouse.   Hazard    &  Co..   In   re    (91 

Fed.  Rep.  96),  19.  24,  347,  727, 
Rusch,  In  re  (116  Fed.  Rep.  270) 

809. 
Rush  V.  Lake  (122  Fed.  Rep.  561) 

821,    839. 
Rushford     v.     Hadfield     (6     EasU 

519),  600. 
Russell,    Ex   parte    (16    N.    B.    R. 

476),  260. 
Russell,  In  re   (97  Fed.  Rep.  32), 

246,  256,  260. 
Russell.  In  re  (101  Fed.  Rep.  248), 

76.   82,   93,   100,   236,   360,   361, 

374. 
Russell,  In  re  (105  Fed.  Rep.  501), 

119,  342. 
Russell,  In  re  (10  Ch.  App.  255), 

691. 
Russell    V.    Cheatham     (16    Miss. 

703),  769. 
Russell  V.  Owen  (61  Mo.  185).  318. 
Russell  V.  Phelps    (42  Mich.  388), 

713. 
Russie.  In  re   (96  Fed.  Rep.  609), 

396. 
Ryan.  In  re   (114  Fed.  Rep.  373), 

202    219    220. 
Ryan.  In  re'(6  N.  B.  R.  235),  713, 

714. 
Ryan,  In  re  (2  Saw.  411),  148,  155. 


TABLE    OF   CASES. 


1295 


References  are  to  pages. 


St.    Cyr.    V.    Daignault    (103    Fed. 

Rep.  854),   567. 
St.    John,    In    re    (105    Fed.    Rep. 

234),   395. 
St.    John's    College    v.    Carter    (8 

Law    Journ.    Eq.    E.    S.    218), 

668. 
Sabin,   In   re    (18   N.    B.   R.    151), 

79,  207,  221. 
Sabin  v.  Camp  (98  Fed.  Rep.  578), 

583,   587,  593,   597. 
Sabine,  In  re  (1  Am.  B.  R.  315), 

709. 
Sacchi,   In   re    (6   N.    B.   R.    398), 

357. 
Sackett  v.  Andrews   (5  Hill  327), 

18. 
Sadler   v.    Immel    (15    Nev.    265), 

25,  27. 
Sage  V.  R.  R.  Co.   (96  U.  S.  712), 

822,  827,  829. 
Sagor  &  Bro.,  In  re  (121  Fed.  Rep. 

658),    333.    576,    587. 
Saint  V.  Pilley  (L.  R.  10  Ex.  137), 

401. 
Salaberry,   In   re    (107    Fed.    Rep. 

95),  138.  139,  188. 
Sallee,  In  re  (2  N.  B.  R.  228),  179. 
Salkey,  In  re   (5  Biss.   486),   613, 

625. 
Salkey,   In  re   (6   Biss.   269),  371, 

623,  624,  666,  668,  670. 
Samson   v.   Burton    (5   Ben.   343), 

91,   563.   634. 
Samuels  v.  Cravens  (10  Ark.  380), 

781. 
Sanborn.  In  re  (96  Fed.  Rep.  551), 

605.    707. 
Sanderlin.    In   re    (109    Fed.    Rep. 

857).  594,  708,  715.  730. 
Sanderson's  Trust  (3  K.  &  J.  497), 

414. 
Sandford   v.   Chase    (3  Cowen,   N. 

Y..   381),   206. 
Sandford  v.  Lackland   (2  Dill.  6), 

395.  414. 
Sanford  v.  Sanford   (58  N.  Y.  67). 

293.  301,  360. 
Sandford   Fork   &   Tool   Co.,  hi  re 

(160  U.  S.  247),  843. 
Sands    v.    Codwise    (4    Johns..    N. 

Y..    536).    385. 
San  Gabriel  Sanatorium  Co..  In  re 

(95  Fed.  Rep.   271),  148. 
San    Gabriel    Sanat/>rium    Co..   In 

re    (102  Fed.  Rep.  310).  92. 
San  Gabriel  Sanatorium  Co..  In  re 

(111   Fed.  Rep.  892).  811. 
Sanger    v.    Upton    (91    U.    S.    56), 

314. 


Sapiro.  In  re   (92  Fed.  Rep.  340), 

626. 
Sargent,  In  re   (13  N.  B.  R.  144). 

238. 
Saul.  In  re  (5  Fed.  Rep.  715),  245. 
Saunders.  In  re  (2  Low.  444),  271. 
Saunders    v.    The    Commonwealth 

(10  Grat.,  Va.,  494),  764,  774. 
Saunders    v.    Mitchell     (61    Miss. 

321).  146. 
Saunders    v.    Williams    (5    N.    H. 

213).  377. 
Saunderson    v.    Rowles    (4    Burr. 

2064),   148. 
Sauthoff.  In  re  (7  Biss.  167),  332. 
Sauthoff.  In  re   (8  Biss.  35),  443. 
Savage,  In  re  (12  Fed.  Rep.  719), 

735. 
Savage,  In  re   (16  N.  B.  R.  368), 

256. 
Savin.  In  re  (131  U.  S.  267),  666, 

674. 
Savings  Bank  v.  Webster    (48  N. 

H.  21).  784. 
Savoye  v.  Marsh   (10  Met..  Mass., 

594).  759. 
Sawyer,    In    re    (124    U.    S.    207), 

672,  673. 
Sawyer,  In  re  (2  Hask.  337),  739, 

753. 
Sawyer,  In  re  (2  Low.  475),  690. 
Sawyer   v.    Hoag    (17   Wall.    622), 

311,  312,  313.  314.  406. 
Sawyer  v.  Turpin   (91   U.  S.  114). 

197.  393,  413,   574,   575,   593. 
Seaboard     Steel     Casting    Co.     v. 

Trigg  (124  Fed.  Rep.  75),  168, 

200. 
Seabolt.  In  re  (113  Fed.  Rep.  766), 

427.  444.  515.  516. 
Seaburv.  In   re   (10  N.   B.   R.   90). 

740. 
Sears,  In  re   (117  Fed.  Rep.  294). 

200.   239.   811. 
Seaton.  Er  parte  (8  Mor.  97).  292. 
Seay.   In  re   (113  Fed.  Rep.  969). 

333.   587. 
Sebring  v.   Wellington    (6  Am.   B. 

R.  671  ),  572.   577.  580,  584. 
Secor.   In  re    (18    Fed.   Rop.   319). 

285. 
Serkendorf,    In    rr    {2    Ben.    462), 

613.  742. 
Seckler.  In  re  (106  Fml.  Hep.  484). 

317. 
Second    Naf.    Bank    v.    State    Nat. 

Bank     (10     Bush.    Ky..    367). 

755. 
Seddon.  Kt  parte  (2  Cox  49),  265. 
Sedgwick     v.     Orlnnell     (9     Ben. 

429).  365. 


1296 


TABLK    OF    CASES. 


References  are  to  pages. 


SedgAvick    v.    Place    (1    N.    B.    R. 

Ii7;5).  27.  392. 
Sedgwick    v.     Place     (12     Blatch. 

163).  384. 
Sedgwick  v.  Sheffield  (6  Ben.  21), 

577. 
Seebold,  In  re  (105  Fed.  Rep.  910), 

809    810    813 
Seldner'  v.    Smith    (40    Md.    602), 

766. 
Selkrig  v.  Davies  &  Salt  (2  Dow. 

230).  377. 
Sellers  v.  Bell  (94  Fed.  Rep.  801), 

183,  405,  424,  445. 
Semmel.    In    re    (118    Fed.    Rep. 

487).  659. 
Senior    v.    Pierce    (31    Fed.    Rep. 

625),  97. 
Sessions   v.    Romadka    (145   U.    S. 

39).  372.  378,  417. 
Severin  v.  Robinson  (60  N.  E.  Rep. 

966).    609. 
Sewell.  In  re  (111  Fed.  Rep.  791), 

596. 
Seymour,  In  re  (1  Ben.  348),  636, 

639,  772. 
Seymour    v.    Browning    (17    Ohio 

362),  782. 
Seymour  v.  Freer    (5  Wall.   822), 

828. 
Seymour   v.    Street '(5    Neb.    85), 

785 
Scammon   v.    Cole    (3    Cliff.    472), 

570,   578. 
Scammon  v.  Cole   (1  Hask.  214), 

574,  575,  577. 
Scammon    v.    Kimball    (92    U.    S. 

362),   312,   314. 
Scanlan,  In  re  (97  Fed.  Rep.  26), 

726. 
Schaefer.    In    re    (104    Fed.    Rep. 

973),   289,   294. 
Schaeffer,    In    re    (105    Fed.    Rep. 

352),   704,   706. 
Schechter,    In   re    (9    Am.    B.    R. 

729),  435,  455. 
Scheiffer,  In  re   (2  N.  B.  R.  591), 

276.    277. 
Scheld,  In  re  (104  Fed.  Rep.  870), 

411,  424,  450. 
Schenck,    In    re    (116    Fed.    Rep. 

554),  745. 
Schenkein    (113    Fed.    Rep.    421), 

155,   161,   190. 
Scheurer  v.   Smith,  etc.,  Co.    (112 

Fed.  Rep.  407),  151,   165,  195. 
Schiller,  In  re  (96  Fed.  Rep.  400), 

119. 
Schlesinger,  In  re  (102  Fed.  Rep. 

117),  633,  668. 
Schlitz    V.    Sphatz    (2    Biss.    248), 

427,  431,  593. 


Schnepf,  In  re   (2  Ben.  72),  570. 
Scholtz,  In  re  (106  Fed.  Rep.  834), 

77.    242,   729. 
Schonberg,    In    re    (7    Ben.    211), 

621. 
Schondler  v.  Wace  (1  Camp.  487), 

418. 
Schrom,  In  re  (97  Fed.  Rep.  760), 

86. 
Schuchardt,   In   re    (8   Ben.    585), 

318. 
Schulenburg  v.  Kabwrech  (2  Dill. 

132),  610. 
Schuller,    In    re    (108    Fed.    Rep. 

591),  388,  433,  554,  597. 
Schultz,    In    re     (109    Fed.    Rep. 

264),   749. 
Schumpert,  In  re  (8  N.  B.  R.  415), 

377,  402. 
Schuyler,  In  re  (3  Ben.  200),  739, 

753,  754. 
Schwartz,    In    re    (14    Fed.    Rep. 

787),   669. 
Schwartz,  In  re  (14  Blatch.  196), 

319. 
Scott.   In  re    (11   Fed.  Rep.   133), 

160. 
Scott.  In  re    (93   Fed.   Rep.   418), 

328,  338. 
Scott,  In  re    (95   Fed.   Rep.   815), 

619,  625. 
Scott,  In  re    (99  Fed.   Rep.   404>, 

119,  133.  214. 
Scott,  In  re   (111  Fed.  Rej.  144), 

185. 
Scott,  In  re   (1  Abb.,  U.  S.,  336), 

603. 
Scott,  In  re  (15  N.  B.  R.  73),  678, 

682,  697. 
Scott   V.   Ellery    (142   U.    S.   381), 

755. 
Scott  V.  Kelly   (22  Wall.   57),  76, 

710,  794. 
Scott    V.     Surman     (Willes'    Rep, 

400),   411. 
Scott    V.    Wilson    (115    Fed.    Rep. 

284),   790,   809. 
Scovill  V.  Thayer  (105  U.  S.  143), 

311.  314. 
Scully,  In  re  (108  Fed.  Rep.  372), 

270,   271. 
Schachter,    In    re    (9    Am.    B.    R. 

499),    674. 
Shaeffer,    In    re    (105    Fed.    Rep. 

352),  396,  438. 
Shaffer,  In  re  (104  Fed.  Rep.  982), 

73,  325. 
Shaffer,  In  re  (124  Fed.  Rep.  Ill), 

304,  306. 
Shaffer  v.   Fritchery    (4  N.  B.  R. 

548),  104. 


TABLE    OF    CASES. 


1297 


References  are  to  pages. 


Shainwald  v.  Lewis   (5  Fed.  Rep. 

513),  80,  87. 
Shapiro,    In    re     (106    Fed.    Rep. 

495),    153,    160,   200,   247,   249, 

254. 
Sharon  v.  Hill  (24  Fed.  Rep.  726), 

667. 
Sharp  V.   Philadelphia  Warehouse 

Co.    (10   Fed.   Rep.   379),   590. 
Shaw,   In   re    (9    Fed.    Rep.    495), 

698. 
Shaw,  In  re   (109  Fed.  Rep.  780), 

340,    727. 
Shaw  V.  Quincv  Mining  Co.    (145 

U.  S.  444),  206,  425. 
Shawhan    v.    Wherrett     (7    How. 

627),  10,  234,  366,  367,  386. 
Shay  V.  Sessaman  (10  Pa.  St.  432), 

419. 
Shea,  In  re   (122  Fed.  Rep.  742), 

714. 
Shears  v.  Solhinger   (10  Abb.  Pr. 

N.    S.   287),  20,   23,   26,   27. 
Sheehan,  In  re   (8  N.  B.  R.  353), 

227,   291,   642,  723. 
Sheldon   v.   Rothschild    (8   Taunt. 

156),   311. 
Sheldon  v.  Rounds  (40  Mich.  427), 

429. 
Shenberger.  In  re  (102  Fed.  Rep. 

978),    395. 
Shepard,  In  re  (97  Fed.  Rep.  187), 

93,  765. 
Shepard,  In  re   (3  Ben.  347),  583, 

591. 
Shepard,  In  re   (1  N.  B.  R.  439), 

320,   337.   739. 
Shepherd  v.  Murril  (90  N.  C.  208), 

434. 
Shera,  In  re  (114  Fed.  Rep.  207), 

622,    625. 
Sheridan,    In    re    (98    Fed.    Rep. 

406),   583,  587,  597. 
Sherman     v.     Bingham     (3     Cliff. 

552),   19,  80,  87.  95.   008. 
Sherman   v.    Hobart    (26   Vt.   60). 

781. 
Sherman  v.  International  Bank  (8 

Biss.    371).   233. 
Sherman  v.  Luckhardt   (9  Am.  B. 

R.  307).  585. 
Sherman  v.  Luckhardt  (11  Am.  B. 

R.  26).  389. 
Sherwood.  In  re  (9  Ben.  66).  148. 
Shields,   In  re   (4  Dill.   588).  678. 
Shields    v.    Coleman     (157    U.    S. 

168).  76.  370,  804. 
Shirley.  In  re  (112  Fed.  Rep.  301). 

592.    595.    596.    811. 
Shoemaker,  In  re  (112  Fed.  Rep. 

648),  88. 


Shoemaker,   In  re    (4   Biss.    245), 

742. 
Shouse,    In    re    (Crabbe    482),   10, 

163,  194,  590. 
Shuman  v.  Strauss  (52  N.  Y.  404), 

645,  780. 
Shurtleff    v.    Thompson     (63    Me. 

118),    784. 
Sibbald  v.  United  States   (12  Pet. 

488),  842. 
Sidle,  In   re      (2   N.   B.   R.    220), 

764,  765. 
Sievers,  In  re  (91  Fed.  Rep.  366), 

30,   212. 
Sigafus   V.    Porter    (84   Fed.    Rep. 

430),  806. 
Sigsby    V.    Willis     (3    Ben.    371), 

283,  285,  298. 
Silberstein  v.  Stahl  (4  Am.  B.  R. 

626),  591. 
Silver  v.  Ladd  (6  Wall.  440),  830. 
Silverman's    Case    (1    Saw.    410) 

17,   69,   163,   225,   586. 
Silverman,    In    re    (97    Fed.    Rep. 

325),  139,  241. 
Silverman,  In   re    (101  Fed.   Rep. 

219),   281,   303. 
Simmons,  In  re  (10  N.  B.  R.  253), 

238. 
Simonson  v.  Sinshelmer   (95  Fed. 

Rep.   948),   191.   201,   223,  237. 
Simonson  v.  Sinsheimer  (100  Fed. 

Rep.  426),  230.  817. 
Simonson,  Whiteson  &  Co..  In  re 

(92  Fed.  Rep.  904).  201,  237. 
Simpson,    Ex   parte    (De    Gex   9), 

571,  751. 
Simpson.  In  re   (2  N.  B.  R.  47), 

643. 
Simpson    v.    Houston     (97    N.    C. 

344).  427. 
Simpson  v.  Van  Etten    (108   Fed. 

Rep.   199).  567. 
Sims,    In   re    (9    Fed.    Rep.    440). 

786. 
Sims.  In  re   (118  Fed.  Rep.   356), 

724. 
Singer    v.    Jacobs    (11     Fed.    Rep. 

559).   581.   59n. 
Singer    v.    Sloane    (3    Dill.    110). 

388. 
SinsliPinier  v.  Simonson  (107  P'ed. 

Rop.   898).   242. 
Sisler.  In  re   (96  Fed.  Rep.  402), 

430.  545.  546. 
Skellev.  In  re   (3   Bi.ss.   260),  226, 

227. 
Skillin  V.  Malbnin  (78  N.  Y.  Supp. 

436).  610. 
Skinner,  In  re  (97  Fed.  Rep.  190), 

656. 


J '25)8 


TAm,K    OK    CASKS. 
References  are  to  pages. 


Slack.  In  re   (111  Fed.  Rep.  523), 

396. 
Slaughter  v.  Detlney  (15  Ind.  49), 

434. 
Slingluff.    In    re    (105    Fed.    Rep. 

502).    G59. 
Slingluff.    In    re    (106    Fed.    Rep. 

154).  409,  410. 
Slipper  V.  Stidstlne  (5  T.  R.  493), 

315. 
Sloan    V.    Lewis    (22    Wall.    150). 

193,   234,   289,  300. 
Slomka,    In    re     (122    Fed.    Rep. 

630),    727. 
Small    V.    Muller    (8    Am.    B.    R. 

448),    75. 
Smith.  Ex  parte  (2  Rose  64),  604. 
Smith.   Ex    parte    (1    M.    D.   &   D. 

165).    264. 
Smith,  In  re   (16  Fed.  Rep.  465), 

744,  749. 
Smith,  In  re   (92  Fed.  Rep.  135), 

27,  30,  74. 
Smith,  In  re   (93  Fed.  Rep.  791), 

113,    119,    120,    371,    428,    440, 

441,  536. 
Smith,  In  re   (96  Fed.  Rep.  832), 

405,   424,    536,    537. 
Smith,  In  re   (108  Fed.  Rep.  39), 

126.   136,   137,   138.   139. 
Smith,  In  re  (112  Fed.  Rep.  509), 

628.  656. 
Smith.  In  re    (8   Am.   B.  R.   55), 

94. 
Smith,   In  re    (9    Am.   B.   R.   98), 

79,   210. 
Smith,  In  re  (5  N.  B.  R.  20).  740. 
Smith.  In  re  (8  N.  B.  R.  401).  426. 
Smith,  In  re    (13   N.   B.  R.   500), 

257. 
Smith,  In  re    (16  N.   B.   R.   113), 

262. 
Smith,  In  re  (8  Blatch.  461).  739. 
Smith,   In   re    (2    Ben.    113).    113, 

274. 
Smith.  In  re   (4  Ben.  1),  392. 
Smith.  In  re    (2   Low.   69),  149. 
Smith  V.   Belford    (106   Fed.  Rep. 

658).  70.   110.   116,   672.  674. 
Smith    V.    Brinkerhoff    (2    Selden, 

N.   Y.,   305),   316. 
Smith   V.    Buchanan    (1    East.    6), 

758. 
Smith  V.  Chandler  (69  Mass.  392), 

407. 
Smith   V.   Cooper    (120   Fed.    Rep. 

230),   137,  139. 
Smith  V.   Ely    (10  N.   B.   R.   553). 

382,   606. 
Smith  V.  Engle  (14  N.  B.  R.  481). 
693. 


Smith    V.    Gordon    (6    Law.    Rep. 

313).  372,  397.  398.  400.  417. 
Smith   V.   Hill    (S  Gray   572).  317. 
Smith   V.    Hodson    (4   T.   R.   212), 

310. 
Smith    V.    Hodson    ^50    Wis.    279). 

763. 
Smith  V.  Jameson    (5  T.  R.  601). 

264. 
Smith   V.    Keegan    (111   Fed.  Rep. 

157).   656,   660. 
Smith   V.   Kehr    (2   Dill.   50),   432, 

436,  611. 
Smith    V.    McLean    (10    N.    B.    R. 

260),   581,  590,   591. 
Smith    V.    Marshal    (2    Atk.    70), 

205. 
Smith    V.    Mason    (14    Wall.   419), 

83,   104,   105,  608. 
Smith   V.   Pickering    (1   Peak's  N. 

P.  Ren.   69),  407. 
Smith  V.  Profitt  (82  Va.  832),  414. 

785. 
Smith  V.  Ramsey   (27  O.  S.  339), 

785. 
Smith  V.  Smith   (5  Ves.  189),  258, 

396. 
Smith  V.  Teutonia  Ins.  Co.  (6  Am. 

Law  Rep.   584).   164.   586. 
Smith  V.  Union  Bank  (5  Pet.  518), 

21,   536. 
Smith  V.  Wheeler   (55  N.  Y.  App. 

Div.  170),  297. 
Snedaker,  In  re  (3  N.  B.  R.  629), 

332. 
Snell,  In  re   (125  Fed.  Rep.  154), 

94,  96. 
Snelling,  In  re  (19  N.  B.  R.  120), 

690. 
Snowdon   v.   Dales    (6   Sim.    524), 

414. 
Societe  v.  Distilling  Co.    (42  Fed. 

Rep.  96),  532,  668,  669. 
Sohier  v.  .Johnson  (111  Mass.  238), 

378. 
Soldiers'    Business,    Messenger    & 

Dispatch    Co.,   In   re    (3    Ben. 

204),   593. 
Solis,  In  re   (4  Ben.  143),  613. 
Solomon,  Ex  parte   (1   Glyn.  &  J. 

25)    339. 
Soltyknff,    In    re    (1   Q.    B.,    1891, 

"415),  145. 
Son,   In  re    (2   Ben.   153).   743. 
Sonstiby  v.  Keeley   (11  Fed.  Rep. 

578),  589. 
Soper,  In  re   (1  Am.  B.  R.   193). 

634. 
Soudan  Mfg.  Co..  In  re   (113  Fed. 

Ren.    804),    388,    578,    592. 
South  End  Imp.  Co.  v.  Harden  (52 
Atl.   1127),   602.   603. 


TABLE    OF    CASKS. 


I  -JiH) 


References  are  to  pages. 


Southard  v.  Benner  (72  N.  Y.  424), 

382. 
Southern  v.  Fisher  (6  S.  C.  345), 

75. 
Southern  Pac.  Co.  v.  Denton   (146 

U.   S.   202),   206. 
South    Straff ordshi re    Ry.    Co.    v. 

Burnside    (5    Ex.    Rep.    128), 

405. 
Southwick  V.  Whipple  (2  Fed.  Rep. 

770),    594. 
Spades,  In  re   (6  Biss.  448),  679, 

681,  693. 
Spalding  v.  Dixon  (21Vt..45),  283. 
Spalding   v.    New    York    (4    How. 

21),  284. 
Sparhawk    v.    Cloon     (125    Mass. 

263),  414. 
Sparhawk  v.  Cochran  (30  Leg.  Int. 

233),  368. 
Sparhawk  v.  Richards    (12  N.   B. 

R.  74),  589. 
Sparhawk    v.    Yerkes    (142    U.    S. 

1),  372,  400,  40G,  417. 
Spaulding  v.  McGovern   (10  N.  B. 

R.   188),  105. 
Speake    v.    Kinard     (4    S.    C.    54), 

438. 
Spear,  In  re  (103  Fed.  Rep.  779), 

750. 
Spenceley  v.  Schulenberg  (7  East. 

357),   627. 
Spencer  v.   Duplan   Silk  Co.    (191 

U.  S.  526),  103,  106,  791. 
Spencer  v.   Duplan   Silk  Co.    (112 

Fed.  Rep.  CIS),  369,  393,  599. 
Spencer  v.  Lapsley  (20  How.  264), 

102,  103. 
Speyer.  In  re  (42  How.  Prac.  397), 

118. 
Speyer,   In  re    (6   N.    B.   R.    255), 

371,  668,  670. 
Spillman,  In  re  (13  N.  B.  R.  214). 

682. 
Spindle  v.  Shreve  (111  U.  S.  546), 

304,  396,  414. 
Spitlev    V.    Frost     (15    Fed.    Rep. 

304),  434. 
Spofford,  In  re  (62  Fed.  Rep.  443), 

667. 
Spooner  v.  Russell    (30  Me.  454), 

779.  780. 
Spreckles   v.   McClain    (102    U.   S. 

376),    791. 
Springer  v.  Foster   (2  Story  385), 

22. 
Squire  v.  Compton  (Vin.  Ab.  Dow- 
er G.  pi.  60).  306. 
Stalker,  In  re  (123  Fed.  Rep.  961), 

723,  724. 
Stamp,  Ex  parte  (1  De  Gex  345). 

145. 


Staniiard  Laundry  Co.,  In  re  (112 

Fed.  Rep.  126),  368,  369,  562. 
Standard  Laundry  Co.,  In  re  (112 

Fed.  Rep.  126),  592,  599. 
Staniforth   v.   Fellowes    (1   Marsh. 

184),   311,   316. 
Stansfield,  Ex  parte  (4  Saw.  334), 

359. 
Stansfield  v.  Portsmouth  (4  C.  B. 

N.  S.  120),  401.  402. 
Stanton,    In    re    (6    Cush.,    Miss., 

447),  256. 
Stark  V.  Stinson  (23  N.  H.  259), 

781. 
State  V.  Pike  (15  N.  H.  83),  623, 

655. 
State  V.  Valle  (41  la.  29),  108. 
State    Bank    v.    Wilborn    (6    Ark. 

35),  18. 
State  Ins.  Co.,  In  re  (16  Fed.  Rep. 

756),  318.  324,  345. 
Staunton,    In    re    (117    Fed.    Rep. 

507),   528. 
Steam  Vehicle  Co.,  In  re  (10  Am. 

B.   R.   385).   572.   587. 
Stearns    v.    Flick    (103    Fed.    Rep. 

919),  286.  729,  323. 
Stedman  v.  Bank    (117  Fed.  Rep. 

237),  388,   578.   592. 
Steed,  In  re   (107  Fed.  Rep.  682). 

515,  516,  660,  743.  752. 
Steele.  In  re    (98   Fed.   Rep.   78), 

409.  410,  469. 
Steele  v.  Buel  (104  Fed.  Rep.  OeS). 

409,    411,    415,    422,    425,    469, 

790.  820. 
Steele  v.  Graves  (68  Ala.  21).  774. 
Steele  v.  Moody  (.'.3  Ala.  418).  434. 
Stegar,  In  re  (113  Fed.  Rep.  078). 

173. 
Steiger  v.  Bonn   (4  Fed.  Rep.  17). 

206. 
Stein.   In   re    (04    F«>d.    Rep.    124). 

719.  720,  722,  7:M. 
Stein,  In  re    {'[^)T^  Fed.  R.'|).  710). 

202.  210.  220. 
Steiner.  In   re    (1    Pa.   L.   .7.   368), 

726. 
Stein ingf'r    Mcrrantllo    Co.,    In    re 

(107  Fed.  Rep.  669).  380,  595. 

597. 
Stelling   V.   .Tones   l>uinl)('r  Co.    (8 

Am.  B.  R.  .')21  ),  700. 
Stengpl-Rotb.schilil  v.  Leldigh  Car- 
riage Co..  91,  215. 
Stephens,  Ex  parte   (11    Ves.   24), 

315. 
StephPUH.    In    re    flit    Fc<I      TJop. 

102).  431.  461. 
Stephrns,  In  re  (3  Biss.  187),  320, 

\V:X,.   315.   604. 


V]00 


TAin.K    OK    CASKS. 


References  are  to  pages. 


Stephens  v.  Cady  (14  How.  531), 

378. 
Stephenson  v.  Jackson  (2  Hughes 

204),  263. 
Stern  v.  Nussbaum   (47  How.  Pr., 

N.  Y.   489).  769. 
Stern,    Falk    &    Co.    v.    Louisville 
Trust  Co.  (112  Fed.  Rep.  501), 
572. 
Steuer,  In  re  (104  Fed.  Rep.  976), 

81,  84. 
Stevens,  In  re  (104  Fed.  Rep.  323), 

262. 
Stevens,  In  re  (107  Fed.  Rep.  243), 

326,  327,  328,  338. 
Stevens,  In  re   (1  Saw.  397),  248, 

265,  270. 
Stevens,  In  re  (1  Low.  397),  143. 
Stevens,  In  re   (2  Biss.  373),  424. 
Stevens  v.  Earles    (25  Mich.   40), 

369. 
Stevenson,    In    re    (6    Fed.    Rep. 

710),  703,  714. 
Stevenson,    In    re    (93    Fed.    Rep. 

789),  423,   444,   515,   616. 
Stevenson.    In    re    (94    Fed.    Rep. 

110),  201,  203. 
Stevenson  v.  McLaren  (14  N.  B.  R. 

403),  217. 
Stewart,  In  re   (3  N.  B.  R.  108), 

173. 
Stewart,  In  re   (13  N.  B.  R.  295). 

444. 
Stewart    v.     Anderson     (10     Ala. 

504),  755. 
Stewart    v.    Emerson    (52    N.    H. 

301),  770,  771. 
Stewart     v.     Hargrove     (23     Ala. 

429),  407,  784. 
Stewart  v.  Ingle    (9  Wheat.  526), 

799. 
Stewart  v.  Isidor  (5  Abb.  Pr.  N.  S. 

N.  Y.  68),  338,  340. 
Stewart    v.    Loomis,     (No.    13433 

Fed    Cas.)     10. 
Stewart  V.  Piatt   (101  U.  S.  731), 

159,  562,  595. 
Stewart  v.  Reckless    (24  N.  L.  J. 

427),  780,  781. 
Stewart   v.    Sonneborn    (98    U.    S. 

187),  241. 
Stewne   v.   Aylesworth    (18    Conn. 

244),  418. 
Steyer,  In  re   (98  Fed.  Rep.  290), 

213. 
Stickney  v.  Wilt    (23  Wall.   150), 

84. 
Stickwell    V.    Woodward     (52    Vt. 

234)     293. 
Stiles  V.'  Lay    (9    Ala.    795),    174, 
176. 


Stillwell,  In  re   (7  N.  B.  R.  226), 

271. 
Stillwell  V.  Cope    (4  Denoo  N.  Y. 

225),  780. 
Stockwell  V.   Silloway    (105  Mass. 

517),  637,  638. 
Stockwell  V.  U.  S.  (13  Wall.  531), 

284. 
Stoddard   v.   Locke    (43   Vt.   574), 

564. 
Stoddart,    In    re    (114    Fed.    Rep. 

486),  661. 
Stoever,  In  re  (105  Fed.  Rep.  355), 

342. 
Stokes,  In  re  (106  Fed.  Rep.  312), 
32,   71,   72,   74,   84,   86,   96,  98, 
254. 
Stokes,   In  re    (1   N.   B.   R.    489), 

357. 
Stokes   V.   Mason    (10   R.    L   261), 

770),    771. 
Stone,  In  re    (116  Fed.  Rep.  35),, 

423,  435,  443,  448. 
Stoner,  In  re  (105  Fed.  Rep.  752),. 

403. 
Storm,  In  re  (103  Fed.  Rep.  618),. 

167. 
Stotts,  In  re   (93  Fed.  Rep.  438) „ 

120,  135,  136,  138,  139. 
Stout,  In  re   (109  Fed.  Rep.  794), 

494. 
Stout  V.  Milling  Co.  (13  Fed.  Rep. 

802),   597. 
Stowell,  In  re  (24  Fed.  Rep.  468),. 

695. 
Stowers,  In  re  (1  Low.  528),  247. 
Strachen,  In  re  (3  Biss.  181),  301,, 

324,  345. 
Strachan  v.  Barton   (11  Ex.  647),. 

571,  751. 
Strain  v.  Gourdin  (2  Woods  380), 

584. 
Strang  v.  Bradner  (114  U.  S.  555), 

769,  770,  775,  794. 
Strassburger,     In    re     (4     Woods 

557),  730. 
Stratton    v.    Perry    (2    Tenn.    Ch. 

633),  293. 
Strause  v.  Hooper  (105  Fed.  Rep. 

590),   255,   261,  267. 
Strauss,   In  re    (2   N.   B.   R.    48), 

727. 
Stniuss  V.  St(-rn,  25f5. 
Street  v.  Dawson  (4  N.  B.  R.  207), 

104,   105,   570. 
Streeter    v.    Summer    (31    N.    H. 

542),  372,  408,  419. 
Strenz,  In  re    (8  Fed.  Rep.  311), 

589. 
Sitrong   v.    Clawson    (10   111.    31G). 
769. 


TABLE    OF    CASES. 


1801 


References  are  to  pages. 
Stubbs,   In  re    (4  N.   B.  R.   376),  i   Sweet,  In  re   (36  Fed.  Rep.  761), 


27. 
Stuckey  v.  Masonic  Savings  Bank 

108  U.  S.  74),  570,  578,  592. 
Studebaker,  In  re   (124  Fed.  Rep. 

945),  750. 
Sturgeon,  In  re  (1  N.  B.  R.  498), 

346. 
Sturgis       V.      Crowninshield       (4 

Wheat.  195),  18,  19,  20,  21,  26. 
Stuyvesant   Bank,   In   re    (6   Ben. 

33),   620,   626. 
Styer,  In  re    (98  Fed.  Rep.  290), 

605,   704,   706. 
Suburban  Electric  Co.,  In  re  (not 

reported),  149. 
Sulling    V.    Gunderman    (35    Tex. 

545),  427. 
Sullivan  v.  Bridge   (1  Mass.  511), 

420. 
Sullivan  v.  Heiskill  (Crabbe  525), 

20,  23,  26. 
Summers  v.  Abbott  (122  Fed.  Rep. 

36),   138,   729. 
Sumner,    In    re     (101    Fed.    Rep. 

224),    341. 
Supervisors    v.    Kennicott    (94    U. 

S.  498),  843. 
Surety    Guarantee    &    T.    Co.,    In 

re    (121    Fed.    Rep.    73),    143, 

149. 
Sutherland,   In   re    (2   Biss.   405), 

814. 
Sutherland,   In  re    (6   Biss.    52G). 

406. 
Sutherland,    hi    re    (Deady    344), 

224,   225. 
Sutherland,    In    re    (Deady    416), 

283,   284. 
Sutherland,    In    re    (Deady    573), 

740,  741,  753. 
Sutherland  v.  Davis  (42  Ind.  26), 

365. 
Sutherland  v.  Lake  Superior  Canal 

Co.    (9   N.    B.   R.   298),   105. 
Sutro  V.  Hoile   (2  Neb.  186),  375. 
Suydam  v.  Broadnax  (14  Pet.  67), 

22. 
Swan,  In  re   (1.50  U.  S.  637),  672, 

673. 
Swan    V.    Robinson    (5    Fed.    Roi). 

287),  577,  380. 
Swarts  V.  Fourth  Nat.  Bank   (117 

Fed.    Rep.    1),    282,    296,    297, 

298,  323,  333,  576,  585. 
Swarts   V.    Siegel    (114    Fed.   Rep. 

1001),   .574,    576. 
Swarts   V.    Siegel    (117    Fed.   Rep. 

13),  296,  298,  323,  585. 
Sweatt   V.   Boston,  etc.   R.   Co.    (3 

Cliff  339),  18. 


755. 
Swepson  v.  Rouse   (63  N.  C.  34), 

412. 
Swift,  In  re   (105  Fed.  Rep.  493), 

303. 
Swift,  In  re   (106  Fed.  Rep.   65), 

262,  298. 
Swift,  In  re   (108  Fed.  Rep.  212), 

367. 
Swift.  In  re  (112  Fed.  Rep.  315), 

282,  304. 
Swift,  In  re  (118  Fed.  Rep.  348), 

120,  121. 
Swords,  In  re  (112  Fed.  Rep.  661), 

429,  461. 
Sylvester    v.    Edgecomb    (76    Me. 

499),  148. 
Sykes,  In  re  (106  Fed.  Rep.  669), 

182. 
Symonds  v.  Barnes   (59  Me.  191), 

769. 

T. 

Tait  V.   Fourth   Nat.   Bank    (2  N. 

B.  R.  1145),  388,  577,  609. 
Taitt,  Ex  parte  (16  Ves.  193),  256. 
Talbott,  In  re  (116  Fed.  Rep.  417), 

428,  436,  461. 
Talcott,  Ex  parte  (9  N.  B.  R.  502), 

298 
Talcott    V.    Dudley    (5    111.    427), 

369,   731. 
Tallman,  In  re  (2  Ben.  404),  741. 
Tampa  Suburban  R.  R.  Co.,  In  re 

(168  U.  S.  583),  798.  800. 
Tanner,  In  re   (1  Low.   215),  621. 
Tatum,  In  re   (112  Fed.  Rep.  50), 

729. 
Taylor,  In  re   (95  Fed.  Rep.  956), 

369,  393. 
Tavlor,  In  re  (102  Fed.  Rop.  728), 

142,  198,  199. 
Taylor,  In  re  (114  Fed.  Rep.  607), 

435,  075. 
Taylor.  In  re  (8  Ves.  328).  623. 
Taylor  v.  Carryl    (20   How.   583), 

76.  370. 
Tavlor    V.    Irwin     (20    Fed.     R»>i>. 

615),  3?2,   400.  417. 
Taylor  v.   Nixon    (4   Sneed.  Tcnn. 

352),  781. 
Taylor  v.   Plumer    (3   Maiile  &   S. 

562).  413. 
Taylor  v.  Ra.sch   (.".  N.  I!.  It.  399). 

104,   258. 
Taylor    v.    Rasrh     (1     Flip.    385). 

261,  262. 
Taylor  v.  Robertson  (21  Fed.  Rep. 

209).    366.    584. 
Tavlor    v.    Tavlor    (4    Am.    B.    R. 
"  211),   77. 


i;^(>2 


TABLK    OK    CASKS. 


References  are  to  pages. 
Taylor  v.  Taylor  (59  N.  J.  Eq.  84).  |   Thompson,  In   re    (115   Fed.   Rep. 


5114. 
Tazewell  County  v.  Davenport   (40 

111.  197),  174. 
Tebbetts.  In  re  (5  Law  Rep.  259), 

739. 

Tebo,  In  re   (101  Fed.  Rep.  419), 

IIG,    127,    135,    137,    242,    708, 

723,   725.   730. 

Tecopa    Mining    &    Smelting    Co., 

lu  re  (110  Fed.  Rep.  120),  147. 

Tempest,   Ex  parte    (6   L.   R.   Ch. 

App.  70),  390. 
Temple,  7«   re    (4    Saw.   92),   247. 
Ten  Eyck,  In  re   (7  N.  B.  R.  26), 

397. 
Tennessee,  etc.,  R.  Co.  v.  East  Ala- 
bama Ry.  Co.    (75  Ala.   529), 
373.  376. 
Terrell,  In 're   (51  Fed.  Rep.  213), 

650,  653. 
Terrill.  In  re  (103  Fed.  Rep.  781), 

136. 
Terry,  Ex  parte   (128  U.   S.  289), 

676. 
Terry  v.  Abraham    (93   U.   S.  38), 

825 
Tertelling,    In    re    (2    Dill.    339). 

271. 
Tesson,  In  re    (9   N.   B.   R.   378), 

261,  263. 
Texas  &  Pac.  Ry.  Co.  v.  Anderson 

(149  U.   S.  237).   842. 
Texas  &  P.  Ry.  Co.  v.  Murphy  (111 

U.  S.  488).  830. 
Thatcher  v.   Rockwell    (105  U.   S. 

467),   359. 
Thomas,  Ex  parte    (2  Mont.   D.  & 

DeG.  294),  402. 
Thomas,  Ex  parte   (44  L.  T.  781), 

402. 
Thomas,  In  re  (96  Fed.  Rep.  828), 

549. 
Thomas,  In  re  (3  N.  B.  N.  38),  95. 
Thomas,  In  re  (11  N.  B.  R.  330). 

235. 
Thomas.    In    re    (29   "W.    R.    527). 

402. 
Thomas,  v.  C.  N.  O.  &  T.  P.  Ry. 

Co..  673. 
Thomas  v.  Hudson  (13  Mees.  &  W. 

353),  046. 
Thomas   v.   Jones    (39   Wis.    124), 

769. 
Thomas  v.  Pemberton  &  Kittredge 
(7  Taunt.  205),  397,  399,  4(lO. 
Thomas  v.  Shaw  (2  Cin.  Sup.  Ct. 

97),  784. 
Thomason  v.  Frere  (10  East  418), 

316. 
Thomnson,   In   re    (102   Fed.   Rep. 
2£7),  142. 


924).  461.  462. 
Thompson,   In   re    (122    Fed.   Rep. 

174),  32,  74.  98. 
Thompson,    In   re    (2    Am.    B.    R. 

216).  714. 
Thompson,    In    re    (2    Ben.    166), 

742. 
Thompson's  Sons,  In  re  (123  Fed 

Rep.  174),  325,  326. 
Thompson     v.     Alger     (53     Mass. 

442).    18. 
Thompson    v.    Spittle    (102    Mass. 

207),  258. 
Thompson    v.    Towne    (Prec.    Ch. 

52),  380. 
Thomson  v.  Harding   (3  C.  B.  N. 

S.  254),  266. 
Thomson   v.    Wooster    (114    U.    S. 

104),   237. 
Thornhill   v.   Bank    (1   Woods  1), 

20,  23,  26. 
Thornhill  v.  Bank  of  Louisville  (3 

N.  B.  R.  435),  143. 
Thorp,  In  re  (2  Ware  294),  353. 
Thrall  v.  Crampton   (9  Ben.  218), 

258 
Three  Friends  The  (166  U.  S.  1), 

800. 
Thurmond  v.   Andrews    (10   Bush 

Ky.  400),  383,   769. 
Tichenor   v.    Allen    (13   Grat.    Va. 

15),    710. 
Tiffany  v.  Boatman's  Savings  In- 
stitution   (18  Wall.  375),  368, 

418,  592. 
Tiffany   v.    Lucas    (15   Wall    410), 

159,    381,    387,    388,    390,    573, 

574,   589. 
Tifft,  In  re   (19  N.  B.  R.  201).  87. 
Tilden,  In  re   (91  Fed.  Rep.  500'|, 

354,  469,  723,  724. 
Tinker   v.   Hurst    (70   Mich.    159), 

695. 
Tipton    V.    Tipton    (87    Ky.    243), 

174. 
Tirrell    v.    Freeman     (139    Mass. 

297),   695. 
Titterton  v.  Cooper  (9  L.  R.  Q.  B. 

Div.  473),   399. 
Tobias,  In  re   (103  Fed.  Rep.  68), 

545,   546. 
Tobias   v.   Rogers    (13  N.   Y.   59), 

778. 
Todd,  In  re   (109  Fed.  Rep.  265), 

115,  116,  123,   127,  128,  139. 
Todd,  In  re   (112  Fed.  Rep.  315), 

657. 
Toenes    v.    Moog    (78    Ala.    558), 

434. 
Toland  v.  Sprague   (12  Pet.  300), 
1  205. 


TABLE    OF    CASES. 


im^ 


References  are  to  pages. 


Toledo,  etc.,   R.  Co.  v.  Penn.   Co. 
(54  Fed.   Rep.  746),  669,  672, 
673. 
Tollett,  In  re  (106  Fed.  Rep.  866), 

436,  439,  534. 
Tonne,   In  re    (13  N.  B.  R.  170), 

443. 
Tontine    Surety    Co.,    In    re    (116 

Fed.  Rep.  401).  147. 
Toof  V.  Martin  (13  Wall.  40),  162. 
197,    386,    387,    570,    571,    57-?, 
575,  577,   590.   591. 
Tooker,  In  re  (8  Ben.  390),  695. 
Topham,   Ex   parte    (8   L.   R.   Ch. 

App.    614),   390. 
Towne,  In  re  (10  Am.  B.  R.  284), 

326. 
Towne   v.    Smith    (1   Wood.   &  N. 

115),  759. 
Townsend,  In  re  (2  Ben.  62),  737. 
Townshend   v.  Windham    (2  Ves., 

Sen.  1),  381. 
Traders    Bank    v.    Campbell     (14 

Wall.  87),  24,  570,  575. 
Trafton,  Ex  parte    (2   Low.   505), 

693. 
Train  v.  Marshall  Papar  Co.  (180 

Mass.  513),  778. 
Traphagen,  Ex  parte  (1  N.  Y.  Leg. 

Obs.   98),   739. 
Trask,  In  re  (7  Ben.  60),  626,  627. 
Tredway  v.  Kaufman  (21  Pa.  256), 

609. 
Tremont  Nat.  Bank,  Ex  parte   (2 

Low.   409),   408. 
Trimble  v.   Woodhead    (102  U.   S. 

647),  383,  563,  606. 
Tripp  V.  Santa  Kosa  Street  R.  Co. 

(144    M.    S.    120),    832. 
Troth,  In  re   (104  Fed.  Rep.  291), 

127. 
Troy  Woolen  Co.,  In  re  {8  N.  B. 

R.  412),  314. 
Truitt  v.  Truitt  (38  Ind.  10),  710. 

755. 
Trust  Co.  V.  Benbow  (96  Fed.  Rep. 

514),    707. 
Trustees  v.  Bosseiux  (3  Fed.  Rep. 

917),  320. 
Tua  V.  Carriere    (117  U.  S.   209), 

20,  23. 
Tubbs  V.   Williams    (9   Fed.  N.  C. 

1),  296,  297. 
Tuck  V.  Fryson  (6  Blng.  321),  372. 

401. 
Tucker  v.  Daly  (7  Grat.  Va.  330), 

367. 
Tucker  v.   Oxley    (5   Cranch.   34), 

311,  315. 
Tudor.  In  re   (96  Fed.  Rep.  942), 

110,   118. 


Tudor,  In  re  (100  Fed.  Rep.  796), 

624,  631. 
Tuesley   v.    Robinson    (103    Mass. 

558),  431. 
Tufts   V.   Sylvester    (79  Me.   213), 

375. 
Tug    River    Coal    &    Salt    Co.    v. 

Brigel     (67    Fed.    Rep.    625), 

836. 
Tune,  In  re  (115  Fed.  Rep.  906), 

74,  78,  445,  446,  569,  571. 
Tunno   v.   Bethune    (2   Dessau.   S. 

C.  285).  297. 
Turnbull,    In    re    (106    Fed.    Rep. 

G67),  424,  440,  481,  482. 
Turner    v.    Richardson     (7    East. 

336),  397.  400. 
Turner  v.  Thomas   (6  L.  R.  C.  P. 

610),  309. 
Turner  v.  Turner   (108  Fed.  Rep. 

TcSf)),  2<(0.  292,  318,  7()5. 
Turrill  v.  Crawley   (13   Ad.  &  El. 

197),  600. 
Tuttle  v.  Truax  (1  N.  B.  R.  601), 

581. 
Twaddell,    In   re    (110    Fed.    Rep. 

145),  395. 
Twogood,  Ex  parte  (11  Ves.  517), 

311,  315. 
Tyler,  In  re   (104  Fed.  Rep.  778), 

99,  369. 
Tyler,  In  re   (49  U.  S.  180),  675, 

G76. 
Tyrrel.   In   re    (2   N.    B.   R.    200), 

743. 
Tyrrel    v.    Hammersteln    (6    Am. 

B.  R.  430).  768. 

U. 

Udall    v.    Steamship    "Ohio"     (17 

How.  17).  835. 
Ufelder   Clothing   Co..    In    re    (98 

Fed.  Rep.  409).  322.  341. 
Ulman    v.    Ritter    (72    Fed.    Rep. 

1000),    632,    669. 
Ulrlch,    In    re    (3    Ben.    355).    79, 

204,  207,  221.  632. 
nirich.  In  re   (G  Ben.  483).  374. 
Underwood  v.  Eastman   (18  N.  H. 

582),   781.   782. 
Ungewitter  v.  Von   Sachs    (4   Ben. 

167).   302.   580. 
Fnion  Pac.  R.  Co.,  In  re  (^0  N.  B. 

R.   178),   149.   163,  390. 
T'nlon    Pacific    Co.    v.    Caliaghan 

(161   IT.  S.  9!)),  829. 
Union    Pacific    R.    Co.    v.    United 

Staffs   (116  U.  S.  402).  834. 
Union    Sugar   Refinery   v.    Mathie- 

80n    (2   Cliff.    304).   206. 


mn 


TAIU.K    OK    CASES. 


References  are  to  pages. 


rnion  Trust  Co.,  In  re  (122  Fed. 

Kep.  937).  70.  704,  SIO,  812. 
I'liited    States,   Ex  parte    (1   Gall. 

338).  103. 
United   States  v.  Adams    (6  Wall. 

101),  822. 
United   States   v.   Anonymous    (21 

Fed.  Rep.  761),  667,  671,  67::, 

674. 
United   States  v.   Armejo    (131   1"^. 

S.  Appendix  Ixxxii),   832,  833. 
United  States  v.  Atcheson  (16  Fed. 

Rep.  853),  671,  674. 
United    States    v.    Bayer    (4    Dill. 

407),  665. 
United    States   v.   Berry    (24   Fed. 

Rep.   780),   670,   672. 
Ignited    States    v.    Block    (4    Saw. 

211).   655,   664. 
United   States  v  Booth    (18  Ho  v. 

47T).  833. 
United  States  v.  Brawner  (7  Fed. 

Rep.  80).  648,  650,  652. 
United  States  v.  Caldwell  (2  Dall. 

333),   667. 
United  States  v.  Carter  (3  Cranch 

C.   C.   423),   666. 
United    States   v.    Curry    (6   How. 

106),  79,  221.  833. 
United  States  v.  Davis  (3  McLean 

483),  763. 
United  States  v.  De  Walt  (128  U. 

S.   393),   664. 
United   States  v.  Dewey    (39  Fed. 

Rep.  251),   351. 
United  States  v.  Dobbins   (5  Law 

Rep.  81),  642. 
United    States   v.    Dodge    (2   Gall. 

313),  674. 
United  States  v.  Fletcher  (147  U. 

S.  664),  652. 
United  States  v.  Fowkes  (49  Fed. 

Rep.   50),   648,   653. 
United   States  v.  Gomez    (1  Wall. 

690).  821,  822. 
United   States  v.  Gomez    (3  Wall. 

766),   833,   837. 
United  States  v.  Griswold  (8  Fed. 

Rep.    496),    592. 
United    States   v.   Hammond    (104 

Fed.    Rep.    862),    693,    818. 
United  States  v.  Herron  (20  Wall. 

251),  325,  729,  762,  763,  774. 
United    States    v.    Hewecker    (164 

U.  S.  46),   804. 
United    States    v.    Hopewell     (51 

Fed.  Rep.  798).  836. 
United    States    v.    Houghton    (14 

Fed.  Rep.  544),  665. 
United   States  v.  Jackson    (2  Fed. 

Rep.   502),  665. 


United   States   v.   Jacobi    (1   Flip. 

108),    649. 
United   States  v.  Jahn    (155  U.  S. 

109),    804. 
United  States  v.  Justices  (10  Fed. 

Rep.  461),   674. 
United  States  v.  King  (Wall.  Sen. 

13),  762. 
United      States      v.      Latorre      (8 

Blatch.  134),  662,  665. 
United    States   v.   Montgomery    (2 

Dall.  335).  205. 
United  States  v.  Memphis,  etc.,  R. 

Co.    (6    Fed.    Rep.    238),    632, 

669. 
United  States  v.  Murphy  (15  Fed. 

Rep.  589),  325.  729. 
United  States  v.  Murphy  (44  Fed. 

Rep.  39),  671,  672. 
United    States    v.    Patterson     (26 

Fed.  Rep.  509),  666. 
United  States  v.  Prescott  (2  Biss. 

325),  655,  365. 
United     States    v.    Rob    Roy     (1 

Woods  42),  763. 
United  States  v.  Rogers    (23  Fed. 

Rep.  658),  650,  652. 
United    States    v.    Rose    (14    Fed. 

Rep.  681),  208. 
United  States  v.  Rider  (163  U.  S. 

132),  804. 
United  States  v.  Shepard   (1  Abb. 

U.   S.,   431),    649. 
United   States   v.    Snyder    (8   Fed. 

Rep.    805),    665. 
United  States  v.  Stevens  (44  Fed. 

Rep.   132),  665. 
United  States  v.  Sweeney  (95  Fed. 

Rep.   434),  673. 
United     States    v.     Throckmorton 

(8  N.  B.  R.   309),  763. 
United  States  v.  Tilden   (20  Wall. 

251),  723. 
United  States  v.  Tureaud  (20  Fed. 

Rep.   020),   649. 
United    States  v.   Union   Pac.   Ry. 

Co.   (168  U.  S.  505),  806. 
United   States  v.  Union   Surety  & 

G.  Co.   (9  Am.  B.  R.  114),  74, 

361. 
United  States  v.  Young  (94  U.  S. 

258),  798. 
Upshur  V.  Briscoe  (138  U.  S.  365), 

769,  772,  775,  783. 
Upson.  In  re  (123  Fed.  Rep.  807), 

302. 
Upson.  In  re   (124  Fed.  Rep.  980), 

786. 
Upton     V.     Hansbrough     (3    Biss. 

417),   406. 
Unton   V.   McLaughlin    (105   U.   S. 

640),  361. 


TABLE    OF    CASES. 


1305 


References  are  to  pages. 


Upton  V.  Tribilcock  (91  U.  S.  65), 

406. 
Uran   v.    Houdlette    (36    Me.    15), 

293. 
Utt,    l7i   re    (105   Fed.   Rep.    754), 

126,  363,  709,  812,  814 

V. 

Vaccaro    v.    Security    Bank     (103 

Fed.  Rep.  436),  157,  160,  167, 

168,   247,   248,   250. 
Vairin  v.  Edmonson    (9  111.  120), 

360. 
Valentine,    7n    re    (4    Biss.    317), 

327. 
Valk,  In  re  (3  Ben.  431),  644. 
Vallandigham,     In     re     (1     "Wall. 

243  k   798. 
Valligreete,  In  re  (4  N.  B.  R.  307), 

390. 
Van    Brovklin   v.   Tennessee    (117 

U.  S.  151),  732. 
Van  Dyke  v.  Tinker  (11  N.  B.  R. 

308),   104. 
Van  Gunden  v.  Iron  Co.   (52  Fed. 

Rep.   838),  838. 
Van  Hook  v.  Whitlock  (26  Wend., 

N.  Y.,  43),  759. 
Van    Nostrand    v.    Carr    (30    Md. 

128),  20,  23,  26.  27. 
Vansant  v.  Gas  Light  Co.    (99  U. 

S.   213),    822. 
Van  Tiiyl,  In  re  (IN.  B.  R.  63(;), 

625. 
Van  Wagenen   v.   Sewall    (160   U. 

S.    369),    805. 
Varick  Bank,  In  re  (119  Fed.  Rep. 

991),  168. 
Vetteiiein,    In    re    (20    Fed.    Rep. 

109),  325,  729. 
Vetterlin,  In  re   (5  Ben.  7),  613. 
Vetterlein,    In    re    (5    Ben.    311), 

256. 
Vernia,  In   re    (5  Fed.  Rep.  723), 

748,  749. 
Veitch,  In  re  (101  Fed.  Rep.  251), 

724,  728. 
Vickery,  In  re    (3  N.  B.  R.  696). 

293. 
Vider    v.    O'Brien    (62    Fed.    Rep. 

326),   838. 
Viele    V.    Ogilvie     (2    Green.,    la., 

326),  781. 
Vietor  v.  Lewis  (1  Arn.  B.  R.  667), 

89. 
Vila.  In  re  (No.  16941  Fed.  Cas.). 

117. 
Virginia  Commissioners,  Ex  parte 

(112  U.  S.  177).  833. 
Voetter,  In  re   (4  Fed.  Rep.  632), 

311. 


Vogel,   In   re    (5   N.    B.    R.    303). 

612. 
Vogel,    In   re    (5    N.    B.    R.    393), 

623,   625,   667. 
Vogel,  In  re    (7   Blatch.  18),   370, 

373,  374. 
Vogler,    In    re    (2    Hughes    297). 

441. 
Vogler    V.    Montgomery    (54    Mo. 

577),  436. 
Voight  V.  Lewis  (14  N.  B.  R.  543), 

413. 
Von  Borcke,  In  re   (94  Fed.  Rep. 

352).  201. 
Von  Roy  v.   Blackman    (3  Woods 

98),    205,   208,   210. 
Voorhees    v.    Bonesteel    (16    Wall. 

16).  419. 
Voorheis     v.     Frisbie     (25     Mich. 

476),  713. 
Voyles    V.    Parker    (4    Fed.    Rep. 

210),   565. 
Vulliany  v.   Noble    (3   Mer.    621), 

315. 

w. 

Wadsworth  v.  Tyler    (2  N.  B.  R. 

316),    104. 
Wager  v.  Hall  (16  Wall.  599),  197, 

386,    387.    570.    574,    575,    577, 

578,   584.  590,  594. 
Waggoner.    In    re    (1    Ben.    532), 

743.  752. 
Wagner  v.   Smith    (13   B.   J.   Lea, 

Tenn.,   569).   391. 
Wagner  v.  United  States  (104  Fed. 

Rep.  133),  88.  91,  96,  669. 
Wagstaff,  Ex  parte   (13  Ves.  65), 

311. 
Waite,   In   re    (1    Low.    207).   152. 

153.   163.   200.   249.   583.   590. 
Wakeman    v.    Hovt    (5    Law   Rep. 

309),  10.   148,  751. 
Walbridge    v.     Harroon     (18    Vt. 

448),    782. 
Walburn  v.  Babbit   (16  Wall.  577). 

590. 
Wald   V.  Wehl    (6  Fod.   Rim).   163), 

200. 
Walker,  In  re  (96  Fed.  Rep.  550). 

616. 
Walker,   In  re   (1   Low.   2.^7).   174. 

176,  637. 
Walker  v.  Brown   (16.''>  U.  S.  .^Sl). 

660. 
Walker    v.    .lark     (88     Fed.     Uf'i'- 

576).  230. 
Walker     v.     Robbins      (11      How. 

5S4).    208. 
Wall.   In   re    (13   Fed.   Rep.   818). 

668. 


i;i(H> 


TAHLK    OK    CASKS. 


References  are  to  pages. 


Wall   V.  Cox    (181  U.  S.  244),  80, 

607.  792. 
Wall  V.  Cox   (101  Fed.  Rep.  403), 

tU)9. 
Wallace,    In    re    (Deady   433),   89, 

3(!().   370. 
Wallace  v.  Loomis  (97  U.  S.  146), 

103. 
Waller  v.  Best   (3  How.  Ill),  10, 

565. 
Walsh,  In  re  (104  Fed.  Rep.  518), 

625. 
Walshe,  In  re  (2  Woods  225),  690, 

693. 
"Walther,  In  re  (95  Fed.  Rep.  941), 

745. 
Walther,  In  re  (14  N.  B.  R.  273). 

327,  340. 
Walton,   In  re   (1  N.  B.  R.   557), 

285,  398. 
Walton,  In  re    (Deady  510),   330, 

571. 
Walworth    v.    Harris    (129    U.    S. 

355),   21. 
Ward,  In  re   (12  Fed.  Rep.  325), 

283. 
Ward,  In  re  (104  Fed.  Rep.  985), 

74,  85,  94,  215. 
Warder,  In  re  (10  Fed.  Rep.  275), 

406. 
Warford    v.    Noble    (2    Fed.    Rep. 

202),  438. 
Warner     v.     Cronkhite     (6     Biss. 

453),  767. 
Warner  v.  New  Orleans  (167  U.  S. 

467),  806,  807. 
Warren,  In  re  (2  Ware  322),  261. 
Warren  v.  Moody   (122  U.S.  138), 

384,  573,  575. 
Warren  v.  Nat.  Bank    (10  Blatch. 

493),  105,  575,  581. 
Warren    v.    Warren    Thread    Co. 

(134  Mass.  247),  378. 
Waring,   Ex  parte    (19   Ves.   345). 

299,  339. 
Warwell   v.   Foster    (31  Me.   558), 

782. 
Washburn,    In   re    (99    Fed.    Rep. 

84),  188. 
Washington  &  Georgetown  R.  R., 

In  re  (140  U.  S.  91),  842. 
Waterberry   Furniture   Co.,   In   re 

(114  Fed.  Rep.  255),  586. 
Waterloo    Organ    Co.,   In   re    (118 

Fed.  Rep.  904),  86,  707,  708. 
Waties  &  Co.,  In  re  (39  Fed.  Rep. 

204),   320. 
Watkins  v.  Maule  (2  .1.  &  W.  237), 

407. 
Watkins  v.  Watkins    (1896,  Prob. 

223).  290. 


Watrous,  In  re  (14  N.  B.  R.  258), 

322. 
Watson,  Ex  parte   (4  Madd.  477), 

285. 
Watson,  In  re   (4  N.  B.  R.  613), 

174. 
Watson  V.  Citizens  Sav.  Bank    (2 

Hughes  200).   .370. 
Watson  V.  Holiday   (20  L.  R.  Ch. 

Div.   780),  319. 
Watson  V.  McDuff  (101  Fed.  Rep. 

241).   738,  753. 
Watson  V.  Taylor   (21  Wall.  378). 

570. 
Watts,  In  re  (3  Ben.  166),  187. 
Watts  &  Sachs,  In  re   (190  U.   S. 

1).   29,   31.   32,   75.   77.   97.   98. 

99,   135.   670.   676. 
Waukesha  Water  Co.,  In  re   (116 

Fed.  Rep.  1009),  79. 
Wanton  v.  DeWolf  (142  U.  S.  138), 

837. 
Waxelbaum,  In  re   (97   Fed.  Rep. 

562),  175,  185. 
Waxelbaum,  In  re   (98  Fed.  Rep. 

589),  173.  176. 
Waxelbaum,  In  re  (101  Fed.  Rep. 

228).  121.  461,  462. 
Way   V.    Howe    (108    Mass.    502), 

785. 
Way,  V.    Sperry    (60    Mass.    238) 

782. 
Wayne  Knitting  Mills  Co.  v.  Nu- 
gent (104  Fed.  Rep.  530).  101, 

370. 
Weatherall    v.    Gearing    (12    Ves. 

504)    401. 
Weaton  v.  Woodcock   (7  M.  &  W. 

14).  402. 
Weaver's  Appeal  (18  Pa.  St.  307), 

434. 
Weaver,  In  re   (9  N.  B.  R.  132). 

152.  163,  249. 
Webb.    In   re    (2   N.    B.    R.    614), 

261. 
Webb,    In   re    (6    N.    B.    R.    302), 

397. 
Webb.   In   re    (4    Saw.    326).    262, 

205,  270. 
Webb  V.  Sachs   (4  Saw.  158),  609. 
Webb  V.  Ward   (7  T.  R.  296),  415. 
Weber,   In  re    (13   N.   B.   R.   529), 

679.  683.  686. 
Weber,  In  re   (13  N.  B.  R.     559), 

087.  693. 
Webster  v.  Upton    (91  U.   S.   65), 

406. 
Weeks    v.    Fowler    (35    Atl.    543), 

609. 
Wehl  V.  Wald    (3   Fed.   Rep.   93), 

610. 


TABLE    OF   OASES. 


1307 


References  are  to  pages. 


Wehl    V.    Wald    (17    Blatch.    342), 

106. 
Weiner  &  Goodman   Shoe  Co.,  In 

re    (96    Fed.    Rep.    949),    323, 

324. 
Weinger-Bergman  Co.,  In  re   (126 

Fed.  Rep.  875).  101,  370,  374. 
Weitzel,  In  re   (7  Hiss.  289),  145, 

227. 
Welch.  In  re   (100  Fed.  Rep.  65), 

657. 
Welch,  In  re  (5  Ben.  230),  441. 
Welch  V.  Myers  (4  Campbell  368), 

397,  399,  400. 
Welge,   In  re    (1   Fed.   Rep.   216), 

138. 
Welling.    In    re    (113    Fed.    Rep. 

189),  408,  409. 
Wells.  In  re  (4  Fed.  Rep.  68),  285. 
Wells,  In  re  (105  Fed.  Rep.  762), 

427,  428,  430. 
Wells.  In  re  (114  Fed.  Rep.  222), 

77.  94. 
Wells.  Fargo  &  Co.  v.  Oregon  Co. 

(19  Fed.  Rep.  20),  670. 
Wentworth      v.      Whittemore      (1 

Mass.  471),  286. 
Werder.  In  re  (15  Fed.  Rep.  789), 

406. 
Wesson.  In  re  (88  Fed.  Rep.  855), 

95. 
West,   In  re    (39   Fed.   Rep.   203), 

257. 
West,  In  re   (108  Fed.  Rep.  940), 

161. 
West,  In  re   (116  Fed.  Rep.  767), 

431,  461. 
West.  In  re   (46  L.  T.  823),  378. 
West    V.    Brashear    (14    Pet.    51), 

843. 
West  V.  Cabell  (153  U.  S.  87),  648. 
West  V.  Irwin  (64  Fed.  Rep.  419), 

837 
West  V.  Pryce   (2  Bing.  455).  313, 

314. 
West  Co.  V.  Lea  (174  IT.  S.  590), 

30,  31,  155,  156,  167,  168,  169. 

196,    198,    224.    225.    226,    232, 

250,  391,  393,  817. 
Western  Sav.  &  T.  Co..  In  re   (4 

Saw.   490).    199. 
Western   Union    Cold    Storage  Co. 

V.  Hurd    (116  Fed.  Rep.  442). 

769,  770. 
Westfall   Bros.  Co.,  In  re   (8  Am. 

B.   R.   431  ),  61:;.  61.^). 
Westinghouse    Air    Brake    Co.    v. 

Christiansen   Engineering  Co. 

(123  Fed.  Rep.  632),  676. 
Westlund,    In    re    (99    Fed.    Rep. 

399).    726. 


West  Norfolk   Lumber  Co.,  In  re 

(112  Fed.  Rep.  759),  561,  602. 
West   Phila.   Bank   v.   Dickon    (95 

U.   S.   180),  387. 
Wetmore.    In    re    (102    Fed.    Rep. 

290),  380,  395. 
Wheeler   v.   Bramah    (3   Campbell 

340),  397,  400. 
Wheeler   v.    Cobb    (75   N.   C.   21), 

174. 
Wheeler  v.  Wheeler   (28   111.  App. 

385).   780. 
Wheelock  v.  Lee    (10  B.  R.  363), 

368. 
Whetmore,    In   re    (99    Fed.    Rep. 

703),   657. 
Whetmore,  In    re    (16    N.    B.    R. 

514),  350,  356. 
Whipple,  In  re  (11  N.  B.  R.  524), 

680,  683. 
Whipple,  In  re  (2  Low.  404),  686, 

687. 
Whitaker   v.    Chapman    (3    Lans., 

N.  Y.,  155),  772. 
White,  In  re  (103  Fed.  Rep.  774), 

542. 
White.  In  re  (109  Fed.  Rep.  635), 

428,  436,  494,  495. 
White.  In  re  (2  N.  B.  R.  590).  748, 

749,  750. 
White  V.  Bradlev  Timl>er  Co.   (116 

Fed.  Rep.  768),  238.  239. 
White    V.   Cushing    (30    Me.    267), 

782. 
White   V.    How    (3    McLean    291), 

783. 
White  V.  Jones   (6  N.  B.  R.  175), 

413. 
White    V.    Piatt    (5    Den.,    N.    Y., 

274),  774. 
White  V.  Schloerb  (178  U.  S.  542), 

71,  73,  76,  82,  84.  89,  93,   100, 

101.  110.  360  370,  374,  792. 
White    V.     Thompson     (119     Fed. 

Rep.  S6S),  SS.  92.  93.  810,  811. 
White    Star    Laundry    Co.,    In   re 

(117  Fed.  Rep.  570),  149,  150. 
Whitehead,  In  re  (2  N.  B.  R.  599). 

432. 
Whitehouse,   In  re    (1    Low.   429). 

636.  645. 
Whitoner.    In   re    (105    Fed.    Rep. 

ISO),   71.   76,   82.   84.   101.   360. 

374,  808,  816,  817.  818. 
Whiting,  Ex  parte    (2   Low.   472), 

313. 
Whitley  Grocery  Co.  v.  Roacli  (115 

Ga.  918).  584. 
Whitman.  Ex  parte.  397.   398. 
Whitney  v.  Crafts   (10  Ma.ss.  23), 

755.  782. 


1308 


TABLK    OK    OASES. 


References  are  to  pages, 

Whiting     (35   N.   H. 


"Whitney    v. 

457)    759. 
Whitridge    v.    Taylor    (66    N.    C. 

273).    710. 
AVhittington,     Ex     parte     (Buck. 

87).   401. 
Whitworth    v.    Hall    (2    B.   &    Ad. 

695),   241. 
Whyte,   In  re    (9   N.   B.   R.    267), 

322. 
Wickelman  v.   Dick  Co.    (85   Fed. 

Rep.   851),  822. 
Wicker     v.     Comstock     (52     Wis. 

315),   434. 
Wickham    v.   Hull    (60   Fed.    Rep. 

326),  97. 
Wicks  V.  Perkins   (1  Woods.  383), 

710. 
Wiggers,  In  re  (2  Biss.  71),  637), 

642,  643. 
Wilbur  V.  Watson   (111  Fed.  Rep. 

493),  729. 
Wilcox,  In  re   (94  Fed.  Rep.  84), 

257. 
Wilcox,  In  re  (109  Fed.  Rep.  628), 

630,  657. 
Wild,  In  re  (11  Blatch.  243),  300. 
Wilder,  In  re  (101  Fed.  Rep.  104), 

335,   338,   339. 
Wiley,  In  re  (4  Biss.  171),  597. 
Wilkes,  In  re   (7  Am.  B.  R.  574), 

566,   568. 
Wilkins    v.    Davis    (2    Low.    511), 

252,    262,    265,   270. 
Wilkinson  v.  Waite   (44  Vt.  508), 

427. 
Willey,  In  re  (4  Biss.  214),  259. 
Williams,  Ex  parte   (10  L.  R.  Eq. 

61),  687,  688,  698. 
Williams,    In    re     (99    Fed.    Rep. 

•  544),  174. 
Williams,    In   re    (105    Fed.    Rep. 

906),  813. 
Williams,    In    re    (120    Fed.    Rep. 

38).  33,  69,  87,  95. 
Williams,   In   re    (123    Fed.    Rep. 

321),  87,  614,  616,  629. 
Williams,  In  re  (2  N.  B.  R.  229), 

203. 
Williams,  In  re  (3  N.  B.  R.  286), 

160. 
Williams,    In    re     (2    Biss.    233), 

636. 
Williams,  In  re  (6  Biss.  233),  643, 

645. 
Williams,   In  re    (3   Woods   493), 

256. 
Williams,  In  re  (14  N.  B.  R.  132), 

192,  227. 
Williams,  In  re  (1  Low.  406),  227. 
Williams    v.    Claflin    (103    U.    S. 

753),  829,  830. 


Williams  v.  Heard  (140  U.  S.  529), 

420,   794. 
Williams    v.    Merritt    (103    Mass. 

187),  366. 
Williams  v.  Robbins  (32  Me.  181), 

779.  780. 
Williams  v.  Thorn  (70  N.  Y.  270), 

414. 
Williams    Bros.    v.    Savage     (120 

Fed.  Rep.  497),  833,  834. 
Williams    &     Leidig,    In    re     (13 

Fed.  Rep.  30),  748. 
Williamson,  In    re  (114  Fed.    Rep. 

190),  461. 
Williamson    v.    Dickens    (5    Ired. 

Law.,   N.   C,   259),   774. 
Williamson    v.    Krohn     (66     Fed. 

Rep.  662),  206. 
Willis  V.  Cushman  (115  Ind.  100), 

780. 
Willitts  V.  Waite    (25  N.  Y.   583), 

377. 
Wilmington    Hosiery    Co.,    In    re 

(120  Fed.  Rep.  180),  168. 
Wilmot  V.  Mudge  (103  U.  S.  217), 

694. 
Wilson,  Ex  parte  (114  U.  S.  424), 

664,  665. 
Wilson,  In  re  (101  Fed.  Rep.  571), 

444,   515,   516. 
Wilson,  In  re  (108  Fed.  Rep.  197), 

545.   546. 
Wilson,  In  re  (116  Fed.  Rep.  419), 

71,  96,  371,   631,  633,  668. 
Wilson  V.  Atlantic,  etc.,  R.  Co.   (2 

Fed.  Rep.  459),  405. 
Wilson  V.   Brinkman    (2  N.  B.  R. 

408),  573. 
Wilson    V.    City    Bank    (17    Wall. 

473),    197,    570,    574,    575,    580. 
Wilson  V.  McElroy  (32  Pa.  St.  82), 

432. 
Wilson  V.  Nat.  Bank  (3  Fed.  Rep. 

391),  284,  294,  311,  314. 
Wilson  V.  Nelson   (183  U.  S.  191), 

166,  167,  568,  792. 
Wilson  V.  Parr  (8  Am.  B.  R.  230), 

99. 
Wilson    V.    Penn.    Trust   Co.    (114 

Fed.  Rep.  742),  306. 
Wilson    V.    Wallani    (5    Ex.    Div. 

155),  398. 
Wilt  V.  Stickney  (15  N.  B.  R.  23), 

104. 
Winchester  v.  Heiskell   (119  U.  S. 

450),   795. 
Windsor    v.    McLellan     (2    Story 

492),  368. 
Winn   V.   Morse    (59   N.   H.    210), 

427. 
Winship.  In  re  (120  Fed.  Rep.  93), 

93),   696. 


TABLK    OF    CASES. 


1309 


References  are  to  pages. 


Winship,  In  re  (7  Ben.  194),  619, 

621. 
Winslow  V.  Bliss   (3  Lans.,  N.  Y., 

220),  312,  588. 
Winslow  V.  Clark   (47  N.  Y.  261), 

710. 
Winslow     V.     Wallace     (116     Ind. 

317),  258. 
Winson  v.  Kendell   (3  Story  507), 

588. 
Winston.    In    re    (122    Fed.    Rep. 

187),  192. 
Winter    v.    Iowa,    etc.,    R.    Co.    (2 

Dill.  487),  18. 
Winter    v.    Railway    Co.    (2    Dill. 

487),  164. 
Winthrop,  In  re  (5  Law.  Rep.  24), 

642. 
Wiseman,    In    re    (123    Fed.    Rep. 

185),  288,  289. 
Witkowski,    In    re    (10    N.    B.    R. 

209),  613. 
Wittenberg   Veneer    &    Panel    Co., 

In    re    (108    Fed.    Rep.    593), 

575. 
Wolf  &  Levy.  In  re  (122  Fed.  Rep. 

127)     333    585. 
Wolf  V.  'Stix'(96   U.   S.  541),  784, 

794. 
Wolf   V.    Stlx    (99   U.    S.   1),   769, 

770,  775,  784. 
Wolff,  In  re   (100  Fed.  Rep.  430), 

738. 
Wolfskin,    In  re     (5    Saw.    385), 

751. 
Wollaston    v.    Porter    (122    Mass. 

oQo\    299 
Wood,  In  re   (98  Fed.  Rep.  972), 

395,   659. 
Wood  V.  Akers   (2  Esp.  594),  314. 
Wood  V.  Owings    (1  Cranch  239), 

170,  390. 
Wood  V.  Partridge  (11  Mass.  488), 

286. 
Wood    V.    Vanderveer    (55    N.    Y. 

App.   Div.  549),  778. 
Wood    M.    &   R.    Co.   V.    Broke    (9 

B.  R.  395),  373. 
Woodard,  In  re  (2  Am.  B.  R.  339), 

584. 
Woodard,    In    re    (95    Fed.    Rep. 

9.55),  133,  137,  139,  423,  424,  441, 

515,  528. 
Woodard  v.  Herbert  (24  Me.  358). 

286. 
Woodbury    v.    Perkins     (5    Cush. 

86),  293. 
Woodford.  In  re  (1  Cin.  Law  Bui. 

37),    194. 
Woodhull  V.  Wagner   (Bald.  296). 

20.  22. 


Woodman    v.    Stowe    (11    Bradw., 

111.    Ap.    Ct.    613),    695. 
Woodruff,    In    re    (96    Fed.    Rep. 

317),  430.  461,  462. 
Woodruff    V.    Cheeves     (105    Fed. 

Rep.  601),  So,  461. 
Woods,    In    re    (143    U.    S.    202), 

802. 
Woods     V.     Oakman     (116     Mass. 

599),  368. 
Woodside    Coal    Co.,    In    re    (105 

Fed.  Rep.  56),  149. 
Woodward,  In  re  (.3  N.  B.  R.  719), 

622. 
Woodward,    In    re    (12    N.    B.    R. 

297),    115. 
Woodward,    In    re    (4    Ben.    102), 

627. 
Woodward,    In   re    (8    Ben.    112). 

232,    343,    619. 
Woodward,    In    re    (8    Ben.    563), 

149. 
Woodward  v.  Brown    (13  Pet.  1), 

836. 
Woolfolk  V.  Murray  (44  Ga.  137), 

428  429,  434. 
Wollock,    In    re    (120    Fed.    Rep. 

516),  767. 
Woolridge    v.    McKenna    (8    Fed. 

Rep.   650).  106,   205. 
Woolsey  v.  Cade  (15  N.  B.  R.  238), 

772. 
Wooten,    In    re     (118    Fed.    Rep. 

670).  134,  341. 
Worcester  County,  In  re  (102  Fed. 

Rep.  808),  303,  728.  819.  821. 
Worcester  v.  Clark  (2  Grant,  Pa., 

84),   438. 
Worden  v.  Searles  (121  U.  S.  14), 

632,  669,  670. 
Worland,    In    re     (92     Fed.   Rep. 

893),  707,  709. 
Worrell,    In    re     (125    Fed.    Rep. 

159),  627. 
Wright.  In  re  (95  Fed.  Rep.  807), 

303. 
Wright.  In  re  (90  Fed.  Rep.  187). 

582,  584. 
Wright.   In  re    (1    N.   B.   R.   393), 

346. 
Wright.  In  re    (2  N.   B.  R.  490), 

570,  581.  751. 
Wright.  In  re   (2  Ben.  509).  760. 
Wright.  In  re  (?,  Hiss.  3.'>:n.  413. 
Wright.   In   rr    (6   Biss.   317).   320. 
Wright  V.  Bird    (1    Prire  20).  149. 
Wright   V.    Fairfield    (2    B.   &   Ad. 

727).  418. 
Wright    V.    First    Nat.     Batik     (8 

Biss.  243).  418. 
Wright  V.  Rogers  (3  McLean  229), 
313. 


laio 


TAHLK    OK    CASKS. 


References  are  to  pages. 


Wright  V.  Snell  (5  B.  &  Aid.  350). 

GOO. 
"Wright    Lumber   Co.,   In   re    (114 

Fed.  Rep.  1011),  162,  163,  574, 

595. 
Wronkow.  In  re   (15  Blatch.  38), 

G84,  685. 
Wulburn  v.  Drake  (120  Fed.  Rep. 

493),  143. 
Wyllie,    In    re    (2    Hughes    449), 

423. 
Wyly.  In  re    (116   Fed.  Rep.   38), 

585. 
Wvnne.  In  re  (Chase  227),  709. 
Wynne,   In   re    (4    N.   B.    R.    23), 

393. 

Y. 

Yale,  Ex  parte  (3  P.  W.  25),  266, 

270. 
Yates.  In  re  (114  Fed.  Rep.  365), 

141.  185,  291. 
Yates  V.  Sherrington  (11  M.  &  W. 

855),  314. 
Yeatman  v.  New  Orleans  Savings 

Institution     (95    U.    S.    764), 

368,  562,  597,  598,  731. 
Yeaton,  In  re   (1  Low.  420),  285, 

898. 
Yonge.  Ex  parte  (3  Ves.  &  B.  31), 

285 
York's  Case    (1  Abb.,  U.  S.,  503). 

820. 
York,    In   re    (3    N.    B.    R.    661). 

715. 
Yost,  In  re   (117  Fed.  Rep.  792), 

528. 
Yost   V.   Heflner    (69   Pa.   St.   68). 

434. 


Young,  In  re   (96  Fed.  Rep.  606), 

242,  301,  729. 
Young,  In  re  (111  Fed.  Rep.  158), 

83,   86,   811. 
Young,   In  re    (3   N.    B.   R.   440). 

444. 
Young   V.    Bank    (1    Moore    P.    C. 

150),  310. 
Young  V.   Insurance  Co.    (29  Fed. 

Rep.  273).  57. 
Young   V.    Upson    (115    Fed.    Rep. 

192),  587. 
Younghusband     v.     Gisborne      (1 

Coll.  400),  414. 

z. 

Zacher  v.  Fidelity  Trust  &  Safety 

Vault  Co.  (106  Fed.  Rep.  593). 

377. 
Zahm   V.    Fry    (9   N.   B.   R.   546). 

581. 
Zantzinger  v.  Ribble  (36  Md.  32). 

367. 
Zarega's  Case   (4  L.  R.  480),  756. 
Zeltner,    H..    Brewing    Co..    In   re 

(117  Fed.  Rep.  799).   160. 
Zeperink   v.    Card    (11    Fed.    Rep. 

295).  770. 
Ziegenfuss.    Ex   parte    (2    Iredell, 

N.  C,  463),  29. 
Zimmer  v.  Schleehauf   (115  Mass. 

52),  318. 
Zinn,  In  re  (4  N.  B.  R.  370).  349, 

356. 
Zug,  In  re  (16  N.  B.  R.  280).  259. 
Zule  V.  Zule  (24  Wend.,  N.  Y.,  74). 

305. 


GENERAL  INDEX. 


w\ 


INDEX. 

References  are  to  pages. 

Abatement— 

Proceedings  do  not  abate  upon  death  or  insanity  of  bankrupt,  146, 

653. 
Suits  are  not  abated  by  death  or  removal  of  trustee,  654. 

Abroad— 

(See  Aliex,  Foeeign.) 

Absconding-  debtor- 
How  to  proceed  against,  154. 

Absence- 
Judge's,  in,  case  sent  to  referee,  130. 
Referee's,  effect  of,  107. 

Accounts— 

Books  of,  destruction,  concealment,  etc.,  prevents  discharge,  748. 

Debts  founded  upon  open,  allowed,  301. 

Notice  to  creditors   of  filing  final,  734. 

Partnership,  insolvent,  kept  by  trustee,  255. 

Penalty   for  making   false,   6G1. 

Referee's  punishment  for  refusing  inspection  of,  663. 

Trustees  to  keep,  352. 

file  final,  when,   718,  352. 

punishment  for  refusing  inspection  of,  663. 

referee  to  audit,  352,  717,  718. 

Acknowledgment— 

(See  Oatu.) 
Act  of  1800- 

Administration   of  the  estate,   9. 

Commission   of  bankruptcy,   8. 

Discharge,  9. 

Dividends,  9. 

What  was  an  act  of  bankruptcy,  7. 

When   petition   filed,   8. 

Who   might   be   adjudged   bankrupt,   7. 

Why  and  when  repealed,  9. 

Act  of  1841- 

Acts  of  bankruptcy,  10. 

Assignee  and  his  powers,  11. 

Discharge,   11. 

Objections  to  and  repeal,  12. 

When   pptition   might  be  filed,   11. 

Where   proceedings   were   had,    11. 

Who  might  be  adjudged  bankrupts,  10. 

Act  of  1867— 

Appellate  jurisdiction  of  supreme  court,  27. 

Objections  to  and   repeal,  13. 

Act  printfd  in  full.  1207. 

Compared  with  act  of  1898,  13. 

1.^18 


l.SU  INDEX. 

References  are  to  pages. 

Act  of  1898— 

Compared  with  act  of  1867,  13. 
State  laws  superseded  by,  25,  29. 
When  it  went  into  effect,  23. 

Actions— 

(See  SriTs.) 

At  law,  what  are,  104. 

Acts  of  bankruptcy- 
Admission  in  writing  of  inability  to  pay  debts,  169. 

by   corporation,   169. 
Assignments  for  the  benefit  of  creditors,  30,   167. 
Averred   in   petition,   199. 
Computing  time  in  respect  to,  170. 
Concealing  or  removing  property,  160. 
Creditors  estopped  to  charge,  when,  191. 
Evidence  of,  not   in   petition  inadmissable,   200. 
Fraudulent  transfer,  159.     (See  Fbaudulent  Tbansfeb.) 

intent  of  transfer  only  material,  160. 
How  committed  by  partners,  152. 
Insolvency  as  an  element  of,  155,  168,  169. 
None  relating  to  the  person,  154. 
Of  partnerships,  152. 

Once  committed  can  not  be  rescinded,  155. 
Permitting  preferences   by   legal  proceedings,   164.      (See  Pkefee- 

ENCES.) 

Preferences  by  a  debtor,   161.      (See  Pbefebences.) 

Question  for  jury,  230. 

Receiverships,  167. 

Removing  or  concealing  property,  160. 

Rescinded,  can  not  be,  155. 

Several  acts  may  be  charged  in  same  petition,  200. 

Support  an  involuntary  petition,  195. 

Voluntary  petitions  as,  169. 

What  are,  153,  195. 

When  committed  must  be,  152,  170. 

Who   may  commit,   152. 

Who  may  not  complain  of,  155. 

Adjudication—  ., 

On  creditors'  petition,  233. 

On  debtor's  petition,  184. 

Partnership  cases,  in,  253. 

Setting  aside  an,  234. 

When  referees  may  make.  111,  114. 

When  not  made  on  debtor's  petition,  184. 

Administration— 

Appointment  of  trustee,  348. 

Arbitration,   698. 

Composition   with  creditors,   677. 

Costs  of,  entitled  to  priority,  725. 

Distribution,    dividends,   etc.,    717. 

Exemptions,  422. 

Expenses,  131. 

Partnership    property,    255. 

Proving  claims,  321. 

Reducing  estate  to  money,  701. 

Settlement  of  the  estate,  733. 

Suits   with   reference  to  estate,   358,    605,   716. 

Trustee's  powers  and  duties,  351. 

Trustee  takes  what  property,  31,  365. 


INDEX.  1815 

References  are  to  pages. 

Administrator— 

Discharge  does  not  release  debts  of,  773. 
Proof  of  claims  by,  324. 

Admission  of  proofs— 
(See  EJviDENCE.) 

Adverse  claimants— 

Jurisdiction  over,  74. 
Jury,  when  entitled  to,  235. 
Who  are,  30,  105. 

Advertisement — 
(See  Newspaper. ) 

Affidavit- 
Arrest  of  bankrupt  for  examination,  for,  640. 
Voluntary  bankrupt,  of,  of  inability  to  pay  fees,  183. 

Affirmation- 

(See  Oath.) 

After-acquired  property- 
Bankrupt  can  not  be  examined  as  to,  416. 
Does  not  pass  to  trustee,  415. 
Protected  by  injunction,  417. 
"What  constitutes,  416. 

Agent— 

"Creditor"  includes,  189. 

Intent  of,  in  transfer,  that  of  principal,  573. 

May  vote  at  creditors'  meeting,  269. 

Penalty  for  use  in  compositions  false  claims,  as  or  by,  662. 

Proof  of  claims  by,  329. 

Property  in  possession  of,  passes  to  trustee,  403. 

Whether  acting  in  fiduciary  capacity  to  discharge  debts,  772.  775. 

Aggrieved  person— 

(See  Appellate  Proceedings.) 

Alabama- 
Exemption  laws  of,  445. 
Territorial   jurisdiction  of   courts   in,   34. 

Alaska- 
Exemption   laws  of,   446. 

Territorial  jurisdiction  and  time  of  holding  courts  In,  3o. 
"States"  include,  422n. 

Aliens— 

Domestic   creditors    preferred   over,    when.    7227?. 
May  be  bankrupts,  143. 
(See  also  Fokei<;n.) 

Alimony— 

Do^s  not  pass  to  trustee,  376. 

Not  affected   by   discharge,  judgments   for,  7(..j. 

Not    a    provable   claim,    290. 


mU  INDEX. 

References  are  to  pages. 

Allowance- 
Claims   of,   against  baiikrufit's   estate,   272,   340.      (See   Proof  o» 

«^LAIMS.) 

assignee  to,  324. 

preferred  claims,   of,  332. 

review  of,  34fi. 

secured  creditors,  of,  331. 
Debts,  subject  of,   281. 
Widow  and  children  to,  fixed  by  state  laws,  437. 

Amendment — 

Clerk's   certificate   of,   835. 

Debtor's  petition  and  schedule,  of,  186. 

must  be  verified,  186. 

referee  may  allow,  187. 
In  involuntary  cases,  199,  223,  237. 

application  for  must  be  made  within  reasonable  time,  238. 

costs,   239. 

discretion  of  court  within,  238. 

grounds  of,  237. 

referee  may  grant  leave  to,  239. 
In  voluntary  cases,  how  made,  186. 
Of  proof  of  claim,  335,  338. 
Of  record   on   appeal,   §35. 

Petition  to  C.  C.  A.  to  supervise  court  of  bankruptcy,  of,  814.. 
Referee  may  allow,  186,  239. 

Amount— 

Appeal  to  U.  S.  supreme  court,  796. 

Bonds   of   referees,   109. 

Bonds  of   trustees  fixed   by   creditors,   278,   350. 

Claims  of  creditors,  who  file  involuntary  petition,  193. 

Debtor's  debts  denied  in   answer,  226. 

Debts  of  petitioning  creditors  denied,  226. 

Ancillary  proceedings— 

In  other  districts,  79,  86. 

Answer- 
Can  not  demur  to,  230. 
Defense  of  coverture,  227. 

act  of  bankruptcy  not  committed,  225. 

each  must  be  separately  stated,  224. 

insufficient  creditors'  debt,  226. 

insufficient  indebtedness  of  bankrupt,   226. 

infancy,  227. 

insanity,  227. 

payment,  227. 

petitioner  has  not  provable  debt,  220. 

solvency,  155,  161,  168,  169,  196,  225. 

statute  of  limitation  to  creditors'  debt,  227. 

want  of  jurisdiction,  227. 
Filed  where  and  when,  228. 
Oath  to,  227. 
Signature  to,  227. 
To  an  involuntary  petition,  224. 
Verification  of.  227. 
When  to  file,  223. 
Where  to  file,  228. 


I]!fDEX.  1317 

References  are  to  pages. 

Apparel— 

Unless  exempt,  passes  to  trustee,  403. 
What  Included  in,  405. 

Appeal— 

(See  Appellate  Peoceedings. ) 

Appearance— 

Can  not  be  withdrawn,  221. 
Effect  of,  207,  221. 
Of  creditors  to  become  parties,  219. 
Of  a  nonresident  creditor,  221. 
Oppose  discharge  to,  740. 
Waives  citation,  832. 

Appellants— 

Who  should  be  made,  823. 

Appellate  proceedings- 
Allowance  of  claim  from,  346. 

Appeals  in   bankruptcy  to  supreme  court  of  territories,  807. 

Appeals  to  U.  S.  supreme  court  from  supreme  court  of  District  of 
Columbia,   795. 

Amendment  of  record,  835. 

Appeal   bond,    828.      (See   Bond.) 

Assignment  of  errors,  827. 

Bankrupt  act  does  not  affect  appellate  jurisdiction  at  law  or  in 
equity,  790. 

Bond  necessary  to  perfecting  appeal,  83G. 

Bond  not  essential  to  taking  an  appeal,  822. 

Briefs  in  appellate  courts,  838. 

Certifying  questions  of  jurisdiction  to  supreme  court,  804. 

Certifying  questions  of  law  from  C.  C.  A.  to  supreme  court,  804. 

Certiorari  from  supreme  court,  797,  et  seq. 

Citation,   830.      (See  Citation.) 

Citation  necessary  to  perfecting  appeal,  831,  836. 

Courts   which   have  appellate  jurisdiction,   790. 

Decree  in,  839. 

How  to  prepare  record,  833. 

How  to  review  a  case  from  a  state  court,  793. 

Jurisdiction  of  C.  C.  A.  of  appeals  in  bankruptcy,  816. 

Mandate,   842. 

Parties,  823. 

who  may  prosecute,  823. 

who   must   join,   826. 

who  mu.st  be  made  appellees,  826. 

Perfecting  an  appeal,  836. 

Perfecting  an  appeal  confers  jurisdiction  on  appellate  court.  838 

Petition  for  appeal,  827. 

Practice  in  C.  C.  A.  on  appeal,  838. 

Printing  record  on  appeal,  838. 

Proceedings    for    rehcarings,   840. 

Supervisory  power  of  C.  C.  A.,  SOS. 
.^       Taking  an  appeal  deprives  court  of  bankruptcy  of  jurisdiction.  S30. 

Time  within  which  to  appeal  in  bankruptcy  to  supreme  court,  796. 

Time  within  which  an  appeal  to  C.  C.  A.  must  be  taken  in  bank- 
ruptcy,  820. 

Time   for  appeal   can   not  be  enlarged.  821. 

Twofold  jnrisciiction  of  C.  C.  A..  807. 

What  constitutes  "taking  an  appeal."  821. 

What  must  be  done  to  "take  an  appedl."  821. 


1318  moKx. 

References  are  to  pages. 

Appellate  proceedings  (contimuMl)  — 

When  appeal  lies  to  supreme  court  from  C.  C.  A.,  796. 

When  record  npt  filed  in  time,  837. 

When  record  must  be  filed  in  appellate  court,  836. 

When  summons  and  severance  is  necessary,  825. 

Who  are  necessary  parties  to  an  appeal.  823. 

Writ  of  error  to  court  of  bankruptcy,  819. 

Writs   of    certiorari,    when    issued,    ldl,et    seq. 

Appellees— 

Who  should  be  made,  826. 

Application— 

For  discharge,  736. 

For  injunction  to  protect  an  estate,  how  made,  215. 

To  amend  in  involuntary  cases,  237. 

To  protect  estates,  how  made,  215. 

To  set  aside  an  adjudication,  234. 

To  seize  bankrupt's  property,  how  made,  217. 

To  stay  a  suit,  89,  et  seq. 

Appointment— 

Arbitrators,  700. 
Receiver  for  estate,  212. 
Referees,  107. 
Trustees,    273,    275,    348. 

Apportionment- 
Referee's,  compensation  of,  127. 
Trustee's,   compensation   of,   362. 

Appraisal- 
Can  not  be  sold   for  less  than  75  per  cent,  of,  713. 
Exempt  property,  441. 
Property  for  a  sale,  712. 

Approval- 
Compromises,  of,  by  court,  698. 
Expenses  of  administering  bankrupt  estates,  725. 
Sale,  of  property  subject  to,  713. 

Trustee  may  prosecute  suits  already  commenced,   with,  of  court, 
358. 

Arbitration- 
Application  for,  699. 
Controversies  may  be  settled  by,  698. 
Choice  of  arbitrators,  700. 
Effect  of  finding,  700. 
Notice  of.  699. 

Referee  may  grant  leave,  699. 
Trustee  may  compound  claims,  when,  699. 

Arizona— 

Exemption  laws  of,  447. 

Territorial  jurisdiction  and  time  of  holding  court  in,  36. 

Arkansas— 

Exemption  laws  of,  448. 

Territorial  jurisdiction  and  time  of  holding  courts  in,  36. 


INDEX. 


1819 


References  are  to  pages. 

Arms,  military  uniforms,  etc.— 

Exempt  by  laws  of  United  States,  422. 

Army  pensions— 

Do  not  form  a  part  of  estate,  408. 
When  money  passes  to  trustee,  408. 

Arrest- 

Contempt  ca.ses,  in,  638. 

Criminal  cases,  in,  637,  638. 

Debts  not  released  by  discharge,  for,  635,  638. 

Extradition  of  bankrupt,  646. 

Examination,  detained  for,  640. 

proceedings   for,   641. 
Injunction,  643. 
Proceedings  upon  arrest,  641. 
Proceedings  to   release  bankrupt  froni,  642. 

application  to  be  made  in  what  court,  642. 
Time  during  which  protection  extends,  636. 
When  bankrupt  protected  from,  635. 
When  bankrupt  liable  to,  638. 
When  in  attendance  on  court  of  bankruptcy,  639. 
When  to  remove  bankrupt  to  another  district,  647,  648. 
When   under,   637. 
(See   Habeas   Corpus.) 

Assets- 
Individual,  what  are,  259. 

Individual  partnership,  creditors  sharing,  257. 
Partnership,    individual   creditors   sharing,   257. 
Partnership,  what  are,  258. 
Unexplained  shrinkage  of,  658. 
Trustees  to  collect  and  distribute,  701. 
What  are  firm  and  individual,  258. 
What  are  generally.      (See  Estate.) 

Assignee  of  claim- 
May  prove,  when,  324. 
May  vote  at  creditors'  meetings,  270. 

Assignment- 
Assets  distributed  under  recovery  of  by  trustee,  618. 
Assignee  not  liable  to  trustee  for  distributing  asfets,  610. 
Creditors  estopped  to  charge,  as  act  of  bankruptcy,  wht-n.  191. 
Errors   on   ai)i)eal,   S27. 

For  benefit  of  creditors,  an  act  of  bankruptcy.  30,  l.^i.},   Ib7. 
For  benefit  of  creditors  may  be  set  aside,  when.  391. 
For  benr-fit  of  creditors,  legality  of.  29,  729. 
In  what  court  property  to  be  administorod.  31. 
Services  in,  when  entitled  to  priority,  729. 
Title  of  assignee.  72. 

Association — 

(See  Pabtneuship.) 

Attachment — 

Against  insolvent  prior  to  four  months,  etc.,  563. 
Against  insolvent  within  four  months,  etc.,  565. 
Dividends  not  subject  to,   731. 

In  foreign  countries  before  trustee  takes  possession,  ..77. 
Title  of  bona  fide  purchaser  protected,  565. 


13i?0  INDKX. 

References  are  to  pages. 

Attendance- 
Bankrupt  exempt  from  arrest  while  attending  court  of  bankruptcy, 

G35. 
Compulsory,  of  bankrupt  and  witnesses  before  referee  or  court,  617 
Witnesses  exempt  from  service  of  subpcBna  while  attending  a  court 

of  bankruptcy,  206. 

Attestation— 

(See   Certificate   and   Writs.) 

Attorney- 
Advise  by,  not  contempt  when,  670. 
Affidavit  by  bankrupt  may  be  taken  by,  when,  134. 
Authority   of,   how   to   challenge,    203. 
Authority  of  to  be  written,  when,  135. 
Bankrupt  of,  not  to  represent  creditors,  134. 
Contempt    by,    135,    670. 
"Creditor"  includes,  269. 
Creditor,  may  appear  for,  220. 
Creditors'  meeting,  may  vote  at,  269. 
Disbarred  for  contempt,  not,  675. 
Examination  of  bankrupt,   may  attend,  620. 
Fees  of — 

allowance  of  by  referee,  135. 

amount  of,  139. 

provided   for   in   mortgage   refused,   140. 

creditors  of  involuntary  bankrupt  of,  137. 

included  in  cost  of  administration,  135,  725. 

lien  of,  for,  137. 

priority  of,  135,  725. 

reasonable,  must  be,  135. 

reasonable,  what  is.  137,  139n. 

services  rendered  assignee  before  filing  petition,  for,  138. 

Bervices  rendered  debtor  in  preparing  schedules    for,  138. 

taxed  as  costs,  139. 

trustee,  of,  137. 

voluntary  bankrupt,  of,  136. 

who  entitled  to,  135. 
Fiduciary  character,  act  in,  774. 
Knowledge  of,  effect  of,  788. 
Notary  may  act  as,  139. 
Notice  to,  135. 

Payment  or  transfer  to,  by  insolvent  for  services,  etc.,  re-exam- 
ined,   586. 
Payment  to  on  distribution,  718,  732. 

Penalty  for  using  false  claim  in  composition,  as  or  by,  661. 
Power  of,  must  be  written,  when,  135. 
Privileged  communications  to,  627. 
Proof  of  claim  by,  329. 
Referee  can  not  practice  as,  114. 
Released  by  discharge,  when  debts  of,  774. 
Referee  should  be,,  107. 

Represent  bankrupt  and  creditor,  not  to,  134. 
Represent  both  trustee  and  bankrupt,  not  good  practice  to,  134. 
Represent  creditors  and  trustee,  when  should  not,  135. 
Trustee,  of,  creditors  may  elect,  135. 
Trustee  may  employ  when  necessary,  134,  138. 
Verification  by,  134,  201. 
Witne-ss  may  be  summoned  as,  627. 
Witness  not  entitled  to  be  attended  by,  620. 
Written  authority  of,  necessary,  when,  135. 
(See  also  Counselor  at  Law.) 


INDEX.  1321 

References  are  to  pages. 

Attorney  General- 
Duty  to  lay  statistical  tables  before  Congress,  etc.,  133. 
Officers  to  furnish  statistical  information  to,  134. 

Auction— 

(See    Sale.) 

Audit- 
Referee  audits  and  allows  trustee's  reports,  717,  734. 

Auxiliary  proceedings— 

In    other    districts,    86. 

Award- 
Effect  of  finding  by  arbitrators,  700. 


B. 

Bail- 
Bankrupt  on  removal  proceedings,  of,   649, 
Bankrupt  about  to  depart,  of,  642. 
Sureties  on  bond,  for,  not  discharged,  777. 

Bailee— 

Preferences  created  by  pledge,  597. 
Rights  of  a,  597. 

Bank- 
Designated  as  depositories,  353. 
National,  can  not  be  bankrupts,  142. 
State,  can  not  be  bankrupts,  142. 
Territorial,  can  not  be  bankrupts,  142. 

Bankers- 
Private,  may  be  bankrupts,  142. 
corporation,  can  not  be,  143. 

Bankrupt— 

Act  of  bankruptcy,  by,  consists  of  what,  153. 

admitting  inability  to  pay  debts,  169. 

general  assignment,  making,  167. 

permitting  preferences  l)y  legal  proceedings,  164. 

transferring,  etc.,  property  to  defraud,  etc.,  159. 
while  insolvrnt,  to  prefer  creditors,  161. 
Alien  may  become,  143. 
Answer  to  be  made  when,  222. 
Arre.sted   in  civil  ca.ses,  when,   638. 

in  criminal  cases,   637,  638. 

protected  from  being,  when,   635. 
Attend   mef>tings,  when.  274,  494,   6.''1. 

not  required  to,  when,  274,  617. 
Attorney  of  should   not  represent  creditors,  134. 

should  not  represent  trustee.  134. 
Bail,  on  removal  proceedings,  649. 

to  secur!^  release  from  custody.  642. 
Bank,  national  can  not  be  adjud-od  involuntary,  142. 
Bond  to  secure  property  seized,  219. 
Canal  rompany  ran  not  be  involuntary.  150. 
Carriers  can  not  be  involuntary,  ir.ii. 


1322  iNUKX. 

References  are  to  pages. 

Bankrupt  (continued)  — 

Claims  against,  allowance  of,  272,  340. 

Disclose  false  to  trustee,   633. 

false,   penalty  for  presenting,   661. 

one  bankrupt  against  another,  323. 

proof,  etc.,   of,  326. 
Compositions — 

application  f..     confirming,  679. 

accepted,  must  be  in  writing  by  majority,  etc.,  682. 
consideration  to  be  paid  and  costs  deposited,  etc.,  682. 
date  and  place  of  hearing,  685. 

confirmation  of,   discharges   from  debts,   693. 
conditions  of   confirmation,    692. 
distribution  of  consideration,  695. 

set  aside  for  fraud,  may  be,  691,  697. 

when  may  be  offered  by,  679. 

must  be  examined  and  file  schedule,  679. 
Co-debtors'  liability  not  affected  by  discharge,  776. 
Compulsory  attendance  before  court,  referee,  etc.,  617, 
Concealing  property,  penalty  for,  660. 
Corporations  can  not  be  adjudged  voluntary,  141. 

can  be  adjudged  involuntary,  when,  142,  146,  151. 
Creditors,  number,  etc.,  to  file  petition  against,  190,  192. 

meetings  of,  268. 

to  attend  first,  272,  274,  631. 
when   not   required   to  attend,   631. 
expenses  of  attending  paid,  when,  631. 
Death  of,  does  not  abate  proceedings,  653. 
Debts  which  may  be  proved,  193,  281,  761. 

which   have  priority,   723. 

not  affected  by  discharge,  694,  700,  et  seq. 
Deceased  person  can  not  be  adjudged,  143. 
Definition  of,  631. 
Detention  for  examination,   640. 

may  be  kept  in  custody  ten  days,  640. 
released  on  giving  bail,  642. 
Discharge,  application  for,  736. 

hearing,  bankrupt  to  attend,  631. 

releases  from  what  debts,  700,  et  seq. 

when  not  granted,  754. 

when  revoked,  784. 
Domicile  of,  claiming  exemptions,  425. 
Duties  of,  272,  631. 

claims,  to  examine,  272,  633. 
disclose   false,    633. 

examination,  to  submit  to,  634. 

inform  trustee  of  attempt  to  evade  act,   633. 

orders  of  court,  to  comply  with,  C31. 

papers,  to  execute,   633. 

schedules,  to  prepare  and   file,  178,   C34. 
Embezzlement  of  property  of,  penalty  for,   655. 
Estate  of  deceased  person  can  not  become,  143. 
Estates    (see  Estate.) 

Evidence  against,  can  not  be  used  in  criminal  cases,  625. 
Examination   of,    275,    612    (see    Examination.) 
Execute  papers  ordered  by  court,  633. 

transfer  to  trustee  of  property,  634. 
Exemption  from  arrest,  etc.,  635. 
Exemptions  of,  under  state  laws,  445,  et  seq. 
Expenses  paid  of  attending  meetings,  when,  031. 

paid  of  attending  examination,  when,  017. 


INDEX. 
References  are  to  pages. 

Bankrupt  (continued)  — 

Extrauition   of,    646. 

False   claim   against   estate,   penalty   for   presenting    862 

bankrupt   to  disclose,   633. 
False  oath  against  estate,  penalty  for  making   661 
Farmers  can  not  be  adjudged  involuntary    141 
Fees,  to  deposit,  182,  202. 
clerk's,  182,  202. 
referee's,  182,  202. 
trustee's,   182,   202. 

voluntary,  not  required  to  pay,  when,  183. 
Habeas  corpus  to  release  from  imprisonment    643 

to  testify  as  to  his  bankruptcy.  613. 
Insane  person,  when  may  be,  145. 
Insanity  does  not  abate  proceedings,  146,  653. 
Involuntary,    who    may    be    adjudged,    141,    147. 

who  can  not  be  adjudged,  142,  150. 
Lists  of  creditors,  to  make,  178,  221. 
Lunatic,  when  may  be,  145. 
Married  woman,  when  may  be,  146. 
Meetings  of  creditors,  to  attend  first,  274,  612,  631. 
Misappropriating  property  of,  penalty,  656. 
Offenses  of.  655.     (See  Ofkensks.) 
Origin  or  the  word,  4. 
Partnership  may  be  adjudged.  244,  246. 
administration  of  estate.  255. 

where  all  not  bankrupts,  244,  255. 
jurisdiction   over  one   partner  sufficient,   244,   251. 
payment  of  debts,  255. 
Petition  to  be  filed  in  four  months,  202. 

bond  to  be  accompanied  by,  to  take  property.  217. 

liability    for    costs,    217. 
counsel  fees,  etc..  fixing  of.  217. 
defense  of  solvency,  155,  161.  168.  169,  196,  225. 

burden  of  proof.   155.  232,  575. 
involuntary,  who  may  file,  189. 
service  of,  manner  of,  203. 
voluntary,  who  may  file.  172. 
Property  may  be  seized,  when.  216. 
bond   of  indemnity,  217. 
bond  to  release,  219. 
Protection   of,    635. 

Railroad  company  can  not  be  involuntary.  150. 
Released  from  imprisonment,  how.  642. 
Removal  of,  647.  648. 
Retains  title  to  property,  how  long,  365. 
Sale,  may  purchase  at,  713. 
Schedule  of  property,  to  prepare,  178,  221,  634. 
make  oath  to,  and  file,  178,  221,  634. 
voluntary,  to  file  with  petition,  178. 
what  to  contain,  178,  634. 
Secured  creditors,  rights  of,  604. 
Service  of  petition,   203. 
Seizure  of  property,  216. 

Solvency  of,  not  ground  for  resisting  voluntary  petition,   141. 
Steamship  company  can  not  be  involuntary.  150. 
Suits  by  and  against,  77,  358. 

appearance  of  trustee,  77,  358. 

stay   until    adjudication,   etc.,   90. 

time  for  bringing,  by  or  against  trustee.  361. 

trustee  permitted  to  prosecute  sulLs  commenced.  .TSS. 


1323 


13:24  INDJIX. 

References  are  to  pages. 

Bankrupt  (continued)  — 

Title  to  property  passes  to  trustee,  365. 

revests  in,  on  confirmation  of  composition,  693,  696. 
Unincorporated  company  can   be  adjudged   involuntary,  142. 
Voluntary,  who  may  be  adjudged,  141. 
Wage  earners  can  not  be  adjudged  involuntary,  HI. 
Widow  and  children,  rights  of,  437. 
Who  might  be  adjudged,  under  act  of  1800,  7. 
Who  might  be  adjudged,  under  act  of  1841,  10. 
Who  might  be  adjudged,  under  law  of  1867,  1214. 

Bankrupt  act — 

Act  of  1800,  7. 

Act  of  1841,  10. 

Act  of  1867,  12,  1207. 

Act  of  1898,  1119. 

Acts  in  England;  4. 

Conflict  of,  with  General  Orders,  653. 

Constitutionality  of  act  of  1898,  17. 

Construction,  rule  of,  69. 

Congress  has  exclusive  power  to  pass,  19. 

Effect  of  a  national,  19. 

upon  persons  not  subject  to  it,  28. 

upon  state  assignment  laws,  29. 

upon  state  insolvent  laws,  23. 
Meaning  of  bankrupt  and  insolvent,  18. 
Power  of  Congress  to  enact,  17. 

states  to  enact,  20. 
State  laws  suspended,  not  repealed,  23. 
Time  when  act  of  1898  took  effect,  23. 

Bankrupt  laws,  history  of— 

England,  4. 
Europe,  2. 
Romans,  1. 
United  States,  6. 

Bankruptcies — 

What  is  meant  by  "subject  of  bankruptcies,"  17. 

Bankruptcy- 
Acts  of,  of  what  to  consist,  153.     (See  Acts  of  Bankruptcy.) 
Adjudication  of,  233. 
Courts  of,  what  are,  33. 
"In    contemplation    of,"    571n. 
Jurisdiction  of  courts  of,  75. 
Partners  of,  243. 
Proceedings  in,  plenary,  70. 

distinguished  from  suits  at  law  and  in  equity,  104. 

Bankruptcy  estate— 
(See  Estate.) 

Bastard— 

(See  Judgments.) 

Bidding— 

(See  Sai>e.) 

Bill  of  exchange- 
Pass  to  trustee,  407. 


INDEX.  1325 

References  are  to  pages. 
Blanks  for  process- 
Furnished  to  referees,  619. 

Bona  fide  purchaser- 
Title  of,  obtained  by  lien,  etc.,  not  affected,  565. 
for  value  protected,  384. 

Bond- 
Appeal,  827. 

amount  of,  828. 

appellate  court  may  change  amount,  829. 

approved  by  judge,  828. 

clerk,  commissioner,  etc.,  can  not  approve,  828. 

cured  in  appellate  court,  when  defective,  829. 

necessary  to  "perfecting"  an  appeal,  828. 

not  necessary  to  "taking"  an  appeal,  822,  828. 

operates  as  a  sui)ersedeas,  when,  829. 

payable  to  whom,   828. 

trustee  not  required  to  give,  828. 
Banks  of,  as  depositories  for  money,  353. 
Bankrupt,  of,  to  recover  possession  of  property,  219. 

condition  of,  219. 
Error,  on,  trustee  not  required  to  give,  828. 
Filed,  to  be  in  clerk's  office,  109,  351. 
Indemnify  bankrupt,  to,  on  seizing  his  property,  217. 

condition  of,  217. 
Joint  trustees,  of,  350. 
Petitioner  to  give,  to  hold  property,  etc.,  217. 

condition  of,  217. 

sureties  of,  217. 
Referee's,  109. 

amount  and  condition  of,  109. 

failure  to  give,  creates  vacancy,  109. 

filed  in  clerk's  office,  109. 

sued  on,  how  and  when,  109. 
Release  of  property,  by  bankrupt  to  secure,  219. 
Suits  on,  how  and  when  brought.  109,  350,  361. 
Sureties,  corporations  may  be,  109,  350. 

two  necessary,  109,  350. 

value  of  property,  109,  350. 
Trustees',  350. 

amount  and  condition,  350. 

amount  fixed  by  creditors  or  court,  278,  350. 

approval  of,  by  referee,  113. 

failure  to  give,  creates  vacancy,  351! 

joint  or  several,  350. 

jurisdiction  of,  suit  on,  74. 

liability,  ZrA. 

not  n  quired  to  give,  on  appeal  or  for  error,  82S. 

sureties  on,  350. 

title,  certified  copy  of  order  approvin?-,  evidence  of,  367.  371. 

where  filed,  350. 

Books— 

Account,  of,  destruction  of,  etc.,  prevents  discharge.  748. 
Account,  of,  proper  to  be  kept,  748. 

failure  to  keep,  as  evidence  of  concealment.  058. 
Pass  to  trustee  as  a  part  of  ostate,  377. 
Referees  to  keep  separate,  for  eacn  case,  124. 

to  certify  and  file  with  papers  in  court,  125. 

to  compel  witnesses  to  produce,  614. 


V,V2i)  INDEX. 

References  are  to  pages. 

Briefs— 

In  appellate  courts,  838. 

Brokers— 

(See  Agents.) 

Burden  of  proof— 

Confirming  compositions  in,  687. 

Discharge,  opposing,  753. 

Exempt  property,  440. 

Habeas  corpus,  in,  64G. 

In  contested  claims,  341,  344. 

Of  domicile.  426. 

On  bankrupt,  232. 

On  petitioning  creditors,  231. 

Partnership  assets  of,  257. 

Preferences,  in  suits  to  set  aside,  575,  609. 

Solvency,  as  to,  155,  232,  575. 

Business— 

Principal  place  of,  175. 

Buying  and  selling— 

(See  Sale.) 


C. 


California— 

Exemption  laws  of,  450. 

Territorial  jurisdiction  and  time  of  holding  court  in,  37. 

Canal  companies— 

As  bankrupts,  150. 

Cargo- 
Vessels  on  high  seas,  376. 

Carriers- 

Common,  as  bankrupts,  150. 

Cash- 
Passes  to  trustee  as  a  part  of  estate,  403. 

Certificate — 

Contempt,  of  facts  constituting,  by  referee,  671. 

Judge's  absence,  etc.,  by  clerk  authorizing  referee  to  act,  129. 

Referee's  record,  of,  125,  735. 

Transcript  of  record  on  appeal,  834. 

U.  S.  circuit  court,  to,  for  jury  trial,  230. 

of  bankruptcy  proceedings  when  district  judge  disqualified,  101. 
U.  S.  supreme  court,  to,  question  of  jurisdiction,  804. 

questions  of  law  from  C.  C.  A.,  804. 

Certified  copies- 
Composition,  of  order  confirming,  evidence  of  revesting  title,  693, 

697. 
Referee,  of  proceedings  before,  as  evidence,  113,  735. 
papers  when   issued  by  clerk  or  referee,  735. 
to  transmit  to  clerk,  by  mail,  when,  735. 
Trustees'  bond,  of  order  approving,  evidence  of  title,  367. 
Authority  to  demand  possession,  371. 


INDEX.  I.*i27 

References  are  to  pages. 

Certiorari— 

Issued  by  supreme  court,  when,  797. 

by  C.  C.  A.,  when,  798. 
Cure  or  complete  records,  797,  835. 

application  for,  798. 

issue  and  return,  799. 

return  by  clerk,  799. 
Removing  case  from  C.  C.  A.  to  U.  S.  supreme  court,  799. 

application   for,    801. 

granted  rarely,  802. 

proceedings  on,  in  supreme  court,  803. 

remand  case  to  proper  court  of  bankruptcy,  803. 

time  within  which  to  apply  for,  801. 

when  issued,  800. 

Chattels- 
Pass  to  trustee  as  a  part  of  estate,  403. 

Checks— 

And  notes,  payment  of,  when  a  preference,  585. 

Dividend,  how  drawn,  732. 

Pass  to  trustee  as  a  part  of  estate,  407. 

Children— 

Of  deceased  bankrupt,  rights  of,  437. 

Choice— 

Of  new  trustee,  358. 

Choses  in  action— 

Negotiable  instruments  a  part  of  estate.  407. 

Rights  of  actions  on  contracts  pass  to  trustee,  when,  417. 

belonging   to    wife  of  bankrupt,    418. 

for   personal  skill,  419. 

involving   personal    injury,    410. 
Tort — 

for  injury  to  person,  420. 

for  injury  to  property,  420. 
Trustee  must  reduce,  to  money,  701. 

proper  party  plaintiff,   418,  420. 

Circuit  courts— 

Jurisdiction  in  bankruptcy,  75,  101,  790. 

controversies  certified  to,  231. 

criminal  cases,  C38. 

depends  on  residence  of  bankrupt,  105. 

of  offenses  under  the  act,  G3S,  663. 

over  what  parties,  105. 

suits  at  law  and  inequity,  103. 
Jury  trials  in,   when,   101. 
Removal   to,   102. 

Circuit  courts  of  appeals- 
Appeals  to,  from  judKmentF.  RK.. 

adjudging  or  refusing  to  adjudge  bankrupt,  R17. 

allowing,  etc.,  debts  of  $5<iO  or  over,  818. 

at  law  and  In  equity,  791. 

cross-appeals,  819. 

discharge,  granting  or  denying.  S17. 

when  appeal  to  be  taken,  820. 

writs  of  error,  819. 


lo'28  INDKX. 

References  are  to  pages. 

Circuit  court  of  appeals  (continued)  — 

Appeals  to  United  States  supreme  court  from  decisions  of,  796. 

amount  is  over  $2,000,  796. 

question  is  certified  by  supreme  court  justice,  796. 

record,  how  made,  797. 

time  for  taking,  797. 
Appellate  jurisdiction  in  bankruptcy,  816,  et  seq. 

in  law  and  equity  cases,  790. 

twofold,  in  bankruptcy,  807. 
Certiorari,  may  issue  writs  of,  798. 
Practice  in,  838. 
Supervisory  power  of,  808. 

application  for  exercise  of,  812. 

decisions  in  exercise  of,  final,  816. 

exercised  only  after  action  of  court  of  bankruptcy,  809. 

exercised  only  when  no  appeal  lies,  809. 

extent  of,  809. 

matters  of  law  only,  applies  to,  810. 

petition,  813.  ■ 

proceedings  on  petition  to  review,  814. 

time  within  which  to  file  petition,  813. 
Territorial  jurisdiction  and  time  and  place  of  holding,  64. 
Trustees  not  required  to  give  bond  on  appeal  or  writ  of  error,  828. 

Citation- 
Appellate  court  may  issue,  831. 
Death  of  party,  to  whom  directed,  832. 
Issuance  necessary,  831. 

Mandamus  not  granted  to  compel  judge  to  sign,  833. 
Necessary  when,  831. 
Object  of,  830. 

Perfecting  an  appeal  by,  831. 
Returnable  when,  832. 
Service  of,  832. 
Signed  by  judge,  831. 
Time  within  which,  may  issue,  831. 
Waived  by  appearance,  832. 
(See  also  Notice.) 

Claimants — 

Who  are  adverse,  30,  105. 
(See    also    Claims.) 

Claims— 

Adverse,  what  are,  30,  105. 

jurisdiction    over,    74. 

jury  trial,  when  entitled  to,  235. 
Against  bankrupt,  creditor  may  purchase,  194. 
Allowance  of,  272,  340. 

Appeal  from,   346. 

burden  of  proof,  341. 

defective,    340. 

distinguished    from    proof,    334. 

final,  review  of,  346. 

fraudulent,    345. 

objections,  when  usually  made,  341. 

objections,  who  may  make,  340. 
Amount  necessary  for  filing  involuntary  petition,  193. 
Averments  as  to,  in  petition,  199. 
Bankrupt,  to  examine,  633. 
Bankrupts,  of,  against  each  other,  323. 


INDEX. 


3829 


References  are  to  pages. 
Claims  (continued)  — 

Contingent,  proof  of,  324. 

when  entitled  to .  share  in  dividends,  720. 
Debts  which  may  he  proved,  281. 

which  have  priority,  723. 
Discharge  releases  from  what,  760. 

does  not  release  from  what,  760,  et  seq. 
Disputed,  provided  for  in  composition,  693. 
Dividends  payable  on,  allowed,  718. 
False,  penalty  for  presenting,  etc.,  661. 

or  using  in  composition,  661. 
Filed  after  being  proved  in  court  or  before  referee,  337. 
Hearing  objections  to,  343.  ^        ,   „„.  ■   ' 

Infants  and  insane  persons,  rights  of,  325. 
Instrument  of  writing,  founded  upon,  to  be  filed  with  proof  of,  380. 

statement  of  loss  filed  under  oath  with,  u30. 
Interest  on,  289,  299. 

Jurisdiction  of  courts  of  bankruptcy  as  to,  67. 
Liquidation  of,  282.  .       . ,       .      cqc 

Payment  of,  after  composition  set  aside   etc.   698. 
Penalty  or  forfeiture,  debt  due  as  how  far  allowed,  730. 
Preferred   creditors,  of,   not  allowed   unless,   etc.,    332. 
Priority,  debts  which  have,  723. 
Proof  of,  326. 

distinguished  from  allowance,  666. 
when  founded  upon  writing,  330.  , 

time  for  proving,  325. 
Purchase,  345. 
Purchase,  creditor  may,  194. 

to  oppose  composition,  690.  .  ^    o^o 

Reconsidered,  may  be  reallowed  or  rejected.  342. 
Re-examination  of,  342. 
application   for,   342. 

who   must   file.   342. 
burden  of  proof,  344. 
costs,   344. 
default,   342. 

evidence,  preservation  or,  .544. 
fraud,    345. 
hearing,  343. 
laches,    343. 
notice   of,   342. 

recovery   of  dividend  on  rejection.,  346. 
time,   within    what,    342. 
where  held,  342. 
witnesses,    343. 
Referee,  filed  before  if  case  referred.  337. 
Secured  creditors,  of,  331. 

allowed  for  what  sums.  283.  66\. 
individual  undertaking,  secured  by,  3.-. 
not  entitled  to  vote  at  creditors'  "j^fl'"^'  f  0^ 
value  of  securities  held  by.  how  determined.  331. 
Status   of,    when    fixed.    282. 
Time  for  proving,  326.  ,      .       ooo 

ITnliquidated   may  be  liquidated,  etc..   28.. 

provided    for    in    composition,    6.t.,, 
Unscheduled,  discharge  no  rHoase  from    768. 

unless  creditors  had  notice,  etc..  768. 
Withdrawal  from  files,  may  be  when,  338. 
(See  also  DEutb.) 


References  are  to  pages. 
Clerk- 
Account  for  fees,  130. 
Certificate  by,  as  to  judge's  absence,  etc.,  authorizing  referee  to  act, 

130. 
Certifies  to  transcript  of  record  on  appeal,  S33. 
Collect  fees,  130. 
Compensation  of,  131. 
Definition  of  the  word,  129. 
Deliver  papers  to  referee,  130. 
Docket  of,  129,  182. 
Duties  of,  129. 
Expenses  of,  131. 

may  require  indemnity  for,  131. 
Fees,  131. 

account  for,  130. 

collect,  of  clerk,  referee,  trustee,  130. 

except  on  affidavit  of  voluntary  bankrupt  of  inability  to 
pay,   130. 

pay  to  referee  and  trustee,  when,  130. 
Indices  of  petitions  and  discharges  to  be  kept  by,  129. 
Issue  certificate  of  absence  of  judge,  130. 
Notice  of  application  for  discharge  given  by,  736. 
Of  referee,  hire  of,  127. 
Papers  filed  with,  103. 
Pay  fee  to  referee  and  trustee,  130. 
Petition,  copy  of,  to  be  filed  for,  182,  201. 
Process  to  be  issued  by,  129. 
Refer  cases,  when  to,  110,  114,  130. 
Referee  to  call  and  receive  papers  from,  when,  121. 

transmit  papers  to,  121. 

certified  copies  of,  by  mail  121. 
Referee  to  employ,  115. 

Schedule,  copy  of,  to  be  furnished  by  bankrupt,  182. 
Subpoena  to  be  issued  by,  203. 
Writs  generally  to  be  issued  by,  129. 

Clerks— 

Wages,  debts  having  priority,  726. 
Who  are  clerks  entitled  to  priority,  726. 

Close  of  bankruptcy— 

When  estate  settled,  733. 

Codebtors— 

Judgment  against  discharged  bankrupt  with  stay  of  execution, 
when,  777. 

Liability  of,  not  affected  by  bankrupt's  discharge,  776. 

May  prove  debt  when,  324. 

Stockholders  and  corporate  officers'  liability,  as  affected  by  dis- 
charge, 777. 

Suit  against  one  joint  debtor  on  debt  discharged  as  to  others.  77S. 

Sureties  on  bonds  not  affected  by  discharge  of  principal,  777,  773. 

Cognovit— 

(See  Judgment  Liens.),  565. 

Collection— 

Of  assets  by  trustee,  701. 
referee  should  not.  111. 


INDEX.  1331 

References  are  to  pages. 
Colorado— 

Exemption  laws  of,  455. 

Territorial  jurisdiction  and  time  of  holding  courts  in,  38. 

Commencement  of  proceedings — 

Involuntary,  189,  et  seq. 
Partnership,  by  or  against,  253. 
Voluntary,  172,  ct  seq. 
When  jurisdiction  attaches,  76. 

Commissioner  of  deeds — 

Referee  may  be,  108. 

Commissioner,  United  States- 
May  administer  oaths,  1136. 

Commissions— 

Referees',  126. 

apportionment,   127. 
Trustees',  362. 

apportionment,    362. 

Commitment — 

Contempt,  for,  power  of  court,  666. 

before  referee.  666. 
Referee  can  not  exercise  power  of.  111.  116. 

Companies- 
Incorporated  (see  Corporations). 
Unincorporated  (see  Pabtnebships). 

Compensation — 

Attorneys',  135. 
Clerks',  131. 
Marshals',  132. 
Referees',  126. 

when  reference  revoked,  127. 

when  case  transferred,  127. 
Stenographers',  115. 
Trustees',  362. 

appointment  of,  362. 

withholding  of,  362. 

Compositions— 

Accepted  how,  681. 

Application  for  confirmation  to  be  filed  when,  fi79. 

accepted  in  writing  by  majority  of  creditors,  etc.,  682. 

consideration  to  be  paid  and  costs  deposited.  682. 

date  and  place  of  hearing,  685. 

debts  having  priority,  must  be  secured  before.  684. 

second,  not  usually  allowed,  680. 

what  to  contain,  684. 
Certified  copy  of  order  confirming  evidence  of  titlp.  t.S.J. 
Collateral  attack  of.  697. 
Confirmation  of.  a  discharge  from  debts,  693. 

can   not   be   made   by   referee.   111. 

conditions  of,  692. 

distribution  of  consideration,  695. 
Consideration,  of  what  to  consist.  683. 
Construction  of  provision  relating  to,  678. 
Courts  of  bankruptcy  to  confirm  or  reject,  692. 
Discharge,  refusal  of,  as  a  bar,  680. 


1332  INDEX. 

Referenpes  are  to  pages. 

Compositions  (continiu'd)  — 

Disputed  claim,,  .provided  for,  693. 

Distribution,   696. 

Effect  of,   693. 

Failure  to   pay,   revives   debt,   695. 

False  claims,  penalty  for  using  in,  661. 

Fraud  vitiates,  691,  695. 

Fraud  presumed  when,  690. 

Greneral   nature   of,  677. 

Hearing  of  application,  685. 

Majority  of  creditors  in  number  and  amount  must  agree  to,  677, 

Meeting  of  creditors  to  consider  terms,  680. 

notice  of,   681. 

petition    for,    680. 

who  may  vote  at,  681. 
Notice  to  creditors  of  hearing,  etc.,  685. 
Offer  of,  when  may  be  made,  679. 

who  may  make,  679.  ^ 

Opposing  a  confirmation,  685. 

because  against  interests  of  creditors,  686. 

because   bankrupt  not   entitled  to   discharge,  688. 

because   obtained   by   fraud,   689. 

burden  of  proof,  687. 

evidence,  687. 

hearing  of  objections,   691. 

notice  of  hearing,   691. 

trustee  can  not,  685. 
Order  of  confirmation,  692. 

appeal  from,  693.  ' 

effect  of,  693. 

evidence  as,   693,  697. 

judge  must  make,   692. 

operates   as  a   discharge,   693. 

referee  can  not  make,  111. 
Partnerships,   by,   681. 

Payments  of  claims  accruing  after  set  aside,  698. 
Power  of  Congress  to  provide  for,  67 
Purchase   of   claims   to   oppose,   690. 
Set  aside,  may  be  when,  697. 

court,  by  what,   697. 

on  ground  of  fraud,  691,  697. 

petition  to,  697. 

petition,  when  filed,  697. 

trustee,  elected  when,  698. 
Time  within  which  confirmation  may  be  made,  689. 

when  composition  may  be  offered,  679. 
Time  revests  in  bankrupt  on  confirmation  of,  693,  696. 
Vote  on  terms,  who  may,  681. 

Compounding"  claims— 

(See  Compromise.) 

Compromise- 
Notice  to  creditors  of  proposed,  699. 
Power  to,  G98. 
Trustees  may,  with  approval  of  court,  698,  716. 

Computation  of  time— 

(See  Time.) 


INDEX.  1333 

References  are  to  pages. 
Computing-  number  of  creditors— 

To  join   in   involuntary  petition,  190,  202. 

interest  may  be  added.  193. 
Voting  at  creditors'  meeting,  277. 

Concealing— 

Books  of  account,  records  of  bankrupt,  prevents  discharge,  748. 

what  constitutes,  748. 
Property,  by  bankrupt,  656    (see  Offenses.) 
Property  of  bankrupt  with  intent  to  defraud,  etc..  effect,  160. 

document  by  trustee,  655. 

Concurrent  bankruptcies— 

Order  of   proceeding,  228-9. 

Conditional  payment— 

(See  Mortgages  and  Transfees.) 

Conditional  sale — 

May  not  pass  title  to  bankrupt,  375. 
Property  sold  on,  passes  to  trustee,  when,  404. 

Conducting  bankrupt's  business— 
By  receiver,  211. 

Confirmation  of  composition— 

(See  also  Composition.) 
Conditions  of,  692. 
Discharge  from  debts,  a,  693. 
Effect  of,  693. 
Judge  must  order,  69?. 
Referee  can  not  order,  111. 

Confusion— 

Of  goods  in  bankrupt's  possession,  373. 
Of  trust  property,  413. 

Congress,  power  of— 

Conferred  by  the  constitution,  17. 

English  bankrupt  laws  do  not  limit,  17. 

Establish  to,  courts  of  bankruptcy,   19. 

Establish,  to,  system  of  bankruptcy,  17. 

Exclusive   to   extent  exercised.    19. 

Limited  to  no  class  of  persons,  17. 

May  adopt  state  laws,  19. 

Modify  obligation  of  contracts,  18. 

Provide  for  composition  to,  678. 

Uniformity   required,   what,   19. 

When  exercised  suspends  state  laws,  23. 

When  not  exercised   states   may  enart  such  laws,   20. 

Connecticut— 

Exemption    laws    oi'.    457. 

Territorial  jurisdiction  and   time  of  holding  courts  In,  38. 

Consent- 
Arbitrators  chosen  by,  700. 

Case  certif'.ed  for  trial  to  circuit  court  by,  101. 
Defendant  may  be  sued  in  what  court  by  his,  SO. 
Involuntary  petition  can  not  be  dismissed  by,  until  notice,  239. 
Voluntary  petition  can   not  be  dismissed  by,  Tinlil  nntlrp.  187. 


]iVM  TNDKX. 

References  are  to  pages. 

Consideration- 
Composition  for,  of  what  to  consist,  683. 
Proof  of  claim  must  be  set  forth  in,  327. 

Consolidation— 

Of  causes  in  bankruptcy,  228,  252. 

Constitution- 
Bankruptcy,  provision  relating  to,  17. 

Contravene,  provision  adopting  state  laws  as  to  exemptions  does 
act  of  1898  does  not.  20. 
as  to  mechanic's  liens  does  not,  602. 
as  to  validity  of  transfers  does  not,  394. 
not,   19,  426. 
compositions,  for,   does  not,  678. 
impairing  obligation  of  contract  does  not,  18. 
Does  not  prevent  act  applying  to  particular  classes,  18. 
Does  not  limit  to  bankruptcy  as  distinguished  from  insolvency,  18. 

Construction- 
Rule  of,  as  to  act,  69. 

as  to  provision   for  composition,   678. 

"Contemplation  olf  bankruptcy"— 

Meaning  of,  571n,  750. 

Contempt — 

Acts  which  constitute,  666. 

Answer  of  contemnor,  673. 

Arrest  of  bankrupt  for,   638. 

Attorney,  by,   135,   670. 

Court  of  bankruptcy  to  punish  for,  72,  666, 

committed  in  another,  675. 

to   release   contemnor,    when,   674,   675. 
Examination,  during,   622. 
Hearing,   674. 

Nature  of  proceedings  for,  670. 
Practice,   pleadings  and   procedure,    671. 
Punishment  for,  675. 
Referee — 

can  not  punish  for,  111,  116. 

certifies  facts  to  judge,  116,  671. 
Replevin  property  in  state  court,  to,  when,  374. 
Relief  of  habeas  corpus,  676. 
Review,   676. 

State  court  can  not  punish  for,  before  referee,  623. 
Who  are  guilty  of,  666,  et  seq. 

Contingent  claims- 
How  proved,  324. 
When  entitled  to  share  in  dividend,   720. 

Contract- 
Bankruptcy  does   not  discharge,   418. 
Belonging  to  wife  of  bankrupt,   418. 
Debts  founded  upon  may  be  proved  and  allowed,  301. 
Obligation  of  can  be  modified  by  Congress,  18. 

can  not  be  impaired  by  states,   21. 
Trustee  vested  with  title  to  rights  arising  upon,  417. 

involving  personal  injury,  419. 

for  personal  skill,  419. 


INDEX.  1335 

References  are  to  pages. 
Consular  oflacers— 

Oaths,  etc.,   may  administer,   1136. 

Controversies — 

Arbitration   of,    698. 

Certified  to  circuit  court  for  trial,  231. 

to  supreme  court  from  C.  C.  A.,  799. 
Compromise  by  trustees  of.  354,   698,   716. 

Jurisdiction  of  appellate  courts  of,  in  bankruptcy  proceedings,  790. 
Notice  to  creditors  of  proposed  compromise  of,  699,  716. 
What  are,  at  law  and  in  equity,  104. 

Conveyances— 

Act  of  bankruptcy,  as  an,  159. 

Bankrupt  to  execute,  to  trustee  of  foreign  property,  367. 

Constitutes  a  preference,  when,  571. 

Fraudulent   under  the  act,   385. 

Set  aside  when  fraudulent.  605. 

Subsequent  to  act  within  four  months  to  defraud,  etc.,  void,  389. 

Trustee  to  execute  to  purchaser,  713. 

Within    four   months    while    insolvent,    void    by    state    laws,    void 

under  act,  393. 
Within  four  months  to  prefer  a  creditor,  385. 

Copartnership— 

(See  Pabtnership. ) 

Copy- 
Bankrupt  to  prepare,  make  oath  to  and  file  in  triplicate,  182,  221. 

claim  for  exemptions,  of,  182,  221. 

lists  of  creditors,  etc.,  of,  182,  221. 

schedule  of  property,  of,  182,  221. 
Claims  allowed,  withdrawn  may  be,  on  leaving,  338. 
Order  approving  trustee's  bond,  of.  certified,  evidence  of  title.  367. 

confirming  or  setting  aside  composition,  of  jurisdiction,  etc., 
693,  697. 
Papers  of,  certified  to  be  transmitted  to  clerk  bv   referee,  when, 

123,   735. 
Petitions  in  duplicate  for  clerk  and  bankrupt.   182.  201. 
Referee,  certified,  of  proceedings  before,  evidence,   113.   735. 
Schedule  of,  bankrupt  to  furnish  clerk,   referee  and  trustee,  182, 

221. 

Copyrights— 

Pass  to  trustee,  378, 

Corporation- 
Admission  of  inability  to  pay  debts.  169. 
Bankrupt,   when   to   be   judged    involtinlary,    146,    l.')l.    169. 

can  not  be  adjudged  voluntary,  141. 
Debts  owing  by,  to  be  adjudged  involuntary,  141. 
Definition  of,  146. 

Dissolved   may  be  adjudged  bankrupt,   151.   195. 
Domicile  of,  425. 

Officers'   liability,   effect   of   discharge   upon.    777. 
"Person"  includes,   172. 
Private  banker  can  not  be,  143. 
Proof  of  claim  by,  322. 

municipal,    322. 
Punishment  of  agents  of.  by  cotirts  of  bankmiitey.  68. 
Service  on,  how  made,  205. 
Stockholders'  liability,  effect  of  discharge  upon.  777. 


I'S'M  IXDKX. 

References  are  to  pages. 

Corporation   (eontimu'cl)  — 

Sureties  on  referees'  bonds.  109. 
Sureties  on  trustees'  bonds,  350. 
Trustees   may  act  as,   349. 

Costs- 
Adjudication,   in  contested,   234. 
Administration,   of,   entitled   to   priority,   725. 

approved  by  court,  725. 

include  attorney's  fee  for  bankrupt,  725. 
attorney's  fee  for  petitioners,   725. 
expenses  of  officers,   725. 
fees  and  mileage  of  witnesses,  725. 

payment  of,   not  a  voidable   preference,   561. 
Amendment,  239. 
Attorneys'  fees  taxed  as,  139. 
Contested  adjudications,  in  case  of,  234. 
Depositions,   of  irrelevant,  etc.,  623. 
Deposit  .or,   182,   202. 

when  none  required,  183. 
Exempt  property,  to  be  paid  out  of,  435. 
Included  as,  what,  725. 
Involuntary  proceedings,  in,  241. 
Judgments  for,  courts  of  bankruptcy  may  render,  69. 

on,  rendered  pending  bankruptcy,  290. 
Partnership   proceedings   in,   252. 
Penalty,  on  recovery  of,  730. 

Poor  person   not   required   to  deposit,   when,   182,  202. 
Preserving   estate,    of,    entitled    to   priority,    729. 
Provable  debt,  when,  301. 
Referee's  fees,  126. 
Re-examination   of   claim,   344. 
Removal  of  trustee,  357. 
Revoking   a    discharge,    788. 
Sale,  of,  715. 

Seizure  of  bankrupt's   property,  217. 
Set  aside  a  discharge,   788. 
Taxation  of,  by  courts  of  bankruptcy,  69. 
When  clerk  to  pay  out  fees  collected  as,  130. 

Counselor  at  law- 
Fees  of,  included  in  cost  of  administration,  135,  725   (see  Fees.) 

payable  by  obligors  of  bond,  217. 
Payments,    transfers    to,    by    insolvent,   when   re-examined,   586. 
Referee  can  not  practice  as,  114. 
(See  also  Attobney.) 

Counterclaim- 
Allowed,  when,  308,  310. 
Of   a  preferred   creditor,   317. 
Provable   debt,   must  be  a,   315. 
Waiver   of,   314,    317. 
When  debt  purchased  as  a,  310,  316. 
(See  also  Set-off.) 


Courtesy- 


Exempt  property,  in,  433,  437. 

Trustee  takes  subject  to,  396. 

Trustee  takes  bankrupt's   right  to,   395. 


INDEX.  1337 

References  are  to  pages. 
Courts- 
Appeals  and  writs  of  error,  790. 

to  supreme  courts  of  territories,  807. 

to  U.  S.  circuit  court  of  appeals,  816. 

to  U.   S.   supreme   court,   795. 
Arbitration  of  controversies,   698. 
Creation  of,  of   bankruptcy,   33. 
Depositions,   laws   governing,   232,   344,   628. 
Evidence,    232,    344. 
Jurisdiction  of,   67. 

of  appellate,   790,  et  seq. 

of  circuit  courts,  101. 
Jury  trials,  231. 

Newspapers,  designation  of,  for  notices,  269,   736. 
Oaths  and  affirmations,  administration  of,  1136. 
Rules,  forms,  etc.,  U.  S.  supreme  court  to  prescribe,  845. 
Suits  by  trustees,  358. 

Courts  of  bankruptcy- 
Adjudge  person,  etc.,  bankrupt,  67. 
Appeal — 

to  supreme  courts  of  territories,  807. 

to  U.  S.  circuit  court  of  appeals,  816. 

to  U.  S.  supreme  court,  795. 
Arbitrator,   appoint,  when,   700. 
Assets,  collect  and  distribute,  96. 
Bar  to  suits  in  other  courts,  proceedings  in,  77. 
Banking   institutions,   designate   as   depositories,    353. 
Business    of    bankrupt,    permit    temporary    transaction    of,    211. 
Claims,  allow  and  reject,  76. 
Confirm  or   reject  compositions,   692. 
Contempt,  punish  for,  72,  666. 
Creation  of,  33. 
Costs,  tax,  69. 
Definition  of,  33. 
Discharge  bankrupts,  754. 
District,  of  bankruptcy,  67. 
District  of   Columbia,  supreme  court  of.   33. 
Exemptions,    determine,    428. 
Extradite   bankrupts,   646. 
Jurisdiction  of,   67,  et  seq. 

attaches  when,   76. 

appellate.    790. 

limited   in   their  "respective  districts,"  78. 

distinct  from  jurisdiction  as   district  courts,  33. 

supreme  court  of  United  States,  795. 

U.   S.  circuit  court  of  appeals,  816. 

U.  S.  circuit  courts,  101,  103. 
bankruptcy,    101. 

concurrent  with'  courts  of  bankruptcy.  G38,  663. 
law  and  equity,  103. 
Marshals,  appoint  to  conduct  business,  211. 
Meetings  of  creditors,   when   to  call,   279. 
Newspapers  to  publish  notices,  designate,  269,  736. 
Open  at  all  times,  34. 
Orders,  make  and  enforce,  68. 
Paramount  to  state  courts,  when,  97. 
Petition,  debtor's,  in  what  court  to  file,  J174. 

creditor's,   in   what  court  to  file,    107. 

to  supervisp  ?n   <~'.  C.   A.,   813. 
PosFcrsion  of,  100,  370. 
Powers,    71. 


13S8  INbKX. 

References  are  to  pages. 
Courts  of  bankruptcy  (continued)  — 

Powers   uuspocified,   09. 
Proceedings  of,  continuous  34. 

nature  of,  70. 
Punish  bankrupts,  68. 
Receivers,  appoint,  72,  211. 
Referees,  appoint  and  remove,  107. 

confirm,  etc.,   records  and   findings,  68L 
Reference  after  adjudication,  110. 
Stay  suits,  72,  77,  87,  et  seq. 
Substitute  additional  parties,  68. 
Terms  of,  34. 
Transfer  cases,  228,  252. 
Try  bankrupts,   68. 
Trustees,  appoint,  when,  72,  276,  349. 

direct,  to  prosecute  or  defend   suits,  77. 

official  or  general,  can  not  appoint,  349. 

Coverture— 

As  a  defense,  227. 

Credit- 
Mutual,  and  debt,  308. 

Set-off,  of  new,  by  preferred  creditor,  317. 
(See  also  Mutual  Debts  and  Credits.) 

Creditors- 
Answer  to  voluntary  petition,  can  not,  184. 
Answer  to  petition  by,  222. 
Appearance   of,   219. 

by  an  attorney  for,  220. 
Attorney  of,  should  not  represent  bankrupt,  134. 
Claims,  allowance  of,  272,  274,  340. 
filing   after    proof,    337. 
hearing  objections,  272. 
lost  or  destroyed,  how  proved,  330. 
of  one  bankrupt  against  another,  323. 
penalty,  due  as  how  far  allowed,  730. 
preferred,  not  allowed  unless,  etc.,  332. 
proof  of,  326. 

when    founded    on    instrument  of    writing,   330. 
reconsideration  of,  342. 
rejected,   dividend  may  be  recovered,  346. 
secured,  of,  allowed  for  what,  331. 

claims  not  counted  unless,  etc.,  270. 
not  entitled  to  vote  at  meetings,  271. 
value  of  securities,  how  determined,  271. 
secured   by  individual   undertaking,   how   proved,   298. 

subrogation  to  extent  of  creditors'    rights,   298. 
time  for  proving,  325. 

of  infants,  etc.,  325. 
withdrawn,  on  leaving  copy,  330. 
writing  when  founded  upon,   how   proved,   330. 
Class,   of  same,   576. 

Computing  number  of,  to  file  petition,  190. 
employees    not    counted,    192. 
relatives    not   counted,   192. 
Debts  due  as  penalty,  how  far  allowed,  730. 
Definition    of,    269. 


INDKX.  1339 

References  are  to  pages. 

Creditors   (continued,)  — 

Dividends  paid  first  to  certain   residents,   722n. 

payment  on  allowed  claims,  356,  718,  732. 

recovery  of,  when  claim  rejected,  346,  3C6. 
Entitled  to  share  in  distribution,  719. 
Estopped  from  joining  in  petition,  101. 
Foreign,  effect  of  discharge  upon,  75C. 
Include  agents,  attorneys,  proxies,  209. 
Individual  sharing  in  partnership  assets,  257. 
Intervene   in   involuntary   proceedings,   may,    220. 

in  partnership  proceedings,  253. 
Involuntary  petition,  number,  etc.,  necessary  to  file,  190,  202. 

amount  of  claims,  192. 

estoppel  to  file  when,  191. 
Joining  in  petition,  202. 
Jury   trial,   not  entitled  tOj   230. 
Lists  of,  bankrupt  to  make,  178,  221. 

referee  to  examine,  113. 

to  prepare  and  file  when,  178,  221. 
Meetings,  first,  held  when  and  where,   268. 

bankrupt  to  attend  first,  272,  274,  631. 

call  of,  by  court,  w^hen,  279. 

final,   280,  718,  734. 

notice  of,  268. 

place  of,  268. 

presiding  officer,  duties  of,  112,  273. 

subsequent,   279. 

to  consider  composition,   680. 

voters   at,   269. 
(See    Meetincs    of    Ckeditors.) 
Notice  to,   of   compromise  of  controversy,   699,   71G. 

dismissal    of    proceedings,    187,    2."9. 
of  petition,   187,   239. 

dividends,   of   declaration  and   time  of  payment.   718,   720. 

examinations  of  bankrupt,   617. 

final  account,   of  filing,   734. 

final  meeting,   718. 

hearing,  on  application  for  confirmation,  etc.,   685. 

meetings,   of,  268. 

petition   for  discharge,   736. 

referee  to  give,  123. 

sales  of  property,  703,  706,  707. 
Numl>er  necessary  to  join    in  petition.   190,   192. 

employefs   and    relatives    not    counted,    192. 

necessary   for  court   to   call    meeting.   279. 
to  call  meeting  at  designated  place.  279. 
to  accept  an  offer  of  composition.  677.  681. 
to  pass  a  matter  by,  277. 
Oppose  discharge,  when,  740. 

confirmation    of   romposillons.   how,   685. 
Ordfr  for  examination,  may  apply  for.  616. 
Partnershii),   may   join    in    petition  against   individual.   245. 

sharing  in   inriividual  estate.s,  257. 
Partnership  and   individual.  260. 
Petition,  averments  as  to.  in.   198. 

partnerships,  against.  243. 

number  necessary  to  join  in,  190. 

who  may  join  in.  189. 
Preferred,  who  are.  560.  et  seq. 

claims   not   allowed    unless,   etc..    332. 
Present  at  meetings,   277. 


1340  INDEX. 

References  are  to  pages. 

Creditors  (continued)   — 

Priority,  entitled  to,  can  not  vote,  etc.,  270. 

Proof  of  claims  of,  321. 

Proxy,  included  under,  269. 

Referee   to  give   notices   to,   122. 

Relatives   not   counted    in    petition   when,    192. 

Rights  of,  proving  after  dividends  have  been  declared,  722. 

Secured,  defined,  004    (see  Skcukki)  Creditoks-.) 

and  prior,  priority  between,  730. 

claims  allowed  for  what  sums,  331. 

rights    of,    604. 

value  of  securities  held  by,  how  determined,  331. 
Set-offs  between  bankrupt  and,  307. 
Share  in  estate,  who  are  entitled  to,  719. 
Suits   to   set   aside  preferences,  can   not  bring,   605. 
Time  for  proving  claims,  325. 
Tort  claimant,  not,  189,  318. 
Trustee  appointed  by,  274,  348. 

bond  of,  fixed  by,  278. 
Who  are,  190. 

(See  also  Meetings  of  Cseditobs,  Secured  Creditor  andt  Pkeferbed 
Creditor.  ) 

Criminal  proceeding- 
Testimony  of  bankrupt  can  not  be  offered  against  him  in,  504. 

Crimes  and  offenses— 

Concealing  property  while  bankrupt,  656.     (See  Offenses.) 

Contempt,  666,  et  seq.   (see  Contempt.) 

Courts  of  bankruptcy  to  punish  for,  663. 

Embezzlement  by  trustee,  655. 

Extorting  money,   etc.,  662. 

False  claims,  presenting  under  oath,  661. 

using  in  composition,  661. 
False  oath  or  account,  making,  660.     (See  Offenses.) 
Indictment  or  information,  limitation  of,  664. 
Misappropriation  of  property,  655. 
Practice  and  procedure,  664. 

indictment,  averments  in,  665. 
Receiving  property  from  bankrupt  with  intent  to  defraud,  etc.,  662. 
Referee  acting  when  interested,  663. 

purchasing  property  of  bankrupt,   663. 

refusing   to    permit   inspection    of   accounts,    etc.,    663. 
Trustee  refusing  to  permit  inspection  of  accounts,  663. 

misappropriating,  etc.,   property,  655. 

secreting  or  destroying  document,  655. 
Who  may  be  punished,  665. 

Crops— 

When  a  part  of  the  estate,  402. 

Custody- 
Effect  of,  of  a  court  not  a  court  of  bankruptcy,  96. 
In  a  court  of  bankruptcy,  96. 
Of   bankrupt  court,    what  constitutes,    100,    370. 
Of  court,  jurisdiction  over  property  in,  76. 
Of  state  court,  to  get  property  from,  99. 
what  necessary  to  constitute,  100. 


rsDEx.  1341 

References  are  to  pages. 

Allowance  of,  on  dismissing  petition  for  seizure  of  property   217 
Instituting  proceedings  against  a  debtor  for,  241. 
Death- 
Bankrupt's,  does  not  abate  proceedings,  653. 
Party's,  appellate  court,  in,  840. 
Party's,  before  appeal  taken,  841. 
Trustee's,  does  not  abate  suits,  358. 
Widow's,  and  children's  rights,  396. 
Debt- 
After  acquired,  283. 
Allowance  against  estate,  272,  340. 

account  or  contract,  founded  on,  301. 
costs  taxable  against  involuntary  bankrupt,  plaintiff   301 
interest,   289,  299. 
mutual,  and  credits,  307,  et  seg. 
objections  to,  272. 

provable,  founded  on,  reduced  to  judgment  af  terfiliug  jietition,  292. 
provable,  generally,  281. 
rent,  304. 

review  of,  final,  346. 
torts,  318. 

vote,  to  entitle  creditor  to,  271. 
Amount  necessary  for  involuntary  proceedings,  190. 

interest  may  be  added,  193. 
Any  person  owing,  may  become  voluntary  bankrupt,  141. 
Barred  by  statute  of  limitations,  319. 

Claims,  proof  and  allowance  of    (see  Claims),  321.  et  seq. 
Contingent  demands  and  liability  not,  286. 
Contract,  founded  on,  allowed,  301. 
Conversion  of  joint  into  several  and  vice  versa,  264. 
Corporation  owing  $1,000  or  over  may  be  adjudged  bankrupt,  142. 
Created  by  fraud,  769. 
Definition  of,  283. 
Discharge   does  not   release  from,   what,   694,   760,   et   seq. 

effect  of  on  firm,  265. 
Duty  of  bankrupt  to  examine,  633. 
Equitable,    what   are,    285. 
Firm,  what  are,  260. 

Fixed  liability,  having,  may  be  allowed,  287. 
Fixed  liability,  what  is.  284. 
Individual,   what  are,   262. 
Interest  on,  289,  299. 
Joint  and  several,  what  are,  262. 
Judgments  may  be  allowed,  289. 
Liquidated,  bow,  282. 
Meaning  of.  283,  289. 
Mutual,  and   credits.   307,  et  seq. 
Open  account,   founded   on,  allowed.   301. 
Payment  of,  having  priority,  723. 

accruing  after  comi)osition  set  aside,  etc..  698. 
Penalty  or  forfeiture,  owing  as  how  far  allowed.  730. 

presenting  false,  662. 
Petitioning  creditors',  denied  in  answer.  226. 
Priority,  having,  723. 

between    lienors.    728. 
costs  of  administration.  725. 
approved   by   court,   725. 
includes  what,  725. 


1342  INDKX. 

References  are  to  pages. 

Debt  (continued)  — 

Priority  ( coiitimied ) — 

costs  of  preserving  the  estate,  725. 

expenses  of  recovering  concealed  property,  725. 

filing    fees,    725. 

on  setting  aside  composition,  or  revoking  discharge,  730. 

owing  to  person  entitled  to  priority,  727. 
assignment,  services  in,  729. 
liens  distinguished  from.  727.  728,  730. 
state  insolvency  laws,  by  728. 

penalty,  due  as,  730. 

referee  to  direct  trustee  to  pay,  730. 

secured  and  prior  creditors,  between,  730. 

secured  creditor,  723. 

taxes,  723. 

United   States,  due  to,  729. 
subrogation  of,  729. 

wages,   726. 
Proved,  how,  327. 

necessary  to  be,  321. 

not  until  filed,  337. 

preferred    creditor,    by,    332. 

secured  creditor,   by,   295,  et  seq.,   331,  604. 
Provable,  discharge  releases  from,  760. 

reduced  to  judgment,  290. 

what   are,   193,   281,  761. 
Released  from,  by  discharge,  except,  760. 

administrators,   773. 

allowable,  need  not  be,  760. 

attorneys,   774. 

claims  not  scheduled,  768. 

codebtor's,  756,  776. 

defalcation  as  officer  created  by,  774. 

embezzlement,  for,  769. 

executors,  773. 

false  pretenses,  etc.,  judgment  in  action  for,  767. 

fiduciary  capacity,  created  while  acting  in,  770. 

fraud,  created  by,  769. 

guardians,  772. 

judgments  in  actions  for  fraud,  etc.,  764.     (Sf^e  Judgments.) 

liabilities  for  fraud,  etc.,  764.     (See  Judgments.) 

misappropriation,  etc.,  775. 

not  scheduled,  768. 

officers,   774. 

provable,   must  be,  761. 

taxes,  762. 

sureties,  756,  776. 

torts,  318. 

trustees,  773. 
Revived  after  discharge  by  a  new  promise,  779. 

by  failure  to  pay  composition,  695. 
Secured,  how  far  provable,  283. 

Set-offs  allowed  between  bankrupt  and  creditor,  308. 
Status  of.  when  fixed,  282. 
Statute  of  limitation,  barred  by,  319. 
Taxes  payable  in  atlvance  of  dividends,  723. 

trustee  credited  with,  on  filing  receipt,  etc.,  723. 
Tort,  189,  318. 

What  is  a,  189,  283,  289.  318,  765. 
(See  Provable  Claim.) 


INDEX.  1343 

Beferences  axe  to  pages. 
Debtor- 
Absconding,  154. 
Petition  against,  198. 
Petition  by,  176. 

Petition  by  and  against  firms,  248. 
Property  of.  seized,  216. 
(See  also  Baxkbupt,  Involuntary  and  Voluntabt  Pbocekuinos.) 

Deceased  insolvent— 

(See  Death.) 

Declaration— 

(See  Dividends.) 

Deeds- 
Pass  to  trustee,  377. 

Default- 
Proceedings  on,  236. 

Defeasible— 

Title  of  bankrupt  prior  to  appointment  of  trustee.  365. 

Defense- 
Committed  no  act  of  bankruptcy,  225. 
Jurisdictio-n,  want  of,  227. 
Infancy,  227. 

Involuntary  petitions,  224. 
Married  woman,  227. 
Non  compos  mentis.  227. 
Payment,  227. 

Solvency,  155,  161,  168,  169,  196,  225^ 
Trustee  may  be  ordered  to  make,  358. 

Definitions— 

(See  Sec.  1  of  the  Act.)    1119- 

Delaware— 

?erHS  5uH'm'uo?aad  time  «.  holding  courU,   ,„.  n. 

Demand— 

(See  Debt.) 

Demurrer— 

To  answer  not  proi)er,  230. 
To  involuntary  petition,  223. 

Denial  of  bankruptcy— 

As  a  defense,  155,  IGl.  168.  169,  196.  225. 

Deposit—  ,  „   rs9 

Costs,  182. 

except   a   poor    person,    i«-i. 
Fees,  to,  with   clerk.   182. 
Trustee    to,  funds  of  estate.  35o. 


1344  INPEX. 

Refereijces  are  to  pages. 
Depositions- 
Involuntary   cases,   232. 
Notice  of   taking,   344,   629. 
Prove   claims,   to,   327. 

Referees,  in  proceedings  before,  116,  344,  628. 
Right  to  take,  determined  by  U.  S.   laws,  232,  344,  628. 

Depositories- 
Bond  to  give,  353. 
Designation  by  courts  of  banks  as,  for  bankrupts  money,  353. 

Deputy  Marshal- 

Fees  and  expenses  of,  133. 

Detention- 
Bankrupt,  of,  for  examination,  640. 

length    of,    640. 
Property   of,   on   petitioner  giving  bond,   216. 

Diplomatic  officers  of  United  States- 
Oaths,  etc.,  rhay  administer,  1136. 

Disability- 
Infant's,  etc.,  rights,  325. 
Judge's,  case  certified  to  circuit  court,  102. 
Judge's  certificate  of,  by  clerk,  130. 
Referee's  effect  of,  107. 

Discharge- 
Appeal  from  judgment  allowing,  818. 
Application  for,  736. 

by  whom  made,  736. 

hearing  of,  752. 

hearing  of,  bankrupt  to  attend,  631. 

how  made,  736. 

notice  to  creditors,  737. 

published  in  newspaper,  737. 

second,  738,  754. 

when  and  where  to  make,  737. 
Attachment,    effect    on,    756. 
Books  of  account,  concealing,  etc.,  prevents,  748. 

•  concealing,   etc.,   what  is,   748. 

imputed,  can  not  be,   749. 

in  contemplation  of  banliruptcy,  750. 

intent,  750. 

negligence  in  keeping,  749. 

partnership,  749. 

what  are  proper,  748. 
Codebtor's  liability  not  affected  by,  756,  776. 
Collaterally  attacked,  can  not  be,  785. 
Composition,  confirmation  of,  operates  as,  693. 
"Contemplation  of  bankruptcy,"  meaning  of,  751. 
Court  will  not  seek  grounds  to  defeat,  754. 

what,  determines  effect  of,  759. 
Debts  released  by,  760. 
Effect  of,  general,  755. 

claims  not  scheduled,  768. 

codebtor,  upon  liability  of,  756,  776. 

debts  created  by  fraud,  etc.,  769. 

proving  does   not   release,   770. 
created  by  misappropriation  775. 
discharge  from  which  was  formerly  refused,  762. 


INDEX.  1345 

References  are  to  pages. 

Discharge  (continued)  — 

Effect  of,  debts  (contiuued) — 
not  allowable,  760. 
not  scheduled,  768. 
of  a  fiduciary  character,  771. 
officers,  of,  774. 
provable,  must  be,  761. 

what  are,  193,   281,  761. 

determined  by  what  court,  159. 

firm   and  individual   debts,   265. 

foreign,  to  release  domestic  debts,  758. 

foreign  creditors,   on,   domestic,   756. 

fraud,  etc.,  liabilities  for,  764   (see  Judgments). 

granted  after  appeal  taken,  784. 

granted  after  judgment  rendered,  784. 

judgments,  on,  756,  764.     (See  Judgment.) 

liens,  on,  755. 

new  promise  waives,  779. 

partnership  cases,  in,  265. 

revoking,  of,  788. 

stockholders'  and  corporate  officers,  liability,  777. 

surety,  upon  liability  of,  756,  776. 

taxes,  762. 

torts,  318. 

United  States,  debts  due  the,  752. 
Fraud,  may  be  revoked  for,  784. 
General  nature  of  a,  755. 
Granted  when,  754. 

when  not  granted,  754. 
Grounds   for   opposing,   744. 
Guarantor's   liability   not   affected,   776. 
Judgment  after,  756. 

Jurisdiction,   lack  of,  ground  for  opposing,  746. 
Misappropriation,  debts  created  by,  775. 
Must  be  pleaded,  782. 

Offense  punishable  by  imprisonment  prevents.  747. 
Officers,   debts  of,   775. 
Oppose,  appearance  to,  740. 

because  of  failure  to  keep  books,  etc.,  748. 

because  guilty  of  an  offense,  747. 

estoppel,  753. 

grounds  to,  744. 

hearing  objections,  742,  752. 

how  to  oppose  a  discharge,  739. 

partners,  how  to  oppose,  265. 

pleading  to  objections,  739,  752.  / 

specification  of  objections,  742. 

who  may,  738,  754. 
Order  granting,  754. 

denying,  754. 
Partners,  from  what  debts,  254,  265. 
Partner.ship  cases,  effect  of.  265. 
Payment  of  claims  accruing  aft  r  revocation,  789. 
Pleading  in  bar,  of  suit  on  debt.  782. 
Records,  destroying,  etc..  prevents,  748. 
Referee  can  not  grant  or  deny  a.  111. 
Releases,  what  debts,  760  et  seq. 
Revoked  or  set  aside.  784. 

application,  785. 

effect  of,  788. 

ground   for,   787. 


1840  1NI>KX. 

References  are  to  pages. 

Discharge  (eontiniiod)  — 

Hi'voked  ( continued ) — 

judgment,   788. 

laches,   what  is,   786n.. 

payment  of  claims  after,  789. 

proceedings.  787. 

title  vested  in  trustee,  789. 

within  what  time,  785,  788. 
Second  application  for,  barred  when,  738,  755. 
Specifications  of  objections,  742. 

amended  when,  743,  753. 

contain  what,  742. 

delay  in  filing,  how  pleaded,  752. 

filed  when,  742. 

must  be  in  writing,  742. 

pleading  to,  752. 

verification  of,  744. 
Sureties,  effect  of,  on,  by,  756,  776. 
Time  to  appear  and  file  specilications,  740. 

enlarging  such  time,  741. 
Waiving,  by  new  promise,  779   (see  New  Promise). 
(See  Debts.) 

Dismissal- 
Costs,  fees,  etc.,  allowed  respondent  on,  of  petition,  when',  217,  234. 
Notice  to  creditors  of,  involuntary  petition,  239. 

of  voluntary  petition,  187. 
Petition  of — 

by  judge,  233,  240. 

by  petitioners,  239. 

by  referee,  114. 

involuntary,  239. 

voluntary,  187. 

Disobedience— 

Of  orders  (see  Contempt). 

Distribution- 
Composition  set  aside  after,  698. 

Consideration,  of,  on  confirmation  of  composition,  695. 
Contingently  liable,  claims  of  persons,  720. 
Court  of  bankruptcy  to  make,  68. 
Creditors  having  priority  to  be  paid  in  full,  when,  719. 

between  secured  and  prior,  730. 

only  one  proves  paid  in  full,  when,  721. 

proving  after  dividend  declared,  722. 

secured,  to  be  paid  how,  719,  723. 

unsecured  to  be  paid  pro  rata,  719. 
Debts,  which  have  priority,  723.    (See  Debts). 
Dividends,  disposition  of  unclaimed,  356,  733. 

first,  when  declared,  718. 

how  declared,  720. 

how  paid,  732. 

recovery  of,  by  trustee,  356. 
Firm  and   individual  estate,   255. 
Funds,  when   there  are  several,  720. 
General  scheme  of,  717. 
Irregular,  effect  of,  722. 
Payment  to  attorneys,  718. 
Rights  of  creditors,   proving  after   dividends  have  been   declared, 

722. 


INDKX.  1847 

References  are  to  pages. 

Distribution  (continued)  — 
Settlement  of  estate,  733. 
Time,  722. 
Who  are  entitled  to  share,  719. 

District— 

Bankrupt  may  be  adjudged  in  which,  67. 

Involuntary  proceedings,  where  instituted,  197. 

Judicial,    extent    of,    34. 

Partnership  proceedings,  where  instituted,  251. 

Proceedings,  ancillary  in  other  districts,  86. 

Referee  of,  107. 

Removal  of  bankrupt  to  other,  647,  C48. 

Voluntary  proceedings,  where  instituted,  174. 

District  courts  of  United  States— 

Courts  of  bankruptcy,  33,  67. 
Jurisdiction  of,  in  bankruptcy,  67. 

at  law,  in  equity,  80. 

territorial,  of,  33,  67. 

District  of  Alaska— 

United  States  courts  in,  made  courts  of  bankruptcy,  33,  67. 

District  of  Columbia- 
Appeals  in  bankruptcy  in  the,  795. 
Exemption  laws  of,  459. 

Supreme  court  of,  a  court  of  bankruptcy,  33,  67. 
Territorial  jurisdiction  and  time  of  holding  courts  in,  38. 

Dividends— 

Attachment,  not  subject  to,  731. 

Checks,  how  drawn,  732. 

Contingent  claims  on,  720. 

Creditors   receiving,   not   affected    by   proof  of  subsequent    claims, 

722. 

entitled  to  receive,  719. 

residing  within  United  States  entitled  to  preference,  722,  n. 
Declaration  and  payment  on  allowed  claims,  718,  720,  723. 

first,   declaration   of,  723. 
subsequent,  723. 
Pinal,  time  of,  722,  734. 
First,  when  declared,  718. 

Interest  on   contested   claims  not  allowed,  721. 
Judgment,  on,  pending  in  appellate  court,  723. 
Limit  to  right  to  collect,  721. 
Lists  of  claims  and,  721. 
Minors  may  claim,  when,  733. 

Notice  to  creditors  of  declaration  and  time  of  iiaynu>nl.  Tis.  7..(i. 
Obtained  from  trustee,  how,  731. 
Payment  of,  when  and  how,  356,  718,  732. 
Recovery  of,  when  claims  rejected,  346,  356. 
Referees  to  declare,  122,  721. 

deliver  to  trustees,  sheets,  721. 
Trustee  to  pay,  when,  356,  732. 
Unclaimed  after  six  months,  disposition  of,  v^.i. 

after  one  year,  733. 
of  minors,  733. 

Docket— 

Of  clerk,  what  to  contain,  129. 


1348  INDEX. 

References  are  to  pages. 

Document- 
Bankrupt's  estate,  a  part  of,  377. 
Definition  of,  377. 

Destroying  or  secreting,  penalty  for,  655. 
Referee  may  require  i)roduction  of,  115. 
Trustee  vested  with  title  to,  377. 

Domicile — 

Bankrupt's,  what  is  the,  425. 

Corporation,  of,  425. 

Exemptions  governed  by  state  of  bankrupt's,  425. 

Only  one,  at  one  time,  425. 

Proceedings  may  be  instituted  in  district  of,  67. 

Dower- 
Estate  of  husband,  wife's  not  a  part  of,  396. 
Exempt,  when,  433,  437. 

contingent  or  inchoate  right,  438. 
Trustee  takes  bankrupt's  right  of,  395. 
Trustee  takes  subject  to,  396. 
Sale  of  land  free  of,  when,  438. 
When  widow  entitled  to  claim,  396. 

Drafts— 

Pass  to  trustee  as  a  part  of  the  estate,  407. 

Due- 
Debt  not,  may  be  proven,  287. 

Duplicate- 
Petitions  to  be  filed  in,  182,  201. 

Duties— 

Attorney  general's,  133. 

Bankrupt's,  272,  631. 

Clerk's,  129. 

Creditors',  at  meetings,  272,  273. 

Referee's,  122. 

Trustee's,  351. 

E. 

Earlier  acts  of  bankruptcy— 

When  amendments  setting  up  allowed,  228. 

Earlier  acts  of  cong^^ess- 

History  of,  6,  et  seq. 

Earnings — 

After  adjudication  belong  to  bankrupt,  416. 

Effect- 
Act  went  into,  when,  23. 

Election— 

Of  trustee,  113,  275,  357. 

To  take  encumbered  property,  372,  704. 

Eligibility— 

Of  referees,  107. 
Of  trustees,   349. 


Embezzlement — 


INDEX.  1349 

References  are  to  pages. 


Debts  created  by,  not  released  by  discharge   769 
Penalty  for,  656. 

Employees— 

Creditors,  as,  not  counted  in  petition,  192. 
Entitled  to  priority  in  payment,  when,  726. 

Encumbrances— 

(See   I>-CUMBBANCES.) 

Endorser— 

For  bankrupt  may  prove,  when,  295. 

Not  released  by  discharge  of  bankrupt,  776. 

Enforcement— 

Act,  creditors  should  take  steps  for,  274. 
Liens  and  preferences,  valid,  561,  599. 

dissolution  of,  when,  570. 

effect  of  discharge  upon,  755. 

judicial,  obtained  prior  to  four  months,  563. 

judicial,  obtained  within  four  months,  565. 

trustee,  by,  for  benefit  of  estate,   when,  569,  600. 

English  bankrupt  laws— 

History  of,  4. 

Enjoining  suits— 

(See  Staying  Suits.) 

Entry- 
Appearance,  how  made  and  what  to  include,  846. 
Appearance  in  appellate  court,  effect  of,  832. 
Cases  on  docket,  845. 

Equity— 

Appeals  taken  as  in  cases  in,  816. 
Jurisdiction  in,  appellate,  790. 

circuit  courts  of  United  States  in,  103. 

courts  of  bankruptcy,  in,  80. 
Law  and,  as  distinguished   from  bankruptcy,  104. 
Process  served  as  in,  205. 
Records  of  referees  kept  as  in  cases  in,  124. 
Rule  13  quoted,  205. 

Error- 
Appellate  jurisdiction  of  matters  of  law,  808   (see  Circuit  Court 

OF    Al'l'EALS). 

Referee,  of,  by  review  of  judge,  112,  118. 
Writ  of,  in  bankruptcy,  819. 
in  law  and  equity  cases,  790. 

Estates— 

Administration  of,  717. 

by  three  trustee^,  356. 

collection  of,  K'l,  et  seq. 

distribution,  717. 

partnerships,  255. 
Accretions  to  land  by  alluvium  a  part  of.  395. 
Acquired  after  adjudication  not  a  part  of,  415. 

what  is,  416. 

before  discharge  revoked,  789. 


1850  INDKX. 

References  are  to  pages. 

Estates  (continued)  — 

Actions,  contracts  on.  a  part  of.   417-420. 

exceptions  to  rule,  419. 

injuries  to  persons  not  a  part  of,  420. 

injuries  to  property  a  part  of,  420. 
Banlvrupt  to  examine  claims  against,  G33. 
Books,  377. 

Claims,  proof  and  allowance  of,  32G,  et  seq. 
Contingent  remainders  not  a  part  of,  395. 
Conveyed  by  trustee  when  sold,  605,  713. 
Costs  of  preserving,  entitled  to  priority,  725. 
Crops  a  part  of,  when,  402. 
Courtesy  and  dower,  395,  396. 
Custody,  in,  of  the  court,  when,  370. 
Debts  which  may  be  proved,  193,  281,  761. 

which  have  priority,  723. 

which  can  not  be  released,  760,  et  seq. 
Depositories  for  money,  353. 

Deteriorating,    proceedings    to   protect,    when,    216. 
Devised  property,  a  part  of,  395. 

Distribution,    general    plan    of,    717    (see    Distribution    and    Divi- 
dends). 

who  may  share  in,  719. 

after  composition  set  aside,  698. 
Dividends,   declaration   and   payment,  etc.,   720,  et  seq.    (see  Divi- 
dends and  Distribution). 

unclaimed  after  six  months,  paid  into  court,  733. 
after  one  year,  distributed,  733. 
rights  of  minors,  733. 
Dower,  395,  396. 
Encumbered  property — 

redeemed,  may  be,  704. 

sale  of,  free  from  lien,  706. 

sale  of,  subject  to  lien,  705. 

trustee  may  elect  not  to  take,  372,  704. 

value  of  encumbrance,  determined  how,  705. 
Equitable  interest  in  lands  a  part  of,  when,  396. 
Equity  of  redemption  a  part  of,  395. 
Exempt  property  not  a  part  of,  427,  429. 

when  it  may  become  a  part  of,  428,  431. 
Fee,  subject  to  an  easement  a  part  of,  when,  395. 
Final  settlement  of,  733. 
Firm  and  individual  property,  258. 
Fixtures,  when  a  part  of,  402. 
Franchise,  part  of,  when,  407. 
Fraudulently  conveyed,  property  a  part  of,  605. 

purchased  by  bankrupt,  when  not  a  part  of,  375. 
Goods  and  chattels  generally  a  part  of,  403. 
Good-will  a  part  of,  402. 

High  seas,  when  property  on,  a  part  of,  376. 
Individual,   partnership   creditors  sharing,   257. 
Information  concerning,  to  be  furnished  by  referee,  122. 
Injunction  to  protect,  214. 
Insurance  policies,  when  a  part  of,  408. 

bankrupt  may  keep  on  paying,  value,  409. 

exemption  of,  410. 

payable  on  death  of  bankrupt,  410. 
to  bankrupt,  409. 
to  third  persons,  409. 
Interference  with,  restrained,  215. 


INDEX.  1351 

References  are  to  pages. 

Estates  (continued)  — 
Inventory  of,  371. 

when  to  be  filed,  352. 
Lease  a  part  of,  396.  (see  Lease.) 

contracts  to  lease,  when  a  part  of,  401. 
Legacies,  when  part  of,  403. 

Levy,  whether  property  subject,  to,  depends  on  state  law,  394. 
Liens  against,  560,  599. 

dissolved,  when,  570. 

invalid,  when,  562,  599. 

judicial,  563. 

mechanics',   601. 

mortgages,  591. 

pledges,  597. 

rights  of  a  lienholder,  604. 

valid,  when,  561,  599. 
Memberships  in  exchanges  a  part  of,  406. 
Merchantable  condition,  trustee  may  put  in,  when,  702. 
Money  belonging  to,  how  and  where  deposited,  353,  717. 
Negotiable  instruments  a  part  of,  407. 
Notice  of  sale  of  property,  703,  706,  707,  711.  712. 
Orders  to  protect,  210. 
Partnership,  of,  258. 

individual  creditors  sharing,  257. 

interest  of  infant  partner,  part  of,  404. 
Pensions  not  a  part  of.  408. 
Perishable  property,  sale  of,  711. 
Possession,  when  trustee  entitled  to,  370. 

property  in,  of  third  parties  vests  in  trustee,  when.  373,  403. 
Property  of  bankrupt,  when  may  be  seized,  216. 

on  which  there  is  a  valid  lien,  562. 

when  released,  117,  219. 
Property  of  husband  or  wife,  when  part  of,  404. 
Protection  of,  210.     (See  Protection.) 
Real  property  a  part  of,  395. 
Redemption  of  encumbered  property,  704. 
Referee  should  not  collect,  111. 
Restraining  order  to  protect.  214. 
Reopened,  may  be,  when,  735. 

Reversion,  with  rent  incident  thereto  a  part  of,  395. 
Sale  of,  701,  712.     (See  Sale.) 
Set-offs  and  counterclaims  allowed,  308,  310. 
Settlement  of,  733. 

Secured  creditors  may  apply  for  sale,  708. 
Separate  property  of  wife,  not  part  of,  419. 
Shrinkage  of,  as  evidence  of  concealment,  658. 
Shares  of  stock  a  part  of,  405. 
Taxable,  where,  724. 
Temporary  investment  of  funds  of.  354. 
Title  to,  when  vests  in  trustee,  365. 

when  revests  in  bankrupt,  693. 

where  in  dispute,  711. 
Transfer  restrained,  215. 
Trust,  property  held  by  bankrupt  In.  not  a  part  of.  411. 

in  which  bankrupt  has  an  Interest  Is  a  part  of,  414. 

what  is,  412. 
Trustee  may  convey  by  deed,  605,  713. 

may  put  in  merchantable  shape  by  repairs,  etc.,  702. 

power  to  free  from  liens.  704.  ct  srq. 

power  to  sell  encumb'  red  property.  701. 

power  to  sell  unencumbered  property.  703. 


1352  INDEX. 

References  are  to  pages. 

Estates  (continued)  — 

Trustee  (coutinued) — 

to  report  condition  of,  352,  717,  734. 

what  Ivind  of  property  passes  to,  as  a  part  of,  365,  et  seq.,  376, 

709. 
what  title  to,  passes  to,  365,  708. 
Wearing  apparel,  405,  424. 
What  is,  71. 

Wife's  separate  property,  419. 
Estimate  of  value  of  security— 

To  allow  creditor  to  vote,  331,  604,  705,  710. 
Estoppel- 
Creditor,  of,  to  charge  acts  of  bankruptcy,  when,  191, 
to  oppose  discharge,  when,  739. 

Evidence- 
Acts  of  bankruptcy  not  in  petition,  inadmissable,  200. 
Against  bankrupt  can  not  be  used  in  criminal  proceedings,  625. 
Answers  of  witnesses  unsatisfactory,  proceedings,  when,  622. 
Burden  of  proof,  habeas  corpus  proceedings,  646- 

involuntary  petition,  232. 

suits  to  recover  property,  609. 
Certified  copies  of  proceedings  before  referee  as,  113,  735. 

order  approving  trustee's  bond,  of  title,  367,  371. 

confirming  or  setting   aside   composition,   of  jurisdiction, 

etc.,  693,  697. 
confirming  composition  of  revesting  title,  693,  697. 

papers  issued  by  clerk  or  referee,  as,  735. 
Concealment  of  property  by  bankrupt,  what  is,  of,  658. 
Claims,  proof  of,  326. 

instrument  of  writing  to  be  filed  with,  330. 

when  lost  or  destroyed,  330. 
Compulsory  attendance  of  witnesses  by  the  court,  232. 
Compulsory  attendance  of  witnesses  by  referee,  115. 
Criminal  proceedings,  testimony  of  bankrupt  can  not  be  offered  in, 

against  him,   625. 
Depositions,  in  involuntary  cases,  232. 

notice  of  taking,  344. 

prove  claims,  to,  327. 

referees,  in  proceedings  before,  344. 

right  to  take  determined  by  U.  S.  laws,  332,  344,  628. 
Habeas  corpus  proceedings  in,  644. 
Indictment  in  extradition  proceedings  as,  649,  650. 
Manner  of  introducing,  232. 
Order  confirming  composition,  as,  693,   697. 
Referees,  how  taken  before,  620. 

may  be  used  in  civil  cases  to  impeach  witness,  626,  628,  630. 

power  to  take,  115. 

preserved  by,  when,  123,  124,  620. 

record  of,  as,  735. 
Testimony  taken  on  examination  before  referee,  630. 
Title  of  trustee,  367,  371. 

Examination- 
Adjourned,  may  be,  613,  621,  622,  623. 
Answers  unsatisfactory,  when,  622. 
Application  for,  how  made,   616. 
Arrest  of  bankrupt  for,  614,  640. 
Attorney  may  attend  witnesses,  when,  620. 


INDEX.  1353 

References  are  to  pages. 

Examination   (continued)  — 
Bankrupt,  of,  612. 

after-acquired  property,  not  as  to,  416. 

compulsory  attendance  for,  640. 

creditors  to  have  notice,  618. 

custody,  when  in,  613. 

gratify  malice,  etc.,  not  to,  613. 

how  often,  612. 

judge  or  referee  direct  when,  612. 

proof  of  claims,  of,  examine,  633. 

second,  when  cause  shown,  612,  616. 

testimony  of,  may  be  rejected,  624. 

upon  what  topics,  623. 

when  bankrupt  can  not  be  required  to  attend,  617. 

witness  fees,  not  entitled  to,  617. 
Certifying  questions  to  judge  from  referee,  622. 
Conducted  by  whom,  620. 
Contempt,  622. 

Degrading  questions,  may  be  compelled  to  answer,  626. 
Deposition,  by,  628. 

Detention  of  bankrupt  about  to  depart,  for,  014,  640. 
District,  within  what,  614,  616. 
Expenses  of,  of  administering  estates,  725. 

of  bankrupt  attending,  when,  617. 
Extradition  for,  614. 
Incriminating  questions  need  not  be  answered,  625. 

waiver  of  privileges,  626. 
Manner  of  making  a,  619. 
Notice  to  Bankrupt  of  his,  613,  618. 

to  creditors  of  bankrupt's,  618. 

to  creuitors  of  application  not  required,  617. 

to  creditors  of,  of  witness  not  required,  618. 

to  witnesses  of,  how  given,  618. 
Objections,  who  to  decide,  621. 

who  may  make,  621. 
Order  for,  by  whom  application  for  made,  616. 

by  whom  made,  615. 

creditor  may  apply  for,  616. 

extract  of  record,  617. 

trustee  may  apply  for,  616. 
Persons  other  than  bankrupt,  614,  616. 
Persons  outside  district,  628. 
Privileged  communications,  627- 
Punish  disobedience  of  subi)nena,  619. 
Referee  may  make,  of  bankrupt,  612. 

may  make,  of  witnesses,  115,  614,  616. 

must  note  exceptions  taken,  6?1. 

of  another  district  may  make,  when,  614,  616. 
Refusal  to  answer,  622. 
Service  of  notice  for,  617. 

of  Rubpfrna  for,  618. 
Stenographer  may  be  employed.  620. 
Time  bankrupt  may  be  detained  for,  640. 

within  which  bankrupt  may  be  examined,  613. 
Testimony  upon,  may  be  used  wlun,  n.^o. 
Topics  upon  which,  of  l)ankrupt  may  be  made,  623 

upon  which,  of  witnesses  may  be  made.  626. 
Wife  of  bankrupt,  614. 
Witnesses  of,  614. 

privilege,    627. 

summoned  how,  618. 


1854  INDKX. 

References  are  to  pages. 
Examination  (eontinnod)  — 

Witiu'sst's  of  ( contiimi'd ) — 
•    upon  what  topics,  626. 

who  may  be  subject  to,  614,  616. 

Exceptions— 

How  taken  before  a  referee,  621. 

Executors — 

Debts  of,  not  released  by  discharge,  773. 
Proof  of  claims  by,  324. 

Exemptions — 

Appraising  exempt  property,  441. 
Burden  of  proof,  440. 

Constitutionality  of  provision  relating  to,  426. 
Construction  of  laws  relating  to,  423. 

Claim  for,  bankrupt  to  prepare  copies  of,  make  oath  to  and  file  in 
triplicate,  etc.,  178,  432. 

time  of  filing,  433. 

who  may  claim  if  bankrupt  fails  to,  432. 
Costs  to  be  paid  out  of,  435. 

Court  of  bankruptcy  to  determine  claims  for,  428. 
Determined  how,  428. 
Crops,  on  exempt  homestead,  424. 
Domicile  of  bankrupt,  425. 
Domicile  of  bankrupt,  law  of,  governs,  423. 

where  domicile  is  changed,  425. 
Dower,  433,  437. 

contingent  and  inchoate  right  of,  438. 
Fraudulent  conveyance  or  encumberance,  effect  of,  435,  443. 

waived  by,  when,  434,  435. 
Insurance  policies  exempted  by  state  law,  410,  424. 
Laws  governing,  generally,  422. 
Laws  of  the  state  of — 

Alabama,  445. 

Alaska,  446. 

Arizona,  447. 

Arkansas,  448. 

California,  450. 

Colorado,  455. 

Connecticut,  457. 

Delaware,  459. 

District  of  Columbia,  459. 

Florida,  4G0. 

Georgia,  4C1. 

Idaho,  464. 

Illinois,  466. 

Indian  Territory,  468. 

Indiana,  468. 

Iowa,  469. 

Kansas,  473. 

Kentucky,  475. 

Louisiana,  477. 

Maine,  478. 

Maryland,  480. 
Massachusetts,  481. 

Michigan,  484. 

Minnesota,  487. 

Mississippi,  491. 

Missouri,  494. 


INDEX.  1355 

References  are  to  pages. 

Exemptions  (continued)  — 

Laws  of  tlie  state  of  (continued) — 

Montana,  497. 

Nebraska,  499. 

Nevada,  502. 

New  Hampshire,  505. 

New  Jersey,  507. 

New  Mexico,  510.  , 

New  York,  512. 

North  Carolina,  515. 

North  Dakota,  516. 

Ohio,  520. 

Oklahoma,  524. 

Oregon,  526. 

Pennsylvania,  528. 

Rhode  Island,  529. 

South  Carolina,  530. 

South  Dakota,  531. 

Tennessee,  534. 

Texas,  536. 

Utah,  538. 

Vermont,  542. 

Virginia,  545. 

Washington,  549. 

West  Virginia,  552. 

Wisconsin,  554. 

Wyoming,  557. 
Liens  on  exempt  property,  430. 
Military  uniforms,  arms,  etc.,  422. 
Mortgages  on  exempt  property,  593. 
Partnership  property,  in,  443. 

Property  purchased  on  eve  of  bankruptcy,  in,  443. 
Property  subject  to,  does  not  pass  to  trustee,  376. 
Schedules,  should  be  claimed  in,  429. 
Set  apart,  how  to,  439. 

appraisement  to,  441. 

exceptions  to,  440. 

homestead,  in  kind,  442. 

trustee  to,  429. 
Title  to  exempt  property,  427. 
Trustee  has  dominion  over  exempt  property  for  what  purFiose.  4-8. 

may  pass  to,  when,  429,  431. 

to  set  apart,  429,  439. 
Waiver  of,  how  made.  433,  437. 

to  pay  certain  creditors,  433. 
Wearing  apparel,  424. 
What  property  generally  is  oxempt,  422,  442. 

Exhibits- 
Attached  to  proofs  may  be  withdrawn,  when.  330. 

Expenses- 
Administering  bankrupt's  estate,  of,  131.  725. 
Advanced  by  whom.  128.  131.  133. 
Bankrupt,  of,  paid  attending  examination,  when.  fil7. 

paid  attending  meetings,  whfn,  f.ol. 
Clerk,  of.  131. 

Involuntary  proceedings,  in.  241. 
Mar.sbal.  of,  132. 
Partnership  bankrupt,  of.  t.ow  paid.  255. 


1856  INDEX. 

References  are  to  pages. 

Expenses  ( eontiniied )  — 
Referees,  of,  126. 
Witnesses,  619, 

Expunging-  claims— 

When  examined  and  allowed,  342. 

Extortion- 
Punishment  for,  662. 

Extradition — 

Bankrupt,  of,  646. 
Foreign  country,  from,  647. 
Indictment  as  evidence  in,  649,  650. 
Jurisdiction  of  courts  of  bankruptcy  in,  68. 
Proceedings  to  remove  bankrupt,  646,  648. 

before  commissioner,  648. 

■before  judge  for  warrant,  650. 
Removal  of  bankrupt,  how  made,  647. 


F. 

Factors— 

Do  not  act  in  a  fiduciary  capacity  for  principals,  772,  775. 

Facts— 

Findings  of,  by  arbitrators,  700. 
Record  on  appeal,  796. 
Reported  by  referee  as  to  contempt,  671. 
Reported  by  referee  as  to  discharge,  851. 

False  account- 
Penalty  for  making,  660.     (See  Offenses.) 

False  claims— 

Bankrupt  to  disclose  proof  of,  to  trustee,  633. 
Penalty  for  presenting  under  oath,  661. 
using  in  composition,  661. 

False  pretenses — 

Goods  obtained  by,  do  not  pass  to  trustee,  when,  375. 
Judgments  in  actions  for  obtaining  property  by,  not  affected  by 
discharge,  767. 

False  representations— 

Judgment    in   actions   for   obtaining   property   by,   not   affected   by 
discharge,  767. 

Farmers— 

Involuntary  bankrupts,  can  not  be  adjudged,  142. 
Who  are,  143. 

Federal  court — 

Suits  stayed  in,  87. 

(See  also  Court  of  Banketjptcy,  Cibcxjit  Coxjbt,  CiBCtriT  Couet  of 
Appeals,  and  Supreme  Court.) 


INDEX.  ISol 

References  are  to  pages. 

Fees— 

Attorney's — 

allowance  of,  by  referee,  135. 

amount  of,  139n. 

assignee  of,  138. 

creditors  of  Involuntary  bankrupt,  of,  137. 

included  in  costs  of  administration,  135,  725. 

involuntary  bankrupt,  of,  135. 

lien  of,  for,  137. 

priority  of,  135. 

reasonable,  must  be,  135. 
what  is,   137,  139n. 

services  rendered  assignee  before  filing  petition,  for,  138. 

services  rendered  debtor  in  preparing  schedule,  138. 

taxed  as  costs,  139. 

trustee,  of,  137. 

voluntary  bankrupt,  of,  136. 

who  entitled  to,  135. 
Bankrupt  to  deposit,  182. 
Clerk's.  131. 

Filing  payment  of,  not  a  voidable  preference,  561. 
Marshal's,  132. 

Ordered  paid  out  of  the  estate,  112,  131. 
Priority  in  payment  of  certain,  725. 
Referee's,  126. 

when  reference  revoked,   127. 

when  case  transferred,  127. 
Required  on  filing  petition,  182. 
Stenographer's,  115. 
Trustee's,  3(52. 

apportionment  of,  362. 
Voluntary  bankrupt  not  required  to  deposit,  when,  183. 

may  be  required  to  pay  later,  183. 
Witnesses',  included  in  costs  of  administration,  725. 

first  paid  or  tendered  when,  619. 

Fiduciary  capacity- 
Attorneys.  774. 

Debt  created  while  acting  in.  not  affected  by  discharge.  771. 
Executors,   trustees,    guardians,   etc.,   773. 
Factor,  agent,  etc.,  not  in.  772. 
Meaning  of,  771. 

Filing- 
Arbitrators'    rmdings,    700. 
Claims  for  exemptions  by  bankrupt,  181,  221. 
Claims  before  referee  or  in  court,  337. 
Discharge,  application  for,  736. 

application  to  revoke,  785. 
Information,  time  of,  665. 
Jury,  of  application  for.  222,  226. 
List  of  creditors  by  bankrupt.  180,  221. 

by  referee,  when,  122. 
Notice  to  take  depositions  with  referee,  344. 
Schedule  of  property,  of.  by  liankrupt.  181,  221. 

by  referee,  when,  1?2. 
Trustee's  accounts,  718,  734. 

Final- 
Accounts  of  trustees,  734. 
allowance  of,  734. 
notice  to  creditors  of.  734. 


1358  INDEX. 

References  are  to  pages. 
Final  (eontimied)  — 

Account  of  trustees  (coutinued) — 

oatlis  to,  734. 

place  for  examining,  734. 
Certiorari  to  C.  C.  A.,  when  judgment,  800. 
Meeting  of  creditors,  280. 

Finding- 
Arbitrators',  effect,  etc.,  of,  700. 
Referees',  transmitted  with  records  to  judges,  when,  124. 

Fines— 

Orders  of  court  enforced  by,  68,  675. 
Referee,  of,  acting  when  interested,  125. 

purchasing  property  of  estate,  125. 

refusing  inspection  of  accounts,  125. 
Trustee  refusing  inspection  of  accounts,  etc.,  125. 
(See  also  Crimes  and  Offenses.) 

Firm— 

(See  Partnership.) 

Fixtures— 

When  a  part  of  bankrupt's  estate,  402. 

Florida- 
Exemption  laws  of,   460. 
Territorial  jurisdiction  and  time  of  holding  courts  in,  39. 

Foreign  country- 
Bankrupt  to  transfer  property  in,  to  trustee,  367. 

Foreign  creditors— 

How  affected  by  discharge  in  this  country,  756. 

When  there  are  bankruptcy  proceedings  at  home  aud  abroad,  722n. 

Foreign  discharge— 

Effect  of,  in  this  country,  758. 
Effect   as    between   states,   759. 

Forfeiture- 
Debts  due  as,  how  far  allowed,  730. 
Referee,  by,  of  office,  acting  in  case  when  inte'-ected,  125. 

purchasing  property  while,  etc.,   125. 

refusing  inspection  of  accounts,  125. 
Trustee,  by,  of  office,  refusing  inspection  of  accounts,  125. 

Forms— 

Adjudication  of  bankruptcy,  912. 

debtor  is  not  bankrupt,  911. 

and  designation  of  newspaper,  913. 
Affidavit.      (See  Oath.) 

of  lost  bill  or  note,  946. 
Ancillary  order  to  pay  funds  of  bankrupt  to  a  trustee  appointed 

in  another  district,  1035. 
Answer,  887. 

to  creditors'  petition,  889. 
Appeal,  petition  for,  1057. 

assignment  of  errors,  1060,  1065. 

bond  on,  1059. 

citation  on,  lOCO. 

motion  and  order  to  dispense  with  printing  record,  1096,  1097. 


INDEX. 


v.m 


References  are  to  pages. 

Forms   (,  cont  iniied )  — 
Appeal  ( contiuriecl ) — 

order  allowing  cross,  1059. 

order  extending  time  within  which  to  file  record  in  appellate 

court,  1095. 
order  granting,  1058. 

petition  for  review  in  C.  C.  A.,  1068,  1087. 
w^rit  of  certiorari  for  diminution  of  record,  1099. 
Appearance  of  United  States  in  C.  C.  A.,  without  citation,  lOOG. 
Appointment,  oath  and  report  of  appraisers,  920. 
Appraisers,  appointment,  oath  and  report  of,  920. 
Assignee  for  creditors  to  account,  order  for,  1013. 
pay  funds  to  trustee,  order  that,  1012. 
rule  to  show  cause  why  he  should  not  pay  funds  to  trustee 

in  bankruptcy,  1012. 
rule  to  pay  over  money,  response  of,  1014. 
Assignment  of  errors,   lOGO,   1065. 
Attorney  to  creditor's  petition,  affidavit  by,  883. 
in  fact,  general  letter  of,  922,  924. 
order  allowing  fee  to,  949,  951. 
Bankrupt,  order  for  examination  of,  930. 
deliver  assets  to  trustee,  order  that.  930. 
examination  of,  931. 
Bill  to  recover  a  preference,  1037. 
Bond  on  appeal,  1059. 
of  marshal,  899. 
of  referee,  916. 
of  trustee   928 
Certificate  by 'referee  to  judge,  1025,  1027    1028.  1029. 

of  referee  to  record  of  proceedings,  993. 
Certiorari  for  diminution  of  record,  1099. 

petition  to  the  supreme  court  for  writ  of,  lio^. 
return  to  writ  of,  1101. 
Citation  on  appeal,  1000. 
Claim.      (See  Dkht.) 

Composition,  petition  for  meeting  to  consider,  994. 
application  for  confirmation   of,  997. 
notice   to   creditors   of    meeting   to   consider,   996. 
order  for  meeting  to  consider,  995. 
order  for  hearing  on  petition  to  confirm.  .»09. 
order  to  confirm,  1000. 

order  of  distribution  on,  1001.  .         ,      ,        ,     inm 

Contempt,  motion  for  rule  to  show  cause  against  bankrupt.  1003. 
rule  to  show  cause  against  bankrupt,  1004 
answer  of  bankrupt  to  rule  to  show  cause    l(»u:.. 
Xlav't  of  trustee  that  bankrupt  has  not  ot.oyod  order  of  rof- 

order'to  tlke'additional  evidence  on  rule  to  ^^^^.v^^^^so   1006. 
order  finding  that  bankrupt  has  concealed  assets.   1007. 
order  committing  bankrupt  for.  1008. 
order  of  referee  recommending  commitment  for.   imn. 
commitment  for,  1010. 
order  purging  of.  1011. 
Creditors'  p-tition.  8S0. 

answer   to,   889. 

order   permitting  creditor  to  jnl^n   In.   s.)".. 

order    to    show    cause    uF)on.    8X5.  ,,,   ^„    son 

^rjoin   in   petition,  orders  permitting  rre,|lt..rH.   896. 
notice  of  first  meeting  of.  918. 
minutes  of  meeting  of,  9.''.3. 
notice  of  final  meeting  of,  988. 
appointment  of  trustee  by.  925. 


1860  INDEX. 

References  are  to  pages. 
Forms   (continued)  — 

Cross-appeal,  order  allowing,  1059. 
Debt,  affidavit  of  lost  bill  or  note,  946. 

by  asent  or  attorney,  proof,  944. 

by  agent,  proof  of,  secured.  945. 

by  partnership,  proof  of,  943. 

due  corporation,  proof  of,  942. 

order  allowing  attorney's  fee,  949,  951. 

order  allowing  claim  of,  947,  948. 

order  expunging  claim,  955. 

order  disallowing  claim  of,  948. 

order  disallowing  and  expunging  claims,  954. 

order  reducing  claim,  955. 

petition  to  expunge  claim,  951. 

proof  of  secured,  940. 

proof  of  unsecured,  938. 

proved  at  first  meeting,  list  of,  921. 
Debtor's  petition,  865. 
Decree.      (See   Jidgment.) 
Deed  from  trustee  to  purchaser,  1055. 
Denial  of  bankruptcy,  887. 

Deposition,  examination  of  bankrupt  or  witness,  931. 
Discharge,   petition   for,   1041. 

clerk's  memoranda  of  bankrupt's  petition  for,  1052. 

notice  of  application  for,  1044. 

of  bankrupt,  1053. 

order  referring  petition  to  referee,  1048,  1049. 

proof  of  publication,  1045. 

referee's  report  on  petition  for,  1049. 

specification  of  grounds  in  opposition  to,  1045,  1047. 
Dividend,  notice  of,  985. 
Dividends,  list  of  claims  to  be  recorded  by  referee  and  delivered 

to  trustee,  984. 
Examination  of  bankrupt,  order  for,  930. 

of  bankrupt  or  witness,  931. 
Exemptions,  trustee's  report  of,  978. 
Injunction,  motion  for,  903. 

order  denying,  906. 

petition  to  enjoin  disposing  of  bankrupt's  estate,  900. 

petition  to  stay  pending  suit,  904. 

temporary  restraining  order,  903. 

to  stay  suit,  905. 
Judgment  on  review  of  order  of  referee  by  the  judge,  1030,  1031, 
1032,  1034. 

for  sale  free  from  liens,  962. 

on  mandate,    1102. 
Jury  trial,  order  for,  888. 

Lien,  petition  and  order  for  redemption  of  property  from,  959. 
Mandate,  final   decree  or  judgment  on,  1102. 
Marshal,  bond  of,  899. 

warrant  to,  897. 
Motion  to  correct  journal  entry,  1030. 
Notice  to  creditors  of  meeting  for  composition,  996. 

of  application  for  discharge,  1044. 

to  attorney  for  bankrupt  with  reference  to  discharge,  1043. 

of  dividend,  985. 

of  filing  petition  for  review  in  C.  C.  A.,  1067. 

of  final  account,  declaration  of  dividends,  etc.,  983. 

of  final  meeting  of  creditors,  988. 

of  petition  for  removal  of  trustee,  1040. 

of  petition  to  sell  real  estate,  968. 

of  petition  and  sale  of  chattels,  978. 


INDEX.  l3{Si 

References  are  to  pages. 
Forms   (continiTed) — 
Notice  ( coutinued ) — 

of  sale  of  bank  stock,  976. 
of  sale  of  uncollected  accounts,  975. 
of  trustee's  sale  subject  to  lien,  970. 
waiver  of.  952. 
Oath  to  Schedule  A,  871. 
to  Schedule  B,  876. 
of  appraisers,  920. 

by  attorney  to  creditors'  petition,  883. 
of  bankrupt,  final,  1050. 
of  referee,  916. 

to  final  account  of  trustee,  981. 
Order  permitting  creditor  to  join  in  creditors    petition,  8yb. 
to  show  causo  upon  creditors'  petition,  885. 
of  adjudication  and  designating  newspaper,  913. 
of  reference,  914. 

of  reference  in  judge's  absence,  915. 
that  bankrupt  deliver  assets  to  trustee,  9o6. 
for  choice  of  new  trustee,  987. 
for  costs  and  confirming  accounts,  986. 

Part^ersM^  affairs,  petition  of  administrator  of  deceased  partner 

to   settle,    895. 
PetiUon^'o?' administrator  of   deceased  partner  to  settle  partner- 
ship  affairs,  895. 
for  appeal  in  bankruptcy,  1057. 
creditors',  880. 

partnership.  877.  , 

affidavit  by  attorney  to  creditors ,  88i. 
debtor's,  865. 

answer  to  creditors',  889.  ^ 

order  to  show  cause  upon  creditors ,  bSb. 
for  meeting  to  consider  composition,  994. 
for  discharge.  1041. 
to  expunge  claim,  951. 

for  receiver,  906. 

for  removal  of  trustee,  1039. 

to  stay  pending  suit,  904. 

and  order  for  redemption  of  property  from  lien.  959. 

and  order  for  private  sale,  972. 

and  order  for  sale  by  auction  of  '"eal  estate.  957. 

and  order  for  sale  of  perishable  property,  973. 

and  order  for  sale  subject  to  lien,  967. 

i:  ?sr;^r^^s4^'^;;5t?o;5 /s^^^no^^. ... 

To  SI  ^^^^^<^"^r^^^^^  ov.r 

by  assignee  to  review  order  o    a  referee  on  rule  to  pay 

money  to  a  receiver  in  ^^fi"'^T"P^^y',J,"rmif; 
by  trustee  to  review  order  allowing  a  claim.  lOlB. 
for  review  in  C.  C.  A..  K)fi8-1f«7-    „ 
for  review  in  C   C.  A.,  notice  of  «'«"«•  J."'\%. 

1096.    1097. 
Preference   bill  to  recover  a,  10.^7. 

of,  919. 
of  proof  of  discharge,  1045. 


lVy&2  INDKX. 

References  are  to  pages. 
Forms   (oontinnod)  — 

Purchaser,  deed  of  trustee  to,  1055. 
Receiver,  petition  for,  906. 

order  appointing,  908. 

order  refusing  to  appoint,  907. 

order  to  put  him  in  jiossession,  909. 

marshal's  return  on  order  to  put  receiver  in  possession,  910. 
Record  in  appellate  court,  order  extending  timo  within  which  to 
file,  1095. 

certiorari  for  diminution  of,  1099. 

motion  and  order  to  dispense  with  printing,  109G,  1097. 

order  to  send  up  exhibits,  1093,  1094. 

praecipe  designating  parts  of,  1091,  1092. 

of  proceedings  before  referee,  989,'  990,  992,  993. 

stipulation  to  omit  parts  in  printing,  1097. 

stipulation  to  use  printed  records,  1095. 

stipulation  reducing,  1090. 
Referee,  bond  of,  917. 

oath,  916. 

appointment  of  trustee  by,   92G. 

list  of  claims  and  dividends  to  be  delivered  to  trustee  by,  984. 

record  of  proceedings  on  composition,  994. 

record    of   proceedings — trustee    appointed — assets    distributed, 
990. 

record  of  proceedings — no  trustee — no  assets,  989. 

to  record  of  proceedings,  certificate  of,  993. 

to  judge,  certificate  by,  1025,  1027,  1028.  1029. 

order  confirming  order   of,   1030. 

order  reversing,  1031. 

on  petition  to  discharge,  report  of,  1049. 
Reference,  order  of,  914. 

in  judge's  absence,  order  of,  915. 
Sale,  petition  and  order  for  private,  972. 

of  bank  stock,  notice  and  report  of,  976. 

of  unmanufactured  stock,  report  of  trustee  of,  977. 

of  perishable  property,  petition  and  order  for,  973, 

of  uncollected  accounts,  order  for,  974. 

of  uncollected  accounts,  notice  of,  975. 

of  real  estate,  petition  and  order  for,  957. 

of  real  estate,  notice  of  petition  for,  968. 

of  real  estate  free  from  lien,  petition  for,  960. 

of  real  estate  free  from  liens,  decree  for,  962. 

subject  to  lien,  petition  and  order  for,  967. 

subject  to  lien,  notice  of  trustee's,  970. 
Schedule  A,   867. 
Schedule  B,   872. 
Specification  of  grounds  in  opposition  to  discharge,  1045,  1047. 

in    opposition   to   discharge,   order   referring  to   referee,    1048, 
1049. 
State  court,   order  that  trustee  apply  to  be  made  party   to  suit 
in,    937. 

to  pay  to  trustee  funds  in  court,  order  that,  937. 
Stay  suit,  injunction  to,  905. 

pending  suit,  petition  to,  904. 
Summons  to  witness,  932. 

and  severance,  order  of,  1058. 
Subpoena  to  bankrupt,   886. 

Supreme  court,   petition  for  writ  of  certiorari  in,   1103. 
Trustee  by  creditors,  appointment  of,  925. 

appointment  by  referee,   926. 

bond    of,    928. 

order  approving  bond  of,  929. 


INDEX. 


imi 


References  are  to  pages. 
Forms    t, continued)  — 

Trustee  (coutiuued) — 

notice  of  appointment  of,  927. 

order   for  choice  of  new,  987. 

order  that  none  be  appointed,  929. 

petition  for  removal  of,   1039. 

notice  of  petition  for  removal  of,  1040. 

order  for  removal  of,  1040. 

account    of,    980. 

deed    of.    1055. 

order  allowing  account  and  discharging,  982. 

to  review  order  allowing  a  claim,  petition  by,  1015. 

apply  to  be  made  party  to  suit  in  state  court,  order  that.  937. 

order  of  state  court  to  pay  funds  to,  937. 

of  sale  subject  to   lien,  report  of.   971. 

oath  to  final   account,   981. 

in  bankruptcy,  order  that  assignee  for  creditors  pay  over  funds 

to,   1012." 
order  that  bankrupt  deliver  assets  to,  936. 
report  of  no  assets,  979. 
report  of  exempt  property,  978. 
Warrant  to   marshal,   897. 
Witness,  examination  of,  931. 
summons  to,  932. 

Forms  of  procedure- 
United  states  supreme  court  to  prescribe,  for  courts  of  bankruptcy. 

845. 

Franchises — 

Pass  to  trustee,  when,  407. 

Fraud—  ^.    ^  „,. 

Books   of   account  concealed,  etc.,  by,   prevents   discharge.    <48. 

Composition  after  confirmation  set  aside  for,  69*. 

Concealing   of   property   by,    punishment,    600 

Debts  created  by.  not  affected  by  discharge.  76). 

Discharge   revoked  when  obtained  by.  784. 

Judgment  in  actions  for.  not  affected  by  discharge,  7rH 

Uen  sought  and  permitted,  in,  of  bankrupt  act.  ^^'f  fj^'^- f  ^.V,f '^• 

Trusteee  vested  with  title  to  property  transferred  in,  351.  381. 

Fraudulent  transfer- 
As  an  act  of  bankruptcy,  159.  .  ,    ,^„ 
intent  of  transferor  only  material.  160. 
As  a  preference,   385,   et  seq. 
Suits  to  set  aside,  605. 

who  to  bring,  383. 
Void  against  trustee.  381. 

by  laws  other  than  bankrupt  act,  38^. 
under  the  bankrupt  act,  381. 

to  prefer  creditors,  385.  et  srq.      (So.-  Pkkkkukn.ks.) 

essentials  of,   387. 
to  hinder,  delay  and   defraud   creditors.   .89. 
essentials  of.  390. 
general    assignments,    391. 

Fraudulent  sales- 
Rescinding,  375. 

Further  credit- 
when  claim   fnr.  may  he  set-off,  317. 


13C-i  INDEX. 

References  are  to  pages. 

C. 

Georgia- 
Exemption    laws   of,    461. 
Territorial  jurisdiction  and  time  of  holding  courts  in,  39. 

General  assignment — 

An  act  of  bankruptcy,  30,  153,  1C7. 

Assets  distributed  under,  recovery  of  by  trustee,  GIO. 

Assignee  not  liable  to  trustee  for  distributing  assets,  610. 

Creditors  estopped  to  charge  as  an  act  of  bankruptcy,  191. 

In  what  court  property  to  be  administered,  31. 

Legality  of,  29,  729. 

May  be  set  aside  when,  391. 

Services  in,  when  entitled  to  priority,  729. 

Title  of  assignee,  72. 

Validity  of,  as  affected  by  the  national  act,  29,  729. 

General  orders— 

Abbreviations   and   interlineations   in   petitions  and  schedules   for- 
bidden   (Order  5),  847. 
Accounts  of  marshal   (Order  19),  853. 

referee    (Order  26),  857. 

trustee    (Order   17),  852. 
Amendments  of  petition  and  schedules    (Order  .11),  850. 
Appeals   (Order  36),  706. 

from  circuit  courts  of  appeals   (Order  36),  862. 
courts   of  bankruptcy    (Order   36),   862. 
supreme  court  of  District  of  Columbia    (Order  36),  862. 
supreme  court  ot  territory    (Order  36),  862. 

to  circuit  courts  of  appeals   (Order  36),  862. 

supreme   court  of  territory    (Order   36),   862. 
supreme  court  of  United  States   (Order  36),  862. 
Application  for  approval  of  composition    (Order  12),  850. 

discharge   of   bankrupt    (Order   12),    850. 
form  of   (Order  31),  860. 
Appointment  and  removal  of  trustee    (Order   13),  851. 
Arbitration    (Order   33),   860. 

Assignment  of  claims  before  proof    (Order  21),  854. 
Attorney,  conduct  of  proceedings  by  (Order  4),  846. 

execution  of  letter  of   (Order  21),  854. 
Checks  for  money  deposited    (Order  29),  858. 
Circuit  courts  of  appeals,  appeals  from    (Order  36),  862. 

to   (Order  36),  862. 
Claims,    assignment    of,    before    proof    (Order    21),    854. 

compounding  of  (Order  28),  858. 

of   persons   contingently   liable    (Order  21),   854. 

proof   of    (Order   21),   854. 

re-examination   of    (Order  21),   854. 
Clerk,  compensation  of   (Order  35),  861. 

indemnity  for  expenses  of  (Order  10),  849. 

indorsement  of  papers  by  (Order  2),  846. 
Compensation  of  clerk,  referee  and  trustee   (Order  35),  861. 
Composition,  approval  of    (Order  12),  850. 

opposition  to   (Order  32),  860. 
Compounding  of  claims    (Order  28),   858. 
Conduct  of  proceedings    (Order  4),  846. 
Consolidation  of  petitions  (Order  7),  848. 
Costs  in  contested  adjudications    (Order  34),  861. 
Courts  of  bankruptcy,  appeals  from    (Order  36),   862. 
Creditors,  special  meeting  of   (Order  25),  857. 
Debtor,  imprisoned   (Order  30),  859. 


References  are  to  pages. 

General  orders   (continued;  — 

Debts,  proof  of   (Order  21),  854. 

Deposition  before  referee  (Order  22),  856. 

Discharge  of  bankrupt,  application  for    (Order  12),  850. 

opposition  to    (Order  32),  860. 

petition  for   (Order  31),  860. 
Districts,  petitions  in  different  (Order  6),  847. 
Doclvet   (Order  1),  845. 
Duties  of  referee   (Order  12),  850. 

trustee    (Order   17),   852. 
Examination  of  witnesses   (Order  22),  856. 

Expenses  of  clerk,  marshal  or  referee,  indemnity  for  (Order  10), 
849. 

allowance  of  (Order  35),  861. 
Fees  of  clerk   (Order  35),  861. 

referee   (Order  35),  861. 

trustee    (Order   35),   861. 
Filing  of  papers   (Order  2),  846. 

after  reference   (Order  20),  854.  ' 

Finding  of  facts  by  referee    (Order  12),  850. 
Forms    (Order    38),    8G3. 
Frame  of  petitions  (Order  5),  847. 
General  provisions  (Order  37),  8G2. 
Habeas  corpus  of  imprisoned  debtor   (Order  30),  859. 
Imprisoned  debtor   (Order  30),  859. 
Indemnity  for  expenses  of  clerk,  marshal  or  referee   (Order  101. 

849. 
Injunctions  of  proceedings  of  courts  or  officers  (Order  12),  850. 
Interlineation    and    abbreviation    in    petitions    and    schedules    for- 
bidden   (Order  5),  847. 
Inventory  by  trustee   (Order  17),  852. 
Involuntary  bankruptcy,  costs  in   (Order  34).  8G1. 

schedule  in    (Order   9),   849. 
Judge  to  hear  application  for  approval  of  composition  (Order  12), 
850. 

discharge  of  bankrupt  (Order  12),  SiiO. 

injunction    (Order  12),  850. 

removal  of  trustee    (Order  13),   S53. 

review  by    (Order  27),   857. 
Jurisdiction  of  two  petitions  in  different  districts   (Order  6),  847. 
Marshal,  accounts  of  (Order  19),  853. 

indemnity  for  expenses  of   (Order  10),  849. 
Meeting  of  creditors,  first    (Order  12),  850. 

special    (Order   25),   857. 
Moneys  deposited,  payment  of   (Order  29),  858. 
Notices   to   creditors    (Order   21),    854. 
Opposition  to  discharge  of  composition  (Order  32),  860. 
Order  of  reference   (Order  12),  850. 
Orders  of  referee   (Order  23),  856. 
Papers,  filing  of  (Order  2),  840. 

after  reference   (Order  20),  854. 
Partnership  cases,  proceedings  in  (Order  8),  848. 
Payment  of  moneys  deposited   (Order  29),  858. 
Perishable  property,  sale  of   (Order  18),  853. 

Petition  and   schedules,  abbreviations  and   InterMneatlons   In,    for- 
bidden   (Order  5),  847. 

amendments  to  (Order  11),  850. 

for  discharge  (Order  31).  860. 
Petitions,  frame  of    (Order   5),   847. 

in  differr'nt  districts   (Order  6),  847. 

two  or  more  again.st  common  debtor    (Order  7).   848. 
Poor  bankrupts,  payment  of  fees  In  cases  of  (Order  35),  861. 


]:}()(»  INDKX. 

References  are  to  pages. 
General  orders   (ei^utmiadj  — 

Practice  and  procedure    (Order  37),  862. 
Priority  oi  petitions  (Order  7),  S48. 
Proceedings,  conduct  of  (Order  4),  846. 
Process   (Order  3).  846. 
Proof  of  debts   (Order  21),  854. 
Property,  redemption  of  (Order  28),  »58. 

sale  of    (Order  18),  853. 
Proved  claims,  transmission  of,  to  clerk    (Order  24).  857. 
Record  of  clerk   (Order  1),  845. 

referee    (Order  1),   845. 

on  appeal  to  supreme  court  of  United  States   (Order  3G),  862. 
Redemption  of  property  and  compounding  of  claims    (Order  28), 

858. 
Re-examination  of  claim    (Order  21),  860. 
Referee,  accounts  of   (Order  26),  857. 

certificate  of.  to  judge  (Order  27),  857. 

compensation   of    (Order   36),   862. 

duties  of    (Order  12),  850. 

finding  of  facts  by   (Order  12),  850. 

indemnity   for  expenses  of    (Order   10),  849. 

indorsement  of  papers  by    (Order  2),  846. 

orders  of    (Order  23),  856. 

proceedings  before    (Order  12),  850. 

record  of   (Order  1),  845. 

to  notify  trustee  of  his  appointment  (Order  16),  852. 

to  transmit  list  of  proved  claims  to  clerk  (Order  24),  857. 
Reference,  order  of   (Order  12),  850. 

papers  filed  after   (Order  20),  854. 
Removal  of  trustee  (Order  13),  851. 
Review  by  judge    (Order  27),  857. 
Sale  of  property  (Order  18),  853. 

Schedule,  abbreviations  and  interlineations  in,  forbidden    (Order 
5),    847. 

amendments  to    (Order  11),   850. 

in  involuntary  bankruptcy  (Order  9),  849. 
Special  meeting  of  creditors   (Order  25),  857. 
Subpccna  (Order  3),  840. 
Summons   (Order  3),  846. 

Supreme  court  of  District  of  Columbia,  appeals  from   (Order  36), 
802. 

territory,  appeals  to   (Order  36),   862. 
from    (Order  36),   862. 

the  United  States,  appeals  to   (Order  30),  862. 
Testimony,  taking  of  (Order  22),  856. 

Transmission  of  proved  claims  to  clerk    (Order  24),   857. 
Trustee,  appointment  of  (Order  13),  851. 

compensation  of    (Order  36),  862. 

duties  of    (Order  17),   852. 

no  official  or  general,  to  be  appointed    (Order  14),  851. 

not  appointed  in  certain  cases  (Order  15),  851. 

notice  to,  of  appointment  (Order  16),  852. 

removal    of    (Order    13),    851. 
Witnesses,  examination  of  (Order  22),  856. 

Gift- 
Included  in  the  word  "transfer,"  571. 

Good  faith — 

Liens   given   in,   etc.,   valid,   591. 
Purchases   made   in,  valid,    565. 


INDEX.  1801 

References  are  to  pages. 


Good  will- 
When  a  part  of  bankrupt's  estate,  402. 

Guarantors— 

Debts  of,  not  released  by  discharge,  776. 

Guardian- 
Debts  of,  not  released  by  discharge,  773. 


H. 

Habeas  corpus- 
Application  for,  643. 
Burden  of  proof,  646. 
Evidence   admissible,  644. 
To  produce  bankrupt  for  examination,  613. 
To  release  bankrupt  from  imprisonment,  G42. 
To  release  bankrupt  held  for  removal,  653. 
To  release  contemnor,  676. 

Hearing— 

Bankrupt  to  attend,  on  application  for  discharge,  631. 
Claims,   of   objections   to   allowance   of,   340. 
Confirmation   of   composition,   application   for,   691. 

notice  to  creditors,  691. 
Contempts,    for,    summary,    671. 
Discharge,  of  application  for,  752. 

notice  to  creditors,  737. 
Insolvency,   on   question   of,   230. 
Involuntary   proceedings  in,  230. 
Petition,  voluntary,  of,  184. 

"Hinder,  delay  or  defraud"— 

Act  of  bankruptcy,  when,  153. 
Preference  to  transfer  property  to,  389. 

Hire- 

(See  Wage  Eabneb.) 

Holder  of  lien- 
Trustee  subrogated  to  rights  of,  when.  569,  600,  606. 
(See  also  Secubed  Cbeditou.) 

Holidays— 

Not    counted,    203. 
What  are,  203. 


I. 

Idaho— 

Exemption  laws  of,  464. 

Territorial  jurisdiction  and  time  of  holding  courts  in,  41. 

Identity— 

Of  bankrupt  to  be  established  before  extradition.  649,  6D0. 
Of  person  proving  claim,  when,  855. 

Illinois— 

Exemption    laws   of,   466.  .      .       ., 

Territorial   jurisdiction   and   timr  nf  hnlding  rnnrm   in.   41. 


imSi  INDEX. 

References  are  to  pages. 
Imprisonment— 

Hankrupt  not  protected  from,  637. 
Bankrupt   subject  to,   for  what  offenses,  655,  et  seq. 
Bankrupt  in  custody  of  marshal  for  examination  not  to  be  sub- 
jected to,  640. 
Contempt  punishable  by,  675. 
Courts  of  bankruptcy  to  enforce  orders  by,  68. 
Discharge  prevented   oy  offense  punishable  by,  747. 
Offenses  punishable  by,  665,  et  seq. 
Referee  can  not  exercise  power  of.  111. 
Trustee  subject  to.  for  what  offenses,  655. 

Inability— 

Of  judge  to  act,  when  to  certify  to  circuit  court,  102. 

Of  judge  to  act,  when  to  certify  fact  to  referee,  117. 

Of  referee  to  act,  judge  may  act  or  appoint  another  referee,  107. 

Inconvenience — 

Place  of  creditors'  meeting  may  be  fixed  to  avoid,  268. 

Incumbrances— 

Included  in  "transfers,"  571. 

Subsequent  to  act,  etc.,  within  four  months,  to  aefraud,  etc.,  void, 

389. 
Within  four  months,  void  under  state  laws,  void  under  act,  393. 
(See  also  Liens,  Mortgages,  Preferences.) 

Indebtedness— 

Amount  of,  to  petitioning  creditors  to  begin  involuntary  proceed- 
ings,  189. 
Total,  of  bankrupt  to  subject  him  to  involuntary  proceedings,  194. 

Indemnity- 
Bond  of,  by  petitioner,  on  seizure  of  bankrupt's  property,  217. 
For  expenses  of  clerk,  131. 

of  marshal,  132. 

of  referee,  128. 

Indexes— 

Clerks   of,    129. 

open  to  inspection,   130. 

Indiana- 
Exemption  laws  of,  468. 
Territorial  jurisdiction  and  time  of  holding  courts  in,  42. 

Indian  Territory— 

Exemption   laws   of,   468. 

Territorial  jurisdiction  and  time  of  holding  courts  in.  42. 

United  States  courts  in,  made  courts  of  bankruptcy,  33,  67. 

Indictments— 

Averments  in,  665. 

Criminal  proceeding  instituted  by,  664. 
Evidence  in  extradition  proceedings,  649,  650. 
Limitation  of  time  as  to  finding,  665. 

Individual— 

Assets,   259. 

Debts,  262. 

(See  also  Partnership.) 


INDEX .  13G9 

References  are  to  pages. 
Infants— 

Adjudged  bankrupts,  when,  144. 

Claims  against  bankrupts,  time  for  proving,  325. 

Defense  of  infancy,  227. 

Unclaimed   dividends,  time  for  claiming,  733. 

In  forma  pauperis— 

Involuntary  cases,  not  in,  202. 
Voluntary  cases,  when,  183. 

Information — 

Criminal   proceedings  begun  by.  when,  664. 
Limitation  of  time  as  to  filing,  665. 
Referee  to  furnish,   122. 
Trustees  to  be  furnished  with,  633. 
to  furnish,  353. 

Injunction— 

To  protect  after-acquired  property,   417. 
To  protect  estate,  211,  214. 

application    for,    215. 

dissolution    of,    when,    216. 
To   stay-  suits,    77,    87. 

Injuries— 

Actions  for,  to  person  do  not  pass  to  trustee,  420. 

to  property  pass  to  trustee,  420. 
Discharge   does   not   release  judgments  in  actions  for  willful,  to 
person  or  property,   768. 

Insane  person— 

Claims  against  bankrupts,  time  for  proving,  325. 

Insanity  as  a  defense,  227. 

Tvlay  be  a  bankrupt,  when,  145.  _ 

When  bankrupt  becomes  an,  proceedings  not  abated,   14G,  6o3. 

Insolvency— 

Admis.'^ion  of,  in  writing  an  act  of  bankruptcy,  ICD. 

Burden  of  proving,  155.  ^rr      .  -.n     iro 

Essential  to  an  act  of  bankruptcy,  when,  155,  et  seq.,  161,   168, 

169. 

to  create  a  preference  by  transfer,  573. 

to  dissolve  a  judicial  lien,  570. 

to  maintain  involuntary  proceedings,   when,   196,  Z^o. 
Evidence  of,   158. 
How  to  determine,  156. 

Involuntarv  proceedings,  in,  material  when,  -^5. 
Meaning  of,   156,  190.  574. 
Presumption  as  to,  158,  575. 
Question  of  fact  for  jury,  575. 

may   be   contested,   196. 
Partnership,   of,    157. 
Trial  by  jury,  when,  157,  196. 

application  for  trial  by  jury,  when  mnde,  196. 

right  to,  confined  to  debtor,  157. 

Insolvent — 

Filing  petition  against,  when,  196. 

Jury  trial,  entitled  to    196,  230. 

Laws,  effpct  of  national  upon  state,  26,  Z\i,  //». 

meaning  of,   18. 

states  may  pass,  when,  20. 


I'JTO  INDKX. 

References  are  to  pages. 

Insolvent   (contiiuied)  — 
Lhavs  (('oiitiiiuoii) — 

suspended,  not  repealed,   by  national  act,   23. 
Meaning  of,   15G. 
Reasonable  cause  to  believe,  570«. 

Inspection- 
Docket  open  to  public.  129. 

Penalty  against  referee  and  trustee  refusing,  of  accounts,  671. 
Trustee's  accounts  and  papers  open  to,  353. 

Instrument  of  writing-— 

Debts  evidenced  by.  allowed,  etc.,  293. 

Filed    with    proof   of    claim,    330. 

Lost  or  destroyed,  statements,  etc.,  to  be  filed  with  claim  under 

oath,    330. 
(See  also  Document.) 

Insurance- 
Companies  as  bankrupts,  150. 

Policies  of,  effect  of  state  laws  exempting,  410,  424. 
bankrupt   may   keep  on  paying  value,   407. 
part   of   estate   of   bankrupt,    408. 

payable  on   death   of  bankrupt,  410. 
payable  to  bankrupt,  409. 
payable   to    third    persons,    409. 
Property  of  bankrupt,  on,  118,  213. 

Intent— 

Of  transferee    determines   preference,   57G. 

In  act  of  bankruptcy  by  legal  proceedings,  165. 

by  preference,   161,  162. 

by   transfer,    160. 

Interlineations — 

When  not  allowable,  198. 

Interest- 
Dividends  on,  when  allowed,  721. 

Judgments  as   debts  proved   and  allowed,   include,  290. 
May  be  added  in  computing  amount  of  debts,  193. 
Party   in,   who  is  a,   739. 
Penalty,  on  recovery  of,   730. 
Provable  debt,   when,   289,   299. 
Referees,  of,  in  case  disqualifies,  114. 
Trustees  to  account  for  and  pay,  354n,  717. 
Usury,  recovery  of  by  trustee,  368. 

Interlocutory  orders— 

Protection   of  the  estate,   210. 

to  conduct  business  by  receiver,  211. 

to   restrain    transfer,    211. 

to  stay  proceedings  in  state  court,  211. 

to  sell  perishable  property,  711. 

to  seize  debtor's  property,  212. 
(See  also  Obdeus.) 

Interveners— 

Appearance  of,  221. 

Creditors  appearing  to  join  in  or  oppose  petitioa,  219,  222. 

Rights  of,  220. 

Who  may  be,  220. 


INDKX.  1871 

References  are  to  pages. 
Inventory — 

Schedule  furnished  by  bankrupt,  221. 
Trustee  to  prepare,  352. 

Investment— 

Of  money  belonging  to  estate,  354. 

Involuntary  proceedings- 
Adjudication,  order  of,  23o. 

proceedings  subsequent  to,  242. 

setting   aside,    234. 
Against  whom  proceedings  may  be  begun,  194. 
Amendments,  199,  223,  237. 

application  for,  must  be  made  within  reasonable  time,  238. 

discretion  of  court,  within,  238. 

grounds  of,  237. 

costs,  239. 

referee  may  grant  leave  to,  239. 
Answer  to  petition,  224. 
Bankrupts,  who  may  be  adjudged,  141. 
Commenced    how,    189. 
Costs  on  adjudication,  234. 

of  proceedings,  241. 
Court  in  which  petition  filed,  197. 
Creditors  appearing  to  be  parties,  219. 

computing  number  of,  190,  202. 

number  of,  required,   190. 

who  may  join  in  petition,  190,  202. 
Damages,  instituting,  grounds  for,  241. 
Default,  proceedings  on,  230. 
Defenses  to  petition,  224,  et  seq. 
Demurrer  to  petition,  223. 
Dismissing   petition,    239. 
Hearing  or  trial,  230. 
Insolvency,  how  far  essential,  196,  225. 
Instituted  how,  189. 
Jury  trial,  when,  223,  226. 
Motion  to  make  more  definite,  etc.,  223. 

to  dismiss,  223. 
Number  of  petitioning  creditors  required,  190,  196. 
Oath  to  petition,  200. 
Order  of  adjudication,  233. 

appointing  receiver,  211. 

authorizing  business  to  be  conducted,   211. 

proceedings,  of,  when  several  petitions  filed,  228,  229. 

restraining  disposition  of  ej^tate,  211. 

reference,  of,  235. 

seizure  of  debtor's  property,  216. 

staying  suits  in  state  courts,  211. 
Partnerships,  proceedings  peculiar  to,  243. 
Petition,  form  of,  198. 

may  be  filed  against  whom,  194. 

service  of  copy  of,  203. 

two  against  same  debtor,  197. 

who  may  join  in,  190. 
Pleading  to  petition.  222. 
Referee,  reference  to,  by  judge,  110. 

reference  to,   by  clerk,  110. 
Replv  to  answer,  229. 
Schedules.  221. 

Seizure  of  debtor's   property,  216. 
Staying  suits  against  debtor,  211. 


lVu'2  INDEX. 

References  are  to  pages. 
Involuntary  proceedings   (continued)  — 

SubpaMia,    when    necessary,    204. 

service  of,   203. 
Subsequent  to  adjudication,   242. 
Time  within  which  to  file  petition,  201,  202. 
Trial,   230. 

V\hat  is  necessary  to  institute  proceedings,  192. 
Who  may  be  adjudged  bankrupt  in,  141. 
Who  may  institute  proceedings,  189. 

Iowa- 
Exemption  laws  of,   469. 
Territorial  jurisdiction  and  time  of  holding  courts,  43. 

Issues— 

Discharge,  on  opposing  a,  744. 
Involuntary  petition,  222. 

acts  of  bankruptcy  denied,  225. 

by  answer,  224. 

determined  by  judge,  233. 

determined  by  jury,  231. 

general  denial,  225. 

solvency,  225. 
Referee,  issue  of  fact  referred  to,  when,  110. 
Supervisory  petition,  no  issue  of  fact  allowed  on.,  815. 


J. 

Joint  and  separate  debts — 

Of  partners,  what  are,  262. 

Joint  and  separate  property— 

Of  partners,  what  is,  258. 

Joint  stock  company— 

(See  Corporations.) 

Joint  trustees— 

Bonds  of,  joint  or  severable,  350. 

Concurrence  of  two  necessary  to  validity  of  act,  356. 

Creditors  or  court  may  appoint  three,  348. 

Death  of  one  does  not  abate  suits,  358,  654. 

Judge- 
Absence  of,  in,  clerk  to  send  case  to  referee,  114,  130. 
Adjudication,  regularly  makes,  184. 
Appoints  referees,  107. 
Appoints  trustees,  when,  349. 

Disqualified,   may  certify   proceedings  to  circuit  court,   10.2. 
Jury  trial,  presides  at,  158. 
May   order   an   examination,    616. 

May  order  fees  paid  out  of  the  estate,  when,  112,  131. 
May  refer  cases,  when,  110. 

Referee  may  exercise  certain  powers  of,  on  issuance  of  certificate 
by  clerk,  etc.,   130. 

must  not  be  related  to,  108. 

powers  subject  to  review  by,  112,  114,  118. 

transfer  of  cases  by,  from  one  referee  to  another,  110. 
To  take  possession  of  and  release  bankrupt's  property,  117. 


Judicial  liens— 

When  invalid,  562 


INDEX.  1373 

References  are  to  pages. 


Judgments— 

Alimony,  for,  not  released  by  discharge,  765. 
Attaches  as  a  lien,  when,  564,  567. 
Confession  by,  570«. 
Court,  how  far  will  go  behind,  292. 
Discharges,  effect  of,  on,  against  debtor,  764. 

actions  for  frauds,  767. 

actions  for  obtaining  property  by  false  pretenses,  767. 

alimony,  for,  765. 

contempt,  for,  765. 

entered  after  discharge,  766. 

entered  after  filing  petition,  766. 

fines,  765. 

judicial   liens,   756. 

malicious  prosecution,  768. 

penalties,  7G5. 

seduction,    765. 

support  of  child,  765. 
Lien,  created  by,  within  four  months,  etc.,  when  dissolved,  565. 

preserved  for  estate,  when,  569. 
Preference,  when  deemed  to  create,  563. 
Provable  debt,  when,  289. 
Verdict  not  a,  765. 

Jurisdiction- 
Ancillary,  79,  86. 
Answer,  challenged  in,  227. 
Appellate,  790. 
Attaches  when,  76. 

Attorney  not  admitted  to  practice  in  court,  134. 
Bankruptcy,  of  court  of,  67,  et  seq. 

in,  exclusive,  75. 

in,  general,  70. 

includes  what,  71.  .  .  .j  « 

Certified  copy  of  order  confirming  composition,  etc.,  evidence  or, 

693. 

Circuit  courts,  in  bankruptcy,  101. 

law  and  equity,  103.  .     mo 

suits  between  trustees  and  adverse  claimant,   lOJ. 

Circuit  courts  of  appeals,  appellate,  in  bankruptcy,  S16. 
appellate,  at  law  and  equity,  790.  .  .      , 

to  superintend  and  revise  proceedings  of  courts  of  bankruptcy. 

Concurrent,  between  circuit  courts  and  courts  of  bankruptcy  of 

offenses,   638,   663. 
Consent  to,  80. 
Contested,   when,   747. 
Contempt,  to  punish  for,  66G. 
Courts  of  bankruptcy,  of,  67,  et  seq. 

conferred    on    existing   courts,   33. 
Criminal  proceedings,  of,  663. 
Debtor's  petition,  to  hear,  174. 
Depends  on  United  States  law.s,  61. 

Determine  title  to  disputed  property,  to.  372.  et  .seq..  711. 
Discharge,  to  determine  effect  of.  759. 
Enjoin  suits  begun   after  bankruptcy,  89. 
Enforce  mechanic's  lion,  603. 
Examine   witnesses,   614,    616. 
Exempt  property,  of.  428.  430. 


inTl  INDKX. 

References  are  to  pages. 

Jurisdiction   (continued)  — 

Lleueral  powers  of  a  court  of  bankruptcy,  69. 

Law  and  equity,  of  suits  at,  80. 

Liens,  to  enforce,  707. 

Limitation  to  exercise  of.  78. 

Limited  to  district,  78. 

Mechanics  lien,  to  enforce,  603. 

Over  adverse  claimants,  74,  80. 

Persons  subject  to  ttie  act,  extends  only  to,  78. 

Partnership,  of  courts  of  bankruptcy,  over  one  member  sufficient, 

251, 
Persons  over,  court  must  have,  176. 
Petitions,  when,  filed  in  different  districts,  228. 
Plenary  suits  in,  against  adverse  claimants,   80,  et  seq. 

suit  to  set  aside  preference  is,  608. 

when   necessary,   85,   668. 
Possession  of  property,  to  obtain,  96. 
Property   in   possession  of  state  court,  over,  97. 

in   district,   209. 
Publication,  by,  209. 
Punish   for  offenses,   to,    663. 
Referee's,   109. 
State  court,  of,  of  suits  by  trustees,  80. 

perjury,    623. 
Stay  suits,  to,  72,  77,  87,  et  seq.      (See  Stat.) 
Summary,  extent  of,  73,  96,  668. 
Supreme  court,  appeals  in  bankruptcy,  795. 

appellate  at  law  and  in  equity,  790. 

appellate  from  state  courts,  793. 

certiorari   to  C.   C.   A.,  799. 
Suits  to  set  aside  preferences,   etc.,  80,  et  seq.,   607. 

on  trustees'  bond,    ^4. 

against  third  persons,  by  trustee,  80,  et  seq. 
Territorial,  of  each  court  of  bankruptcy,  33. 
"When  two  or  more  petitions  are  filed,  228. 

Jury- 
Act  of  bankruptcy,  question  for,  230. 
Adverse  claimant  entitled  to,  235. 
Application  for,  when  to  be  filed,  222,  226. 
Circuit  court,  case  certified  for  trial  by,  to,  101. 
Damages  in  suits  to  recover,  a  question  for  the,  611. 
Insolvent  entitled  to  trial  by,  230. 
Issues,  court  to  determine  without,  when,  233. 

submitted   to,    231. 
Offenses,  for,  right  to  trial  by,  664. 
Right  to,  absolute,  231. 

adverse   claimant   of,   235. 

confined  to  bankrupt,  226,  230. 

discretion  of  court,  not  in,  231. 

on  question  of  act  of  bankruptcy,  230. 

on  question  of  solvency,  157,  196. 

on  question  of  ownership  of  property,  361. 
Solvency  a  question  for,  196,  226. 

Special,  summoned  if  one  not  in  attendance,  231.  '  ^^ 

Trial,  nature  of,  75.      -  '  "'■ 

United  States  laws  as  to  trials,  applicable  in  criminal  proceedings, 

664. 
Verdict  directed,  when,  233. 

judgment  contrary  to,  231. 

setting  aside  a,  231,  233. 
Waiver  of  right,  223,  226. 


INDEX.  ^  1371 

References  are  to  pages. 

Justice  of  the  peace- 
Referee,  may  be,  lu8. 

Kansas— 

Exemption  laws  of,  47?>. 

Territorial  jurisdiction  and   time  of  holding  courts,   44. 

Kentucky- 
Exemption   laws  of,   475. 
Territorial  jurisdiction  and   time  of  holding  courts.   45. 


Labor  claims— 

Priority   of,   726. 

amount,  726. 

assigned,  726. 

for  what  time,  727. 

labor  contract  can  not  be  apportioned,  726. 

rendered  by  minor,  726. 

where  priority  is  given  by  state  law,  727. 
What  are,  726. 

Laches — 

Discharge,  in  filing  application  to  set  aside,  786n. 

Law  and  equity- 
Distinguished    from   bankruptcy,    104. 
Jurisdiction  of  court  of  bankruptcy,  at,  80. 
of  circuit  courts  at,  10:i. 
circuit  courts  of  appeals,  791. 
U.  S.  supreme  court,  791. 

Law  and  fact — 

Conclusions  and  findings  to  be  separately  stated,  when,  796,  797. 

Lease- 
Bankrupt's  estate,  when  a  part  of,  o96. 
Contract    to,   passes   to  trustee,    when,   401. 
Covenants  in,   306. 
Surety  on,  liability  of,  401. 
Trustee  takes,  subject  to  equities,   400. 

may  elect  not  to  take,  305,  306,  397.  et  scq. 

surrender  of,  by,  400. 

waste,  by,  400. 

Legacies — 

Pass  to  trustee,  when,  403. 

Legal  proceedings — 

Act  of  bankruptcy  created  by.  when,  IT-,?,,  164. 
Meaning  of,   166. 

Letter  of  attorney — 

Necessary  for  agent,  etc.,  to  prove  claims,  269. 
Necessary   for  agent,  etc.,  vote,  269. 
Oath  to,  admini.stered  by  whom,  1136. 

Levies— 

Obtained  against  insolvent  within   four  months,  etc..  void.  565. 


137G  INDEX. 

References  are  to  pages. 

Liability— 

Debts  which  are  a  fixed,  allowed,  etc.,  2S7. 

Discharge  does  not  affect  codebtor's,  guarantor's  or  surety's,  776. 

Petitioner's  bond,  on,  to  hold  property,  217. 

Liens— 

Admiralty,  how  enforced,  603. 
Attorney,  of,  for  fees,  137. 
Common  law,  what  are,  600. 
Created  by  statute,  GOO. 

Created  by  suit  within  four  months  of  filing  petition,  to  be  dis- 
solved  by   adjudication   in   bankruptcy,  570. 

if  defendant  was  insolvent,  57U. 
believed  to  be  insolvent,  570. 

permitted   in  fraud  of  bankrupt  act,   570. 

trustee  subrogatea  to  rights  of  holder,  569. 
Conveyance,  incumbrance,  etc.,  by  bankrupt  after  act  and  within 
four  months,  etc.,  to  defraud,  etc.,  void,  389. 

except  as  to  purchasers  in  good  faith  for  consideration,  389. 

property  assets,  and  passes  to  trustee,  389. 

void  under  state  law,  void  under  bankrupt  act,  393. 

property  passes  to  trustee  to  be  recovered  for  creditors, 
393. 
Discharge,  effect  of,  on,  755. 
Dissolution  of,  570. 

Distinguished   from  priorities,  727,  728,  730. 
Enforcement  of,  in  state  court,  709. 

in  bankruptcy  court,  76,  710. 
Equitable,  what  are,  600. 
Exempt   property,   on,   430. 

marshaling   of,    432. 

where  enforced,  431. 
General  nature  of,  560. 
Given  or  accepted  in  good  faith  for  consideration  not  affected,  etc., 

591. 
Invalid,  when,  562,  599. 
Mechanics',  601.     (See  Mechanic's  Lien.) 
Mortgage,  591,  601. 

Obtained  through  legal  proceedings  against  insolvent  within  four 
months,  etc.,  void,  565. 

obtained  prior  to  four  months,  563. 

property  passes  to  trustee  as  part  of  estate,  565. 
unless  court  otherwise  orders,  565. 

insolvency  essential,  565,  567. 

court  may  order  conveyance,  565. 

t)07ia  fide  purchaser  for  value  protected,  565,  569. 

when  execution  has  issued,  567. 
Part  of  property  on,  708. 
Preferences,  classification  of,  as  to,  600. 
Preserved  for  benefit  of  estate,  when,  569,  607. 
Sale  of  property,   subject  to   or   free   from,   601,  605,   704,  et  seq. 

(See   Saxe.) 
Trustee  subrogated  to  rights  of  creditor,  569,  600. 

may  redeem  from,  704. 
Unrecorded  claims  not,  when,  599. 
Valid,  when,  561,  599. 
When    created,    564,    567. 

determined   by   state   laws,   566. 

Life  insurance  policies— 
(See  Insubance.) 


DvDEX.  137; 

_ ,     .       .  References  are  to  pages. 

Limitations— 

Actions,  of,  on  bond  of  referee,  109. 

of,  on  bond  of  trustee,  351. 

by  or  against  trustees,  3iil. 
Application  for  discharge,  737. 
Claims,  time  for  proving,  320,  325. 

rights  of  infants,  etc.,  325. 
Examination  of  bankrupt,  613 

of   third   persons,    615. 
Indictment,  of  finding,  for  offenses,  665 
Information,  of  filing,  etc.,  665. 
Prosecution,  of,  for  offenses,  665. 
Revoking  a  discharge,  on,  785. 
Statute   of,  as  a  defense,  227. 

bankruptcy  stops  running,  320. 

'^^TATir.rr'^  by'  iiot  provable,  319.     (See  Statutes  of  Limi- 

Limited  partnerships— 

When  corporations,  146. 

Louisiana- 
Exemption  laws  of,  477. 
Territorial  jurisdiction  and  time  of  holding  courts  in.  46. 

Lists  of  creditors- 
Bankrupt,  involuntary,  to  prepare  and  file  in  triplicate,  221. 

voluntary,  to  prepare  and  file  in  triplicate,  178. 
Proving  claims  and  voting  at  first  meeting,  276. 
Referee  to  examine,  122. 

to  prepare  and  file,  when,  122. 

to  prepare,  entitled  to  dividends,  122,  721. 
(See  also  SciiJiULLEs.) 

Lost  bill  or  note- 
How   proven,  330. 

Lunatics- 
May  become  bankrupt,  when,  145. 

Proceedings  do  not  abate  when  person  becomes,  146.     (See  Insane 
Person.) 

M. 

Mail- 
Expense  of  sending  notices  by,  how  paid,  128,  131. 
Notices  sent  by,  123. 
Penalty  envelope  may  be  used,  123. 
Referee  to  transmit  certified  copies  of  papers  by,  to  clerk  when,  123. 

Maine- 
Exemption    laws    of.   478. 
Territorial  jurisdiction   and   time  of  holding  courts   In,  47. 

Majority— 

Minors,  time  to  claim  dividends,  733. 

Number  anu  amount  of  creditors  necessary  to  validity  act,  277. 

Place  of  meeting  may  be  designated  by,  279. 

Trustees,  of  three,  to  concur,  356. 

Voter's,  what  constitutes  a,  of,  277. 


1;>7S  INDEX. 

References  are  to  pages. 

Manc'amus— 

To  compel  allowance  of  appeal.  822. 

To  compel  clerk  to  produce  transcript,  833. 

To  compel  obedience  to  mandate,  842. 

Will  not  lie  to  compel  judge  to  sign  citation,  833. 

Mandate— 

Court  of  bankruptcy  bound  by,  842. 

may  decide  matters  left  open  by,  842. 
Mandamus  lies  to  compel  obedience  to,  842. 
Supreme  court,  of,  on  certiorari,  803. 
To  whom  direct;ed,  839. 
When  issued,  842. 

Manufacturing-  corporation— 

What  are,  147. 

When,  may  be  a  bankrupt,  147. 

Married  women— 

When,  may  be  bankrupts,  146. 

Marshaling  assets — 

Insolvent  partnership,  of,  255. 

Marshals— 

Bankrupt  held  for  examination  by,  when,  640. 

Compensation    of,    132. 

Conduct  bankrupt's  business,  when,  211. 

Duties  of,  132. 

Expenses  of,  132. 

Fees  of,  132. 

"Officer"  includes,  132. 

Property  in  possession  of,  can  not  be  disturbed  by  process  from 

other    courts,    100. 
Return  to  writ  of  subpoena  by,  207. 
Service  of  subpoena,   205. 
Warrant  issued  to,  to  seize  property  when,  217. 

execution   of,   by    seizing   property   not   debtor's,    217. 

Maryland- 
Exemption  laws  of,  480. 
Territorial  jurisdiction  and  time  of  holding  courts  in,  47. 

Massachusetts— 

Exemption  laws  of,  481. 

Territorial  jurisdiction  and  time  of  holding  courts  in,  47. 

Master  in  chancery- 
Referee  may  be  a,  108. 

Maturity  of  debt— 

Not  necessary  to  make  it  provable,  287. 

Mechanic's  lien— 

Created   by  statute,   601. 

Enforce,  how  to,  602. 

Jurisdiction  to  enforce.  In  court  of  bankruptcy,  603. 

Trustee  should  be  a  party  to  suit  to  enforce,  602. 

Valid,  when,  COl. 


INDEX.  1379 

References  are  to  pages. 

Meetings  of  creditors- 
Appearance  of  no  creditor  and  no  assets,  277. 
Assignee  of  claim  may  vote,  when,  270. 
Attorney,  agent,  etc.,  may  vote,  when,  269. 
Bankrupt  to  attend  first,  272,  274,  631. 

examination  of,   275. 

when  not  compelled  to  attend,  631. 

expense  of  attending,  paid,  when,  631. 
Compositions,  to  consider,  G80. 
Conduct  of  first,  how  to,  273. 
Courc  to  call,  when,  279. 

to  fix  place  of  first,  when,  268. 
Creditors,  effect  of  disallowing  claim  of   after  voting,  273. 

entitled  to  vote,  what,  269. 

fail  to  attend  first,  273. 
Final,  called  when,  280. 

proceedings  at,  734. 
First,  allowance  of  claims  at,  274. 

bankrupt  to  attend,  273,  631. 

conduct,  how  to,  273. 

court  may  fix  place,  when,  268. 

creditors  fail  to  attend,  when,  273. 

how  to  call,  268. 

notice  to  creditors,  268. 

organizing,  273. 

place  of  holding,  205. 

referee  to  preside,  112,  274. 

time  of  holding,  268,  273. 

trustee  appointed   at,   275. 

vote  at,  who  entitled  to,  2C9. 
Majority  necessary  to  valid  act  of,  277. 
Notice  of  first,  268. 

of   subsequent,    279. 
Objections  to  allowance  of  claims  at  first,  272. 
Other  than  first,  when  held.  279. 
Present,  who  are  considered,  277. 
Proving  and  allowing  claims,  274. 
Referee  to  preside  at  first,  .il2,  274. 

preside  at  subsequent  meetings,  need  not,  280. 
Secured  rlaims,  holders  of,  not  entitled  to  vote,  269,  270. 
Subsequent,  time  and  place,   279. 
Trustees  appointed  at,  275. 

to  lay  detailed  statements  before  final,  734. 
Voters  at,  269. 

Memberships  in  exchanges— 

Pass  to  trustee,  406. 
"Mercantile  pursuits"— 

What  are,  150. 

Michigan- 
Exemption  laws  of,  4S4. 
Territorial  jurisdiction  and  time  of  holding  courts  in,  17. 

Minnesota- 
Exemption  laws  of,  487. 
Territorial  jurisdiction  and  time  of  holding  courts  !n.  4S. 

Mileage— 

Bankrupt  entitled  to  expenses,  when,  617. 

Witnesses  before  referees,  of,  when  to  be  first  pnid  or  tfndered.  619. 


io80  INDEX. 

References  are  to  pages. 

Military  uniforms,  arms,  etc.— 

Exempted,  422. 

Minors- 
Unclaimed  dividends,  time  for  claiming,  733. 
(See  also  Infants.) 

Misappropriation — 

Debts  created  by,  not  affected  by  discharge,  775. 
Offense  by  trustee,  of  property,  655. 

Misdemeanor— 

(See  Offenses.) 

Mississippi- 
Exemption  laws  of,  491. 
Territorial  jurisdiction  and  time  of  holding  courts  in,  49. 

Missouri— 

Exemption  laws  of,  494. 

Territorial  jurisdiction  and  time  of  holding  coucls  in,  49. 

Moneys— 

Depositories  designated  for,  353,   717. 
Investment  of,  belonging  to  estate,  35i. 
Trustee  to  collect,  deposit,  etc     353,  717. 
to  disburse,  how,  732. 

Montana- 
Exemption  laws  of,  497. 
Territorial  jurisdiction  and  time  of  holding  courts  in,  51. 

Mortgages— 

Actual  loan,  valid  to  extent  of,  592. 

Avoided  if  invalid  under  state  law,  may  be,  595. 

Court  will  uphold  valid,  591. 

Enforced   in   state   courts,   when,   709. 

in  bankruptcy  court,  710. 
Essentials  to  invalidity  of,  593. 
Exchange  of  securities,  593. 
Exempt  property,  valid  on,  593. 

Foreclosure  not  allowed  in  bankruptcy  court,  when,  595. 
Future  advances,  valid  for,  593. 
Individual  property  to  secure  firm  debt,  594. 
Pre-existing  debt,  invalid  to  secure,   594. 
Preference,  when,  created  by,  591,  et  seq. 
Prior  promise,  when    valid  to  secure,  592. 
Renewal  valid,  592. 

Sale  of  property  subject  to  or  free  of,  704,  et  seq.     (See  Sale.) 
States,  on  property  in  two,  593. 

laws  of,  followed,  595. 
Third  person  in  trust  for  creditor  to,  595. 
Trustee  may  redeem  from,  704. 
Unidentified  part  of  mass,  to,  595. 
Valid  if  not  made  within  four  months,  592. 

to  secure  bona  fide  loan,  592. 

by  state  law,  must  be,  595. 

unless  reasonable  cause  to  believe  a  preference  was  intended, 
592. 
Voidable,  when,   593. 


rsDEx.  13S1 

References  are  to  pages. 
Motion- 
Dismiss  petition,  to,  22.'). 

Proper  method  of  objecting  to  irregularity  of  service,  209. 
Receiver,  for.  211. 
Seize   bankrupt's  property,  to,   21G. 
Set  aside  adjudication,  to,  234. 
Strike  out  answer,  to,  229. 
Temporary  injunction,  for,  215. 

Mutilate— 

(See  Concealing.) 

Mutual  debts  and  credits- 
Debts  acquired  by  purchase  to  be  set  off,  316. 
Meaning  of,  309. 
Must  be  in  same  right,  313. 

exceptions,    315. 

preferred   creditors,   317. 
Mutuality  required,  311. 

deposits  for  specific  purpose,  312. 

deposits  with  power  to  sell,  313. 

intention  not  necessary,   312. 

nature  need  not  be  same,  312. 

preferred  creditors,  317. 
Partnership,  315. 
Payable  at  different  times,  311. 
Preferred  creditors,  317. 
Provable  debts  may  be  set  off,  307,  310,  315. 

costs,    316. 
Waiver,  314,  317. 
What  are,  309. 

N. 

National  bank— 

Involuntary  bankrupt,  can  not  be  adjudged,  141. 

Nebraska- 
Exemption  laws  of,  499. 
Territorial  jurisdiction  and  time  of  holding  courts  in,  51. 

Ne  exeat— 

(See  Baxkrupt,  Dete.xtio.n   rou  Examination.) 

Negotiable  instruments— 

Notice  of  dishonor,  407. 

Pass   to  trustee,   407. 

Payment  of,  a  preference,  when,  585. 

Nevada- 
Exemption  laws  of,  502. 
Territorial  jurisdiction  and  time  of  holding  courts  in.  51. 

New  credit— 

When  claim  for,  may  be  set  off,  317. 

New  Hampshire— 

Exemption   laws   of,   505. 

Territorial  jurisdiction  and  time  of  holding  courts  In.  61. 

New  Jersey— 

Exempti-on  laws  of,  507. 

Territorial  jurisdiction  and  timo  of  holding  rourt     in    ..l. 


lo82  INDEX. 

References  are  to  pages. 
New  Mexico- 
Exemption  laws  of,  510. 
Territorial  jurisdiction  and  time  of  holding  courts  in,  52. 

New  promise- 
Declaration  on  old  debt,  779. 
Discharged  debt  revived  by,  779. 
May  be  made  when,  781. 
May  be  made  to  whom,  780. 
Must  be  in  writing,  when,  779. 
Not   negotiable,   781. 
Pleading,  779,  782. 
What  is  necessary  to  constitute,  780. 

Newspaper- 
Notice  of  application  for  discharge  published  in,  737. 
Notice  of  first  creditors'   meeting  published   in,  269. 

New  trustee- 
When  appointed.  348,  358.  789. 

New  York- 
Exemption   laws   of,   512. 
Territorial  jurisdiction  and  time  of  holding  courts  in,  52. 

Notes,  promissory,  etc.— 

Pass  to  trustee,  407. 
North  Carolina- 
Exemption  laws  of,  515. 
Territorial  jurisdiction  and  time  of  holding  courts  in,  53. 

North  Dakota- 
Exemption  laws  of,  516. 
Territorial  jurisdiction  and  time  of  holding  courts,  54. 

Notary- 
Attorney  may  act  as,  134. 

Notice— 

Adjudication  in  voluntary  cases,  none  before,  184. 

Amendment  of,  not  required,  187. 

Application  for  receiver,  212. 

Application  for  removal  of  trustee,  356. 

Arbitrate  or  compromise,  of  hearing  of  application  to,  699. 

Attorney,  to,  135. 

Bankrupt,  to,  of  his  examination,  618. 

Composition,  certified  copy  of  order  confirming  imparts,  when,  696. 

Creditors,  to  (see  58a  of  act). 

compromise,  of  hearing  of  petition  to,  G99,  710. 
composition,  of  meetings  to  consider  terms  of,  681. 
of  hearing  of  objections  to,  685. 
petition  to  set  aside,  697. 
discharge,  of  application  for,  by  mail,  736. 
publication  of  order  of  notice  of,  736. 
dismissal    of   Involuntary   petition,    239. 

of   voluntary   petition,    187. 
dividend,  declaration  of,  718,  720. 
payment  of,  720. 


INDEX.  rss'6 

References  are  to  pages. 


Notice  (continued)  — 

Creditors  (coutiuued) — 

examinations  of  bankrupt,  617. 

of  application  for,  not  required,  617. 
of  witnesses,  not  required,  618. 
final  meeting,  718. 

final  reports  and  closing  estate,  734. 
first  creditors'  meeting,  of,  268. 
meeting,   of  first,   268. 

subsequent  to  first,   279. 
to  consider  terms  of  composition,  680. 
publication  of,  of  first  meeting,  269. 
redeem   property,   of  application   to,   705. 
referees  to  give,  122. 
sale  of  disputed  property,  711. 

encumbered   property,  706,  707. 
perishable   property,   not   required,   712. 
unencumbered  property,  703. 
Depositions,  of  taking,  344. 
Discharge,  of  application  for,  736. 

does  not  release  from  unscheduled  claims  unless  creditor  had, 

768. 
petition,  of,  to  set  aside,  (87. 
Dishonor  of  negotiable  instruments,  407. 
Filing  petition,  how  far,  366. 
Given  by  referee,  123. 
Hearing  of,  230. 

How  far  bankruptcy  proceedings  are,  70. 
Newspaper,  of  application  for  discharge  published  in,  736. 

of  first  meeting  published  in,  269. 
Partner  to,  of  petition,  250,  253. 
Petition,  how  far,  366. 
Petition  involuntary,  not  dismissed  without,  239. 

voluntary,  not  dismissd  without,  187. 
Preference  was  intended,  what  is,  577. 
Protest,  of,  to  whom  given,  407. 
Reasonable,  what  is,  618. 
Receiver,  application  for,  212. 
Re-examination  of  claim,  of,  342. 
Referee  gives,  by  mail,  123. 
Sales,  generally,  703,  706,  707,  711,  712. 

of  pledge  by   pledgee,   598. 
Service,   253. 
Trial,  of,  230. 

Trustee's   bond,   certified  copy  of  order  approving,   recordfvi    im- 
parts, 367. 
Trustee,  of  his  appointment,  27S. 
of  his  acceptance,  278. 
of  application  for  removal,  356. 
Witnesses,  to,  for  examination,  618. 

Number— 

Arbitrators,    of,    700. 

Creditors,  of,  who  may  file  involuntary  petition.  100.  202. 

employees  can  not  be  counted,  192. 

nor  relatives  within  third  degree.  192. 

necessary  for  majority  at  croditors'  meeting,  277. 
Referees,  of,  to  be  appointed,  107. 
Trustees,  of,  348. 


1384  INDEX. 

References  are  to  pages. 


Oath- 


o. 


Administered  by  whom,  generally,  177,  201,  330. 

by  referee,  115. 
Affirmation  included  in,  177. 
Answer  to,  227. 
Attorney,  verification  by,  134. 
Bankrupt  to  make,  to  schedule  of  property,  list  of  creditors  and 

claims  for   exemptions,   filed,   etc.,    177. 
Claim  founded  on   lost  writing,   proof  of,   under,   330. 

presenting  false,   under,   penalty,   6G1. 
Creditors'   petition,  to,   200. 

by  whom  made,  201. 
Debtor's  petition,  to,  177. 

False,  penalty  for  making,  611.     (See  Offenses.) 
Proof  of  claims,  to,  330. 
Referee,  of,  109. 

Schedule  to  be  made  under,  178. 
Trustee's  final  report  to  be  under,  718,  734. 
Verification  by  attorney,  134,  201. 

of  answer,  227. 

of   petition,    200. 

petition  for  discharge  not  necessary,  73G. 

specifications  in  opposition  to  discharge,  744. 

Obedience  of  orders— 

(See  CoxTEMPT.) 

Objections- 
Adjudication,  how  plead,  against,  223. 
Claims,  to,  proof  of,  340. 
Confirming  compositions,  685. 
Discharge,  how  to  make,  to  granting,  740. 

grounds  of,  to  granting,  744. 
Referee  must  note,  in  depositions,,  623. 
Sale,  how  and  when  to  raise,  to,  714. 
Service  of  subpoena,  to  make,  to,  209. 


Obligation  of  contracts— 

Congl-ess  may  modify,  18. 
States  can  not  impair,  21. 


Offenses— 

Bankrupt  act,   under,    655. 
Concealing  property,  650. 

friend,  payment  to,  C58. 

husband,  by,   657. 

imputed,  not,  657. 

includes  what,  656. 

knowingly  and  fraudulently,  must  be,  656. 

omission  from  schedules,  657,  658. 

penalty,  660. 

proof   of,    G59. 

property  which  passes  to  trustee,  must  be,  of,  657. 

receivership,  after,  657. 

relatives,   payment  of  debts  to,   658. 

secret  trust,  657. 

shrinkage  of  assets  unexplained,  658. 

transfer,  not  a,  656. 


INDEX.  1385 

References  are  to  pages. 
Offenses   (continiTed)  — 

Contempt,   666. 

acts  which  constitute  a,  666,  et  seq. 

answer  of  contemnor,   673. 

attorney,  by,  135,  670. 

courts,  power  of,  to  punish  for,  666,  669. 
committed  in  another  court,  675. 
power  to  release  contemnor,  674,  675. 

hearing,  674. 

nature  of  proceedings,  670. 

petition  or  motion  for  commitment,  allegations  of,  671. 

practice    pleading,   etc.,    671. 

punishment  for,  675. 

relief  by  habeas  corpus,  676. 

review,  676. 
Embezzlement,  655. 

penalty  for,   656. 
Extorting  money  for  forbearing  to  act,  662. 

punishment  for,  662. 
False  oath  or  account,  making,  660. 

evidence  of,  660. 

examination  on,  by  bankrupt,  660. 

indictment,  allegations  in,  601. 

knowingly  made,  must  be,  660. 

penalty  for,   GOl. 

who  may  be  guilty  of,  661. 
False  claims,  presenting  under,  661. 

penalty  for,   662. 

using  in  compositions,  661. 

who  may  commit,  661. 
Indictment,  averments  in,  665. 
Information,  6G4. 

Jurisdiction  to  punish  for,  what  court  has,  663. 
Jury  trial,  right  of,  664. 
Misappropriation  by  trustee,  655. 

penalty  for,  656. 
Misdemeanors,  are  not  felonies,  but,  655. 
Obtaining  goods  by  false  pretenses,  655. 
Practice  and  pleading  to  punish  for,  664. 

court  which  may  entertain  proceedings,  663. 

indictments,  averments  in,  665. 

information,  when  employed,  664. 

time  for  instituting  criminal   proceedings,  665. 
Punished,  who  are  liable  to  be,  665. 
Receiving    property    from    bankrupt,    662. 

penalty   for,  662. 
Referee,  acting  when  interested,  125,  663. 

purchasing  property  of  bankrupt,  125,  663. 

refusing  to  permit  inspection  of  accounts.  125,  663. 
Trustee  refusing,  etc.,  inspection  of  accounts,  663. 

misappropriation  by,  655. 
United  States  laws  applicable  as  to  jury  trials  for,  664. 
(See  also  Chimes.) 

Offer- 
Composition,  of,  when  made,  679. 

Office- 
Referee  can  not  hold  any  other,  except,  etc.,  108. 
must  have,  in,  or  be  resident  of  district.  108. 
term  of,  108. 
Trustee  must  have,  in,  or  bo  resident  of  district,  349. 


188()  TNDKX. 

References  are  to  pages. 

Officers— 

Attorney-General,  133. 

Clerk,    129. 

Debts  of  an,  not  released  by  discharge,  when,  774. 

Definition   of,    134. 

Marshal,  132. 

Oaths,  authorized  to  administer,  177,  206,  330,  1136. 

Receiver,  134. 

Referee,  107. 

Trustee,   348. 

Official  bonds— 

(See  BoADs.) 

Official  trustee— 

Can  not  be  appointed,  349. 

Ohio- 
Exemption  laws  of,  520. 
Territorial  jurisdiction  and  time  of  holding  oourts  in,  54. 

Oklahoma- 
Exemption  laws  in,  524. 
Territorial  jurisdiction  and  t-l"me  of  holding  courts  in,  55. 

Onerous  property- 
Trustee  not  bound  to  take,  371,  378,  397,  406,  411,  417. 

Open  account— 

May  be  proved  against  estate,  301. 

Operation  of  law- 
Title  of  bankrupt  vests  in  trustee  by,  365. 

Opposition- 
Composition,  to  confirmation  of,   685. 
Discharge,  to  granting,  739. 
grounds   of,   744. 

Order- 
Adjudication,  of,  on  debtor's  petition,  184. 

on  creditor's  petition,   233. 

conclusiveness  of,  234. 
Certified  copies  of,  as  evidence,  735. 

approving  trustee's   bond,   367. 

confirming,  etc.,  composition,  693,  697. 
Composition,  of  confirmation  of  a,  692. 
Court  to  enforce,  68,  632. 

what  is  an,  of,  632. 

when  a  person  is  subject  to,  of,  632. 
Discharge,   denying  a,  V54. 

granting  a,  754. 
Examination,    for   an,    616. 

Proceduce,  as  to,  United  States  supreme  court  to  prescribe,  845. 
Prisoner,  of  court  to  release,  646. 
Proceedings,  of,  when  petition  is  filed  in  different  districts,  228. 

when  several  petitions  are  filed  in  same  district,  229. 
Protect,  to,  the  estate  pendente  lite,  210. 

state  ofiicers  in  releasing  prisoner,   646. 
Reference,  of,  235. 
Referees,  of,  112. 

subject  to  review  by  judge,  112. 


rxDEx.  1387 

Reference*  are  to  pages. 
Order  (continued)  — 

Setting  aside  composition,  697. 
discharge,   784. 

preference  or  conveyance,   610. 
Transferring  cases  in  bankruptcy,  228,  252. 
Trustee,  vesting  title  in,  367. 

for  removal  of,  357. 
Warrant  for  removal  of  bankrupt  to  another  district,  052. 

Orders  in  bankruptcy— 

(See  Genekal  Okuees.) 
Oregon- 
Exemption  laws  of,  526. 
Territorial  jurisdiction  and  time  of  holding  courts  in,  55. 


Papers— 

Bankrupt  to  execute  and  deliver,  633. 

Certified  copies  of,  before  referee  as  evidence,  113. 

Penalty  for  refusing  inspection  of,  by  referee  and  trustee,  125,  063. 

Referees  to  receive  from  clerks,  123,  130. 

to  endorse,   how,   124. 

secure   return  of,   123,   125. 

transmit  to  clerks,  122,  125. 
to  judge,    122. 
Trustee,  of,  open  to  inspection,  125. 

pass  to,  what,  377. 

Parties— 

Additional,  courts  may  substitute  in  bankruptcy  proceedings,  68. 

Appeal,  to  an,  in  bankruptcy,  823. 

Creditors  may  appear  to  become,  219. 

Discharge,  "parties  in  interest"  may  oppose  a,  739. 

Evidence  to  be  preserved  by  referee  on  application  of,  122. 

Referee  to  furnish  information  to,  122. 

Trustee  to  furnish  information  to,  353. 

Partners— 

Acts  of  bankruptcy  by,  1"2. 
Administration  of  property  o1,  255. 
Contesting  voluntary  petition,  ISt. 
Discharge  on,  effect  of  a,  2  ,'j. 

of  one,  effect  on  others,  77'). 
Petition  by  or  against  individual,  244. 
Proceedings   peculiar  to,   24'!. 

Rights  of  partner  who  refuses  to  join  in  petition,  250. 
Surviving,  may  be  adjudged  bankrupt,  247. 
(See  P.MiTNERSiiir.s.) 

Partnerships— 

Acts  of  Ijankruptcy  by,  152,  200.  246.  249. 

by  less  than  all  the  partners.  240. 
Adjudication,  233.  2.".3,  2.".4. 
Administration  of  estate  of,  255. 

general    rule   waiveij,   when,    258. 

when  all  are  not  bankrupt,  244,  255. 
Bankrupt,  when,  may  be  adjudged,  244,  246. 

may  be  adjudged   involuntary,  141. 

may  be  adjudged   voluntary,  141. 

not  after  death  of  partner,  247. 

surviving   partner   may   be   adjudged,   247. 


1388  INDEX. 

References  are  to  pages. 
Partnerships  (('(mtiniied)  — 

Books  of,  destroyed,  effect  of,  749. 

Business,  settlement  of  when  all  are   not   bankrupts,  245. 

Claims,  proof  of,  against  a,  329. 

proof  of,  by  a,  244,  o22. 

by  a  solvent  partner  against,  285. 

of,  against  individual  estate,  244. 
Commence  proceedings  by  or  against,  how  to,  248. 
Composition,  who  may  vote  on,  offered  by,  681. 
Creditors  of,  appoint  trustee,  270. 

when,  may  vote  for  trustee  of  individual  estate  of  partner,  270. 
Death  of  partner  before  bankruptcy,  247. 
Debts  of,  what   are,   260. 

how  paid,   255. 

joint  and  separate,  262. 
Discharge,  from  what  debts;  254,  265. 

effect  of,  265. 

of  one  partner,  effect  of,  776. 
Dissolution,  may  be  adjudged  bankrupt  after,  247. 
Equitable  principles  followed,  243. 
Estates,  firm  and  individual,  255. 

individual,  partnership  creditors  sharing,  257,  720. 
Exemptions  in  property  of,  443. 
Expenses  of  administration,  255. 

Firm  creditors  may  share  in  individual  estate,  when,  256,  720. 
Firm  property,   what  is,   258. 
In   general,   243. 
Individual,  petition  by  or  against,  244. 

discharge  in,  effect  of,  245. 

partnership  assets  only  administered,  245. 

partnership  creditor  may  join,  245. 

resisted  by  other  partners,  may  be,  250. 

when  no  firm  assets,  24G. 
Individual  property,  what  Is,  2.b9. 
Infancy  of  one  partner,  effect  of,  248. 
Insolvent,    when,    157. 

Jurisdiction  of  one  partner  sufficient,  244,  251. 
Limited,   when   corporation,    146. 
Mutual  debts  and  credits,  315. 
Payment  of  debts  of,  255. 
Petition  against,   by  creditors,   249. 

by  all  partners,   248. 

by  less  than  all  partners,  184,  244,  250. 

filed  by  partners,  243. 

filed  in  what  court,  251. 

filed  in  several  districts,  251. 

form  of,  252. 

must  charge  what  act  of  bankruptcy,  200. 

partners  should  all  be  named  in,  251. 

when  partner  will  not  join  in,  250. 
Payment  of  debts  of,  order  of,  255. 
Proceedings  peculiar  to,  243. 
Proof  of  claim  against  a,  329. 

by  a,  244,  322. 
Reference,  253. 
Schedules,  252. 

Settlement  of  business  when   all   are   not  bankrupts,   245. 
Several  adjudged  bankrupt,  256. 
Surplus  of  property,  255. 

Surviving  partner  may  be  adjudged  a  bankrupt,  247. 
Transfer  of  cases  against  different  members  of,  252. 


INDEX.  1389 

References  are  to  pages. 

Partnerships  (continued)  — 

Trustee,  accounts  of,  255. 

administers  firm  and  individual  estate,  255. 

appointed  by  partnership  creditors,  244,  255. 

who  may  vote  for,  270. 
What  is  firm  and  individual  property,  258. 

Patents- 
Trustee  invested  with  title  of,  378. 

Pajnnent— 

Attorneys,  to,   in  contemplation  of  insolvency,   re-examination   of, 

586. 
Debts,  of,  which  have  priority,  723. 

order  of,  725. 
Defense,  as  a,  to  petition  against  debtor,  227. 
Dividends,  of,  on  allowed  claims,  732. 

notice  to  creditors  of,  718,  720. 

unclaimed   dividends,   733. 
Preference  created  by,  584,  et  seq. 

Penalties— 

Concealing  property,  660. 
Debts,    284. 

due  as,  how  far  allowed,  730. 
Document,  for  secreting  or  destroying,  656. 
Embezzlement,  656. 
Extorting  money,  etc.,  662. 
False  oath,  making,  661. 
False  claims,  presenting,  662. 

Receiving  property  from  bankrupt,  to  defeat  act,  662. 
Refusing  inspection  of  books  by  referee  or  trustee,  125,  663. 
(See  also  Offenses.) 

Pennsylvania— 

Exemption  laws  of,  528. 

Jurisdiction  and  time  of  holding  courts  in,  56. 

Pensions—. 

Do  not  pass  to  trustee,  408. 

Perishable  property- 
May  be  sold  without  notice  to  creditors,  711. 

Perjury— 

Jurisdiction  of  state  court,  623. 

Permitting  or  suffering— 

A  lien,  by  legal  proceedings,  105. 
void  as  a  i)reference,  when,  565. 

Personal  property— 

Not  to  be  sold  for  less  than  75  r>«r  font,  of  appraised  value,  713, 

714. 
Schedule  of.  181. 
Passes  to  trustee,  394,  403. 

Persons- 
Definition  of,  141. 

Involuntary    bankrupts,   who   may   be   adjudged.    141. 
Voluntary  bankrupts,  who  may  bf  adjudgod.  141. 


1800  INDKX. 

References  are  to  pages. 
Petition— 

Act  of  bankruptcy,  filing  a,  1G9. 

Allegations  of  a,  142h,  147.  198. 

Amendment  of,  186,  199,  223. 

Appeal,  for  an.  827. 

Arrest  of  bankrupt,  for,  641. 

Bar  to  subsequent  proceedings  in  state  court,  not,  77. 

Composition,  to  set  aside,  697. 

Compromise  debts,  to,  716. 

Creditor's  petition  against  debtor,  198. 

against  whom  filed,  194. 

by  whom  filed,  189. 

court  in  which  filed,  197. 

number  of  copies  filed,  201. 

number  of,  may  be  filed,  197. 

service  of,  203. 

time  for  filing,  201. 

what  to  contain,  142n,  147,  198. 

where  filed,  201. 
Debtor's,   176. 

amended  when  may  be,  186. 

by  whom  filed,  172. 

court  in  which  filed,  174. 

filing  of,  and  schedule,  182. 
Discharge,  for,  736. 
dismissal   of — ■ 

involuntary  dismissal  of.   239. 

voluntary,  187. 
Filed  by  and  against  whom,   194. 

how  to  file,  201. 

in  what  court,  174. 

number  of  copies  to  be,  182. 

where,  182. 
Involuntary,  must  state  what,  142n,  147. 
Multifarious,  200. 

Partnership  by  and  against,  184,  243,  et  seq. 
Procedure  when  filed  in  different  districts,  228. 

when  several,  filed  in  same  district,  229. 
Redeem,  to,  encumbered  property,  705. 
Rehearing  in  appellate  court,  840. 
Sale,  for,  703,  706,  711. 
Service,  203,  208. 
Summons  returnable  when,   204. 
Supervisory,  in  C.  C.  A.,  813. 
To  review  ruling  of  referee,  118. 

what  to  contain,  119. 

where  filed,  119. 
Two  against  same  debtor,  197,  228,  229. 

in  partnership  proceedings,  252. 
Verification,  200. 
Voluntary,  176. 
Who  may  join  in,  202. 

'  etitioners— 

Bond,  by,   on  taking  property,   217. 
Who  may  be,  in  involuntary  cases,  189. 
Who  may  be,  in  voluntary  cases,  172. 

Place— 

Business,  of,  meaning  of,  175. 
Courts  of,  holding,  33,  et  seq. 
Creditors'  meeting,  of,  268. 

when  bankrupt  required  to  attend,  272,  274,  631. 


INDEX.  1391 

References  are  to  pages. 

Pleading  and  practice- 
Appeal  at  law  and  in  equity,  790. 

bankruptcy  in,  to  circuit  courts  of  appeal,  816. 

to  territorial  courts,  807. 

to  U.  S.  supreme  court,  795. 
bond,   828. 
citation.  8;;0. 
death  of  party,  840. 
how  to  take  an,  821. 
mandate  issued  when,   842. 
parties  to  an,   82l 

perfecting  an,  and   filing  record,  836. 
petition,  827. 

proceedings  after,  taken,  8S8. 
record  on,  833. 

amendment   of,    835. 
supervisory  proceedings,  808,  812. 
time  within  which  to  take  an,  820. 
Appellate  courts,  790. 
Arbitration  of  controversies,  698. 
Arrest  of  bankrupt,  on,  641. 
Compositions,  677. 

application  for  confirmation,  682. 
bankrupt  may  offer  terms  of,  when,  679. 
confirmation  of,  effect  of,  693. 

objections   to   a,    685. 

order  of,  692. 

proceedings  after,  695. 
creditors'   meeting  to  consider  terms,  680. 
hearing  of  objections  to  confirmation,  691. 
objections,  685. 
order  of  confirmation,  692. 

effect  of,  C93. 
pleaded  in  bar,  must  be,  695. 
proceedings   after  confirmation,  695. 
setting  aside  a,  697. 
Criminal  proceedings,  in,  664. 
Discharge — 

application    for,   736. 

when  and  where  filed,  737. 
grounds  for  opposing  a,  744,  et  seq. 
hearing  of  objections,  752. 
objections  to,  how  made,  739. 
pleading  a,  to  suit  on  debt,  782. 

to  a  specification,  739,  752. 
revoke  a,  how  and  when  to,  787. 

effect  of,  788. 
specification   of  objections,  7  2. 

pleading  to,  739,  75J. 
waiver  of,  by  new  promise,  77D.  782. 
who    may    plead,    783. 
Distribution  of  the  estate,  717. 

dividends,  decl?.ration  of,  71 S.  720. 

manner  of  paying,  732. 

unclaimed,  733. 
order   of    payment    of   claims,    725. 
settlement  of  the  estate,  733. 
Equity   practice,    rules   of   ai)r)lipd.   230n. 

Evidence  against  bankrupt  not  use  1  in  criminal  prorpedlnes.  626. 
answers  of  witnesses  not  satisfactory.  622. 
burden   of  proof,   habeas  corpus   proceedlnK.s.   C,u:, 


1892  INDEX. 

References  are  to  pages. 
Pleading  and  practice  (coutiuued)  — 

Evideiuv  (fontiiuied) — 

involuntary   proceedings,   231,   232. 

suits  to  recover  property,   G09. 
compulsory  attendance  of  witnesses,  115. 
depositions  in  involuntary  cases,  232. 

notice  of  taking,  344. 

prove  claims  to,  327. 

right  to  take,  232,  344,  628. 
manner  of  introducing,   232. 
referees,   how   taken   before,   620. 

power  to  take,  115. 

preserved   by,   when,   122. 

record  of,  as,  735. 
Forms  prescribed  by  supreme  court,  865. 
Fraud,  where  a  discharge   is  set  up  as  a  defense,  771. 

Involuntary   cases,    189. 

adjudication,  233. 

against   whom   petition   filed,   194. 

amendments,   199,  223,  237. 

answer,  224. 

bankrupt  to  file  list  of  creditors  and  of  property,  178,  221. 

default  proceedings  on,   236. 

deposit   for   costs,   202. 

dismissing  proceedings,   18. 

hearing  on  trial,  230. 

order   of  adjudication,   233. 
of  proceedings,   228. 

petition,    involuntary,    198. 

allegations   necessary,   142n,    147,   198. 

dismissal   of,   239. 

filed  where,  197. 

multifarious,   200. 

pleading   to,    222. 

service  of,  205. 

verification  of,  200. 

pleading   to   a   petition,    222. 

proceeding  subsequent  to  adjudication,  242. 

reference,  order  of,  235. 

referee,   case   referred   to,   110,   235. 

reply,  229. 

seizure  of  debtor's  property,  216. 

service  of  subpoena  and  petition,  203. 
return  of,  207. 

subpoena,  203. 

time  to  plead,   222. 

verification   of  petition,   200. 
Issue,  how  made,  223. 

none  permitted  on  petition  to  supervise,  815. 
Jury  trial.     (See  Jury.) 
Limitations,  statute  of,   3G1. 

Merits,  pleading  to,  waives  formal  defects,  223. 
Multifariousness,  200. 
New  promise,  after  discharge,   779,   782. 
Notices.     (See  Notice.) 
Oaths  and  affirmations.     (See  Oaths.) 
Orders  of  reference,  114,  184,  23.5. 

protect,  to,  estate  pending  adjudication,  210. 

referees,  suhjpct  to  rpview,  112. 
Petition,  involuntary,  must  contain  what  allegations,  142n,  147. 
Rulers,  orders,  etc.,  prescribed  by  supreme  court,  845. 


INDEX.  1393 

References  are  to  pages. 
Pleading  and  practice  (continued)  — 

Suits  by  or  against  trustees,  358,  605,  716. 
Voluntary  cases,  172. 
amendments,  186. 
court  in  which  to  file,  174. 
dismissing  proceedings,  187. 
deposit  for  costs,  182. 
how  and  when  to  file  petition,  etc.,  182. 
order  of  adjudication  and  reference,  184. 
petition,  176. 
filing,  182. 
verification  of,  177. 
proceedings  subsequent  to  adjudication,  188. 
schedules,  178. 
filing,  182. 

Pledgee— 

Fraudulent,  when  not,  597. 

Enforcement  of,  598. 

Negotiable  paper,  redelivery  for  collection,  599. 

Prior  promise,  given  in  pursuance  of,  597. 

Preference  when.  597. 

Redeemed  by  trustee,  598. 

Plenary  suits— 

(See  Jurisdiction.) 

Policies  of  insurance— 

When  pass  to  trustee,  408,  et  seq. 
(See  also  I.nsurance.) 

Possession- 
Bankruptcy  court,  of,  can  not  be  disturbed  by  process  from  other 

court,  100. 
Bankrupt's  property,  of,  pending  hearing,  etc.,  216. 
petitioner  to  give  bond,  217. 
power  of  bankrupt  court  to  take.  96. 
when  bankrupt  is  neglecting  property,  etc.,  216. 
petitionor  to  give  bond  of  indemnity,  217. 
bankrupt  to  give  bond  to  release,  219. 
Exempt  property  of,  by  trustee,  429. 
Referee  to  take.  when.  112,  117. 
Trustee  to  take,  of  bankrupt's  i)ropprty,  .'',70. 

Powers  of  appointment— 

Pass  to  and  vest  in  trustee,  whrn,  :'.79. 
Power  of  attorney— 

:\Iust  be  written,   when,  135,  269. 

Powers  of  congress- 

(See  CoxoKKss.) 

Powers  of  courts— 

(See  JuRXsnicTioN.) 

Powers  of  referee— 

(See  Refkhki:.) 

Powers  of  trustee— 

(See  Trustee.) 


1804  rNDEX. 

References  are  to  pages. 

Preference— 

As  an  act  of  bankruptcy — 

created  by  the  debtor,  161. 
examples,    162. 
intent  necessary,  162. 
voidable  by  trustee,  need  not  be,  162. 
what  necessary,  161. 

created  by  legal  proceedings,  164. 
insolvency  necessary,   164,  165. 
intent  not  necessary,  164. 
legal  proceedings,  what  are,  166. 
must  be  acquired  when,  167. 
suffered  or  permitted,  165. 
voidable  by  trustee,  need  not  be,  166. 
what   constitutes,    164. 
Costs  of  preserving  estate,  payment  of  not  avoidable,  561. 

of  administration,   payment  of  not   avoidable,    561. 
when  committed,   165. 
Create,  what  is  necessary  to,  387. 
Creditors,    of,    residing    in    United    States,    722n. 

must  be  to,  573. 
Filing  fees,  payment  of  not  avoidable,  561. 
Foreigner,  given  to  a,  573. 
Four  months,  must  be  within,  581. 

when   within,    582. 
General  nature  of,  560. 
Given  within  four  months,  581. 
Insolvent,  must  be  by,  574. 
Intent  of  transferee,  576. 
Insolvency  essential,  574. 
Invalid,  .when,  562. 
Judgments  and  transfers,  563. 

attachments,  levies,  etc.,  563. 

obtained  prior  to  four  months,   563. 

obtained  within  four  months,   565. 
Lien,  as  a,  599. 

Attaches  when  a,  564,  567. 

court   may   preserve  a  judicial,   when,    569. 

valid,   561. 
Mortgage,  when  a,  591.     (See  Mortgages.) 
Payment,  when  a,  584,  et  seq. 
Pledge,  when  a,  597. 

Property  transferred  to  prefer  creditors  passes  to  trustee,  385. 
"Reasonable  cause  to  believe,"  570??,  577. 
Return  of  goods  purchased  on  credit,  591. 
Sale,  when  a,  589,  et  seq. 
Suits  to  set  aside  a,  605. 

bankruptcy  proceedings,  not,  608. 

burden  of  proof,  609. 

bona  fide  purchaser  protected,  610,  611. 

damages,  where  property  has  been  sold,  611. 

decree,  610. 

demand,  not  necessary,  609. 

failure  to  contest  claim,  not  a  bar,  609. 

in  what  court,  607. 

in  what  district,  608. 

order,  610. 

order  of  bankruptcy  court,  trustee  need  not  obtain,  609. 

petition,  allegations  in,  609. 

pleading  and  practice,  608. 

plenary,  are,  608. 

trustee,  must  bring,  606. 


INDEX.  1395 

References  are  to  pages. 
Preference  (continued)  — 

Suits  (continued) — 

trustee  represents   general  creditors,   006. 

trustee  subrogated  to  right  of  creditors,  606. 
Surrender,  what  constitutes  a,  334. 

when  necessary,  332,  5S1. 

whether  it  must  be  voluntary,  336. 
Taxes,  payment  of,  not  a  voidable,  5fil. 
Time  begins  to  run.  when,  582. 

four  months'  limit,  581. 
Transfers  by,  571. 

to  one  who  has  cause  to  believe  it  a,  577. 

voluntary  or  by  threat,  573. 
Valid,  when,   561. 
Voidable,  when,   572. 
Voluntary  or  by  threat,  573. 
"Wages,  payment  of  not  a  voidable,  561. 

Preferred  creditors- 
Claims  of,  not  allowed  unless,  etc.,  332. 
Prove  claims,  324. 
Set-off  of  further  credit  by,  317. 
When  preference  voidable,  560. 
Who   are,"  560,   et  seq. 
(See  also  Creditors.) 

Preliminary  injunction  — 

To  protect  the  estate,  211,  214. 
(See  Injuxctiox.) 

Presumption— 

As  to  solvency,  158,  575. 

As  to  intent  to  prefer.  158. 

As  to  fraud  in  compositions,  690. 

Knowledge  of  attorney,  from,  788. 

Priority— 

Del)rs  which  have.     (See  Di:bts.) 

Principal  place  of  business  — 

Vv'hat  is,  175. 

Procedure— 

United  States  supreme  court  to  prescribe  rules,  etc.,  845. 
(See  Pleadixu  and  Pkactice.) 

Proceedings- 
Dismissal  of,  187,  239. 

Subsequent  to  adjudication,  188.  242,  268. 
When  commenced.  70. 
Where  instituted,  174,  197. 

Process — 

Bankrupt  exempt  from  arrest  upon  civil.  635. 
Issued  by  clerk  under  seal  of  court.  840. 
Service  of,  203. 
(See  Writs.) 


l:i9()  INDEX. 

References  are  to  pages. 
Proof,  burden  of— 

Conlirmiug  compositions,   GS7. 

Discharse.  opposing,  753. 

Exempt  property,  440. 

In  contested  cases  341,  344. 

Habeas  corpus,  in,  646.    " 

On  bankrupt,   232. 

Of   domicile,   426. 

On  petitioning  creditors,  231. 

Partnership  assets,  of,  257. 

Preferences  in  suits  to  set  aside,  575,  609. 

Solvency,  as  to,  155,  232,  575. 

Proof  of  claim- 
Administrators,  executors,  receivers,  etc.,  by,  324. 
Affidavit  in,  what  to  contain,  327. 
Allowance  of  claims,  272,  340. 

burden  of  proof,   341. 

defective,  340. 

distinguished  from  proof,  334. 

final,  review  of,  346. 

fraudulent,  345. 

objections,  when  usually  made,  341. 

objections,  who  may  make,  340. 
Amendment  of,  335,  338. 
Appearance  to,  effect  of,  221. 
Assignee  of  claim,  by,  324,  329. 

for  creditors,  by,  323. 
Attorney  may  act  as  notary,  134. 

may  make,  322. 
Change  of,  339. 

Consideration  to  be  stated,  327. 
Contingent  claims,  324,  720. 
Corporation,  by  a,  322. 
Filing,  337. 
Form  of  proof,  327. 
Founded  on  a  writing,  330. 
How  to  make,  326. 

assignee,  by,  329. 

attorney  or  agent,  by,  329. 

consideration,  327. 

exhibits,  330. 

forms  of,  327. 

founded   on  instrument  in  writing,   330. 

founded   on   open   account,   329. 

partnersaip  against,   329. 

payments   must   be   stated,    326. 

security  must  be  stated,  326,  329. 

signed  by  creditor,  must  be,  326,  330. 

under  oath,  must  be,  326,  330. 
Necessity  of,  321. 

Notary,  attorney  may  act  as,  134. 
Oath  to,  330. 

Objections  to  allowance,  340. 
Open  account,  in,   329. 
Partners,  by,  322. 
Partnership,  against  a,  329. 

by  a,  244,  322. 
Petitioning  creditors  must  make,  321. 
Preierred  creditors  must  make,  324. 

how  to  make,  by,  332. 

surrender  of  preference,  338. 


References  are  to  pages. 

Proof  of  claim  (continued)  — 
Preferred  creditors  (continued) — 

surrender,  what  constitutes,  334. 
Receivers,  by,   324. 

Re-examination  of,  342.     (See  Claims.) 
Review  of  final  action  on,  346. 
Scheduling  not  sufficient,  321. 
Secured  creditors  must  make,  321,  331. 

amendment,  335. 

how  to  make,  by.  295,  et  seq.,  331,  604. 
Solvent  partner  by,  285. 

surety,  by,  for  principal,  296,  et  seq. 
Time  within,  may  be  made,  325. 

by  person  prevented  by  fraud,  326. 
Trustee  of  bankrupt,  by,  323,  355. 
United  States,  by,  324. 
Who  may  prove,  322. 

examples,  323. 
Withdrawal,  338. 
(See  Claims,  Creditobs.) 

Property— 

After-acquired,  what  is,  415. 

Concealing,  embezzling,  etc.,  penalty  for,  656,  et  seq. 

Custody,  in,  of  court  other  than  court  of  bankruptcy,  96. 

can  not  be  taken  by  process  from  another  court,  76. 
Encumbered  trustee  not  bound  to  take,  371. 
Foreign  countries  conveyed  in,  by  bankrupt,  367,  376. 

personal  in,  377. 
Individual,  what  is,  259. 
Insured,  may  be  ordered,  118,  213. 

Judgments  in  actions  for  willful  injuries  to,  not  released,  etc.,  768. 
Partnership  of,  administration  of,  253. 
Partnership,  what  is,  258. 
Passes  to  trustee,  what,  365,  et  seq.,  376. 
Possession,  of,  of  bankrupt,  when  taken  by  creditors,  216. 

when-  taJien  by  referee,  112. 

when  taken  by  judge,  117. 

when  taJien  by  trustee,  370. 

in,  of  third  persons,  how  collected.  96,  605.  716. 
Receiving  from  bankrupt  with   intent  to  defraud,  662. 
Referee  purchasing  when  interested,  penalty,  o63. 

to  take   possession  and   release  when,   117. 
Seizure  of,  216. 

Sold,  can  not  be,  for  less  than  75  per  cent,  of  appraised  value,  71. '5, 
714. 

conditionally,  .17.5. 
Title  to,  vests  in  trustoe  when,  365. 
Transferred  before  adjudication,  366. 

between   adjudiration  and   appoinfmont   of  trustee,  365. 

revests  in   bankrupt,  when,  309,  693.  696. 
Third   persons,   of,   in  possession   of  bankrupt,   372,   668. 

contempt  to  replevin  in  state  fourt.  374. 

fraudulent  sales,  .'174. 
Trustee  to  convey,  sold,  713. 

secretin.?  or  destroying.  655. 

title  to,  vests  in  when.  365. 

title  to  what,  vests  in,  365,  et  seq.,  376. 

turned  over  to,  by  bankrupt,  668. 
(See  also  Estates.) 


1398  ENDKX. 

References  are  to  pages. 
Prosecution — 

(See  Offense.) 

Protection- 
Hank  nipt,  of,  from  arrest,  635.      (See  Arrest.) 
Estate,  to.  mode  of  proceeding  for  the,  210. 
applications  for,  how  made,  212. 
appoint  receiver,  etc.,  211. 
injunction  for,  211,  214. 
seizure  of  property  of,  216. 

Protest- 
Notice  to  whom  given,  407. 

Provable  claims- 
Assignee,  324. 
Assignee,  expenses  of,  2'86. 
Banlirupt  is  endorser,  etc.,  where,  294. 
Contingent  demands  and  liabilities,   286,  288. 
Contracts,  founded  upon,  301. 

contingent,  303. 

contract  may  be  oral,  302. 

contract  must  have  been  made  prior  to  proceedings,  302. 

covenants  in  lease,  306. 

examples,  302. 

illegal   consideration,   304. 

must  arise  in  one  year,  302. 

need  not  be  owing,  301. 

quasi  contract,  303,  319. 
Costs,  301. 
Counter  claims,  308. 
Damages  to  persons,  318. 
Debts  "absolutely  owing,"  288. 

due  at  a  future  date,  289. 

evidenced  by  a  writinc,,  293. 

evidenced  by  a  judgment,  289. 

founded  on  contract^  301. 

founded  on  open  account,   301. 
Equitable  debts,  285. 
Expenses  of  administration,  285. 
Fixed  liability,  what  is  a,  284. 
How  to  prove,  321. 
Interest,  299. 

amount  of,  300. 

rebate  of,  300. 

stops  on  filing  petition,  300. 

usury  dependent  on  state  laws,  300. 
Judgments  pending  bankruptcy,  292. 

prior  to  bankruptcy,  290. 
appealed,  291. 
going  behind,  291. 
must  be  for  a  "debt,"  290. 
obtained  within  four  months,  291. 
Liens  barred  by  limitation,  320. 
Liquidated,  must  be,  281. 

Mutual  debts  and  credits,  307,  et  seq.     (See  Mutual  Debts  and 
Credits.) 

what  are,   309. 
Penalties,  284,  730. 

Preferred  creditors,  rights  to  set-offs,  317. 
Principal  and  surety  both  bankrupts,  298. 
Proved  within  one  year,  must  be,  320,  325. 


IKDEX.  1899 

References  are  to  pages. 
Provable  claims  (continued)  — 

Rent,  304.      (See  Rent.) 

Secured  claims,  283. 

Set-offs  and  counter  claims,  308,  310,  315. 

acquired  by  purchase,  310,  316. 
Surety  for  bankrupt,  295,  et  seq. 

amount  for  which  principal   creditor  may  prove,  297. 

amount  for  which  surety  may  prove,  296. 
Statute  of  limitations,  what  are  barred  by,  319. 
Stockholders'   liability,   282». 
Torts  318. 

What  are,  193,  281,  761. 
(See  Debt.) 

Proxy- 
Penalty  for  using  false  claim  in  composition,  as  or  by,  662. 
Vote  at  creditors'  meeting,  when  may,  269. 

Publication- 
Application  for  discharge  of,  737. 
Notice  of  first  creditors'  meeting,  of,  268. 
Service,  by,  when  permitted,  208. 

partnership  proceedings,  in,  253. 

Puuishment— 

(See  Offenses.) 

Purchaser- 
Bankrupt  may  be  a,  at  sale,  713. 
Bona  fide,  for  value,  etc.,  title  by  levy,  lien,  etc.,  not  impaired,  565. 

for  present  consideration  protected,  384. 
Referee  can  not  become  a,  125,  653,  713. 
Trustee  can  not  become  a,  713. 

attorney  or  agent  of,  can  not  be,  713. 


0. 


Qualification- 
Referees,  of,  107. 
Trustees,  of,  348. 
Vote  to,  at  creditors'  meetings,  269. 


R. 

Railroad  companies— 

Can  not  be  adjudged  bankrupt,  150. 

Real  estate- 
Included  in  schedule,  178,  221. 
Not  to  be  sold  for  less  than  75  per  cent,  of  appraised  value,  713, 

714. 
What  passes  to  trustee,  395. 


Reallowance  of  claims— 

When  may  be  made,  342. 

Reasonable  attorney  fee— 
(See  Attobneys.) 


1400  INDKX. 

References  are  to  pages. 

Reasonable  cause  to  believe— 

That  preference  has  been  given,  570n,  577. 

Receivers— 

Ancillary.  213. 
Application  for,  212. 

notice  of,  212. 
Appointment  of,  an  act  of  bankruptcy,  153,  167. 
Appointment  of  by  bankrupt  court,  211,  212. 
Business  of  bankrupt  may  be  conducted  by,  211. 
Compensation  of,  214. 
Courts  of  bankruptcy  to  appoint,   211. 
Judge  to  appoint,  212. 
Objections  to  report  of,  214. 
Officer  to  include,  134. 
Powers  of,  213. 
Proof  of  claims  by,   324. 
Referees  may  appoint,  117,  212. 
Reports  of,  objections  to,  214. 
Sell,   may,  when,  702. 

Reconsideration  of  claims— 

(See  Re-allowance  of  Claims.) 

Record- 
Appeal — 

amendment  of,  upon,  834,  835. 

failure  of  appellant  to  file,  837. 

filed,   when  must  be,   836. 

printing,  838. 

what  must  consist  of,  833. 
Bankrupt's   destruction   of,   prevents    discharge,   748. 
Decree  of  adjudication,  of,  367. 

Inspection  of,  refused  by  trustee  or  referee,   125,  663. 
Notice  imparted  by,  of  order  confirming  composition,  696, 

trustee's   title,    of,    is,    367. 
Referee's — 

dividends,  to  contain,  721. 

how   made,   122,   124. 

to  be  made  by,  122,  735. 

transmitted  to  judge  with  findings  by,  when,  122. 
Time  after,  only  counted  in  four  months'  limitation,  170. 

Recovery- 
Dividends,  of,  on  reconsidered  claims,  350. 
Fraudulent  conveyances,  of,  360,  384,  390,  605,  716. 
Property,  of,  transferred  to  attorney,  355,  586. 

Redeeming— 

Encumbered   property  from  liens,  etc.,   704. 

Re-examination— 

Claims,  of,  342.     (See  Claims.) 

Payments,  of,  made  to  attorneys,   355,  586. 

Referee— 

Absence  or  disability  of,  107. 

Accounts,  penalty  for  refusing  inspection  of,   125. 

Accounts  of  trustee,  to  audit,  352,  717,  718. 

Acts  only  after  reference,  110. 

Administrative  duties  of,  122. 


DsDEX.  1401 

References  are  to  pages 

Beferee   (continued)  — 

Adjudication,  reference  after,  110,  114,  184,  235. 

to  make  when,  111,  114. 
Administration  of  oaths  by,  115,  177,  201,  330,  642. 
Allow  attorney's  fees,   135. 
Amendments,  may  allow,  187,  239. 
Appointment  of,  107. 
Attendance  of  witnesses  before,  115. 
Attorney — 

bankrupt  cases,  can  not  act  as,  in,  114. 

should  be,  107. 
Bond  of,  109. 

amount   of,    109. 

failure  to  give,  creates  a  vacancy,  109,  350. 

filed  of  record  in  clerk's  office,  109. 

sureties  on,  109,  350. 

value  of  property,  109. 

suits  on,  how  and  when  brought,  109. 
Books  containing  record,  etc.,  to  keep,  124. 

certify   and  transmit   to   court,   124,   735. 
Certified   copies  of  proceedings  before,  evidence,   113,  735. 
Claim  for  exemptions,  bankrupt  to  file  copy  of,  for,  181,  221,  429, 

433,  439,  G34. 
Claims  filed  before,  when  case  referred,  337. 
Clerk  hire  of,  128. 
Clerk  to  collect  fees,  130,  182. 

except  when,  183. 

pay  when,  130. 

referee  to  employ,  115. 
Collect  estate  of  bankrupt,  should  not.  111. 
Commissioner  of  deeds,  may  be,  108. 

Commissions  on  dividends,  12G.  .   ^    ^h  ,    nnA 

Commitment,  can  not  exercise  power  of.  111,  lit!,  G14,  b74. 
Compensation  of,  126. 

none  except  that  expressly  authorized,  126. 

when  case  transferred,  127. 

when  reference  revoked,  127. 
Compositions,  can  not  approve.  111,  682,  692. 
Contempt  before.  111,  116,  343.  666,  et  seq.,  747. 

proceedings  to  punish  for,  116,  671. 
Copies  of  proceedings  before,  113.  „    ^oc 

Counselor  at  law  can  not  act  as,  in  bankruptcy  cases,  125.  , 
Court  may  act  as,  107. 

Creditors'  lists,  to  make  and  file,  when,  1^^. 
Deposition,  notice  to  take,  filed  with,  344. 
Disability,  effect  of,  107. 
Discharges,  can  not  determine,   111. 

may  report  the  facts  on,  753. 
Districts  of,  court  to  designate,  107. 
Dividends,  to  declare,  122,  717,  721. 
Dividend  sheets,  to  prepare  for  trustee,  ].-,    ui. 

Duties  of,  122.  ,       i-    "ni 

Encumbered  property,  may  order  sa  e  of    /04 
Evidence,  to  presence  when.  123.  12.1    3»^».  C20. 

to  make  up  record  embodying,  etc.,  125. 
Examination—  ,  ♦      no 

bankrupt    of,  power  to  regulate,  filJ. 

may  conduct  an,  to  be  used  in  another  district,  when.  616. 

may  order,  615. 
Expenses  of,   126,   127. 

must  keep  accurate  account  or,  i-«. 


1402  mDEX. 

References  are  to  pages 
Referee   (continued)  — 

Expouses  (foiitiiiued) — 

may   require   indemnity   for,   when,   128. 
Fees  of,   12G. 

apportionment  of,   127. 

claim   for  must  be  passed  upon  by  court,  128. 

clerk  to  collect,  131. 

may  be  ordered  paid  by  judge,  128. 
I        Fined,  for  what  offenses,  125,   6G3. 

Findings,  to  transmit,  etc.,  to  judges  when,  124. 

Fix  time  and  place  of  acting  upon  matters  before  them,  may,  110. 

Forfeit  office,  when,  125. 

Government  penalty  envelopes,  may  use,  123. 

General  powers  of,  109. 

Information  to  furnish,  when,  122. 

Inspection  of  books,  etc.,  must  allow,   when,  663. 

Interested,  penalty  for  acting,  when,  125,  663. 

Jurisdiction  of,  109,  et  seq. 

administer  oaths,  115. 

clerk,  employ,   115. 

consider  petitions,   114. 

examine  witnesses,   115,  116. 

stenographers,  employ,  115. 

take  possession  of  and  releise  property,  117. 
Jury  trial,  should  not  preside  at,  158. 
Justice  of  the  peace,  may  be,  lOS. 
Limitation  of  action  on  bond,  109. 
List  of  creditors,  bankrupt  to  file  copy,  for,  178. 

when  to  prepare  and  file,  113. 
Marshal,  may  appoint,  117. 
Master  in  chancery,  may  be,  108. 
Meetings  of  creditors — 

calls  first,  268. 

presides  at  first,  112,  273. 
Notices  to  creditors,  given  by,  122,  123. 

to  take  depositions,  filed  with,  344. 
Number  of,  107. 
Oath  of  office  by,  109. 

to  administer,  115,  177,  201,  330,  642. 
not  in  court,  115. 
Offenses — 

acting  when  interested,  125,  663. 

purchasing  property  while,  125,  663. 

refusing  inspection  of  accounts,  etc.,  125,  663. 
Office,  can  not  hold,  except,  108. 

must  be  in  district,  unless  resident  of,  108. 

term  of,   107. 
Officers  of  court,  are,  107. 
Orders  of — 

subject  to  review  by  judge,  112. 

what  should  be  recited  in,  112. 
Papers  to  receive  from  clerks  when,  123,  130. 

penalty  for  refusing  inspection  of,  125,  663. 

to  be  endorsed  how,  124. 

to  transmit  to  clerk,  when,  125. 
Parties  in  interest,  to  furnish  information  to,  122. 
Payment  of  fees  to,  by  clerk,  131. 
Penalty  for  offenses  by,  125,  663. 
Persons   holding  office   under   a  state   or  the   United   States   not 

eligible,  except,  108. 
Petition,  to  consider,  etc.,  114,  184,  230. 


INDEX.  1403 

References  are  to  pages. 

Referee   (continued)  — 

Possession   of   bankrupt's    property,    to  take,    when,    112,    212. 

Powers  of,  109,  et  seq. 

Powers  denied  to.  111,  113. 

Property  surrendered  to  trustee,  may  order,  118. 

Preserve  evidence,  when,   123,  124. 

Punishment  for  contempt  before,  116,  671. 

for  offenses   by,   125,  663. 
Purchaser,  can  not  be,  of  bankrupt's  property,  when,  125,  663,  713. 
Qualifications,  107. 
Receivers,  may  appoint,  117. 
Records — 

certified  by,  124. 

penalty  for  refusing  an  inspection  of,  125,  663. 

to  keep  and  transmit  to  clerks,  122,  124. 

to  make  up  and  send  to  judges,  122,  124,  735. 

what  to  include  in,  124,  275,  717,  735. 
Reference — 

cases  of,  after  an  adjudication.  110,  184,  235. 

voluntary  cases,  184. 

when  and  by  whom  cases  are  referred  to,  110. 
Related  to  judges  of  courts,  etc.,  can  not  be,  108. 
Release  property  of  bankrupt,  when,  117,  212,  219. 
Remove,   court,   may,    107. 

Resident  of,  must  be,  or  hold  oflRce  in  district.  108. 
Review,  powers  subject  to,  112,  118. 
Ruings  of,  mav  be  reviewed  by  judge,  118,  et  seq. 
Sale,  can  not  bid  at,  125,  663,  713. 

Stay  proceedings  of  other  courts,  have  no  power  to,  112. 
Schedule,  to  examine,  and  amend,  122,  179,  186. 

copy  of,  to  be  filed  for,  178,  634. 

to  prepare  and  file,  if  bankrupt  neglects,  etc.,  122. 
Stenographer,  to  employ,  115,  344,  620. 
Subpoenas  should  not  \ye  issued  by.  111. 
Term  of.  107. 

Time  of  bringing  suit  on  bond,  109. 
Transfer  of  cases  to,  110,  228,  252. 

apportionment  of  fees,  127. 
Trustees — 

appointment  of,  by,  in  certain  cases,  113. 

approve  the  bond  of,  may,  113. 

discharge,  when  may,  734. 

notify  trustees  of  appointment,  to,  113,  359. 

removal  of,  113. 
Vacancy,  filling,  107,  100. 

failure  to  ^ive  bond  creates,  109,  350. 
Warrant  for  detention  of  bankrupt,  no  power  to  issue,  111. 
Who  may  conduct  proceedings  before,  116. 
Witnesses — 

'attendance  beforn.   115,  343,  616. 

may  compel  to  produce  books,  614. 

may  examine,  11. ""i. 

may  summon,   115. 

iceference— 

Absence  of  judge,  110,  114,  130. 
Adjudication,  after,  110,  184,  235. 
Involuntary   cases,   in.   235. 
Order  of — 

to  be  served  on  referee,  186. 
Partnership  cases,  in,  253. 


1404  INDKX. 

References  axe  to  pages. 
Reference  (^ continued)  — 

Proceedings  after,  185,  268. 
Voluntary  cases,  in,  184. 
When  made,  130,  185. 

Rehearing— 

In  appellate  cases,  840. 

Relationship— 
Computing,  192. 

Relative — 

Creditor,  of  bankrupt,  can  not  be  counted  in  petition,  etc.,  192. 
Referee,  not  to  be,  of  judges  of  United  States  courts,  etc.,  108. 

Release- 
Bankrupt's  property  of,  giving  bond,  117,  219. 
Referee,  by,  of  property,  when,  117,  212,  219. 
What  debts  discharge.     (See  Dischabge.) 

Removal- 
Bankrupt,    of,    from    one    district   to    another,    646-652.      (See    Ex- 
tradition.) 
Cases  to  circuit  court,  102. 
Property  of  bankrupt,  of,  with  intent  to  defraud,  etc.,  effect,  153, 

159,  IGO. 
Referee,  of,  107. 
Trustee,  of,  effect,  356,  654. 
by  judge  only,  113,  357. 
on  hearing  and  notice,  356. 
(See  Trustee.) 

Rent— 

As  a  provable  debt,  304. 

after  adjudication,  305,  400. 

apportionment,  305. 

before  adjudication,  305. 

covenants  in  lease,  306. 

election  by  trustee,  305,  306,  397,  et  seq. 

lien  for,  401. 

surety  for,  liability  of,  401. 

Replevin- 
Action  of,  will  not  lie  in  state  court,  when,  374. 

Reply- 
When  necessary,  229. 

Report— 

Annual,  of  Attorney-General,  133. 
Officers,  by,  of  expenses  of  administering  estates,  128. 
Trustee,  by,  of  condition  of  estate,  when,  352,  717,  721. 
final,  when,  734. 

Representations — 

Judgment  in  action  for  false,  not  released  by  discharge,  766,  767. 

Residence — 

Banking  institutions,  depositories,  etc.,  to  be  convenient  to  trus- 
tees   353. 
Departure  of  bankrupt  from,  cause  fer  detention,  614,  640. 


INDEX.  liOo 

References  are  to  pages. 
Residence  (continued) —  , 

Dower  fixed  by  law  of  bankrupt's,  396,  437,  653. 
Expenses  of  bankrupt,  attending  examination  from,  617. 
List  of  creditors  filed  by  bankrupt  to  show,  178,  180,  221. 
Persons  adjudged  bankrupt,  of,  144,  172,  197,  198,  206,  224.  247,  251, 

425. 
Referee's,  in  district,  etc..  108. 
Sureties  on  bond  when  property  seized,  217. 
Taxes  of,  bankrupt  not  released  from,  by  discharge,  762. 
Trustees,  in  district,  etc.,  349. 

Respondent— 

Costs,  counsel  fees,  etc.,  allowed  on  dismissal  of  petition,  234. 

Restraining  orders— 

To  protect  an  estate,  214. 

Return— 

Subpoena,  207. 

Revesting-- 

Of  title  in  bankrupt,  when,  369,  693,  697. 

Review- 
By  circuit  court  of  appeals,  808.  et  seq.  (See  Circuit  Coubt  or  Ap- 

PE.\LS.) 

Contempt  proceedings,  of,  676. 

Final  allowance  or  rejection  of  a  claim,  346. 

Referee,  of  action  of,  112,  118,  et  seq. 

Revivor— 

On  death  of  party,  in  appellate  court,  840. 

Revocation— 

Discharge  of  bankrupt,  of,  when  may  be  made,  784. 
Title  vested  in  trustee  on,  of  discharge,  3G9.  789. 

Rhode  Island- 
Exemption  laws  of,  529. 
Territorial  jurisdiction  and  time  of  holding  courts  in.  56. 

Rules— 

Amendment  of,  bv  supreme  court  of  United  States.  845. 
Supreme  court  of  the  United  States  to  prescribe  in  bankruptcy 
proceedings,  845. 

Salary — 

Persons  receiving,  of  $1,500  can  not  be  involuntary  bankrupt.  112. 


Sale- 
Advertising,  as  to,  712. 
Application  for,  who  may  make,  705,  708. 
Appraising  property  before,  712. 
Approval  of  court.  713. 
Auction,  usually  by,  712. 
Bankrupt,  may  purchase  at,  713. 
Conditional,  to  bankrupt  may  not  pass  title,  375. 
Conducted  bow,  712. 


1-iOG  INDEX. 

References  are  to  pages. 
Sale  (continued)  — 

Confirmation  of,  when,  713,  714. 

Costs  of.  715. 

Encumbered  property,  of,  601,  605,  704. 

application  for,  how  made,  706. 
should  be  made  when,  706. 

free  from  encumbrance,  706. 

petition  for,  706. 

proceeds,  how  dealt  with,  707. 

purchase  by  lienor,  708. 

subject  to  encumbrance,  705. 

trustee  represents  whom,  705. 
Fraudulent,  to  bankrupt  may  not  pass  title,  375. 
Grounds  for  setting  aside  a,  714. 
Mortgage  or  lien,  subject  to  or  free  of,  705,  706. 
Must  be  for  75  percent  of  appraisement,  713,  714. 
Notice  to  creditors  of,  703.  706,  707. 
Order  of  court,  should  be  by,  702. 

must  be  strictly  followed,  712. 
Perishable  property,  711. 
Power  of  trustee  to  make  a,  701. 
Preference  created  by  a,  589,  et  seq. 
Price,  inadequacy  of.  ground  for  setting  aside,  714. 
Private,  or  public,  703,  706,  707,  712. 
Property,  to  be  conveyed  by  trustee,  713. 
Property  in  dispute,  711. 
Receiver,  by,  702. 
Referee  can  not  bid  at,  125,  663,  713. 

purchasing  at,  penalty  for,  125. 
Setting  aside  a,  714. 

Title  of  bankrupt  only,  transferred,  713. 
Trustee  can  not  bid  at,  713. 
Unincumbered  property,  of,  703. 
Who  may  bid  at,  713. 

Schedule— 

A,  180. 

amendment  of,  186. 

B,  181. 

Bankrupt  to  make  oath  to  and  file,  when,  634. 
Composition  can  not  be  offered  before  filing,  679. 
Copies  in  triplicate  to  be  filed  by  bankrupt.  178,  221. 
Discharge  does  not  release  from  unscheduled  claims,  768. 

unless  creditors  had  notice,  768. 
Filed  in  involuntary  cases,  201,  221,  634. 

in  voluntary  cases,  182,  634. 

when  bankrupt  absent,  221. 
Form  of,  178. 
Referee  to  examine  and  amend,  122,  179. 

prepare  and  file  when,  122. 
Signed,  each  sheet  should  be,  179. 
Voluntary  bankrupt  to  file,  with  petition,  182,  634. 
What  to  contain,  178. 

Seal  of  court— 

Authentication  of  record,  necessary  to,  834. 
Process  issued  under,  846. 

Secured  creditors- 
Allowance  of  clams,  for  what  sums,  331. 
Claims  secured  by  individual  undertaking,  332. 
subrogation  of  obligor  discharging,  332. 


INDEX.  1407 

References  are  to  pages. 
Secured  creditors  (continued)  — 

Definition  of.  004. 

Enforcement  of  security  by,  76,  709. 

Meetings  of  creditors,  not  entitled  to  vote  at,  270. 

claims  not  counted,  etc.,  unless,  etc.,  189. 
Paid  in  full,  when,  719. 
Pay  costs  of  sale,  to  whom,  715. 
Priority  of,  as  to  prior  creditors,  730. 
Prove  deficiency  and  rely  on  security,  604. 

how  to.  claims,  331. 
Rights  of,  604. 

Sale  of  property  on  application  of,  708. 
Security,  may  rely  on.  and  not  prove,  604. 

enforcement  of,  76,  709. 

must  be  stated  in  proving  claims,  329. 

value  of,  how  determined,  331,  604,  705,  710. 
Surrender  security  and  prove  claim,  may,  604. 
Vote,  entitled  to,  when,  271. 

Trustee  may  elect  not  to  take  encumbered  property,  372,  704. 
(See  also  Creditors  and  Preferred  Creditors.) 

Seduction— 

(See  Judgments.) 

Seizure- 
Bankrupt's  property,  of,  216. 

application  for,  217. 
Proceedings  where  property  not  bankrupt's  is  taken,  218. 
Redelivered,  when  and  how,  of  property,  219. 
Referee  may  order,  when,  117,  217. 

Servant— 

Wages  due,  etc.,  have  priority,  726. 

Service— 

Notice  of  examination,  of,  617. 

to  take  depositions,  of,  344. 

to  testify  without  district  of  his  residence,  344,  617. 

upon  bankrupt,  618. 
Partnership  proceedings,  in,  253. 
Petition  of,  with  subpoena  for  involuntary  bankrupt,  203. 

manner  of,  203.  ' 

Subpoena  of,  etc.,  203,  205. 
How  to  object  to  irregularity  of,  209. 
Manner  of,  205. 
Publication  by,  208. 
Return  of,  207. 
Waived  by  appearance,  207. 
(See  also  Notice  and  Subpoena.) 

Set-off- 
Allowed  between  creditor  and  bankrupt,  when.  308,  310.  315. 

not  between  debtor  and   bankrupt,  when.  312. 
Preferred  creditor,  by,  giving  furtlior  credit,  etc..  317. 
Waiver  of,  314,  317. 
(See  Mutual  Debts  and  Credits.) 

Setting  aside- 
Confirmation  of  a  composition,  COT. 
Discharge,  order  granting.  7K4. 
Preferences  and  fraudulent  conveyances.  605. 


1408  INDEX. 

References  are  to  pages. 

Settlement— 

Controversies  of.  by  arbitration,  698,  716. 

Estate,  of  the,  733. 

Shrinkage  of  assets— 

Evidence  of  concealment,  658. 

Sickness — 

Judge  of,  referee's  powers  when  exercised,  117. 

Solicitor— 

(See  Attorney.) 

Solvency— 

Burden  of  proof  as  to,  155,  232. 

Defense,  a  complete,  when,  155,  161,  168,  169,  196,  225. 

Jury,  trial  by,  as  to,  196,  226. 

Solvent  debtor- 
Can  not  give  a  preference,  574. 

South  Carolina- 
Exemption  laws  of,  530. 
Territorial  jurisdiction  and  time  of  holding  courts  in,  56. 

South  Dakota- 
Exemption  laws  of,   531. 
Territorial  jurisdiction  and  time  of  holding  courts  in,  57. 

State  banks— 

Can  not  be  adjudged  involuntary  bankrupt,  142. 

State  courts— 

Bankrupt  may  be  released  by  habeas  corpus  issued  by,  642. 

Bankruptcy  proceedings,  can  not  enjoin,  173. 

Contempt  before  referee,  can  not  punish  for,  623. 

Decisions  of,  bankruptcy  courts  will  follow,  when,  724. 

Determine  effect  of  discharge,  when,  759. 

Enforce  mortgage  or  lien,  when,  709. 

Perjury  before  referee,  can  not  punish  for,  623. 

Suits  in,  may  be  stayed,  77,   87. 

United  States  supreme  may  revise  decision  of,  when,  793. 

State  laws— 

Adopting,  as  to  exemptions,  constitutional,  426. 

as  to  mechanics'  liens,  constitutional,  602. 

as  to  validity  of  transfers,  constitutional,  294. 
Assignment,  effect  of  national  act  upon,  29. 
Bankrupt  or  insolvent,  may  be  enacted  when,  20. 
Can  not  discharge  debtor  from  existing  contracts,  21. 

debts  owing  to  nonresident,  21. 

impair  obligation  of  contract,  21. 
Dower  of  widow  fixed  by,  437. 
Effect  of  repeal  of  national  act  on,  20. 
Exemptions  governed  by,  422. 
Insurance  policies,  exemption  of,  by,  410. 
Insolvency,  728. 

Liens,  time  of  attaching  governed  by,  566. 
Superseded  only  when  congress  acts,  19. 
Transfers  void  under,  void  in  bankruptcy,  393. 


INDEX.  1409 

References  are  to  pages. 

State  officer— 

Will  be  protected  in  obeying  order  of  court  of  bankruptcy,  646. 

Statement— 

Bankrupt  to  file,  of  his  assets  and  debts,  634. 

Trustee  to  lay  detailed,  before  final  meeting  of  creditors,  718,  734. 

(See  also  Schedules.) 

Statistics— 

Attorney-general  to  lay  tables  of,  annually  before  congress,  IS.*]. 
Officers  to  furnish,  to  attorney-general  on  request,  134. 

Statutes  of  limitation- 
Bankruptcy  stops  running  of,  320. 
Debts  barred  by,  not  provable,  319. 
Defense,  as  a,  227. 
Liens  barred  by,  319. 
Time  for  claiming  dividends,  733. 

proving  claims,  320,  325. 

taking  appeals,  820. 

Statutes  of  United  States  (quoted)  — 

Act  of  March  3,  1891,  Sees.  5  and  6,  790,  791. 

Bankruptcy  act  of  1898,  1119. 

Bankruptcy  law  of  1867,  1207. 

Equity  rule  13,  205. 

R.  S.  Sec.  601,  transfer  proceedings  to  circuit  court,  102. 

R.  S.  Sec.  709,  revising  decision  of  state  court  in  supreme  court, 

793. 
R.  S.  Sec.  1007,  supersedeas,  829. 
R.  S.  Sec.  1014,  extradition,  647. 

Stay- 
Application  for,  of  suits  in  state  court,  89,  112. 

who  may  make,  90. 

how  made,  90. 

what  to  contain,  90. 
Begun  after  bankruptcy,  89. 
Effect  of,  of  suits,  95. 

Founded  on  debt  discharged,  of  suits  only,  88. 
In  different  district,  95. 
Judge  and  not  referee  may,  suits,  91. 
Length  of,  90,  94. 
May  be  had  at  any  stage,  88. 
Suits,  power  to,  72,  77,  87. 

in  federal  court,  87. 

in  state  court,  88,  211. 
When  granted,  92. 
When  two  or  more  petitions  are  filed,  228. 

Steamboat  companies— 

As  bankrupts,  150. 
Stenographer— 

:\Iay  be  employed,  115,  344,  620. 

Stock,  shares  of— 

Fictitious  person,  in  name  of.  40.f.. 

Pass  to  trustee,  405. 

Transfer  on  books  to  trustee.  405. 

Trustee  may  recover  uniiaid  su])Scrlptions,  406. 

may  elect  not  to  take,  405. 

may  vote,  405. 


1410  INDEX. 

References  are  to  pages. 
Stockholders— 

Liability  on  discharge  of  corporation,  777. 

Subpoena 

Disobedience  of,  how  to  punish,  619. 

How  issued,  204. 

May  run  into  other  districts,  115. 

Necessary,  when,  204. 

Return  of,  by  marshal,  etc.,  207. 

Service  of,  203,  205. 

when  personal,  can  not  be  made,  206. 

when  served  without  district,  G19. 
Should  not  be  issued  by  referee,  111,  115. 
Witness,  to,  to  testify  before  referee  or  court,  618. 

Subrogation- 
Claims  secured  by  individual  undertaking,  of  person  discharging, 

296. 
Trustee,  of,  to  rights  of  creditor  or  holder  of  lien,  569,  600,  606. 
of,  to  rights  of  creditors  to  recover  property,  356. 

Suits— 

Bankrupt,  by  and  against,  358,  365. 

appearance  of  trustee,  358. 

commenced  by,  prior  to  adjudication,  358. 

stay  of,  against,  72,  77. 
Bonds  of  referees  and  trustees,  on,  74,  109. 

in  name  of  United  States,  etc.,  109. 

limitation  of  action  on,  109. 
Equity,  where,  in,  109. 

Expense  of,  to  recovei'  concealed  property  entitled  to  priority,  725. 
Injury  to  property,  right  to  bring  for,  passes  to  trustee,  420. 

to  person,  right  to  bring  for,  does  not  pass  to  trustee,  420. 
Instituting  bankruptcy  proceedings  as  grounds  for,  241. 
Law  and  equity,  may  be  brought  in  court  of  bankruptcy,  80. 

what  are,  104. 
Lien  created  pursuant  to,  etc.,  when  dissolved,  570. 
Measure  of  damages  in.  to  recover  property  sold,  611. 
Mechanics'  lien,  to  enforce,  602. 
Plenary,  against  third  persons,  80,  668. 
Prosecuted  after  discharge,  may  be,  when,  756. 
Referee,  on  bond  of,  74,  109. 

can  not  stay,  110. 
Review,  how  to,  at  law  and  in  equity,  790. 
Set  aside,  to  conveyances,  605. 

bankruptcy  proceedings,  not,  608. 

burden  of  proof,  609. 

bona  fide  purchaser  protested,  610,  611. 

damages,  where  property  has  been  sold,  611. 

decree,  in,  610. 

demand  not  necessary,  609. 

failure  to  contest  claim  not  a  bar  in,  609. 

in  what  court,  C07. 

in  what  district,  608. 

orrler  in,  (^10. 

order  of  bankruptcy  court,  trustee  need  not  obtain,  609. 

petition,  allegations  in,  609. 

pleading  and  practice,  608. 

plenary,  are,  608. 

trustee  must  bring,  606. 

trustee  represents  general  creditors  in,  606. 

trustee  subrogated  to  right  of  creditors,  606. 


DTOEX.  1411 

References  are  to  pages. 
Suits  (continued) — 

Staying  suits  in  state  court,  72,  77,  87,  211.     (See  Stat.) 
Trustee,  on  bond  of,  351. 

by,  brought  in  what  courts,  81,  360. 
death  or  removal  not  to  abate,  358,  654. 
not  bound  by  price  of  sale,  when,  611. 
time  of  bringing,  by  or  against,  361. 
on  bond  of,  351. 

"Suffered  or  permitted"— 

Meaning  of,  165. 

Bummary  proceedings— 

(See  Jurisdiction.) 

Summons— 

(See  Subpoena.) 

Summons  and  severance — 

When  necessary,  825. 

Sunday— 

In  commuting  time,  171. 

Supersedeas— 

Appeal  does  not  operate  as,  829. 
How  obtained,  829. 

Supervisory  power- 
Circuit  courts  of  appeal  may  exercise,  808. 
How  invoked  and  exercised,  812. 
(See  also  Appellate  Pkoceedixgs.) 

Supreme  Court  District  of  Columbia- 
Appeals  from,  795. 
A  court  of  bankruptcy,  33,  67. 
Jurisdiction  of,  G7. 

Supreme  court  of  a  territory- 
Created  an  appellate  court,  790. 
Practice  and  procedure  in,  807. 

Supreme  court  of  United  States- 
Appeal  in  bankruptcy  lies  to,  from  C.  C.  A.,  when.  796. 

from  C.  C.  A.  not  in  the  exercise  of  supervisory  powers.  816. 

from  supreme  court  of  District  of  Columbia    Tn.". 
Appellate  jurisdiction  at  law  and  equity  from  todoral  courts.  790. 
791. 

from  state  courts,  793. 
Certifying  questions  of  jurisdiction  to.  804. 

of  law  to,  804. 
Certiorari  to  correct  record  in.  797. 

to  remove  cases  from  C.  C.  A.  for  review,  799. 

practice  in,  802. 

Sureties— 

Bankrupt,  for,  may  prove,  when,  290. 
Effect  of  discharge  on,  756,  776. 
discharge  of  principal,  776. 
Liable  for  covenants  in  lease,  when    401. 
Proof  of  claim  of  principal,  when,  .^^l. 
Referee,  on  bond  of,  109. 


1412  INDEX. 

References  are  to  pages. 

Surrender- 
Value  of  insurance  policies,  410. 
What  constitutes  a,  of  preference,  335. 
Whether  it  must  be  voluntary,  336. 

T. 

Taxation  of  costs— 

By  courts  of  bankruptcy,  69. 
(See  Costs.) 

Taxes— 

Discharge  of  bankrupt  not  to  affect,  762. 
Payment  of  not  a  voidable  preference,  561. 
Priority  in  payment  of,  723. 

Tennessee- 
Exemption  laws  of,  534. 
Territorial  jurisdiction  and  time  of  holding  courts  in,  57. 

Terms— 

Courts  of  bankruptcy,  of,  34. 
Referee's  office,  of,  107. 

Territorial  jurisdiction- 
Courts  of  bankruptcy  in  each  state,  33. 
Court's,  limited  to  its  respective  district,  78. 

Territories— 

District  courts  of,  made  courts  of  bankruptcy,  33. 
Jurisdiction  of,  67. 

appellate,  of  supreme  courts,  807. 
States  include,  422w. 

Testimony- 
Bankrupt  to  give,  as  to  estate,  634. 

Criminal  proceeding,  in,  can  not  be  offered  against  bankrupt,  625. 
Manner  of  introducing,  232. 
Person  denying  insolvency  to  give,  232. 

Texas— 

Exemption  laws  of,  536. 

Territorial  jurisdiction  and  time  of  holding  courts  in,  59. 

Temporary  injunction— 

To  protect  the  estate,  when  granted,  214. 
(See  Injunction.) 

Time- 
Accounts,  by  trustee,  of  filing,  352,  718,  734. 
Actions,  of  bringing,  by  and  against  trustees,  361. 

on  bonds  of  referees,  109. 

on  bonds  of  trustees,  351. 
Adjudication  should  be  made,  233. 
Answer,  to,  228. 
Appeal  in  bankruptcy  can  not  be  extended,  821. 

to  circuit  court  of  appeals,  820. 

to  supreme  court  of  territories,  807. 

to  supreme  court  of  United  States,  797. 
AnnMcation  for  jury  must  be  made  within  what,  223. 
Bankrupt  may  be  examined  within  what,  613. 


INDEX.  14:13 

References  are  to  pages. 
Time   ( continued )  — 

Bonds  of  referees,  of  giving,  109. 

of  trustees,  of  giving,  350. 
Certiorari  to  remove  case  from  C.  C.  A.,  of  application  for,  800. 
Citation  may  be  issued,  within  which  a,  831. 
Claims,  of  proving,  325. 

hearing  objections  to,  343. 
Composition,  of  filing  application  to  set  aside,  697. 

may  be  made  within  what,  689. 
Computation  of,  as  to  acts  of  bankruptcy,  170. 

as  to  filing  petition,  202. 

as  to  creating  preferences,  584. 
Creditors'  meetings,  of,  268,  279. 
Discharge,  of  application  for,  737. 

of  appearance  to  oppose,  740. 

to  oppose  may  be  enlarged,  741. 

specifications,  to  be  filed,  742. 
Dividends,  of  declaring,  720. 

of  paying,  356,  718,  732. 

unclaimed  dividends,  733. 
Examination  may  be  made,  within  which,  613. 
Exemptions  should  be  claimed,  when,  433. 
Holding  courts,  34,  et  seq. 
Involuntary  petition,  to  file  under  act,  201. 
Jury  trial,  of  filing  application  for,  223. 
Notice  to  creditors,  of  giving.     (See  Notice.) 
Petition  against  insolvent,  of  filing,  201. 
Pleading  to  petition,  of,  222. 
Preference  created,  within  which,  581. 

when,  begins  to  run  as  to,  582. 
Record,  of  filing,  in   appellate  court,   836. 
Referees  fix,  and  place  of  acting,  110. 
Subpoena,  of  return  of,  207. 
Trustees,  when  to  give  bond,  350. 

account,  to  file  final,  718,  734. 

limitation  of  actions  by  and  against,  361. 
on  bond,  351. 

report,  to  make  final,  718,  734. 
Voluntary  petition,  to  file  under  act,  182. 

Title- 
Between  adjudication  and  appointment  of  trustee,  365. 
Confirmation  of  composition,  on,  369,  693,  697. 
Discharge,  upon  revoking  a,  369,  789. 
Estate,  prior  to  appointment  of  trustee,  365. 

when  no  trustee  is  appointed.  365. 
Exempt  property,  to,  427. 

in  bankrupt,  when,  427. 

in  trustee,  when,  428. 
Foreign  property,  to,  367. 
Proof  of  vesting  of,  in  trustee,  367. 
Revests  in  bankrupt,  when,  693. 
Trustee  to  convey,  605,  713. 
Vests  in  trustee,  365. 

wlien  composition  set  aside,  369,  693,  696. 

Torts— 

Debts,  not,  189,  318. 

Trade  marks— 

Vest  in  trustee,  378. 


1414  INUKX. 

References  are  to  pages. 

Trading  corporations— 

May  be  involuntary  bankrupts,  147. 
what  are,  148. 

Transfer— 

Act  of  bankruptcy,  when,  159. 

intent  of  transferor  only  material,  160. 
Attorneys,  to,  re-examination,  etc.,  when,  586. 
Bankrupt  to  execute,  to  trustee  of  foreign  property,  367. 
Before  adjudication,  3GG. 
Cases,  of,  by  court  of  bankruptcy,  228. 

when  petition  filed,  against  member  of  partnership,  252. 
Definition  of,  571. 

Fraudulent,    what    constitutes    a,    381.     (See    Fraudulent    Trans- 
fers.) 
"Hinder,  delay  or  defraud,"  to,  389. 
Mortgage,  by,  591.     (See  Mortgages.) 
Payment,  by,  584. 
Preferences,  when  given  by,  571.     (See  Preferences.) 

insolvent  person  to  creditor,  by,  573. 

creditor   must   receive   a   greater    percentage   than   others   of 
same  class,  576. 

reasonable  cause  to  believe  a  preference  intended,  577. 

within  four  months,  must  be,  581. 
Sales,  by,  589. 

Solvent  debtor,  by,  effect  of,  575. 

Subsequent  to  act,  within  four  months,  etc.,  void,  389. 
Suits  to  set  aside,  605. 
Within  four  months,  void  under  state  laws,  void  under  act,  393. 

Traveling  expenses— 
(See  Expenses.) 

Trial- 
Involuntary   petition   on,   230. 
Solvency,  of  question  of,  157,  226. 

Triplicate— 

Schedules,  copies  of,  filed,  182,  221. 

Trust—  ^ 

Companies  may  be  trustees,  349. 

Courts  to  settle  what  is  trust  property,  413. 

Property  held  by  bankrupt  in,   does  not  pass,  411. 

in  which  bankrupt  has  an  interest  passes,  414. 

whether  bankrupt  has  interest,  how  determined,  414. 

Trustees- 
Acceptance  of  appointment  by,  278. 
Accounts,  etc.,  open  to  inspection,  353. 

objection  to,  734. 

partnership  cases,  in,  255,  352. 

referee  to  adult,  352,  717,  718. 

sale  of,  704. 

to  keep,  352. 

to  file  final,  when,  718,  734. 
Accretions  to  land  by  alluvion  pass  to,  395. 
Actions  on  contracts,  right  of,  pass  to,  417. 

injury,  for,  to  property  pass  to,  420. 
to  persons  do  not  pass  to,  420. 


INDEX.  1115 

References  axe  to  pages 
Trustees  (continued)  — 

Adjudication,  decree  of,  must  file,  353. 
After-acquired  property  does  not  pass  to,  415. 
Alimony  does  not  pass  to,  376. 
Appeal  bond,  not  required  to  give,  828. 
Appointment  of.  273,  275,  348. 

creditors  to  make,  when,  275,  357. 
judge  or  referee,  to  make,  when,  276,  349. 
new,  after  removal,  358. 
upon  setting  aside  composition,  698. 
upon  revoking  discharge,  789. 
by  referee,  113,  349. 
setting  aside,  273,  348. 

when  no  assets  and  no  creditors  appear,  277,  349. 
who  are  qualified  for,  349. 
Arbitration,  trustee  to  submit  controversies  to,  354,  699. 
Assigned  for  benefit  of  creditors,  property  passes  to,  391,  et  seq. 
Attorney  of,  should  not  represent  bankrupt,  134. 
creditors  may  elect,  135. 
may  employ  when  necessary,  134,  138,  354. 
Bankrupt,  to  inform,  of  attempt  to  evade  act,  633. 

may  be  adjudged,  142. 
Banks  as  depositories,  to  deposit  money  in,  333. 
Bid  at  sale,  can  not,  713. 
Bonds  of,  350. 
amount.  278. 

creditors  to  fix,  278,  350. 
court  to  fix,  when,  350. 
appeal,  not  required  to  give,  828. 

evidence  of  title,  certified  copy  of  order  approving,  etc.,  367. 
failure  to  give,  effect,  109,  350. 
filed  where,  109,  351. 
joint  or  several,  etc.,  350. 
recording  of,  how  far  notice,  367. 
suits  on,  351. 

sureties  approved  by  court,  351. 
corporations  may  be,  350. 
number  of,  350. 
value  of  property,  etc.,   350. 

court  to  require  evidence,  350. 
time  of  giving,  350. 
Business  of  bankrupt,  when,  conducted  by.  211,  702. 
Circuit  courts,  when  suit  by,  in,  103. 
Collect  and  reduce  to  money  the  estate,  to.  354,  701. 
Commissions  of,  362. 
Compensation  of,  362. 

apportionment  of,  362. 
withholding,  362. 
who  is  an  attorney,  138. 
CornpoGition  can  not  object  to.  685. 
Compromise  controversies,   may.   when,   354,   69S,   716. 
Concurrence  of  two.  necessary.  356. 
Condition  of  estate,  to  report  when.  352.  717.  ""4. 
Confirmation  of  composition,  title  upon.  369.  693.  696. 
Contingent  remainder  pass  to.  395. 
Contracts,  rights  under  pass  to.  subject  to  election.  417. 

exceptions  to.  419. 
Controversies,  arbitration  of,  354. 
Convey  title,  605,  713. 
Copyrights  pass  to,  378. 
Corporations  authorized  to  act  as,  349. 


1416  INDEX. 

References  are  to  pages 
Trustees  (continued)  — 

Created  by  act,  349. 

Creditors  to  appoint  when,  348,  358,  698,  789. 

when  no  creditor  proves  claim,  349. 
Creditors'  naeetinj^s,  to  mal^e  detailed  statement  at  final,  734. 
Crops  pass  to,  402. 
Courtesy,  trustee  takes  subject  to,  396. 

trustee  takes  bankrupt's   right  to,  395. 
Death  or  removal,  effect  of,  358,  654. 
Depositories,  deposit  money  in,  353,  732. 

disbursed  by  check  on,  353,  732. 
Devise,  property  by,  passes  to,  395. 
Discharge  of,  718.  734. 

debts  of,  not  released  by,  773. 

when  may  be  set  aside,  735. 
Distribute  estate,  to,  351. 
Dividends,  to  pay  when,  356,  732. 
Documents,  etc.,  pass  to,  377. 

punishment  for  secreting,  destroying,  etc.,  656. 
Dower,  trustee  takes  subject  to,  396. 

trustee  takes  bankrupts  right  to,  395. 
Duties  of,  351. 

Elect  to  take  incumbered  property,  may,  372,  704. 
Election  of,  273,  275. 
Embezzlement  by,  655. 
Emblements,  402. 
Encumbered  property  may  be  sold  by,  601,  605,  704. 

not  bound  to  take,  371. 
Equitable  interest  in  land  pass  to,  when,  395. 
Equities,  takes  subject  to,  368. 
Equity  of  redemption  pass  to,  395. 
Error,  not  required  to  give  bond  on,  828. 
Estates  pass  subject  to  equities,  368. 

merchantable  form,  may  put  in,  when,  702. 

to  close  up,  etc.,  354. 
Examination,  may  apply  for  an  order  for,   616. 
Exemption,  property  subject  to  does  not  pass  to,  427. 

for  what  purposes  it  may  pass,  428. 

to  set  apart,  428,  439. 
Expenses,  362. 

Failure  to  qualify  creates  a  vacancy,  278. 
Fee  subject  to  an  easement  passes  to,  395. 
File  decree  of  adjudication,  must,  353. 
Final  accounts  to  file,  when,  718,  734. 

reports  to  make,  352,  718,  734. 
Fixtures,  when  pass  to,  402. 
Foreiirn  pro:"erty,  title  acquired  to,  367,  376. 

subject  to  rights  of  attaching  creditors,  377. 
Franchises,  pass  to,  when,  407. 

Fraud  of  the  act,  property  transferred  in,  passes  to,  389. 
property  transferred  in,  passes  to,  351,  381. 
property  purchased  in,  by  bankrupt,  does  not  pass  to,  375. 
Goods  and  chattels  generally  pass  to,  403. 
Good  will,  when  passes  to,  402. 
Governed  by  whom,  352. 
Information,  to  furnish,  353. 
Inspection  of  papers,  penalty  for  refusing,  125. 
Insurance  policies  pass  to,  408,  et  seq.    (See  Insurance.) 
Interest,  to  pay,  354/i,  717. 
Inventory,  when  to  file,  352. 
Invest  funds,  when  may  temporarily,  354. 


INDEX.  141' 

References  are  to  pages. 

Trustees  (continued)  — 

Join  to  prosecute  or  defend  suits,  359. 
Lease,  when  passes  to,  305,  806,  396. 

contract  to,  when  passes  to.  401. 

may  elect  not  to  take,  397,  et  seq. 

takes  subject  to  equities,  400. 

surrender,  may,  400. 

waste,  401. 
Legacies,  pass  to,  when,  403. 

Lien,  subrogated  to  rights  of  holder  of,  569,  600,  606. 
Limitations  as  to  suits  by  or  against,  361. 

must  be  pleaded,  3G1. 
Memberships  in  exchanges,  franchises,  etc.,  pass  to,  406. 
Meetings  of  creditors,  make  statements  before  final,  734. 
Money,  deposit  in  designated  depository,  353. 

disbursed  by  check,  etc.,  353. 
Negotiable  instruments  pass  to,  407. 

notice  of  dishonor,  of,  to  be  given  to,  407. 
Notice  of  appointment,  278,  350. 
Notice  of  equities,  takes  with,  351. 
Number  of,  348. 

Object  to  composition,  can  not,  685. 
Offenses  by,  655. 
Office  of,  where,  349. 
Officers  of  the  court,  are,  348,  351. 
Official  or  general,  can  not  be  appointed,  349. 
Partnership,  creditors  to  appoint,  270. 

how  to  administer  an  estate  of,  255. 
Patents,  copyrights  and  trade  marks  pass  to,  378. 

issued  after  adjudication,  379. 
Pay  dividends,  to,  356. 

the  taxes  on  estate,  354. 
Payments  to  attorneys,  re-examined  by,  when,  355. 
Pensions  do  not  pass  to,  408. 
Perishable  property  may  be  sold  by,  711. 
Personal  property  of,  passes  to,  394. 
Possession,  entitled  to,  370. 

constructive,  370. 

of  unscheduled  property,  371. 
Powers  of  appointment  pass  to,  3.79. 
Preferences,  voidable,  to  set  aside,  355. 
Property  of  bankrupt,  to  collec.t,  354.  CCS.  701. 

transferred  to  preferred  creditors,  385. 

fraudulently  transferred   passes  to,  381. 

fraudulently  purchased  does  not  paFs  to,  375. 

in  hands  of  factor  or  agent,  passes  to.  403. 

on  which  there  is  a  valid  lien.  562. 

what  passes  to,  365.     (See  Est.\ti:s.) 
Prove  claims  of  estate  against  other  estates,  323.  355. 
Punishment  for  offenses,  125,  655,  660.  663. 
Purchaser  at  sale,  can  not  be,  713. 
Qualifications  of,   348. 

Real   property  subject  to  levy  passes  to,  395. 
Recovery  of  property  by.  355,  384,  605,  et  seq. 
Reduce  the  estate  to  money,  to,  351.  354. 
Removal  of,  356. 

application   for,  357 

by  judge  only.  113,  357. 

cause  for,  356. 

costs,  357. 

does  not  abate  any  suit,  358,  654. 


1418  TNDKX. 

References  are  to  pages. 

Trustees   (, continued)  — 
Kemoval  of,  (coutiiuied) — 

hearing  and  notice,   357. 

new  trustee  appointed  after,  358. 
Rent,   liability   tor,   305,  30G,  397. 
Reports,  to  make,  352,  717. 

final,  when,  718,  734. 
Represent  whom,  351,  606,  705. 

Residents  of.  must  be,  or  have  oflBoe  in  district,  349. 
Resignation  of.  358. 

Reversion  with  rent  incident  thereto  passes  to,  395. 
Sale  of  property,  power  to  make,  701.     (See  Sale.) 
Schedule,  copy  of,  to  be  filed  for,  221. 
Separate  property  of  wife,  does  not  take,  419. 
Shares  of  stock  pass  to,  405. 

may  vote,  405. 
Subrogation  to  rights  of  individual  creditors,  356. 

to  rights  of  lienholders,  569,  600,  606. 
Successor  may  prosecute  or  defend  suit,  358. 
Suits  by  or  against,  77,  358. 

appeal  in,  359. 

courts  to  be  brought,  in  what,  81,  82,  360,  607. 

how  far  bound  by,  359. 

leave  of  court,  must  obtain,  when,  359,  360. 

limitation  of,  by  or  against,  361. 
on  bond,  351. 

to  set  aside  preferences  and  fraudulent  transfers,   605.     (Se© 
Suits.) 
Summoned  as  witness  by  referee,  can  not  be,  115. 
Taxes,  credited  with,  on  receipt  filed,  for  payment  of,  354. 
Third  person,  when  property  of,  passes  to,  373. 
Title  to  property  vested  in,  365,  et  seq. 

on  revocation  of  discharge,  369,   789. 

all    kinds    of   property    which    may    be    applied    to    pay   debts 
vests  in,  376. 

exempt  property,  427. 

extent  of,  367,  et  seq. 

holds,  until  conveyed  or  estate  settled,  369. 

what  passes,  367. 
Transfer  void  under  state  law,  void  under  act,  393. 

penalty  for  unlawful,  655. 
Trade  marks  pass  to,   378. 
Trust  property  does  not  pass  to,  411. 

in  which  bankrupt  has  an  interest  passes  to,  414. 

what  is,  412. 
Two  trustees  must  concur  when  three  act,  356. 
Unencumbered  property  may  be  sold  by,  703. 
Unpaid  subscription  on  stock  may  be  recovered  by,  406. 
Vacancy,  appointment  in  case  of,  348,  358,  789. 

by  failure  to  give  bond,  350. 

by  failure  to  qualify,  278. 
Vested  with  title  to  property  on  high  seas,  376. 
Vested  with  title  to  property,  when,  365. 
What  passes  to,  365,  et  seq.,  376,  709. 
"When  appointed,  348. 
Who  may  be,  349. 


Unclaimed  dividends— 

*Dfsposition   of,  733. 


U 


INDEX.  1419 

References  are  to  pages. 
Uniformity- 
Uniformity  required  by  constitution,  19. 

Unincorporated  company  — 

May  be  adjudged  involuntary  bankrupt,  141. 

United  States— 

Banknrpt  statutes  of,  history  of,  6. 
Discharge  on  debts  due,  effect  of,  762. 
Proof  of  claims  by,  324. 
Prove  claims,  failure  of,  to,  324. 
Taxes  of,  discharge  not  to  affect,  760. 

United  States  commissioner- 
Proceedings  before,  to  remove  bankrupt  to  another  district,  64S. 

United  States  courts— 

(See   CouETS,   Circuit   CorRTS,   Circttit    Courts   of   Ai'peals    and 
SuPBEiiE  Court.) 

Unliquidated  claims— 

Provable,  when  and  how,  282. 

Utah- 
Exemption  laws  of,  538. 
Territorial  jurisdiction  and  time  of  holding  courts  in,  61. 

V. 

Vacancy- 
Referee's  ofSce,  in,  108. 

court  appoints  successor,  107. 
Trustee's  office,  in,  on  failing  to  qualify,  278. 

on  failure  to  give  bond,  350. 

how  filled,  348,  358,  789. 

Vacating-  orders — 

(See  Set  Aside.) 

Value— 

Exemptions,  of,  to  be  set  apart,  determined  by  what  law,  422. 
Sale,  no,  for  less  than  75  percent  of  appraised,  713.  714. 
Securities  of,  how  determined,  705. 

Verdict— 

Court  can  not  enter  judgment  contrary  to,  231. 

Directing,  233. 

Setting   aside,    231,    233. 

Vermont— 

Exemption  laws  of,  542. 

Territorial  jurisdiction  and  time  of  holding  courts  in.  Gl. 

Virginia- 
Exemption  laws'  of.  545. 
Territorial  jurisdiction  and  time  of  holding  courts  in.  61. 

Verification— 
(See  Oatii.) 

Vesting  of  title—  •  ,  • 

(See  Title.) 


ll-JO  INDEX. 

References  are  to  pages. 

Violation  of  law— 

(See  OiTENSES.) 

Void  conveyances — 

(See    PllEFERKXCES.) 

Voluntary  bankruptcy- 
Act  of  bankruptcy  to  file  petition  in,  169. 
Adjudication,  order  of,  184. 
Court  in  which  petition  filed,  174. 
Dismissing  proceedings,  187. 
District  in  which  petition  may  be  filed,  174,  176. 

time  within,  175. 
Enjoin  proceedings  in,  state  court  can  not,  173. 
Filing  petition,   182. 

after  assignment  for  benefit  of  creditors,  173 

after  involuntary  petition  filed,  173. 

fees  required,  on,  182. 

in  two  districts,  176. 
How  instituted^  176. 
In  forrna  pauperis,   183. 
Partnership  cases,  184,  246. 
Petition.   176. 

number  of  filed,  173. 

who  may  file,  172. 
Proceeding  in,  172. 

subsequent  to  adjudication,  188. 
Reference,  order  of,  184. 
Schedules,   178. 

number  of,  to  be  filed,   178. 
State   court  can  not  enjoin  proceedings    in,   173. 
Subsequent  to  reference,  proceedings,  188. 
Void  if  court  has  no  jurisdiction,  176. 
Who   may   file  petition,   141,   172. 

Voters— 

At   creditors'   meetings,    269,   et   seq. 

Claim    disallowed    after   voting,    273. 

How   to   count   votes,    277. 

Referee  can   not  be  a,   273. 

Secured   creditor   can   vote,   when,    270. 


w. 

Wag-e-eamers- 

Can  not  be   adjudged  involuntary  bankrupts,   142. 

Who   are,    142. 

Wages— 

Entitled  to  priority,  726.     (See  Labor  Claims.) 
Payment  of,  not  a  voidable  preference,   561. 
(See   also   Wage-eabners. ) 

Waiver- 
Act  of  bankruptcy  of,  by  consent  of  petitioning  creditor,  191. 
Appearance  is,   of  service,   207. 
Discharge,  effect  of,  by  new  promise,  779.     (See  New  Promise.) 

estopped   by  consent   to  allege  act  against,   789. 

right  to  oppose  by  not  appearing  to  oppose  in  time,  741. 
Examination    before    United    States    Commissioner,    of,    649. 
Exemptions,   of,   433. 


INDEX.  14"21 

References  are  to  pages. 

Waiver    (continued)  — 

Formal  defects  of,  pleading  to  merits,  223. 

Jury   trial,   of.    223,   226. 

Set-offs    and    counter   claims,    314,    317. 

Want  of  prosecution- 
Involuntary  petition  not  dismissed  for,   239. 
Voluntary  petition  not  dismissed  for,  187. 

Warrant— 

Bankrupt,  for  removal  of,  652. 

for   detention   of,    referee  can  not   issue.    111. 
Seizure  of  debtor's  property,  for,  216. 

Washington- 
Exemption   laws   of,    549. 
Territorial   jurisdiction  and  time   of  holding  courts   in,  62. 

West  Virginia- 
Exemption  laws  of,  552. 
Territorial  jurisdiction   and    time   of   holding   courts    in,   63. 

Widow- 
Entitled  to  dower,  when,   396,  437. 

Wisconsin- 
Exemption   laws   of,   554. 
Territorial  jurisdiction  and  time  of  holding  courts,  in,  63. 

V/ithdrawal- 

Appearance   of,   221. 

Of  proof,   338. 

Of   written   evidence   of   debt,   when   and   how  allowed,   330. 

Proof  of  claim,  of,  338. 

Written   evidence    of   debt,    330. 

Witnesses- 
Attendance  before  referee,  115,  343,  61G. 
Competency    not   regulated    by   state    laws,    615. 
Compulsory    attendance    to   be    examined,    614,    616. 
Contempt  for  refusal  to  appear,  etc.,  619. 
Court,   how,   are   brought   before,    232. 
Evidence  before  referee  may  be  used  in  civil  suits  to  impeach.  626, 

628,  630. 
Examine,   power  of  court  to,  614,   616. 
Examined,  refusal  of,  to  be,  G22. 

before  a  referee,  116. 
Expenses  of,  indemnity  for,  128. 

Fees  and  mileage  of,  to  be  first  paid  or  tendered,  619. 
How  examination  of,  is   made,  619. 
Irrelevant  questions,  need  not  answer,  627. 
Privileged    communications,   628. 
Service  of  summons,    618. 

without   district,   when,   619. 
Sign  depositions  taken  before  referee,  623. 
Summons  by  referee,  115. 

to  testify,   618. 
Topics  upon   which,   may  be  examined,   626. 
Who  are  subject  to  service  of  process.  206. 
Who  may  be  summoned  as,  before  court.  614.  616. 

before  referee,  115. 


14l'2 


INDEX. 


References  are  to  pages. 
Women- 
Married,  as  involuntary  bankrupts,   14G. 
Married,  may  file  voluntary  petition,   141. 

Workmen- 
Wages  of,  have  priority,  726. 


(See  Labor  Claims.) 


Writ- 

Certiorari,  of,  to  complete  record,   797. 

to  remove  case  to  U.  S.  supreme  court,  Y99. 
Error  of   in  bankruptcy,   819. 

in   law   cases,   790. 
Seize,  to,  property  of  bankrupt,  216.  • 

Subpoena,  of,  203. 

Writing- 
Debts  evidenced  by  provable,  293,  et  seq. 
Filed,  to  be,  with  proof  of  claim,  330. 
List  of,  included  in  schedule,  181. 
Pass  to  trustee,  what,  377,  407. 

Written- 

Admission,  act  of  bankruptcy,  when,  169. 

Evidence  of  claim,   how   proved   and   withdrawn,   330. 

Reports  of  trustee  to  court,  352. 

Wyoming- 
Exemption  laws  of,  557. 
Territorial  jurisdiction  and  time  of  holding  courts  in,  64. 


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